Sunday, May 21, 2006

Internet Neutrality

Net neutrality again.

I am not opposed to the idea of government regulation to protect the net. But the point of government regulation is to correct injustice resulting from unequal distribution of power. While the local telephone operators have a certain degree of unjust leverage as a result of their local monopolies at the 'last mile', the balance of power remains with the Internet users and service companies.

Google is understandably concerned that Verizon might attempt to extort 'settlements' from them. As Ronnie Kray might say "nice little search engine you have got there, be shame if it got slow wouldn't it?"

In practice the largest Web companies have the best defense, if connections to Google search become slow customers are going to blame Verizon rather than Google. It is very unlikely that Verizon does not understand that the time consumers would accept a walled garden are long gone.

Verizon customers have already paid for their 1mb/s plus. It makes no sense for Google to pay them a second time. Attempts to force a third party to pay for what has already been paid for will inevitably set off a rash of anti-trust and class actions.

The real question is whether there should be an option for a third party to pay for a temporary performance boost above and beyond what the customer paid for. If the customer has paid for a 1 mb/s connection and a video on demand provider wants to provide a temporary boost to 8mb/s should this be allowed?

This question is rather harder to answer. One possibility of accepting this type of scheme is that we end up with a situation where control of the last mile becomes control over all value added content. Instead of Internet distribution trumping the local cable monopoly it would be a change of owner.

I don't think that happens though, provided that the content providers can pass on the upgrade charge to the consumer.

If I want to watch the latest episode of Dr Who via the Internet I might well be prepared to pay a $0.50 surcharge for a high bandwidth link if thats the type of thing I do occasionally. If I am using the higher bandwidth so often that the upgrade charge is significant I probably want to pay my local broadband provider for a faster connection.

What is not going to be acceptable or sustainable is a situation where the content distributor is prevented from passing the additional cost onto me as a consumer. Or rather as the cost is going to be passed onto me in any case, the content provider must not be prevented from offering me a discount when I bring my own bandwidth.

The tin foil hat brigade are almost certainly right in thinking that there are commercial interests plotting to do evil things. Where I disagree is I don't think that Dr Evil has the capability to make good on his plans. I suspect that there will be some unpleasant business where broadband providers attempt to block competing VOIP services but the unpleasantness will inevitably be settled in favor of the consumer and the VOIP providers.

Instead what I believe will happen is that everyone will win something, but nobody will win everything. The content distributors and broadband providers have a common interest in building out new high bandwidth infrastructure to support Video On Demand over IP (VODIP). Someone has to pay for that infrastructure and it is going to be difficult to persuade consumers to pay for higher bandwidth until they understand why they might need it. The temporary upgrade model allows gradual phased deployment of high bandwidth links, I only need to pay for the high bandwidth when I need it.

Eventually the basic Internet connection will be fast enough to support VODIP in high definition. Upgrade charges will only be required for people who need the next bandwidth upgrade quanta to support the next bleeding edge bandwidth hog applications.

I cannot get excited about the net neutrality issue in Congress because I don't think it has any difference on the outcome. The most a net neutrality bill would achieve is to create a profitable market to circumvent it.

1 comment:

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