Engine Files in Net Neutrality Repeal Challenge

This week, Engine joined the chorus of voices challenging the Federal Communications Commission’s 2017 decision to repeal its 2015 net neutrality rules, which were critical to U.S. startups. The brief was drafted by Chris Bavitz and the Harvard University Cyberlaw Clinic.

Prior to the repeal late last year, the FCC’s rules prevented Internet Service Providers (ISPs) from blocking or slowing access to content online and from charging websites and other online services for better access to users. These net neutrality protections kept the Internet a level playing field, where a small, young company didn’t have to worry about outbidding large incumbents for better access to users.

As we said in comments to the FCC last year, the companies that make up the thriving U.S. startup ecosystem—and the investors that have supported them—have long relied on federal net neutrality protections, dating back to the FCC’s first foray into net neutrality over a decade ago. We specifically cited data provided by several prominent venture capitalists who collectively invested $24 billion in startups since the FCC’s first formal net neutrality rules in 2010.

“We have made our investment decisions based on the certainty of a level playing field and assurances against discrimination and access fees from Internet access providers, including through the rules established in the FCC’s 2015 Open Internet Order and the Commission’s long-standing actions undertaken to protect the open Internet,” the investors wrote. “Indeed, our investment decisions in Internet companies are dependent upon the certainty of an equal-opportunity marketplace, and the low barriers to entry that have existed on the Internet.”

But in its decision to repeal the 2015 net neutrality rules, the FCC ignored the evidence that the startup ecosystem has relied on strong net neutrality protections. In the brief filed in federal court this week, we argued that the agency failed to fulfill its responsibility to adequately consider the economic impact the repeal of the 2015 net neutrality rules will have on startups and their investors.

And, as we explain in the brief, the “protections” put in place by the FCC’s repeal of the 2015 rules are insufficient to protect the new and small companies that make up the startup ecosystem. Specifically, the FCC replaced the bright line “ex ante” rules that prevented ISPs from harming startups with protections that theoretically allow startups to engage in the expensive and time consuming process of challenging ISP behavior after harm has already occurred. The agency “relied upon tortured and nonsensical policy rationales to reach its conclusions that ex ante rules against blocking and paid prioritization are unnecessary to prevent ISPs from undermining the openness of the Internet ecosystem,” we wrote.

As the case against the 2017 net neutrality repeal heads to court, it’s crucial that the judges and policymakers hear from the startups that are most vulnerable.

Engine would like to thank Chris Bavitz and Christina Chen from Harvard University's Cyberlaw Clinic for their help on the brief.