The Internet Distinction

(Original commentary archived at Washington Speakers and on The Internet Distinction.)

“Twenty years ago, no one was thinking that the Internet would be used to share small numbers of cars among large numbers of people. I don’t know what brilliant and unexpected uses the Internet will enable tomorrow. No one does. That’s why we need to make sure that the fundamental characteristic of the Internet — its ability to accommodate, adapt and evolve — remains as open as possible.”

By Robin Chase

March 3 (Bloomberg) — Eleven years ago, I co-founded a company called Zipcar Inc. While there were many things we had to get right in order to make renting a car as simple as getting cash from an ATM, free and open access to the Internet was central to our success.

It’s thanks to the Internet that Zipcar members can effortlessly locate a car near them, make a reservation based on real-time availability for a specific car in a specific location, and then unlock the right car at the right time at the right location. It’s only because of the ease, speed and zero marginal cost of this transaction that anyone in their right mind would be willing to rent a car for an hour, or to sell only an hour of a car’s time.

Without the Internet (and wireless data transmission), Zipcar could not have become a mainstream service. It would not exist.

Incredibly, this fundamental asset is in serious jeopardy in America, putting at risk our ability to innovate and to compete. The U.S. House of Representatives is trying to block the Federal Communications Commission from implementing a network neutrality order it issued in December.

If the House action is successful, it will put small entrepreneurs at a disadvantage because we can’t pay the tolls for faster speeds and quality of service that the big guys can, and it may help them create groups of users that we can’t access at all. How could we compete?

Discriminate Against Data

Net neutrality polemics turn on the ability of telecommunications providers to be able to discriminate against some data flowing over the network: to charge more for better service for some and to block or degrade service for others. Like any startup, there was no way Zipcar could afford or gamble on premium anything.

A hallmark of an open Internet is the ability to create your own experience on the Web, without needing the permission of your Internet provider. For example, if Zipcar had been forced to rely on the auto industry’s definitions of car ownership — or worse yet, to ask their permission — our vision of a fleet of personal cars being shared among unconnected individuals would never have made the cut.

Likewise, we cannot rely on the telecommunications industry to define the Internet. The industry would almost certainly define it as their new preferred “triple play” — their telephone service, their movie service, and access to their idea of your ideal Internet experience. We need government intervention to ensure that the Internet remains its evolving and flexible and accessible self. Without it, startups with crazy and novel ideas might not be able to even reach consumers to try their wares.

The telcos can’t be expected to think outside their boxes. When we first approached them for a data plan back in 2000, we were met with blank, nonresponsive stares.

Despite the paltry amounts of data that were being sent to and from our cars, the telcos only had one vision of wireless use and therefore one data product to sell. We were either a cellphone or we didn’t exist.

Hobbled Excuse

So for the first three years of Zipcar’s experience, we used their hobbled excuse for a data network while they slowly figured out that there might be another market out there for their wireless highway.

Lacking a data plan, the telco was setting the pricing rules, and these rules didn’t include or imagine the type of service we wanted to offer. Likewise, any new packaged bundles of services, and the pricing plans they might now think up, are quite likely to exclude novel services that don’t fit their needs or match with the ideas of innovators.

Twenty years ago, no one was thinking that the Internet would be used to share small numbers of cars among large numbers of people. I don’t know what brilliant and unexpected uses the Internet will enable tomorrow. No one does. That’s why we need to make sure that the fundamental characteristic of the Internet — its ability to accommodate, adapt and evolve — remains as open as possible.

Most innovation and economic growth over the past 15 years has come from companies wholly reliant on the Internet or wireless data transmission. It’s worth noting that the root cause of Wi-Fi’s success was the basic FCC ruling that enabled unlicensed (i.e. free) use of certain bands and let market forces decide which were the technology winners.

The number of Wi-Fi chipsets will pass 1 billion units shipped annually by 2012. In the three short years since Apple and then Android smart phones have come online, more than 500,000 applications have been built on these newly opened devices, resulting in a $5 billion marketplace.

Our country thrives on its ability to innovate. And unfettered access to a free and open internet is a critical part of our toolkit. Protecting the Internet by defining it as broadly as possible, and letting the FCC protect it from oligopoly interests, is in America’s best interest.

Robin Chase is a founder and former CEO of Zipcar Inc. and an entrepreneur. She’s a member of the National Advisory Committee for Innovation and Entrepreneurship for the U.S. secretary of commerce.