FADS: Pet Rocks, Members-Only Jackets and Net Neutrality

November 28, 2006 - 1 Comment

SAN JOSE, CA – Fads are sometimes hard to explain and can be tough to stop. I still do not understand the pet rock, the Member’s Only (TM) jacket or Beanie Babies, so I won’t even try.Pet Rock.jpgI do, however, understand the fad of”net neutrality.” Over-the-top (OTT) providers of applications over networks (i.e. search engines, shopping sites, game sites, etc.) have famously argued that if net neutrality is not enacted into legislation then the Internet as we know it will cease to exist and your individual access to all the sites and applications that you love will fade away. That is a scary picture and if I were told that the only way to stop this would be to get the government invovled, then I certainly would be the first one on the phone to my elected representatives. I, however, know better.Let’s be realistic. Do you really think that if broadband service providers (in the U.S., generally, the cable and telecom companies) all of the sudden stopped letting you access the sites that you wanted that the government wouldn’t step in and stop that practice? Further, the government likely would not even have the time to step in because the marketplace would see to it that consumers got what they wanted. If broadband service provider A stopped letting you access the site you wanted then broadband service provider B would market the fact that they let you access any site you want. Problem solved. So, what really is the crux of this issue? In a word: business.The coalition that was formed to lobby in the U.S. on behalf of net neutrality states that it wants a”free and open” internet. For the vast majority of the world (over 1 billion people now online), you can currently say that the Internet is open. You can access the sites you want, when you want and where you want. That”free” part is a little more difficult. The infrastructure that created the internet and will create the next generation networks (NGN) cost a lot of money. If the companies that invest in building out these networks were told that they would have to provide all their services for free then the business model would likely collapse under its own weight. Business is good for the marketplace because it takes cares of needs. It takes care of needs for a fee, however. “Free” and business generally do not go together. “Free” is generally in the non-profit world. Service providers know that the amount of data on their network is only going to grow. In fact, it is growing at a nearly un-checked rate. Video and heavy graphics in gaming is the driver of this. Service providers need to update their networks and build more capacity to meet the demands of their customers. This takes a lot of money and they may need the abiliity to ask those sites that create the most amount of traffic across their networks to pitch in to help them to continue to meet the demands of both of their customers. Or, they may need the ability sell different broadband speeds to customers based on those customers individual demands.Instead of meeting service providers half way and working on a solution, the OTT response, thus far, has been to ask for legislation. It seems they would rather use politics than take care of their customers. Those of us who have been around the internet for a while know that the”R” word (regulate) is to the Internet what a broken leg is to a racehorse. Regulators and legislators have important roles to play, but the success of the internet has been, in part, the effect of the forbearance of regulators and legislators. Don’t just take my word for it, however. The U.S. Federal Trade Commission (FTC) Chairman Deborah Platt Majoras recently said that, “proponents of net neutrality regulation have not come to us to explain where the market is failing or what anticompetitive conduct we should challenge.” Similarly, the head of the U.S. Federal Communications Commission, Kevin Martin, has stated “I do think the commission has the authority necessary” to enforce network neutrality. “We’ve already demonstrated we’ll take action if necessary.” In other words, there isn’t a problem, but if there were a problem the authority already exists to take care of it. Can we please, however, calm down the rhetoric on this issue and begin to discuss real issues including using the Universal Service Fund for broadband buildout? For one, we can put a little sunshine on this net neutrality issue which I am attempting to do with this brief essay. If service providers are threatened that they will not be able to recoup any of their investment in Next Generation Networks (NGN’s) then they won’t be able to provide consumers with the broadband speeds that these new applications are demanding. In a very real way, consumer advocates and the OTT’s are arguing against what is best for consumers. If net neutrality is enacted, service providers will not be able to confidently invest in NGNs and consumers will lose. How’s that for irony?

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  1. I Love the Pet Rock!