First Round Capital to FCC: net neutrality ruling will 'stifle innovation' - Technical.ly Philly

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May 14, 2014 11:30 am

First Round Capital to FCC: net neutrality ruling will ‘stifle innovation’

"If established companies are able to pay for better access speeds or lower latency, the Internet will no longer be a level playing field."

FCC Chairman Tom Wheeler ruled that Internet service providers can charge web companies more for a "fast lane." Photo by Flickr user @alawash, used under a Creative Commons license.

Investors from First Round Capital were some of the 50 tech investors that sent a letter to the Federal Communications Commission decrying its recent proposed ruling that suggests the end of net neutrality. The ruling will “stifle innovation in the Internet sector,” they wrote.

From the letter:

If established companies are able to pay for better access speeds or lower latency, the Internet will no longer be a level playing field. Start-ups with applications that are advantaged by speed (such as games, video, or payment systems) will be unlikely to overcome that deficit no matter how innovative their service. Entrepreneurs will need to raise money to buy fast lane services before they have proven that consumers want their product. Investors will extract more equity from entrepreneurs to compensate for the risk. Internet applications will not be able to afford to create a relationship with millions of consumers by making their service freely available and then build a business over time as they better understand the value consumers find in their service (which is what Facebook, Twitter, Tumblr, Pinterest, Reddit, Dropbox and virtually other consumer Internet service did to achieve scale).

Read the letter

Josh Kopelman signed the letter, as did First Round Capital’s Chris Fralic, Howard Morgan and Phineas Barnes. Brett Topche of University City-based MentorTech Ventures also signed the letter.

One day before investors sent that letter to the FCC, nearly 150 tech companies, including Facebook, Reddit and Paoli-based DuckDuckGo, sent a similar letter.

The FCC will vote on the ruling, which has since been revised, Thursday.

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