GOP, tech industry mostly out of step over net neutrality issue

Sen. Ted Cruz said new Internet regulations could put a chill on innovation. Supporters of net neutrality say innovation would be stifled without the rules.
(Molly Riley / Associated Press)

The intensifying debate over how to keep the Internet open and ripe for innovation has heightened tensions between Republican congressional leaders and tech entrepreneurs they have been trying to woo.

As tech firms and cable companies prepare for a fight that each says will shape the future of the Internet, Silicon Valley executives and activists are growing increasingly irritated by the feeling that the GOP is not on their side.

Republican leaders have struggled to explain to their nascent allies in the Bay Area why they are working so hard to undermine a plan endorsed by the Obama administration to keep a level playing field in Internet innovation, enforcing what the administration and its allies call “net neutrality.”


Arguments from the GOP that the plan amounts to a government takeover of the Web — “Obamacare for the Internet,” as Sen. Ted Cruz (R-Texas) called it — are falling flat with many tech innovators.

“This is one of the most prominent moments in Internet freedom,” said Julie Samuels, executive director of Engine, a nonpartisan advocacy group that brings policymakers together with tech start-ups. “I don’t think any party can afford to be on the wrong side of this conversation.”

But Republicans, she said, are on the wrong side.

The Federal Communications Commission is expected to vote this month to adopt the net neutrality plan proposed last week by the panel’s chairman, Tom Wheeler. The plan would regulate Internet service providers, such as Comcast Corp. and AT&T Inc., as public utilities and would ban them from offering high-speed lanes to companies that pay more.

Republicans have promised to push legislation to overturn any such move, but most high-tech companies support it.

The fight comes at a time when Republicans had been making gains in Silicon Valley, a constituency of well-heeled donors and coveted millennial-generation voters who have generally been loyal to Democrats.

Prominent Republicans, including House Majority Leader Kevin McCarthy (R-Bakersfield), have taken members of Congress on listening tours of tech companies. Tech money has begun flowing into GOP campaign accounts. Presidential hopefuls, including Sen. Rand Paul (R-Ky.), have made an aggressive case that the GOP better understands the values of privacy and freedom in the digital world.


GOP leaders had hoped to build on those gains at an event in Washington called RebootCongress, which started Wednesday evening, where top Republican lawmakers plan to join Silicon Valley business leaders to discuss the future of the Internet.

Republicans have hoped to seize on recent Democratic policy moves that riled tech companies, including a push for strict anti-piracy rules and the Obama administration’s continued backing of National Security Agency surveillance of Internet users.

But the hot issue in Silicon Valley now is net neutrality. And on that issue, the GOP and the tech industry are mostly out of step.

Republicans argue that intervention by a big government agency is the wrong approach to leveling the playing field for companies that depend on the Internet. That’s especially true now, as conservatives accuse Obama of a broad pattern of regulatory overreach in healthcare, the environment and immigration.

“As is often the case in Washington, those who want more power create the specter of a false threat that is not occurring in the marketplace today,” Cruz said in an interview in which he warned that new regulations could lead to new taxes and put a chill on innovation. “The power of regulation is like a camel’s nose under the tent,” he said.

In Congress, GOP lawmakers are unified in opposition to the administration approach.

That includes tech-savvy California Republicans such as Rep. Darrell Issa (R-Vista), who warns that the administration approach “will result in over-regulation and years of fruitless litigation.” McCarthy joined his House leadership colleagues in warning regulators that imposing net neutrality rules would “deter investment and stifle one of the brightest spots in our economy.”

Many Internet entrepreneurs disagree.

“The argument is a red herring,” said Corynne McSherry, intellectual property director at the Electronic Frontier Foundation, which fights alongside GOP lawmakers on privacy and surveillance issues but is helping lead the attack against them on net neutrality.

“Nobody is talking about wanting the Federal Communications Commission to regulate the Internet. That would be terrible,” McSherry said. “All they would be doing is putting in rules of the road for broadband providers.”

Republicans, she said, are essentially helping big corporations squeeze out innovation. “Politically, this is a real mistake,” she said.

It is unclear to what extent the issue will overshadow other Silicon Valley priorities. But it is certainly making the GOP a tougher sell.

“It is close to a litmus test,” said Paul Sieminski, a Republican who is the general counsel to Automattic, the company that operates Web-making tool

“It’s such a fundamental issue for the Internet,” said Sieminski, who has been active in fighting for net neutrality. “I guess it is a proxy on where a candidate may stand on a lot of issues related to the Internet.”

The fight goes beyond wealthy entrepreneurs making or seeking their fortunes in start-up companies. Silicon Valley is adept at mobilizing consumers eager to protect what they see as a core value of the digital age.

The FCC received nearly 4 million comments on the net neutrality rules — most urging them to enforce stricter regulations — before Wheeler announced his proposal last week.

Groups such as Fight for the Future, whose donors include technology companies, said they have helped initiate tens of thousands of calls from their members to regulators and lawmakers using technology that bypasses switchboards.

Polls also showed overwhelming support for the concept that big carriers such as Verizon Communications Inc. and Comcast should not be allowed to charge more to companies that want a fast lane.

That may have propelled a shift among some Republicans, who once questioned the need for any new regulations.

Sen. John Thune (R-S.D.) is proposing a bill that would let Congress, rather than regulators, set the terms for net neutrality. In establishing the concept, however, the measure also would take away the FCC’s authority to make any new regulations in the fast-changing broadband marketplace.

Thune and others frame their disagreement with Obama and federal regulators as one over process, asserting that Congress would better protect openness on the Internet yet avoid burdensome regulations.

“I worry that online innovators will be subject to the Mother-may-I system in which startups have to hire regulatory lawyers before they hire engineers,” Thune said Wednesday night as the Reboot conference began at the U.S. Chamber of Commerce headquarters in Washington.

Silicon Valley activists are unimpressed. They don’t trust the GOP-controlled Congress on this issue.

“They’re cynical attempts,” Evan Greer, campaign manager for Fight for the Future, said of the legislative proposals, “last-ditch efforts by cable lobbyists who know they’ve been beat in the court of public opinion.”