Thursday, June 15, 2006

Killing Net Neutrality = Killing Internet Investment

Inspired by a comment at TechDirt, the following reflects -- with almost uncanny prescience -- what will happen to Internet investments should the telcos succeed in their efforts to neuter the FCC and kill net neutrality:

As providers of first-round funding to Internet startups, without the guarantee of net neutrality (NN), we believe our USD5MM to USD15MM investments could suffer. Now that the House has passed the HR5252 bill without language guaranteeing net neutrality, the risk on our present investments has increased. Given the timeframe on the Senate decision, we will make no further Internet startup investments until the decision-point. If the decision is against NN, then no longer will we fund Internet start ups. The lack of net neutrality shifts the build-out cost of (previously incentivized) high-speed networks to investors such as we. However, unlike the reasonably calculable costs of network build-out, the costs our startup investments may face can't be calculated for the foreseeable future. We do not require "free" broadband access, rather we require "neutral" access. Otherwise we just can't calculate the risks of investing in the Internet startup class.

For another glimpse into a future without net neutrality, there's always this.

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