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Next Gen StartUp Founders Really don’t know what they’re in for under Title II Net Neutrality Regs

start up founders

start up founders

As the message filters out more that the key to future opportunities and jobs is work in the tech sector, more parents are eager to push their kids towards jobs in the technology field.

They also want their sons and daughters to become the next Steve Jobs or Mark Zuckerberg or Sheryl Sandberg.

So too do the next generation of start up founders want to be that next big tech pioneer.

Ana-Marie Kovacs hit the nail on the head in her recent contribution to Fed Scoop about the importance of keeping the internet open for  “the kids in the garage and the dorm, the next Steve Jobs and Mark Zuckerberg, the ones everyone wants to protect.”

Of this group, she writes how “they are working feverishly day and night to create the next Facebook, Twitter, Twitch, Shutterfly, YouTube,” and how while these guys are thinking about “the code they are writing, its elegance and efficiency” and “about attracting investors and marketing their inventions”, they are not simultaneously thinking about “price regulation, quality regulation, privacy regulation and myriad other regulations.”

This is quite on point.

A couple of weeks ago, I sat through the painfully technical September 19  FCC roundtable on the effect internet regulation would have on technology.

On the panel was Michal Rosenn, deputy general counsel of the wildly successful crowdfunding site, Kickstarter, who seemingly, based on her comments that day,  is in support of efforts  to impose telephone regulation on the future of the internet despite the fact on that very panel she spoke about how her start up was able to develop, grow and flourish under the current open Internet.

It baffled me then as to why would she want to impose archaic regulatory frameworks created for the telephone industry on the next generation of start ups that want to be as successful as Kickstarter is.

How fair is that?

Kickstarter didn’t have to, as Kovacs writes, “think about federal and state commissions, hearing rooms and courtrooms.”

Since Congress passed a law making it easier for crowfunding to happen without the immense paperwork, filing and reporting burdens of traditional securities, Kickstarter has taken off.

“They do not think about the endless paperwork needed to prove compliance with rules promulgated by all those commissions,” Kovacs wrote about the generation of startups that are success cases. “They don’t have to, because the applications they are developing are not regulated.”

Currently, the Internet is not regulated under the same exhaustively burdensome section of the Telecommunications Act as telephone services (Title II) because it is considered an information service.

Earlier this year, the US Supreme Court agreed with the FCC’s interpretation of the telecommunications law which identified the Internet as an information service.

“But the FCC is now under tremendous pressure to reclassify broadband Internet access as a telecommunications service subject to common-carrier regulation under Title II,” Kovacs writes.  “If it does so, many Internet services and applications will also find themselves subject to reclassification.”

She added:

“Blurring that distinction will change our kids’ thought process radically. Once they understand the innumerable obligations that being subject to federal and state regulation will place on them, every creative thought will be filtered through the questions: “Am I creating an information service or a telecommunications service?” and “How do I change it to keep it from being a telecommunications service?”

I also agree with this:

“Creativity does not thrive when it is focused on bureaucratic contortions. The creators of Facebook, Twitter, Twitch, Shutterfly and YouTube did not sit in their garages and dorm rooms contemplating the burdens of Title II regulation and ways to evade them. But if the advocates of reclassification get their way, they might have. All of those platforms look like telecommunications services once you start asking where the line is drawn: Exactly how little data manipulation and storage does it take to slide from the nirvana of information service into the nightmare of telecommunications service?”

I also have been wary about this renewed campaign to stick new digital and mobile businesses in limbo.

As Kovacs writes, regulatory uncertainty, fostered by hearings, litigation and continuous and on-going court challenges could convince”the investors [start ups] might have attracted” to “flee to less risky ventures.”

It’s a game of “Risk”, “Clue” and “Where in the World is Carmen San Diego” all in one but it doesn’t appear many players are aware of the rules.

If the FCC makes one false move or step in the wrong direction,  the next generation of start ups may end up stuck and without the same options or opportunities as digital businesses of the past.

But many start up, founders and entrepreneurs are not really engrossed in the fight because they are, rightfully,  busy building their dreams. Nonetheless, seemingly some are signing off on plans they have no clue will potentially harm that dream.

image: Shutterstock

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