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VC Pitches in a Year or Two

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Re: VC Pitches in a Year or Two

#51

Post by wdewind »

nightpool wrote: post #36
Grue3 wrote: post #33

Earlier quoted context omitted.

Enterpreneur: I plan to launch an encyclopedia that people can edit, and it's better than Wikipedia VC: Well, since Wikimedia Foundation has already convinces telcos to provide their data for free ( http://wikimediafoundation.org/wiki/Mobile_partnerships ), we are passing. Now wait a goddamn minute. This doesn't make any sense. The alternative is even worse: no free access to Wikipedia. Is this what you're arguing fo…

The difference is Wikimedia doesn't pay for this benefit, the telcos are doing it because they support Wikimedia's mission. Any company with a similar mission and better execution has a chance of talking the telcos into a similar deal. The argument is that the paid types of mobile partnerships add another cost onto the already high barrier to entry into the market. This supports monopolistic practices by these compan…

But this still breaks net neutrality. You don't get to treat some traffic differently because it's served by a 501c3.

Re: VC Pitches in a Year or Two

#52

Post by exelius »

Most VCs would pass on these ideas regardless. They're all in mature, saturated markets. One of the signs of a mature, saturated market is that the incumbents have taken great lengths to create barriers to entry that are very high. This is a discouraging thing for VC investment because it increases the chances that a new entrant will fail.

Besides, you've had to pay for access for years. The big difference is that before, you had to go through a CDN like Level3 or Akamai. Part of what you paid them went to the ISPs to ensure fast connections. All this means is that the YouTubes of the world will begin to buy interconnects with the big ISPs. Small ISPs will likely just band together into a cartel and sell access that way.

Yeah, there will be a fast lane and a slow lane, but the advent of CDNs in the early 2000s already created that anyway. The data caps are disappointing, but not really unexpected if you look at the mobile market. We're reaching the point where in many major cities, there is no media consumption that requires a much faster connection than is already available. So why will consumers pay for more speed when their existing 50mbps cable modem is enough to stream 4k video from Netflix? Those speeds ARE possible today if you buy carriage through a CDN like Akamai (and I regularly get those speeds from Steam downloads) and the fact that Netflix hasn't is really more of an implication of their business model.

The most recent ruling really changes nothing, because net neutrality has been dead for 10 years anyway. While everyone on the internet was complaining about it, the business side moved on and built a few billion dollar companies around it. Capitalism at its finest.

Re: VC Pitches in a Year or Two

#53

Post by rayiner »

legutierr wrote: post #32

I think the pertinent question now is whether the FCC rewrites its rules to classify ISPs as common carriers. It seems to me, given the local monopoly or duopoly that the vast majority of ISPs enjoy, that this is an obvious move. But I have heard it barely discussed, which is distressing.

It's not an obvious move. Being classified as a common carrier carries a ton of baggage. The common carrier regulations are very much 1970's-style oppressive regulation, complete with extra taxes for providing service to rural subscribers, regulatory oversight of every business decision, etc. The FCC didn't want to impose that burden on ISPs in 1996, and they don't want to do it now.

As an aside, it's amusing to me how people trumpet common carrier status here on HN while also complaining how U.S. providers lag the rest of the world in speed and prices. Imposing the common carrier regime on ISPs won't make that situation better, it will make it worse. Look at Google's approach to building out gigabit: focus on urban areas where the density lets you hit more subscribers per mile of fiber. That's exactly what you can't do if you're classified together with the phone companies and are forced to spread capital expenditures thin over the vast swaths of rural America.

The current situation isn't ideal, but I think it's myopic to advocate treating telecom networks as regulated public infrastructure. I don't know if you have noticed, but public infrastructure in the U.S. sucks. One of the reasons it sucks is that we have a huge, spread-out country and gerrymandering that weighs rural votes about 2x as high as urban votes. We can't have nice high speed rail along the northeast corridor because politics mandates that Amtrak also has to support money-losing lines through rural Pennsylvania. Do you really want to bring the weight of all this ridiculousness down on the internet?

Re: VC Pitches in a Year or Two

#54

Post by BrownBuffalo »

What's interesting are the comments below the post about Net Noot. The problem really comes less about the fact that traffic shaping may not occur, but there are no safe guards if someone attempts to do so. In smaller markets, its more and more sounding like a small cottage industry will start because of the lack of existing laws to protect the consumer. The larger markets will have power in numbers, but mom-pop towns like Marion, AL with only a small regionarl carrier - not so much. Problematic and there is SOME truth to this in scale of economy.

Re: VC Pitches in a Year or Two

#55

Post by drb311 »

zxcvvcxz wrote: post #16

Not the point of the article, but is anyone else annoyed by these "entrepreneur-sounding" ideas? I'm so sick of low-tech, solve-first-world-problem ideas and conflating that with entrepreneurship. If I were the VC, I'd tell them to get the fuck out, and it'd have nothing to do with Telcos.

Yes! My first thought was that if abolishing net neutrality forces entrepreneurs to develop less trivial ideas then it might not be such a bad thing.

Thanks Fred for explaining why the examples are so bad! And it's reassuring that even VCs don't have great ideas popping into their heads every time.

Re: VC Pitches in a Year or Two

#56

Post by cwp »

Grue3 wrote: post #33
r0h1n wrote: post #10

This is already reality in some countries. Like India for instance. 1st Indian entrepreneur: I plan to launch a search engine that understands Indian languages and contexts better than Google. VC: Well since Google has already paid telcos like Airtel ( http://www.airtel.in/free-zone/ ) so their searches and even some results don't use up any of the data plan, we are passing. 2nd Indian entrepreneur: I have an idea fo…

Enterpreneur: I plan to launch an encyclopedia that people can edit, and it's better than Wikipedia VC: Well, since Wikimedia Foundation has already convinces telcos to provide their data for free ( http://wikimediafoundation.org/wiki/Mobile_partnerships ), we are passing. Now wait a goddamn minute. This doesn't make any sense. The alternative is even worse: no free access to Wikipedia. Is this what you're arguing fo…

Yes. I'd rather have "better than Wikipedia" than "Wikipedia for free."

If browsing Wikipedia is too expensive, let's work on lowering data rates for all content, rather than giving Wikipedia special privileges.

Re: VC Pitches in a Year or Two

#57

Post by anovikov »

Scary thing, this is same thing that created Rockfeller-era monopolies: they had right and did pay railways to create preferences (price-wise and otherwise) for their traffic, literally derailing competition. Internet is the bloodline of the post-industrial economy just like railways were of industrial one. That is much worse than most of you think.

Re: VC Pitches in a Year or Two

#58

Post by crgt »

A friend of mine was part of the team that made the decision for UHC to participate in AT&T's new sponsored data program. When I found this out, I tried to point out the broader implications of a shift towards pay-to-play, but had trouble getting past the narrow vision of "but we just want to get our content out to people that can't pay for mobile bandwidth". Just wanted to say thanks for this article for demonstrating what some of the implications are of a shift to a pay-to-play model. Non-techies really seem to struggle to get their heads around what happens to the entire ecosystem if net neutrality dies, and articles like this are helpful for making the consequences clearer.

Re: VC Pitches in a Year or Two

#59

Post by dragonwriter »

wdewind wrote: post #49
dragonwriter wrote: post #44

Earlier quoted context omitted.

> AFAICT (and please correct me if I'm wrong), the ruling actually disallows the FCC from regulating in anyway at all, including classifying ISPs as common carriers. AFAICT, you're wrong. In fact, the dispute between the majority and the dissent in the ruling is that the majority not only accepted that the FCC can regulate broadband providers, but allowed some of the regulation in the Open Internet Order at issue (ju…

I haven't read the decision, just secondary sources, so I am probably incorrect. The reply above yours linked to: http://recode.net/2014/01/15/whats-net-neutrality-what-happe... Which seems to do a good job explaining it. Specifically this bit: > It’s those rules [the Open Internet rules] that Verizon is saying the FCC had no legal authority to enact. The reason that Verizon was successful was because of the basic in…

> My original comment was incorrect: I meant they can either not regulate or classify ISPs as common carriers and then regulate.

That's true of the non-blocking and non-discrimination rules in the Open Internet Order, which were ruled to be equivalent to common carrier rules and thereby foreclosed so long as the FCC designated ISPs as "information services" (which cannot be treated as common carriers under the Telecommunications Act) and not "telecommunication services" (which are common carriers under the Act.)

The FCC, under the ruling, still has power to regulate broadband ISPs in other ways, and the provisions in the Open Internet Order that were not found to be equivalent to common carrier requirements (and thus incompatible with the FCC designation of ISPs as "information services") were allowed to stand.

Re: VC Pitches in a Year or Two

#60

Post by avemuri »

r0h1n wrote: post #10

This is already reality in some countries. Like India for instance. 1st Indian entrepreneur: I plan to launch a search engine that understands Indian languages and contexts better than Google. VC: Well since Google has already paid telcos like Airtel ( http://www.airtel.in/free-zone/ ) so their searches and even some results don't use up any of the data plan, we are passing. 2nd Indian entrepreneur: I have an idea fo…

In all fairness, these are tactics to get people with no data plan to start using these services. Data is ridiculously cheap (1GB/month is ~ $4). People with data plans don't really care about google or facebook's data usage. Youtube and streaming music services are a big deal though. So yeah, the incumbents have a bigger addressable market in India, but data consumption is not the differentiator for the vast majority of apps.
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