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This article was published on May 8, 2014


    50 prominent VCs sign letter to the FCC in support of net neutrality

    50 prominent VCs sign letter to the FCC in support of net neutrality
    Josh Ong
    Story by

    Josh Ong

    Josh Ong is the US Editor at The Next Web. He previously worked as TNW's China Editor and LA Reporter. Follow him on Twitter or email him a Josh Ong is the US Editor at The Next Web. He previously worked as TNW's China Editor and LA Reporter. Follow him on Twitter or email him at [email protected].

    Following an outpouring of support for net neutrality from tech companies yesterday, 50 prominent venture capitalists have joined together to submit a letter to the FCC calling for a free and open internet.

    According to Union Square Ventures’ Nick Grossman, the letter came together over the course of 24 hours, so some VCs aren’t on the list yet because they haven’t been reached directly. The group plans to submit the letter tonight, so it will presumably add names throughout the day. Even in its current form, the list of signees is a virtual who’s who of investors with names like Sam Altman (Y Combinator), Ron Conway (SV Angel), Chris Dixon (Andreessen Horowitz), Naval Ravikant (AngelList) and Fred Wilson (Union Square Ventures).

    The FCC is currently working on a new proposal on internet openness after its 2010 rules were struck down in court. Recent reports have suggested that the FCC could erode net neutrality by allowing ISPs to charge content providers extra for preferred access on their networks.

    Here’s the letter in its entirety:

    Dear Chairman Wheeler:

    We write to express our support for a free and open Internet.

    We invest in entrepreneurs, investing our own funds and those of our investors (who are individuals, pension funds, endowments, and financial institutions).  We often invest at the earliest stages, when companies include just a handful of founders with largely unproven ideas. But, without lawyers, large teams or major revenues, these small startups have had the opportunity to experiment, adapt, and grow, thanks to equal access to the global market.  As a result, some of the startups we have invested in have managed to become among the most admired, successful, and influential companies in the world.

    We have made our investment decisions based on the certainty of a level playing field and of assurances against discrimination and access fees from Internet access providers. Indeed, our investment decisions in Internet companies are dependent upon the certainty of an equal-opportunity marketplace.

    Based on news reports and your own statements, we are worried that your proposed rules will not provide the necessary certainty that we need to make investment decisions and that these rules will stifle innovation in the Internet sector.

    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).

    Instead, creators will have to ask permission of an investor or corporate hierarchy before they can launch. Ideas will be vetted by committees and quirky passion projects will not get a chance. An individual in dorm room or a design studio will not be able to experiment out loud on the Internet. The result will be greater conformity, fewer surprises, and less innovation.

    Further, investors like us will be wary of investing in anything that access providers might consider part of their future product plans for fear they will use the same technical infrastructure to advantage their own services or use network management as an excuse to disadvantage competitive offerings.  Policing this will be almost impossible (even using a standard of “commercial reasonableness”) and access providers do not need to successfully disadvantage their competition; they just need to create a credible threat so that investors like us will be less inclined to back those companies.

    We need simple, strong, enforceable rules against discrimination and access fees, not merely against blocking.

    We encourage the Commission to consider all available jurisdictional tools at its disposal in ensuring a free and open Internet that rewards, not disadvantages, investment and entrepreneurship.

    Sincerely,

    Puneet Agarwal, True Ventures

    Sam Altman, Y Combinator

    Phineas Barnes, First Round Capital

    Phil Black, True Ventures

    Brady Bohrmann, Avalon Ventures

    Mike Brown, Jr., Bowery Capital

    Brad Burnham, Union Square Ventures

    Jeffrey Bussgang, Flybridge Capital Partners

    John Buttrick, Union Square Ventures

    Jon Callaghan, True Ventures

    Tony Conrad, True Ventures

    Ron Conway, SV Angel

    Chris Dixon, Andreessen Horowitz

    Bill Draper, Draper Richards

    Roger Ehrenberg, IA Ventures

    Brad Feld, Foundry Group

    Chris Fralic, First Round Capital

    David Frankel, Founder Collective

    Nick Grossman, Union Square Ventures

    Rick Heitzmann, FirstMark Capital

    Eric Hippeau, Lerer Ventures

    Rob Hutter, Learn Capital

    Mark Jacobsen, OATV

    Josh Kopelman, First Round Capital

    David Lee, SV Angel

    Kenneth Lerer, Lerer Ventures

    John Lilly, Greylock Partners

    Om Malik, True Ventures

    Jason Mendelson, Foundry Group

    Ann  Miura-Ko, Floodgate

    Howard Morgan, First Round Capital

    Tim O’Reilly, OATV

    Alexis Ohanian, Initialized Capital

    David Pakman, Venrock

    Eric Paley, Founder Collective

    Naval Ravikant, AngelList

    Neil Rimer, Index Ventures

    Bryce Roberts, OATV

    James Robinson, RRE Ventures

    Toni Schneider, True Ventures

    Christopher M. Schroeder, venture investor

    Jim Stewart, True Ventures

    Hunter Walk, Homebrew

    Andrew Weissman, Union Square Ventures

    Albert, Wenger, Union Square Ventures

    Boris Wertz, Version One Ventures

    Fred Wilson, Union Square Ventures

    Image credit: asharkyu / Shutterstock