Net Neutrality

The internet is a level playing field where everyone, from big companies to small startups, can access and send data quickly and without discrimination. However, a new European law is causing concern among entrepreneurs.

Brussels has initiated an online consultation regarding the future of the connectivity sector and infrastructure. This consultation could potentially lead to internet providers charging websites fees for access and disrupting the principle of net neutrality, which ensures equal treatment of all internet users.

While the focus may be on big tech companies, startups are worried about the unintended consequences that this law may bring. They fear that restricting internet access could distort the startup ecosystem, hamper innovation, discourage new market players, and hinder investment in the tech industry’s growth.

Johann Svane, head of policy at Danish Entrepreneurs, expressed his concerns about the negative impact on startups and urged to maintain the current net neutrality regulations, emphasizing that there is no need to fix something that isn’t broken.

The ongoing debate can be compared to cars on a motorway, where big tech companies are like the large number of cars, and broadband providers are the ones responsible for maintaining the infrastructure. Broadband providers argue that it is unfair for them to bear all the costs and propose that big tech companies contribute towards upgrading the infrastructure they heavily rely on.

Thierry Breton, the EU’s internal market commissioner, also supports this argument, suggesting the need for a new financing model to address the substantial investments made by telecoms companies.

Inés Moreno-Alonso, director at Allied for Startups, voices the need to understand this conversation from a broader perspective beyond big tech versus big telco. She emphasizes that startups, SMEs, and consumers should have a say, as they are integral parts of the internet ecosystem.

Startup founders express their worries about the uncertainty surrounding the issue. They feel powerless and excluded from the discussion, highlighting that there is minimal awareness and dialogue about the potential changes to net neutrality.

Although Brussels claims that any new regulations will not violate the principle of net neutrality, Moreno-Alonso argues that introducing network fees will inevitably create an imbalance. She states that allowing payments within networks will lead to a two-tiered internet, which contradicts the net neutrality principle.

Startups are concerned that if fees are imposed on larger companies, it may discourage their scaling and competition against established incumbents. They fear that the introduction of fees could also pave the way for smaller players to be subjected to such financial burdens in the future, further inhibiting their growth.

Similar fees implemented in South Korea have demonstrated negative consequences, such as a decrease in content production and quality, slower digital transformation, increased prices for consumers, and reduced investment in network infrastructure. This experience serves as a cautionary example for the potential impacts of introducing fees.

Research conducted by the European Parliament also suggests that the South Korean experiment has not been successful, with reports and expert opinions largely agreeing on its failures.

A report from Startup Poland, which surveyed 143 startups in central and eastern Europe, found that almost all respondents believed that imposing fees on larger companies would make it more challenging to create successful startups. Furthermore, 72% of startups anticipated a negative effect on fundraising.

Startups like inStreamly, which operates in the intersection of video games and live-streaming, foresee potential disruptions due to increased traffic and new regulations. They worry about losing a significant portion of their market and see the idea of a paywall on the internet as both surprising and regressive.

The proposed changes challenge the established norms of open and unrestricted internet access and pose significant concerns for startups and the future of innovation. The outcome of the consultation and subsequent decisions will shape the landscape for internet businesses and users going forward.

It’s been one year since the controversial net neutrality rules were repealed by the FCC. Many net neutrality proponents believed that this would spell the end of the internet as we knew it. However, upon closer examination, we find that the internet has actually improved since the regulations were relaxed.

Prior to the repeal of net neutrality, there was a lot of hysteria surrounding the issue. People genuinely believed that without government intervention, all the online services we enjoyed would disappear. This sentiment was widely accepted as truth, despite the fact that these services were already in existence before net neutrality rules were implemented.

The panic continued as organizations like the ACLU warned that without net neutrality, we would be at the mercy of powerful telecommunications giants. However, none of these dire predictions actually came true, highlighting the exaggeration and absurdity of the push for net neutrality rules.

Net neutrality aimed to define the internet as a public utility, subject to regulatory oversight. This meant that internet service providers were required to provide equal connection speeds to all websites, regardless of content. Prior to net neutrality, providers had the freedom to offer different connection speeds and even charge extra for faster speeds on certain websites.

Supporters of net neutrality believed that this was a necessary measure to prevent internet service providers from abusing their power. They saw it as a way to protect consumers from excessive charges. However, the reality is that market forces were already responding to consumer demand, and consumers had the freedom to choose which services and providers to use.

Comparisons to the railroad industry, which was regulated as a public utility, remind us of the negative consequences of such regulation. The Interstate Commerce Commission (ICC), created to regulate railroads, ended up stifling innovation and progress. It took the abolition of the ICC for the industry to recover and flourish again.

Contrary to the warnings of net neutrality advocates, the repeal of net neutrality has actually led to positive outcomes. Internet speeds have increased by nearly 40 percent since the repeal, as service providers have been allowed to expand their infrastructure without regulatory barriers. This is good news for both companies and users.

While some publications have reluctantly admitted that none of the dire predictions came true after the repeal, they still cling to the belief that an unregulated internet is not truly free. However, the evidence suggests that less government regulation leads to better outcomes for both companies and consumers.

We should keep this in mind the next time we’re told that lack of regulation will bring about the end of the world. The reality is that freedom from excessive government regulation often leads to positive results. The internet is a prime example of this.