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Wednesday, March 15, 2006

Net Neutrality? Only in Switzerland

I'm a fence sitter when it comes to Net Neutrality. This of course defines the latest battle of technology pundits against the carriers' campaign to realize revenue off the "service" that they provide. The reason I find myself conflicted is because while I agree the Internet should be a common, global network for all to access and can not be regulated by the United States government, I realize (mainly from being in IT myself) that companies providing transport network services need to make money to maintain the very network that I demand free access to.

It's the same battle that IT departments face: do less with more. Users demand more speed and more applications and expect the network to simply handle it. As IT budgets are slashed and qualified technical talent is outsourced, enterprise networks get closer and closer to the edge of unacceptable user community support.

People assume the Internet is an unlimited free tool at their own disposal. This is quite counter-intuitive considering I pay 5 times more for Internet access now than I did with my original dial-up ISP for my 2400 baud modem. However, when people stop receiving a separate bill for an Internet ISP because it's bundled with their cable or phone bill and they have instant online access with cable modems and home wireless routers and the speeds are as fast as when they surf the web at work (on lunch breaks of course), an arrogance of sorts sets in. "The network is there at my beck and call and on a whim I can connect to Google, or download music or shop online or buy and sell at eBay." The thought that "someone" provides the access between my computer and Google or eBay is somewhat transparent and very unclear for people. Everyone has Comcast or Verizon DSL. I'm not positive, but I think it's a safe bet to say that Google isn't connected to the global Internet by Comcast. To the tech savvy, we realize that this means there are other Tier 1 providers that carry my web page requests from the Comcast network through the Internet cloud to the provider that connects Google. These "men in the middle" don't see a dime from me or eBay, yet both eBay and I (through my eBay store front) can make a boat load of cash.

Not to sound like a communist, but I think we're beginning to see the limits of a free market economy. So called "healthy" competition drives prices down and makes consumers happy. But when the price of voice; for example, gets so low that traditional providers can no longer effectively compete, what happens? Do they go out of business like a failed dot com? Who will be interested in buying and maintaining the assets (the network) of a company with a business plan that didn't fail, but rather was undermined by competition from "innovators" who got a free ride?

It may not be realistic to assume all carriers will eventually fail. Indeed, it is up to them to find a profitable business plan. But charging for traffic on their networks can not be eliminated as a possibility.

Take voice for example. As cheap as it is, each call I make is charged to me. I pay a monthly cost for connection and incremental costs per call. Money changes hands between my local and long distance carriers without my knowledge all to sustain dial tone in my house. With new VoIP plans offering unlimited calling for a flat fee, I (and everyone else) is getting unlimited access for a smaller and smaller price to a limited resource that the company selling me the service does not own or control. Kudos to the VoIP services companies that are making a killing in this environment now; the model does not seem to be sustainable.

Jeff Pulver crying that Google should effectively Denial of Service all users attempting to access its site through a BellSouth connection is absurd (VON Magazine, March 2006). The real worry is an Internet wide Denial of Service - not by some script kiddies running a bot network, but by the service providers themselves. After all, it is their network. Imagine a worldwide shutdown of the Internet for a day by key service providers as a demonstration. That would put all of us in our place and show us who really "owns" the Internet.


lessgov said...

Switzerland? A WW2 reference?

I'm not sure I share your pessimism regarding the market's ability to provide quality service. You are presuming that the existing technological paradigms will remain true. But the very nature of free market evolution will ensure the creation and implementation of new technologies.

To the extent that consumers have become arrogant regarding their ability to access the Internet, they will also shy away from technologies that are not meeting their needs. This will keep the Internet evolving for years to come.

paulaner01 said...

I guess that when the price of voice gets so low that traditional providers can no longer effectively compete, they'll have to adapt. Just like any other company in a changing economy. If they have good ideas, and embrace new developments instead of trying to hang on to the old model, they'll continue to thrive. Lessgov is right - the customer will decide what succeeds. If you have a good product, at a reasonable price, and meet the needs of the consumer, you'll do just fine.

pkp646 said...

Well, lessgov makes a sound point. The free market should not be so quickly doubted. You are, however, correct when it comes to your view that the government should stay out of the net neutrality debate. Honestly, who really thinks that regulation is a good idea?

oldhats said...

it's nice to see some reasoned debate on this issue. consumers have both the free market and the FCC's current regulatory authority to protect them from any company that tries to sqeeze thier pipes or otherwise limit service. why do we need NEW regulation?


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