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Snap is worried that losing net neutrality could ‘seriously harm’ its business

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New companies depend on open access

Photo by Amelia Holowaty Krales / The Verge

Snap, Inc., the parent company of Snapchat, filed its IPO paperwork yesterday, and there’s lots of information about the company and its business contained inside. We’ve already learned a larger rollout of Spectacles is coming, and the company prioritizes iOS development, for example.

The company is also required to list the various risks and threats it might face as it attempts to grow, and while some of them seem obvious — the company points out that it doesn’t control the iOS and Android operating systems the Snapchat app runs on, for example — there’s also a pointed callout of potential net neutrality changes. Here’s the line from the filing, with my emphasis added:

Current Federal Communications Commission, or FCC, “open internet rules” prohibit mobile providers in the United States from impeding access to most content, or otherwise unfairly discriminating against content providers like us. These rules also prohibit mobile providers from entering into arrangements with specific content providers for faster or better access over their data networks. The European Union similarly requires equal access to internet content. Additionally, as part of its Digital Single Market initiative, the European Union may impose network security, disability access, or 911-like obligations on “over-the-top” services such as those provided by us, which could increase our costs. If the FCC, Congress, the European Union, or the courts modify these open internet rules, mobile providers may be able to limit our users’ ability to access Snapchat or make Snapchat a less attractive alternative to our competitors’ applications. Were that to happen, our business would be seriously harmed.

This fear is much less theoretical than it seems — new Republican FCC Chairman Ajit Pai voted against net neutrality in 2015, and seems intent on dismantling it now that he’s taken the agency over. The carriers themselves are certainly acting as though they know net neutrality’s days are numbered: AT&T CEO Randall Stephenson told investors the other day that the company would “go hard” on zero-rating video services because he assumed the regulations would pass muster in a Trump administration.

On the other hand, the teens really love Snapchat, and screwing with their access to it — and investors’ potential returns on what promises to be 2017’s hottest tech IPO — doesn’t seem like a great policy fight to wade into. Your move, Chairman Pai.