Pro-Net Neutrality Payment Companies Rely on FCC Chair's Strong Stance

The head of the Federal Communications Commission is pushing hard against charging fees for faster Internet access, a stance that's a relief to businesses like Dwolla that use the Internet to develop and deliver payment services.

"The Internet is our network," said Jordan Lampe, director of communications for Dwolla. "It's the way we connect and send data and the way we connect financial institutions to their users."

FCC Chair Tom Wheeler this week urged net neutrality in an oped in Wired.  Wheeler is calling on the FCC to regulate broadband as a common carrier under Title II of the Communications Act. That means the FCC would be able to stop Internet Service Providers from charging higher rates for "better or faster" service.

The FCC will vote on Wheeler's plan this month. Wheeler is also arguing the FCC should have authority over gateways between ISPs and the rest of the Internet, along with broader power to investigate claims of unfair connection practices.

President Obama separately urged the FCC to protect net neutrality, and said Internet providers should not be able to act as "gatekeepers" by charging fees. "For most Americans, the Internet is an essential part of communication," Obama said. The President cannot regulate the Internet unilaterally, but can apply political pressure on the FCC and Wheeler, an Obama appointee.

Once the FCC issues its final rule, opponents may appeal or sue. In the past, such responses have derailed the FCC's attempts to regulate the Internet.

"There is still a lot of work to do," Lampe said, noting there would likely be further Congressional legislation or government action on telecommunications and the Internet.

Wheeler's strong stance was a surprise, since he was reportedly considering other approaches to Title II-level oversight.  Net neutrality advocates had complained when Obama appointed Wheeler, who in the past has worked as a lobbyist for cable and wireless companies.

"Our network relies on a community, a set of people," Lampe said. "If these people had one more contract to look at to build e-commerce, that's one more potential business partner that is off the table."

Net neutrality's opponents include Congressional Republicans such as Sen. Ted Cruz (R, Texas), who contends the FCC is overreaching. Also, the Information Technology and Innovation Foundation, a non-partisan technology public policy think tank, released a statement saying Wheeler's proposal was an "overblown" response to hypothetical concern.

For relatively smaller companies, including the e-commerce payment API startups that have become common over the past couple of years, an  assurance of net neutrality provides a low-cost environment to develop, share and deliver their technology.

"[Net neutrality] is the way we are able to distribute innovation without it being messed with or taken advantage of or singled out by a third party," Lampe said.

Other payment technology companies, such as Stripe, have advocated for net neutrality. Other larger payment companies that work with developers such as Amazon, eBay and PayPal also support net neutrality in part through membership in the Internet Association, a lobbying group that this week put out a statement in support of Wheeler's stance.

"Most payment innovation over the past few years has come from smaller companies that use tools that require mobile connectivity," said Gil Luria, an analyst at Wedbush Securities. "If access providers start charging for access it could curtail innovation."