Guest commentary: Regulators threaten startups and an open internet

For several years, Kansas City has been at the forefront of a movement in the Midwest. The region was an early leader of the Silicon Prairie, showing firsthand that a thriving startup ecosystem is not the exclusive purview of the coasts. But federal regulators are about to hurt the open internet and put this growth at risk.

Last October, we launched Techstars Kansas City, a business accelerator modeled off of similar Techstars programs around the country. This initiative will invest millions into 10 companies each year and build on a long history of Techstars involvement in the Kansas City startup community dating back to 2013. Back then, my co-founder Brad Feld purchased a house for entrepreneurs in the Startup Village and has since backed hundreds of successful startups.

These startups’ successes are dependent on an open internet. The rise of digital technologies has eroded boundaries: Anyone can participate, start a business and reach a global audience. Thanks to the way the internet was designed, it’s one of the most open, competitive markets we’ve ever known. Consumers can reach any site they want, without interference from the big telecom and wireless companies that provide access to the internet. This is often called “net neutrality.”

But many of the incumbent internet access providers have long wanted to change the way the internet works. For instance, cable companies have been caught blocking video applications and choking off bandwidth to services such as Netflix. Some have already said that they want to create new pay-to-play “fast lanes,” effectively favoring big companies over new competition.

This sort of behavior has been kept in check because of net neutrality rules enforced by the Federal Communications Commission, but new FCC Chairman Ajit Pai plans to do away with the existing legal protections. Without net neutrality, the incumbents who provide access to the internet would be able to pick winners or losers in the market. They could impede traffic from startups’ services in order to favor their own services or established competitors. They could also impose new fees on startups, inhibiting consumer choice.

Pai has said this step is necessary to drive more investment in broadband networks, but we’ve seen firsthand in Kansas City what really drives faster internet speeds and lower prices: competition. More competition with the incumbent cable and wireless companies drives a race to the top, where everyone has to improve their service to satisfy customers. Thanks to new competition in internet access from players like Google Fiber, today Kansas City has some of the highest internet speeds in the whole country.

Rules designed to ensure competition ensure that innovators with new ideas can challenge incumbents on a level playing field. In fact, if net neutrality rules go away, then internet access providers might have a disincentive to invest in new networks with faster speeds; after all, the way to get big companies to pay for a “fast lane” is to make the “slow lane” everyone else is in miserable.

If Pai is serious about supporting entrepreneurship and innovation, we hope he’ll back away from his plan to undermine net neutrality. We worked with over 1,000 startups from all over the country to send him a letter opposing his plan. Many others from Kansas City added their voices, including the Kansas City Startup Foundation; Dayreel, an app that makes scheduling appointments easier; and Leka, a startup that moved to Kansas City as it built an interactive robot designed for children with special needs, such as autism and other developmental disabilities.

It’s not too late to stop Pai’s plan, and we hope that you and everyone in Kansas City will join our call to protect an open internet.

This story was originally published May 14, 2017 at 8:30 PM with the headline "Guest commentary: Regulators threaten startups and an open internet."