Web Startups Want An Open Internet -- House Republicans Don't

In approving the resolution to nullify the FCC's open Internet rules, Republican members in the House show that they don't care if big companies impose unfavorable conditions on start-ups and entrepreneurs.
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Veer and Vinay Gidwaney are the kind of people that House Republicans should like. They are young, energetic, brilliant entrepreneurs. They are just the kind of startups and small business creators that members of Congress love to laud as the heart of the economy.

Just a week ago, on March 3, they and four colleagues and friends launched their latest venture, a social networking site called www.dailyfeats.com, their first foray onto the Web. Veer Gidwaney, the CEO of the new company, is 32. Vinay, the CTO, is 29.

They have already started three companies and in 2005 sold one of those, which sprang from some software Vinay wrote in high school, to the giant firm Computer Associates. Vinay also took some time out to dabble in neuroscience research at the Massachusetts Institute of Technology, spending two years at the university's famed Media Lab and starting a biotech company.

Now, House Republicans want to allow them to be crushed by the likes of Verizon, AT&T and Comcast/NBC.

In approving the resolution to nullify the Federal Communications Commission's (FCC) open Internet rules, the Republican members of the House Communications Subcommittee (no Democrats voted to block the FCC) said they didn't care if the big companies imposed unfavorable conditions on start-ups and didn't care if there was nowhere small companies could go if they felt disadvantaged.

Big Mission for DailyFeats Requires Open Internet

The Gidwaneys think big. Their goal, reflected in the site, is to help people live better lives by rewarding them for doing good deeds. Unlike other sites in which people collect awards by going somewhere or buying something, the DailyFeats site has a reward system set up for eating better, exercising, watching the news, giving up a seat on the subway, giving a tourist directions, or doing homework. Corporate sponsors support the awards, which are designed as motivators to help people keep up good habits. The goal, Vinay Gidwaney said in an interview, is to "build a technology that could apply to individuals to help them lead more successful lives." They want nothing less than to "solve big problems in the world" and affect how people live.

They also know that an open Internet is essential to trying to achieve those goals. An entrepreneur wants to take full advantage of the Internet to make better solutions, Vinay Gidwaney said in an interview, adding: "Net Neutrality is essential to that. As soon as you get cordoned out from an activity that happens on the Internet, you lose the ability to innovate."

"We need to be part of solving the problems we have," Vinay Gidwaney said, "That open environment (online) allows for that to happen." Gidwaney said he realizes that "It's natural for business to feel the need to monetize how their platform is used. That's where the ultimate desire is for Comcast and others to think about what the issue means for their business. The longer term vision is to see it as more open, and more valuable to add services that add value. It just takes a lot of thought leadership and long-term thinking to recognize that." In fact, if Comcast were to open its cable platform to allow others to broadcast, such as video bloggers or content providers, the company would see "a tremendous amount of value," Gidwaney said.

The Gidwaneys weren't at the hearing on March 9. Robin Chase was, as a witness. She is a co-founder and former CEO of Zipcar, the popular car-sharing service. She has won award after award for her entrepreneurial skill. Based on her experience, her message to the Subcommittee was the same: An open Internet is necessary for startups and entrepreneurs to compete.

"Sentence First -- Verdict Afterwards"

Yet in today's Wonderland that is the House, real-world experience means nothing.The conclusions have been drawn. Off with the head of the FCC! The traditional arguments and politics that usually govern House Republican votes mean nothing.

At the Subcommittee hearing held just prior to the vote, A leading small businesswoman says openness is needed for the Internet. Never mind. Even big business, which usually has the Republicans at its beck and call, is largely going along with the FCC rules. No matter. While witnesses like Chase called for openness, witnesses for the Republicans had a different world view.

Instead, there is the power-centric view favoring telecom carriers. One witness who runs a wireless ISP said it was OK to block Netflix from going to his customers. Another, a former Wall Street analyst who fears for the financial safety of the Big Telecom companies, asked what would happen if Google decided to "withhold its services from Verizon in Boston but continue to provide them to Comcast," which would be a problem for Verizon retaining customers. Wonderland, indeed.

Instead, there are bizarre interpretations in which FCC rules which an open Internet rule is seen as a hindrance to small business, rather than an arbiter to which, as Chase rightly pointed out, small companies could turn if they thought they were being taken advantage of by super carriers.

Subcommittee Chairman Greg Walden (R-OR), a former broadcaster, instead saw the rules as making it "harder for upstarts to compete with incumbents." Rep. Marsha Blackburn (R-TN) failed, again, to recognize that a Net Neutrality environment in did exist in 1999 when Zipcar was founded. Then it was called "non-discrimination" and was required of all telecommunications services under the Communications Act. It wasn't until 2005 that the Bush-era FCC did away with the protections for high-speed Internet access services.

"There was no Federal governance of the Internet," Blackburn told Chase, cutting off Chase's correct answer that, "I would like to see the FCC rules preserve the status quo that existed when I was doing the innovation." There is no "Federal governance of the Internet" now, but there was, and should be, regulation of telecommunications services provided by huge monopolies or duopolies. Second-term Rep. Steve Scalise (R-LA), a former computer science major, showed the difference between a computer science major/engineer and a Web-based entrepreneur. The entrepreneurs, like the Gidwaneys and Chase, are more familiar with the Internet environment and know that the equal opportunities afforded startups, whether in the "non-discrimination" era or Net Neutrality, are essential.

Walden doesn't, and asked whether Chase should be worried if Google charged for "prioritized placement" of ads online. Scalise doesn't, and was insulting when he asked whether there is anything in the FCC rule which prohibits Zipcar, her former company, from buying a good placement under Net Neutrality, suggesting Chase might prefer Google could give Chase's company preference over a startup in ad placement. It boggles the mind that legislators making law for the Internet are so uninformed as to confuse the concept of Net Neutrality, which goes to the behavior of large carrier duopolies with Web-based services like Google and Netflix.

Scalise was inadvertently correct to say that if you wanted "a good template for creating jobs, look at the Internet." He, as with Blackburn, didn't recognize that the template was made possible by the equal opportunities the law allowed, and that the "new regulation of the Internet" as far as Internet access goes, isn't new.

Once again, the only people suggesting "regulation of the Internet" were the Republicans, when they once again attempted to drag in Google and Netflix, to name a couple of companies that have attracted Congressional attention. Neither supply network services, and so the rubric of "Net Neutrality," which goes to the behavior of telecommunications carriers, wouldn't apply.

Yet the same people who couldn't bear to see those poor, little telephone and cable companies be responsible to anyone for their improper behavior wasted no time in going after Google for search results or after Netflix for having a popular service. This is part of the big telecom strategy of roping in others, saying that if we, the carriers have to be regulated, then the other guys do, also. That makes no sense, but then again, this is the House.

And so the circus will reconvene on the 15th, when the full House Commerce Committee will vote to repeal the FCC rule, and the later in the week the full House will do so as well. It will all be cloaked in the sanctimony of curbing government and helping small business, but nothing will be further from the truth. All it will do is put entrepreneurs like Vinay Gidwaney and Robin Chase further behind when the big carriers decide the time is right to put the pressure on and they start charging for preferential "fast lanes" that start-ups can't afford, or requirements they can't meet.

"We like to think about big issues and how to fix them," Gidwaney said. "That's the beauty of the Internet" because it's now possible to do on the Internet within weeks what it would have taken months to do fifty years ago to make any headway against those problems, Gidwaney said. He added: "That's what you lose when you take away Net Neutrality. That's what we need to fight for."

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