What is Net Neutrality all about? The US House rejected the Net Neutrality bill yesterday. Whenever politicians get involved the truth gets twisted. So what are the facts? I am no expert on this issue, but here is what I have learned.
What is Net Neutrality? (hereinafter NN) is basically what we have today...er...yesterday. It means that all web sites and services are equal and get the same rights to bandwidth from the carriers. So, email, web site content, music files, video, VoIP, IPTV, etc., all get equal access to bandwidth without any additional charge.
What do the telecom carriers want? They want the right to charge extra for certain applications at their discretion. Consumers pay about $40 - $60 a month for unlimited Internet access. The carriers are rethinking "unlimited" in cases where applications consume huge amounts of bandwidth. Things like video, IPTV, and VoIP could be the target of extra charges from the carriers. Companies like YouTube, BrightCove , Skype, and Vonage might be asked to pay surcharges for bandwidth.
What is the problem? What happens if Verizon decided to charge Skype and Vonage extra for VoIP but allows its own VoIP service to go over its network for free? What happens if Comcast decides to charge BrightCove and other IPTV companies extra and has its own competing IPTV service? What happens if Comcast and Verizon coincidentally decide to add a surcharge YouTube traffic? What happens if they decide to add a surcharge to Google, Yahoo, or Microsoft just because they have billions of dollars and can afford it?
What is likely to happen? My guess is that not much will change in the near term. But, the first time one of the carriers tries to add a surcharge this issue will resurface and there will be another bill in congress to get us back to Net Neutrality. The most likely targets for a surcharge are the big video and VoIP companies.
Will competition prevent surcharges? How many broadband Internet carriers are there? Verizon and Comcast. I'm sure there are others but they don't come to mind at the moment. If one adds a surcharge and the other does not, consumers might switch over to the other one. If they both add surcharges for the same service they may be charged with antitrust and collusion. So, the carriers still must be very careful about their decisions from a competitive and legal standpoint.
We haven't heard the last of Net Neutrality. Expect the truth to get twisted in bizarre ways by both sides of the argument.