Net (Non)Neutrality, Start-up Investment and Your Home Internet Bill – Changes-a-Comin’?

Two years ago, as a grad student, I attended an expert panel discussion in DC where it was firmly declared that net neutrality was dead. Well, not so much. With the Verizon vs. FCC case hitting the Circuit Court last week, there is now speculation that a compromise is coming.

Essentially, big Service Providers have long wanted to charge more for faster speeds, more bandwidth, etc. But in 2010, they  were formally denied the right to do so by the FCC, who claimed this would provide unfair advantage to those with deep pockets, disadvantage those less able to pay (like start-ups), and be detrimental to the overall economy.

It looks like there may be some FCC back-pedaling. Apparently in last week’s court hearing, the FCC claimed that “pay for priority was tolerated” under their 2010 Order – which is contradictory to what the Order said and what is widely held to be reality. Which likely means a compromise  is coming out of this court fight.

Assuming some sort of tiered payment structures will be instituted by all service providers (let’s face it, that is what will happen with lightening speed), that means a lot of changes can be expected. There is insatiable demand for more bandwidth – from Millenials streaming endless YouTube videos on their mobiles, from home offices, from streaming sporting and cultural events, from start-ups collaborating, from university researchers sharing data around the world. The rise of Big Data collection and analysis will take this to another level still.

We have yet to know what the FCC compromise – IF there is one – will be. But I do think it’s reasonable to expect that our costs will be going up. Is this that much different from paying more for a T1 line? Maybe not. But Angel investors and VCs should start factoring increased budget for start-ups’ needs. Mom and Dad will have to start thinking about that rising cable or wireless bill. Or maybe we’ll just get used to pixelated video…



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