Net neutrality repeal would jeopardize city tech industry, experts say

The city’s tech industry is at risk if the FCC goes forward with a planned repeal of net neutrality, according to experts.

The progress made in the development and expansion of a sector that has grown 30 percent since 2006 and supports some 326,000 local jobs, according to a recent report by HRA Advisors, stands to be rolled back if startups face internet service providers (ISPs) demanding higher costs for hosting their websites and for faster speeds and bandwidth caps for users.

“They don’t have the money that [ISPs] will demand,” Nicholas Economides, a professor of economics at the NYU Stern School of Business said. “Killing net neutrality automatically puts them at a disadvantage.”

The economic burden of preserving the industry’s upward momentum could fall onto everyday New Yorkers, according to Dana Spiegel, executive director and founder of the startup incubator FounderTherapy in lower Manhattan.

“It will cause a significantly higher cost of business. That will lead to higher prices or worse a reduction of funds available for jobs,” he said.

Economides, who has written several reports on net neutrality over the years, said the battle over net neutrality has been a long time coming as ISPs generally allowed the internet to be free of any major restrictions since the early ’90s.

Over the past decade, they began to attack the concept of a free and open internet by pursuing policies such as speed throttling, bandwidth caps and specialized access to certain services.

The FCC enacted a strict set of net neutrality regulations in 2015 that blocked those practices.

But last month, Commissioner Ajit Pai, who has been openly critical of net neutrality protections due to his contention that they hamper innovation, said the agency will vote to roll back the protections on Dec. 14.

The agency didn’t return messages for comment.

Representatives for the city’s major ISPs — Verizon, Altice and Spectrum — all released statements expressing their support for overturning net neutrality, arguing that in addition to restricting innovation, the regulations hamper customer performance.

They all stated they have no plans to change the way they provide web access.

Altice owns one quarter of Newsday Media Group, amNewYork’s parent company.

Several of the city’s larger firms, like Squarespace, Foursquare and Vimeo, expressed a lack of trust in those promises. They joined other companies from around the country to express their concerns about an increased amount of roadblocks in a Cyber Monday letter to Pai.

“It’s important that we continue to keep the internet an even playing field so that businesses can continue to innovate at any scale without worrying about what carrier is best for which websites or services,” Anthony Casalena, Squarespace’s founder and CEO, said in a statement to amNewYork.

Economides predicted that legal challenges will prohibit the FCC’s repeal from taking instantaneous effect.

New York Attorney General Eric Schneiderman is currently investigating phony comments posted in support of the repeal on the FCC website and said the agency hasn’t been cooperating with the case.

He is scheduled to hold an event Monday calling on the agency to work with his office.

Both Mayor Bill de Blasio and Gov. Andrew Cuomo have called on the FCC to keep the regulations.

Miguel Gamiño, the city’s chief technology officer, said the city would also seek ways to protect New Yorkers and businesses.

“We’re investigating the legal authority to backstop those plans,” he said.

Some in the tech community doubt the city or state can do much to fight the changes. 

Spiegel noted Pai’s plan prohibits states and local counties from making their own rules. Ultimately, he said, New Yorkers and other Americans who object to the changes need to speak out to their congressional representatives.