Albert Wegner

Net neutrality: Why we need regulation

January 17, 2014: 1:57 PM ET

If the federal government won't protect us from the monopolies, then the states must.

By Albert Wenger

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FORTUNE -- We live in the Chelsea part of Manhattan, which in turn is part of New York City, one of the iconic cities of the U.S. and arguably the world. We have exactly one broadband provider available at our address. There is zero competition. Never mind an oligopoly or a duopoly. Broadband for us is a monopoly. And that's exactly why net neutrality matters, as much of the U.S. finds itself in a similar situation.

A competition based solution to net neutrality is simply not possible given the current market structure. If there were half a dozen or more options to choose from and broadband providers were competing along multiple dimensions -- including how neutral or not they are -- then maybe the market could take care of it. But that is not the world we actually live in. Which is not to say that we shouldn't work towards that world by making more unlicensed spectrum available and stringing/using municipal fiber. But as far as net neutrality is concerned in the here and now we need regulation.

RELATED: Why the man who coined the phrase 'net neutrality' feared Apple

If the federal government fails to do this, then cities and states should take the leadership.

Many of the providers have their current monopolies under some degree of local licensing. Wherever and whenever possible, such licensing should be revised to ensure net neutrality. A model in which bandwidth is paid for twice, once by the customer through their monthly fee and once by content providers, not only unreasonably enriches monopoly providers but will deeply entrench incumbent companies, as my partner Fred Wilson pointed out.

Beyond that we are on a super slippery slope where the next step would be outright filtering by broadband providers (as we are seeing in the UK). Once neutrality goes with regard to bandwidth there is really no reason why a site should be accessible at all!

As I wrote in one of my first posts of the year, keeping the Internet open will be one of the central issue of 2014. The court decision striking down the FCC's attempt to provide for broadband net neutrality should be a wake up call for everyone.

Albert Wenner (@albertwenger) is a partner with Union Square Ventures. This post originally appeared on his blog.

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