A group of self-proclaimed Internet "elders," including early pioneers of voice-over-IP services and proponents of Internet freedoms, is now warning that the FCC's move to impose Title II regulations on the Internet will have toxic effects on investment and innovation.
The warnings were issued on a conference call arranged by Daniel Berninger, known primarily for his early work in VoIP, including as part of VocalTec Communications, and that also included Jeff Pulver, VoIP pioneer with Free World Dialup and later Pulver.com ; John Perry Barlow, who founded the Electronic Frontier Foundation and is still on its board; George Gilder, economist and author of Telecosm; and Bryan Martin, chairman of 8x8 Inc. (Nasdaq: EGHT), a VoIP provider.
One over-arching goal of the teleconference was to lay to rest the notion that the technology industry universally backs what the Federal Communications Commission (FCC) has done, Berninger noted. While there is general support for net neutrality, imposing Title II regulations is not the answer, he said.
"The US represents 70% to 80% of the [global] information technology economy -- why would you reverse your strategy that got us to this point?" Berninger said.
Gilder was probably the most agitated of the group in decrying the FCC move. He recalled the telecom crash of 2000, and said another crash could result from the new rules.
"We've had 15 years of marvelous success, just stunning success on the Internet [since then]," Gilder said. "Our seven top technology companies are all related to the Internet. The US has four times the investment in fixed broadband than Europe, with its government intervention, and twice the investment in wireless. Most of Internet traffic in the world flows through the US. What on earth is wrong that the FCC thinks it has to reduce it to a public utility?"
Both Martin and Pulver related their experiences trying to be VoIP innovators in a Title II regime, when their efforts drew negative attention from regulators in the days before the FCC under Michael Powell adopted Internet freedom rules.
Martin said 8X8 was barely off the ground when it received threatening letters from the California state attorney general warning the company it needed to register as a competitive local exchange carrier in order to offer voice over the Internet. Calling Title II regulations "the nuclear option," Martin said he expects the new rules to be overturned in court, but only after the industry has suffered a couple of years of regulatory uncertainty and spent a fortune on lawyers. Instead of an FCC ruling, the industry needs action by Congress.
"I am very concerned that in the era of the Title II Internet, we will see many fewer communication innovators come forward because of regulatory uncertainty," added Pulver. Innovators are less likely to act if they think they have to get permission from the FCC, he said.
Barlow called the FCC's actions "singular arrogance" in that a US agency is trying to regulate a global force. Stressing that he speaks for himself and not the EFF, he said the issue in the US is the monopoly/duopoly of Internet access, and that is a problem the FCC cannot solve.
The group, in general, was a bit derisive in discussing Silicon Valley's support for the new rules. Gilder and Barlow said many of the companies there are afraid of the FCC and not willing to speak up and take on the government directly.
"There is limited willingness to believe that Title II is the best answer to this problem," Barlow said.
Martin believes that those who haven't previously lived through the government regulation that Title II will bring don't understand what it might mean for them.
"There's been a bubble over Silicon Valley protecting them from the FCC and it's been called the information services category," Berninger said. They have been able to ignore the FCC to this point but that will change now.
— Carol Wilson, Editor-at-Large, Light Reading