Net Neutrality Thoughts

The Wall Street Journal has a great article on net neutrality and in it there are quotes from people against net neutrality from companies such as Vonage and Cisco. On the opposing side of course are LECs. Here is an excerpt:

"Any model that allows the consumer to have more control and more choice makes sense to us," says BellSouth Chief Technology Officer William Smith, who is contemplating the new models but has no immediate plans to implement them.

Mr. Smith often laments the fact that his parents, who use the Internet for only low-capacity activities such as Web surfing and email, pay fees similar to those of heavy users who suck up capacity by downloading music or using BitTorrent, which is used by millions to download movies and other material off the Internet. Overall at BellSouth, 1% of broadband customers drive 40% of Internet traffic, he says. "People who drive cost in the network create additional charges in the network," Mr. Smith says. "If my elderly parents don’t use a lot of traffic we ought to be able to create a service plan that meets their needs."

Smith makes a good point but it is worth noting that if we had more than two broadband providers in the states the likelihood of this debate even taking place would likely be zero. In fact increased competition would force broadband providers to increase broadband access speed just to stay competitive.

We cannot have real competition with only two choices. I look to the automobile market or the airline market as examples of how new entrants are necessary for real competition. Consumers are getting shortchanged by a system where only two companies control access to broadband.

The United States was the country that made the Internet possible and now many other countries have broadband access that is cheaper and faster than ours. We are having the wrong argument in my opinion. We need to figure out how to get more companies into this game.

If we ever get to a point where there are 5-10 Internet providers, perhaps we should then allow these providers to have multiple tiers of Internet service. At least then the open markets will make such decisions for us and not a few monopolistic players. 

  • Ted Wallingford
    March 2, 2006 at 7:46 pm

    I completely disagree with the pretense of Mr. Smith, the CTO of BellSouth, who desires to charge a premium for heavy network access. Whether he’s saying it or Mark Cuban is saying it, the idea is bad.
    What he is suggesting is virtually the same as saying, “old people and orphans with leukemia drive up the cost of health care, so the rest of us should quit paying their medical bills and let them pay their own way.” The point is, in a system like this, we all pay for each other’s access into the network. And with a decentralized, non-commercial public service like the Internet, this is the only way it can be.
    I’m as big a capitalist as anybody, but I recognize that their is a communal aspect to the Internet that cannot be divided in any fair way. Do you really want to pay by the bit? It’s easier to create more available bandwidth than it is to figure out ways to conserve bandwidth. Bandwidth isn’t a finite resource, so conservation isn’t necessary! Charging for premium bandwidth is similarly transparent: Why increase bandwidth when I can charge certain users more for the same communal network I’ve already delivered for years at a fixed price?
    It’s the long distance calling rate crash story just told a different way. Competition will drive so-called premium bandwidth (what I equate to the L.D. of the 1980s and 90s) into the toilet until there’s no longer a premium on it. Today, there is no premium on long distance–but at least LD was a real commmodity at one point! So-called “premium bandwidth” is a false commodity because there is an essentially unlimited supply. If we learn from the past we see that creating an artificial premium on network access is a bad idea.
    This illustrates one of the many reasons why BellSouth and other incumbant LECs have doomed itself with antiquated thinking. In fact, I just read an article today about how CenturyTel is shedding employees (34 in my local area, just for starters) and I’m reminded how, upwards of a year ago, I saw the writing on the wall and I said, “how are these big LECs going to survive without massive layoffs and a total change in strategy?”.
    Charging for heavy bandwidth consumption isn’t the answer. People will *just go elsewhere*. Like to speakeasy.net or any number of other well-run independent access networks that make their money oversubscribing bandwidth, but don’t go around acting as if there’s a limited supply of it!

  • Rich Tehrani
    March 2, 2006 at 9:41 pm

    You make excellent points and where there is competition, charging for bandwidth doesn’t work. But it does work if there are only a few choices.
    Your comments actually put it all into perspective and can be summed up as follows… Once VoIP came on the scene most customers stopped paying per minute for calls. We had unlimited calling.
    Even though Vonage has high costs associated with its network it found a way to charge a flat fee for unlimited long distance. Customers love the idea. The LECs could have done the same thing years ago but waited for competition to come into the market to drop their prices.
    Similarly, with less competition, they are now raising prices by advocating new pricing structures that charge per minute and while they’re at it, charge content providers for high speed connections as well.

  • realizePhiladelphia
    October 4, 2008 at 1:04 am

    Check some more information about net neutrality here at http://web.illish.us

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