Net Neutrality – Continued

Blog posts during my holiday breaks are sporadic. I have more time, but I may be spending time in locations that make it difficult to connect my computer (not my TREO) to the Internet. I guess we all need a break.

Net neutrality is one of those issues that most citizens are unprepared to take sides on, but that may be decided before the long term (or even short term) consequences are known.

The controversy involves the issue of whether service providers can charge extra for allowing access to certain content or can prioritize what content moves through their fiber. To me, the concern seems to involve what might happen and what might happen is not necessarily obvious from our present experiences. The providers contend they must be able to generate a reasonable amount of revenue and somehow this potential is being limited. I have really tried to understand this position and must admit I struggle. I think the argument is that the popularity of new applications (e.g., streaming media) may swamp capacity reducing the number of subscribers who can be serviced. One solution from this perspective might be to charge more for those clients who want to receive such content. So, it might be fair for you to read your email and view static web pages for $29.95 a month, but not spend hours watching YouTube or watching CNN Pipeline.

The neutrality position suggests that making money should not involve the opportunity to control what content is sent through “the pipe”. This is the situation in which what could happen is the problem. Companies with the money to be major players are complex and do much more than put fiber optic cable in the ground. For example, you may access the Internet through your cable company or through your phone company. While the cable company must be able to generate money by providing Internet access, should it be able to retard the flow of packets that would allow you to view video? Online video represents a challenge to a cable company’s interest in selling you more cable channels – nothing to do with fiber capacity. A similar position exists for phone companies. What if a phone company decided that VOIP packets should be slowed unless users wanted to pay a premium? Potentially, companies could make money by providing access to the Internet and also control access in ways that allow the companies to make more money from other unrelated services.

C|NET reports that the recent FCC agreement to allow BellSouth and ATT to merge required these companies to agree to certain principles proposed by consumer advocacy groups. A major argument that net neutrality legislation is not needed has been that competition would make packet discrimination a bad business decision. In other words, if your local cable provider wanted to charge you more for watching YouTube and this was a big interest of yours, you might move your account to DSL. However, mergers and other factors that reduce access to potential competitors diminish the validity of this argument. So, these two providers agreed to the nondiscriminatory expectations to move their merger ahead. However, the agreement holds for only 30 months.

This is not the most serious issue facing the new congress, but it is also much more significant that most people realize. Pay attention.

[Appended – here is another related piece from the New York Times]

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