PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Comments to FCC: Protecting and Promoting an Open Internet

By at 10 July, 2014, 10:47 pm

Via Electronic Submission

Marlene H. Dortch, Secretary

Federal Communications Commission

Office of the Secretary

445 12th Street, SW,

Washington, DC 20554

 

RE: Protecting and Promoting an Open Internet, GN Docket No. 14-28

Preserving the Open Internet, GN Docket No. 10-127

 

Dear Secretary Dortch:

On behalf of the Small Business & Entrepreneurship Council (SBE Council), I am writing to express our deep concern regarding the notion of applying outdated, restrictive and prescriptive regulation to the broadband Internet. Small businesses and entrepreneurs — as consumers, suppliers and innovators – have benefitted greatly from the Internet and broadband. Applying telephone-era Title II regulation to our dynamic and competitive Internet is not needed, and will cause great harm to U.S. innovation, competitiveness and our entrepreneurs who have come to depend on the break-through technologies and tools that have enabled them to survive and grow in a challenging economy.

SBE Council is a nonpartisan, nonprofit advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. With nearly 100,000 members and 550,000 small business activists nationwide, SBE Council is engaged at the local, state, federal and international levels where we collaborate with elected officials, policy experts and business leaders on initiatives and proposals to enhance competitiveness and improve the environment for business start-up and growth.

Broadband has been a critical development for our members, as well as for U.S. entrepreneurship. The array of tools made possible through the Internet and broadband has helped countless firms grow, innovate and become more competitive in today’s challenging climate. SBE Council has long been a proponent of policies that support broadband investment, as well as initiatives that encourage adoption. Accelerating the reach and benefits of broadband are critical to sustaining U.S. entrepreneurship and job creation. We strongly believe that adopting Title II regulation for the broadband Internet – that is, treating it as a public utility — will deeply erode investment and innovation, which will dramatically harm entrepreneurs and small businesses.

Washington policymakers and Congress have a responsibility to protect the innovative and competitive broadband market on which new business models have been structured. Also, as noted above, countless entrepreneurs and small businesses depend on innovative tools made available through broadband to startup and grow. Policies must continue to encourage the robust innovation and investment that brought us to this present day.

There have been no market failures to speak of that would warrant such intrusive regulation. That being the case, why would regulators impose such restrictive and misfit Title II regulation? Why would regulators take the risk of harming a vibrant ecosystem upon which the broadband Internet, and entrepreneurs, thrive?

Reclassifying broadband as a telecommunications service would lump broadband into a rigid regulatory framework designed for the telephone oligopoly of the 1930s (last updated in 1996). Instead of privately managed networks, such regulations will vest control of traffic over broadband Internet with the FCC. This is misguided.

In our reading of Title II, the rules would effectively give the FCC power to dictate pricing, service levels and operations of broadband networks. Our members do not believe the FCC can do these things “efficiently” without imposing great harm in this space.

Private investment and calculated risks took the Internet from the halls of the Department of Defense to households and offices across the globe; innovators and investors transformed dial-up into the instantaneous networks most Americans use today. Keeping robust development alive will only occur in an environment where broadband providers can freely compete, innovate, invest and provide new services. Broadband providers have been highly incentivized to invest in infrastructure and services. Such an environment has produced breakthrough services for consumers at competitive prices. Such effects echo up and down the business chain; they mean faster and more innovative services for business owners at less of a cost.

For the small business and entrepreneurial sector of our economy, broadband access to the digital marketplace is vitally important. Beyond the tools and resources that help startups and established firms grow and compete, broadband enables small businesses to reach and connect with consumers from every corner of the country, if not the globe.

Regulating the broadband Internet under Title II will hurt small businesses and entrepreneurs by:

  • Roping-in small businesses under a complicated regulatory regime, burdening entire industries, and hurting the same consumers that “net neutrality” activists claim they are trying to protect. Additional regulatory layers could threaten the 6.3 million jobs supported by the Internet and related industries, and would shift business costs to all consumers.
  • Stifling innovation by subjecting entrepreneurs to prescriptive regulations. The Information Technology & Innovation Foundation found that the information and communications technology industry “contributed about $650 billion to the U.S. economy.” Mobile apps have generated hundreds of thousands of jobs, and nearly 90 percent of the “500 most popular mobile apps were developed by small businesses.”
  • Removing incentives for companies to invest in new high-speed networks and services. A light-touch regulatory framework has enabled billions in Internet infrastructure investment. More than $1.2 trillion has been invested in the U.S. since the mid-1990’s. According to the Progressive Policy Institute, telecom and cable companies invested more than $50 billion last year alone, second only to the energy industry. Small businesses within the supply chain directly benefit from these investments, as do entrepreneurs who innovate off the platform and who use broadband services and tools.
  • Empowering the government with vast, new authority over the Internet means more control of broadband access for small businesses, entrepreneurs, and consumers. Broadband access for the more than 99% percent of Americans who have access to at least one wireless Internet provider is at risk.
  • Title II regulation has traditionally required pre-approval from the government before companies can offer new services to consumers or set the pricing of their products. Applying these regulations to the broadband Internet will vastly slow the pace of innovation, which will limit choices in the marketplace and hurt entrepreneurship.
  • Allowing the FCC to pick and choose which elements of Title II to apply to Internet networks will cause great uncertainty among the broadband companies, consumers, and in the marketplace, which will lead to less investment and slower innovation.
  • Title II public-utility-style regulation wouldn’t ban so-called “fast lanes” on the Internet as the history of common carriage is full of examples of differentiated services that are legal under Title II.

The broadband market today is fundamentally different from the regulated telephone monopolies of the past. Because of the intense and dynamic competition online between ISPs, content creators, and Internet new entrants, consumers are getting more choices and benefits than ever before. Broadband Internet access has revolutionized the marketplace and equipped small businesses with tools to succeed. We need to maintain an environment where broadband providers can continue to compete, innovate and invest.

Small business wins under the continuation of a “light regulatory touch,” and the FCC should reject Title II regulation.

 

Sincerely,

Karen Kerrigan, President & CEO

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