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  • The Net Neutrality Greed Argument

    August 27th, 2010

    Yes, we know the Michael Douglas character in the 1980’s film, “Wall Street,” said “greed is good,” but you wonder just how far that can go without hurting your customers. And, no, I’m not about to talk about how the character might have evolved in the forthcoming sequel, since I haven’t read the script.

    To stay on point: We really didn’t talk much about Net Neutrality in the public space until a certain ISP started throttling torrent downloads, making them really slow. How dare they decide whether a specific type of download merits pushing the brake pedal, even if the downloads might be of questionable legality? I mean, they don’t actually see what you’re downloading, right?

    The issue of Net Neutrality has become a political hot potato. Some feel it’s an insidious scheme on the part of the powers that be to control the Internet, whereas others say it’s a good thing, a way to keep your ISP from deciding which traffic you’ll receive, and at what level of performance.

    To add to the confusion, there’s that recent suggestion from Google and Verizon Wireless, who partner on all those Android OS phones, that net neutrality should apply strictly to “wired” services, such as Verizon’s own FiOS, Comcast and loads of other services. Wireless services ought to have the right to do what they want, I gather.

    In theory, that would mean that Google can pay a special fee to Verizon to allow their content to download at full speed, but other services would find their content delivery slowed unless they paid the price. I suppose the fees could be managed the same as Google’s pay-per-click ad scheme, where the ones who give higher bids get precedence.

    Is this the sort of broadband service you want?

    Now it’s perfectly true that you are already paying for specific levels of service. If you want to save money and you don’t mind tepid download and upload speeds, there’s probably a plan for you. If you seek the fastest available performance from your ISP, there’s a plan for that as well. Most ISPs have different tiers of service to accommodate customer needs.

    If you happen to use too much bandwidth, I’m sure there’s something buried in your ISP’s service agreement that allows them to throttle service or charge you extra for your “abuse” of their system. Certainly we know that AT&T did just that when they modified their data plans ahead of the launch of the iPhone 4.

    All this is perfectly legal and is an accepted way of doing business. What’s more, if the ISP decides that income from their broadband services isn’t sufficient, they can raise the rates. Sure, they might have to submit paperwork to a local or state regulatory agency first, but if their financials demonstrate potential losses, they’d probably get a favorable ruling. They usually do.

    On the other hand, if that ISP sets up toll lanes to allow third-party services to send data through their pipes at higher speed, it becomes a have and have-not situation. A smaller company that doesn’t have the extra funds to finance higher traffic rates faces potential discrimination. If they deliver poor performance to their customers, they get fewer hits, and, as a consequence, sources of income, such as ads, might be negatively impacted. Talk about possible extortion!

    Now it seems to me that all of this ought to be perfectly logical to anyone who seriously considers the situation and wants an open Internet. However, as soon as you expect government agencies, such as the FCC in the U.S., to intervene in the affairs of an ISP, there are all sorts of political considerations on many sides of the equation. The carrier wants to be able to conduct business fettered as little as possible by government regulations. Bureaucrats and elected officials, no doubt with pure intentions in many cases, want to protect the public they represent from being abused by heartless and greedy businesses.

    Unfortunately, when governments meddle, there may be unpleasant and unexpected consequences, even if, as I said, the motivations were honorable.

    I suppose it would be best of the ISPs simply got together and issued public guarantees that they’ll never throttle Internet traffic, although I suppose they’d have justification to give special priority to emergency services, such as 911 systems, under extraordinary situations. I don’t think that many of you would dispute an ISP’s right to open the floodgates for services that might save your life.

    Otherwise, they should leave well enough alone. I do not think Google — or any other company — ought to have the right to use financial muscle to put themselves in the Internet fast lane at the expense of other companies. It’s not even the issue of enriching your ISP. They surely have the right to charge a fair price for their services.

    But when the delivery speeds of those services can be bought and sold, the public is being cheated. Now maybe your broadband provider would prefer to have governments regulate their ability to control traffic, so they don’t have to do the right thing, and can make the excuse that they have no choice. They should be careful what they wish for.



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    3 Responses to “The Net Neutrality Greed Argument”

    1. dfs says:

      I’m a great believer in the Law of Unintended Consequences. Back ca. 1990 the Internet was largely used by universities, and there’s already been some talk of a consortium of universities setting up a kind of second, super-speed internet just for themselves. Ending net neutrality might give this idea a tremendous boost, Because academic traffic doesn’t generate revenue, so when it comes to figuring out who gets priority it’s pretty easy to imagine the greedheads giving this sector the short end of the stick. And I could see government and the Enterprise doing something similar. So the result might not be a huge cash cow for corps. like Google and Verizon, but instead the fragmentation of the Internet into a number of more specialized nets rather than the single monolithic one we’ve had so far.

      • Aaron says:

        @dfs,

        But in an even better world without network neutrality: Universities build those networks because they need the high speeds on demand. However, because they own the pipes and can do with them as they please they can open those super fast lines to the general internet (earning income from their use) when they are not being fully utilized by the universities. The lack of neutrality rules would allow them to throttle the regular internet and prioritize university data whenever the universities require higher bandwidth.

        For example, at night they would allow any traffic to travel. But when professors arrive at 9 am, they receive priority, gaining the full speed of the super fast lines.

        Network neutrality rules would prevent this situation. Universities would have to not allow any traffic on their lines to ensure that the speed would be available when needed. How is that better for the internet?

    2. dfs says:

      You are thinking only in terms of the USA. Presumably an academic net would be worldwide, so that there wouldn’t be any hours of heavy traffic and hours of light traffic. B. t. w., I’m not arguing that a series of separate nets would necessarily be better or worse than what we have now, just very different. And I do wonder if the corporations that would like to make an end to net neutrality have really thought through the likely implications of what they want to do.

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