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Net neutrality: it isn’t serious. . .

June 22, 2006

For months people have been talking about net neutrality.  Tim Wu, author of Who Controls the Internet, came up with the term and argued that the internet has NEVER been a neutral place as it has a “built in bias against … VoIP.  The big concern is that major network operators (i.e. United States Telcos) could begin to discriminate against users on their networks by providing ‘better’ access to some website.  The concept is confusing as some supporters of ‘network neutrality’ (like Tim Berners-Lee) still support charging for various levels of quality of service.

The topic came up over dinner at Shel Israel’s house a couple of weeks ago.  I was asked my position and I simply said, “it doesn’t matter - at the end of the day the internet will be neutral.”  Wow, did I get a reaction!  People are passionate about this issueso I wanted to clarify my position.

Lets assume that Congress does nothing and allows the telcos to begin to sign contracts with various websites to give their site preference over others and limit access to competiting websites and services.  What would happen?  Clearly most people (myself included) would be annoyed and pissed off.  But soon viable competitors to the telcos would emerge.  Millions of users would migrate their traffic from the telcos and in the end network operators could differentiate themselves by offering ‘neutral services’.  Hm…  A little painful at first, but in the end we have a more distributed network - more companies - more choices - no more dominate players.

Now assume that Congress passes a law mandating net neutrality and the president signs it.  What would happen?  The dominate telcos would continue to dominate the access market in the United States.  Smaller competitors would continue to disappear (1,000s in the late 90’s and 100s today).  The telcos would continue to lobby Congress for loopholes and exceptions to the neutrality rule and eventually they would find a Congress willing to listen.  Much like a lobster being placed in luke warm water we would all complain about the minor loophole at first.  Then the next and the next and so on until the water was boiling and the lobster died.  But in the end, new providers would launch offering ‘neutral services’ and in the end we would have a more diverse and competitive landscape.

The net-net?  It really doesn’t matter.  Pain now or later, in the end someone will sell us what we want to buy.  If we want net neutrality there will be someone to sell it to us.  Consider that a promise - i.e. I will sell neutral connections to you if no one else will… :)

Written by Alexander Muse · Filed Under Blog 

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No Responses to “Net neutrality: it isn’t serious. . .”

  1. Gary Wisniewski Says:
    June 22nd, 2006 at 2:31 pm

    You’re right. People will be able to buy what they want, regardless of how the net-nut argument pans out.

    But, I don’t think consumers “want” net neutrality. Consumers want video, audio, speed, content, entertainment. If one vendor can provide better services than another, people will move to the better service. It’s simple economics. So, economics and competition will inevitably end net neutrality no matter what anybody does.

    Saying that people will favor vendors who have net neutrality is like saying that people will favor retail stores that carry ALL products, not just the products they care about. Consumers only care about what they want, and if telcos/isps provide consumers with what they want, it won’t matter whether they have lower-tier access to what they don’t know or care about.

  2. ixley Says:
    June 22nd, 2006 at 2:38 pm

    The unfortunate part of this debate is that there are two (potentially) distinct issues at hand. Net Neutrality to protect against content discrimination, and tiered access to allow for more dedicated streaming, heavier media access, etc. I am not specifically against the telcos getting to charge more for distinctly better service, but they have proved very corrupt without regulation already and I give them very little trust. Consider that we are down to around 16th place in broadband tech in the global market and then ask yourself why. (ref: http://blogs.siliconvalley.com/gmsv/2006/02/the_united_stat.html)
    I would like to believe that new competition would emerge, but the fact of the matter is that the telcos are trying to pass this legislation largely in part to squash any future competition. Ever wonder why we’ve only seen giant telcos merging into huger ones over the last decade and not the emergence of new competitors?

  3. abowlofcereal.com » Blog Archive » Texas Neutrality Says:
    July 4th, 2006 at 11:40 am

    [...] Simple and useful analysis of the Net Neutrality debate as well as a plain lesson on economics and purchasing power: Texas Startup Blog [...]

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