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.
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I can see where Net Neutrality is going to heat up as an issue in the next couple of years. Wondering what's behind the problem (is it a bandwidth issue and/or a business - territorial issue?)
Great Post - I did not understand much about Net Neutrality but I saw it as the subject of several posts in my RSS feed reader.
Posted by: Webmetricsguru | June 09, 2006 at 11:53 PM
Net Neutrality is to rigid of a concept for the future of the Internet.
I happen to have invested lots of money since 2000 in a company that plans to roll out multi-ten millions of Fiber-To-The-Home connections at 1 Gigabit per second each. This infrastructure will replace copper (Telco systems) and coax (CATV systems)infrastructures. Our job is to operate the fiber-optic systems to the maximum possible profitability. We also want to prevent abuse of this infrastructure and speed by large players.
We came up with a multi-level approach to this whole "speed through put guarantee" issue. We will be implementing this solution as we grow the subscriberbase into a critical mass (e.g. 33% or more of a particular market/area).
In short:
1. All personal streaming content (including VideoPods/ Video news/ Video broadcasts and Video unicasts, etc.) will be delivered without involvement of any need of a partnership with us.
2. Small and enterpreneurial businesses (for profit) can also go on without any need of partnership or extra payment. If the traffic is going to exceed a certain level (e.g. multiple thousands of paid downloads and streams) they slide into the medium business range. This means these people are starting to make lots of money on an infrastructure that we invested in (because customers can start downloading at 1 Gbps, meaning terabits per hour)
3. Medium size market (50,000+ downloads and streams) must pay a traffic charge, most likely on a fixed fee bases and small revenue sharing. (Think of online TV channels that can allow paid Full-motion Full-screen, DVD quality or High Definition quality streams or downlaods.)
4. Large size market (100,000+ downloads/streams) revenue sharing and fixed fee.
5. Mega size market (200,000+) must do revenuesharing and fixed fee.
The above system is not going to be used on dowloads that can be done today too. Would we block Vonage because we have our own VoIP service? No, I don't want my company to block anyone or any company. Would we charge Vonage extra for prefered traffic/prioritizing? Yes, absolutely.
FTTH systems like Verizon is building (maximum of 30 Mbps and maybe in the future 100 Mbps) seems fast, but compared to what our technology enables, we can offer much more (1 Gbps per customer). Verizon and AT&T are in their right to charge extra, why else would they want to invest multiple ten billion dollars in infrastructures? And if Verizon and AT&T are in their right with their systems to charge or prioritize, my company (with its 1 gbps connections) is even more so.
Also, do not forget that next generation infrastructures allow for the first time in history the migration from standard definition to truly High Definition TV. This infrastructure must be paid back, ask the net neutrality people how, and they won't be able to answer.
Net neutrality is just some paranoid issue.
Posted by: Neal S. Lachman | June 10, 2006 at 02:11 PM
The problem I see is one of money. This is another example of the republican Congress selling off what is PUBLIC. To commoditize the internet is to go the way of energy — UP, UP, and WAY UP for prices. And what will consumers see? Not much different except the bill. Things are fine as they are now. Web 2.0 apps are being conceived as we speak mainly to extract money from our pockets, not to provide new and useful "services."
Posted by: Zaine Ridling | June 10, 2006 at 03:44 PM
Net neutrality is an attempt to control pricing of assets that are not owned by the person intending to do the controlling. Google for example wants to control pricing of Verizon. (If this is such a great business perhaps Google could enter it?)
How about applications neutrality? How about pricing per bit regardless of whether it is an ad by google, microsoft office software or freeware by linux (support only business model)
Our problem today is that there simply are no principles...not even (or perhaps particularly) with billionaires like sergei and larry and bill. It is all about how much can you loot by bribing congress and hiring good lawyers....
how about legal neutrality? same hourly charges for a will as defending Ken lay...hmmmm this neutrality idea might be good!
Posted by: sanno tochigi | June 10, 2006 at 05:37 PM