Etsy CEO: We Couldn't Have Succeeded Under Proposed FCC Net Neutrality Rule Chad Dickerson called on the FCC to regulate the Internet as a utility, saying startups will be roadkill if fast lanes are allowed

By Peter Page

Etsy CEO Chad Dickerson has asked in official comments for the Federal Communication Commission to reclassify Internet service providers (ISPs) as utilities so the commission will have "authority to protect an open Internet once and for all.'' Dickerson bluntly urged the FCC to take the politically explosive move of reclassifying ISPs as "telecommunications services'' subject to tight regulation under Title II of the Telecommunications Act, originally enacted in 1934 to regulate telephone service.

Related: The Latest FCC Net Neutrality Rules Should Be Opposed

The reclassification is vehemently opposed by ISPs such as Verizon, which warned reclassification would "impose 1930s utility regulation on the Internet'' and "lead to years of legal and regulatory uncertainty and would jeopardize investment and innovation in broadband."

The ISPs' congressional allies urged FCC Chairman Tom Wheeler to "halt your consideration of any plan to impose antiquated regulation of the Internet'' in a letter sent before Wheeler unveiled the latest proposed rule. Wheeler said Title II reclassification was under consideration the following day when the rule proposal was released for public comment.

Etsy is the archetype Internet success story, launched in a Brooklyn apartment in 2005 by Dickerson and furniture maker Rob Kalin. The company now has offices globally and employs 500 people. In 2013, more than a million artists, designers and collectors, had cumulative gross sales of $1.35 billion.

Dickerson noted in his comments that 88 percent of Etsy sellers are women mostly working from home. Sellers have an average household income of $44,900 but about 25 percent of Etsy sellers make a scant $25,000 per year.

"These Internet-enabled entrepreneurs are building businesses on their own terms, prioritizing flexibility and independence over rapid growth, and using Etsy income to build resilience in the face of declining job security,'' Dickerson wrote.

With just days left until the July 15 FCC deadline for the initial round of comments, there is growing specificity from relatively smaller Internet businesses insisting on Title II reclassification. Mozilla, a coalition of online education companies, and the Electronic Frontier Foundation, long a skeptic of government regulation of the Internet, have already publicly supported Title II reclassification.

Google and Facebook were the corporate face of net neutrality advocacy for years leading up to the FCC's 2010 Open Internet Order but have been nearly silent in the current debate. Both were signatories to a letter urging the five FCC commissioners to "protect users and Internet companies on both fixed and mobile platforms against blocking, discrimination, and paid prioritization'' but did not recommend Title II reclassification.

Related: Net Neutrality, Explained

Dickerson's comments are notable for cogently analyzing in plain language both complex telecommunications law and how the economics of making a living on the Internet will shift under the current proposed rule that would allow "fast lanes'' that are "commercially reasonable'' but mandate a vague "adequate level of service'' for companies that can't afford a fast lane. Dickerson, drawing from the federal court decision in January that invalidated most, but not all, of the 2010 Open Internet Order, reasoned the FCC does have authority to make the slow lanes fast enough without reclassification probably would be overruled in the courts, also.

"If the proposed rules were in place when Etsy was founded, we would never have achieved the success we have today. Etsy and other startups will suffer if the FCC allows some companies to negotiate priority or exclusive access to consumers,'' Dickerson wrote.

The FCC has received more than 600,000 comments on the net neutrality rulemaking. The public can comment online until July 15 for the initial round. After July 15 the public can review commens and file replies until Sept. 15.

Related: WATCH: Comedian John Oliver Takes On FCC in Witty Net Neutrality Rant

Peter Page

Entrepreneur Staff

Senior Editor for Green Entrepreneur

Peter Page's journalism career began in the 1980s in the Emerald Triangle writing about the federally-funded Campaign Against Marijuana Planting. He now writes and edits for Green Entrepreneur.

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