Startups worry that Rand Paul will crush net neutrality rules

Kentucky Sen. Rand Paul visits with supporters during an event in Grand Rapids, Mich., this week. He will be in San Francisco on Saturday for a tech gathering and to open a campaign office. Kentucky Sen. Rand Paul visits with supporters during an event in Grand Rapids, Mich., this week. He will be in San Francisco on Saturday for a tech gathering and to open a campaign office. Photo: Emily Rose Bennett / Associated Press Photo: Emily Rose Bennett / Associated Press Image 1 of / 1 Caption Close Startups worry that Rand Paul will crush net neutrality rules 1 / 1 Back to Gallery

Rand Paul has been trying to position himself as Silicon Valley’s best protector in the field of 2016 Republican White House hopefuls. But as the libertarian-leaning Kentucky senator heads to San Francisco Saturday to headline a tech gathering, some entrepreneurs and investors are scratching their heads over where he stands on one of the tech world’s core beliefs: That the Internet should be equally accessible to companies of all sizes.

Last week, Paul introduced a resolution urging the Senate to repeal the Federal Communications Commission’s recent reclassification of broadband as a utility under Title II of the Telecommunications Act, giving the commission authority to referee the Internet’s open playing field.

The FCC’s new rules codify the principle of net neutrality — a wonky concept that became an urgent economic and political issue last year when a federal appeals court struck down FCC rules barring service providers from discriminating against individual websites. Soon after, Netflix accused Internet service providers of slowing access to its streaming video service, leading the Los Gatos company to cut deals to guarantee that its movies and TV shows would reach viewers quickly.

Fearing pay-for-speed deals would become the norm, tech firms large and small urged regulators to take action.

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But Paul said the new rules that forbid Internet service providers, including Comcast, Verizon and AT&T, from charging for access to an online fast lane would “do nothing more than wrap the Internet in red tape.”

“The Internet has successfully flourished without the heavy hand of government interference,” Paul said. “Stated simply, I do not want to see the government regulating the Internet.”

Paul’s move confused entrepreneurs like Kieran Farr, the founder of Vidcaster, a 5-year-old San Francisco video service startup. If a service provider charged his company for faster online service, he said, “We would have to increase our fees to our customers,” unlike a larger company that might be able to absorb the cost of paying for its content to travel faster online.

Farr said the Senate resolution sounded strange coming from Paul “because the general libertarian stance is attractive to a lot of business owners here.”

“But it seems like he’s doing this weird acrobatic move to try to court the Republican Party. But that alienates tech,” he said.

Brad Burnham, managing partner at venture capital firm Union Square Ventures, was also confused. Burnham, whose firm was an early investor in Twitter, Tumblr and Etsy, said that because many tech entrepreneurs and investors want government to stay out of their business, Paul’s “general message about small government and open markets is pretty well received. But this particular example about net neutrality — I really don’t know what he’s thinking here.”

“The frustrating thing is that Rand Paul seems to be using the same language as the telecommunications companies when he’s talking about 'wrapping red tape around the Internet,’” Burnham said. “But the FCC isn’t going to be regulating the Internet. It’s going to be preserving it the way it is.”

Politically, in Silicon Valley that puts Paul “on the wrong side of the street on this issue,” said Corynne McSherry, legal director at the Electronic Frontier Foundation. “He is staking out a position that is very different from what many in the tech community think that we need from government.”

Paul will be in San Francisco to headline a forum titled “Disrupting Democracy,” co-sponsored by Lincoln Labs, a libertarian-leaning tech leadership group, and Brigade, a nonpartisan tech firm focused on civic engagement and funded by billionaire former Facebook President Sean Parker. While in the city, Paul will officially open a campaign office in Startup House, a shared incubator work space in he South of Market neighborhood.

It is outreach like that makes Paul’s message appealing to many in the tech community. Paul has regularly visited Bay Area tech firms since being elected to the Senate, and has made tapping into the region’s deep pockets for campaign contributions a priority for his presidential campaign.

Landing votes in Silicon Valley will be a challenge for any Republican. In 2012, President Obama won by a margin of 42 percent in Santa Clara County.

Lincoln Labs co-founder Garrett Johnson defended Paul’s position on net neutrality as more nuanced politically than it might appear.

“Sen. Paul is calling on Congress to do its job,” Johnson said. “The failure of Congress to act should not provide an opportunity for the FCC to essentially force a round peg into a square hole.”

Others say that the valley doesn’t share the same opinion this issue. While larger technology and telecommunications firms may support the concept of net neutrality, many agree with Paul that they don’t want broadband to be regulated like a utility, said Gary Shapiro, president and CEO of the Consumer Electronics Association, a trade association which represents more than 2,000 consumer electronics companies, including some large telecoms.

Shapiro doesn’t think that Paul’s stance on net neutrality will kill his chances of snagging votes in the valley.

“There’s a view in Silicon Valley that 'We can solve anything.’ That’s what Rand Paul brings. He speaks the language of Silicon Valley,” said Shapiro, who does not support any 2016 presidential candidate.

“But he’s got to be honest with the tech world,” Shapiro said. “He’s got to go in there and say, 'I’m not going to agree with you on everything.’”

Joe Garofoli is a San Francisco Chronicle staff writer. E-mail: jgarofoli@sfchronicle.com Twitter: @joegarofoli