May 31, 2006 | Comments: (0)

'Net Neutrality' Nonsense

TAGS: Telecom

Is the Internet a public utility? Or is it an agglomeration of profit-making businesses that have unfettered rights to change, price, and allocate their product?

I believe how you answer this question (and belive me, both answers have some validity) is quite telling as to your view of marketplaces in general.

The public utility folks (a long list of folks including the EFF) believe unequivocally that all traffic should be treated the same. The 'greedy' providers claim that this is merely a QOS issue -- ensuring equal access to Internet resources requires that heavy users pay more.

The "Internet should be free, unfettered, blah blah blah.." folks are ignoring the most powerful lever that can tame the AT&T's and Verizons of the world -- user choice. There's a reason that we are all not stuck on AOL in the old walled garden -- alternatives became more attractive, and AOL got caught in the classic innovator's dilemma.

The big providers are ignoring the fact that any change in the terms and conditions is basically a price increase (which nobody likes). And the Internet crowd (Yahoo!, Google, etc.) don't want to share their advertising shekels with mere pipe providers.

This is basically much ado about nothing, and an exercise in feel-good populism. The first ISP to start any form of content discrimination will find out very quickly how easy it is to change ISPs. And the Internet crowd should realize that playing ball with the major ISPs (to a certain extent) is just smart business -- somebody has to pay for all of the bandwidth required for widespread video distribution, VOIP, etc. It might as well be Google (they seem to have a few dollars lying around) -- especially since Google has been threatening to Wi-Fi the world, and make the traditional ISPs moot. Hey -- folks like Yahoo! already pay Akamai to distribute their content more efficiently across the ISP networks. What's the difference?

Posted by Paul T. Ryan on May 31, 2006 07:03 PM