Without Net Neutrality, Pittsburgh Startups Might Not Ever Start Up

Sep 11, 2017

In the spacious corridor of a trendy co-working space on Pittsburgh’s North Side, Michael Shenck runs through a list of all the ways his real estate startup, Ikos, uses the internet each day.

“We are collecting a lot of market data to help better inform investors and all of that communication is over the internet, and also how we coordinate with insiders, our gig economy workforce,” Shenck explained. “It’s pretty critical to the flow of our workforce.”

Ikos is a year-old business that connects landlords and renters, first virtually and then in-person. Without a fast website to facilitate that communication, Shenck, who is the vice president of engineering, said his company couldn’t operate.

He said tech startups like his rely on the concept of net neutrality in order to succeed. Net neutrality is the idea that all web pages are treated equally and that internet service providers like Comcast and Verizon can’t charge for certain websites to load faster and can’t throttle, or slow down, other sites.

Right now, Congress and the Federal Communications Commission are debating how to classify the internet. In 2015, the Obama administration designated it as a Title II public utility. That means the FCC has regulatory authority and ensures that ISPs can’t favor some websites over others.

Jon Peha, Carnegie Mellon University engineering and public policy professor, used to be the chief technologist for the FCC and said changing the industry would give ISPs a lot of power.

“If they wanted to block Facebook, they could. Or, if they wanted to say, ‘Oh, it’s $5 a month extra if you decide to use Facebook,’ [they] could if there were no net neutrality policies,” Peha said.

Peha said it’s unlikely that major social networking sites would bear the brunt of negative impacts because they can afford to pay for priority service. 

Brian Dietz, spokesperson with the National Cable and Telecommunications Association, which represents ISPs and television networks, said Title II is the wrong classification for the internet.

“It was designed for the telephone era of the 1930s and has nothing to do with the internet,” Dietz said. “There is a raging debate about what is the best way to ensure net neutrality principles can be enforced and finalized in statute.”

FCC Chairman Ajit Pai pictured in 2015 when he was a commissioner. Pai says he's in favor of revoking the internet's Title II telecommunications designation and giving ISPs more flexibility and less regulation.
Credit Pablo Martinez Monsivais / AP

Dietz said he’d like to see the internet removed from Title II classification. He said companies he represents have been clear about their stance on net neutrality.

“We have no interest in blocking, throttling or interfering with consumer’s traffic because that would disrupt the experience and then we would never hear the end of it,” Dietz said. “We’ve taken out full-page ads in the newspapers, we’ve shouted it from the rooftops.”

But many net neutrality advocates are wary of the ISPs public voice on the issue. They point to incidents that indicate ISPs would prioritize their services and slow down competitor traffic, specifically in 2007 when Comcast throttled service to the file-sharing website, BitTorrent. Backers of net neutrality pushed for the Title II designation, providing strong FCC oversight to the ISPs. 

Too much regulation, Dietz argued, is hurting the broadband industry, which is troubling at a time when people are becoming more reliant on the web.

“The amount of investment in broadband networks has declined since the FCC did impose the Title II public utility regulation,” Dietz said. “So the real problem is that heavy regulation leads more companies to be more cautious about investing.”

Instead, he said to ensure net neutrality is upheld, he’d like Congress to pass a law that better defines the FCC’s role and gives ISPs more flexibility.

Peha said he sees Dietz's point of view. Because FCC rules tend to change depending on which party is in power, it creates uncertainty for the industry. He’s an advocate for a compromise solution that includes cementing net neutrality as a law rather than tying it to the Title II designation.

Michael Sorg stands in the new storefront for Sorgatron Media in Pittsburgh's Beechview neighborhood on Monday, Aug. 14, 2017. Sorg says without net neutrality, he wouldn't be able to compete with major media organizations to deliver the content he produces because it'd be too expensive.
Credit Katie Blackley / 90.5 WESA

But Michael Sorg, founder of Sorgatron Media in Beechview, said he doesn’t have a lot of confidence that ISPs will responsibly regulate themselves. He said companies have to make money for their investors, which could mean incentivizing fast lanes and charging more for priority web speeds.

“That’s their job. They’re going to try to do that every way they possibly legally can,” Sorg said. “So you take the reins off them completely and what do you think they’re going to do? They’re going to do whatever is in their best interests.”

Shenck said he’s concerned that small and new businesses like his could be left behind because they don’t have the budgets to pay for fast access.

“Most people think: we’re a small company, how could this dramatically affect us?” Shenck said. “But the smaller you are, the more affected you are.”

For example, if Comcast owned a separate real estate web service that competed with Shenck’s Ikos, they could slow down service to Ikos. It hasn’t happened yet, but it could without net neutrality laws.

Equitable access is what allows new companies to exist, Shenck said, and without it, Pittsburgh’s tech scene wouldn’t succeed.