Subsidizing the status quo Internet

Subsidizing the status quo Internet

Summary: Jeffrey Young writes about the Internet Non-Discrimination Act of 2006--also known as the Net Neutrality Act:Are we in a new episode of The Prisoner? Is Patrick McGoohan about to walk through my browser?

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TOPICS: Browser
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Jeffrey Young writes about the Internet Non-Discrimination Act of 2006--also known as the Net Neutrality Act:

Are we in a new episode of The Prisoner? Is Patrick McGoohan about to walk through my browser?  Hasn’t the socialist managed economy model been discredited enough already with the rise of the free for all scrum of the Internet?

There’s an old saw that goes: “To a carpenter everything looks like a nail.” It is equally true of politicians: No matter what the issue, their answer is always more legislation.  And the Internet is the latest target for the hammerers.  The absurdity is that Internet companies are holding the nail.

The latest evidence of this is Senator Ron Wyden’s ill-conceived bill to “guarantee” a level playing field for Internet commerce, blogged about by fellow ZDNetter Russell Shaw. This is a terrible idea that should be resisted by every right thinking netizen. It comes a couple of days after a roar of protest over AOL and Yahoo!’s plans to charge high volume email senders special fees to have their mail delivered. This is the kind of target for the “Net Neutrality” bill—or perhaps the “Internet Business Welfare Act”.

So perhaps what this is all about is paranoia. The idea that somehow a network operator with bundled services will play favorites. This is a legitimate concern, but it could be dealt with very simply by instituting the equivalent of a Common Carrier code (similar to the trucking industry that uses another Super Highway system) for those who deliver packets across the Internet: In exchange for the right to carry traffic, a baseline level of service has to be provided, with a first come first served system for anyone who delivers legitimate packets to your port. Higher throughputs than that can be paid for. The FCC has already decreed no discriminatory or retaliatory traffic shaping, so what’s the big deal?

Do we really  need, or want, a law to act like a governor on the ‘Net?  No more free for all, we know what you need when it comes to packets. This is like saying that there is only one way to ship packages, and everybody has to use it—didn’t we try that with the US Postal Service?  Don’t try and build a value-added network business model that folks will pay extra to access (Take that Fedex!), because we the Government won’t let you do it. Maybe some company or other could pay to gain an advantage—think of that!  No one thinks there is some god-given right to fast free shipping that comes with a business license.

Except apparently in the Internet Economy. The irony in the uproar over the idea that Internet carriers might charge differential rates for various speeds, and volumes, and delivery options is thick.  Here we have the world’s greatest concentration of Darwinian companies, all of whose motto is “Don’t Tread on Me”, endorsing the imposition of a government fiat mandating some central managed economy idea of what the Internet should be.

Sure Google doesn’t want to have to pay for what they’ve had essentially for free, even as they extract profits from my ability to travel effortlessly to their door.  The same goes for eBay that wants to use the subsidized Internet to extract profits from Skype which makes heavy use of it.  But guess what?  Maybe they should be paying for a portion of their bandwidth hogging. 

Enterprises have been doing this for a while by prioritizing traffic based on business rules—server load balancing it is loosely called. Some traffic is more important than others and is treated accordingly.  Why shouldn’t the same thing hold true in the public Internet—if I’m going to sell you a video download service, I’ll integrate the cost of guaranteed bandwidth into the price. If the fees that the carriers slap on fast data streams are too great, someone else will come along and build another network and take the business away from them. This is called competition, or the Survival of the Fittest.

Pray explain to me what is so wrong about paying extra to deliver content to customers faster, better, cheaper? The more you pay, the more luxuriously you travel.  As it stands, if you have more servers, in more peering points, your traffic gets to me faster.  So the big guys can already pay for better delivery. I can already buy more and more bandwidth to receive faster delivery in the last mile. 

The only issue is giving the middlemen—read telcos of every ilk--a chance to add value to their telecomm networks and figure out creative ways to monetize it.  Isn’t that incentive exactly what is going to goad them to keep upgrading their infrastructure?

Once upon a time there was a telecomm monopoly and you could have any color phone you wanted—as long as it was black. There was also one cheap level of service for consumers and local calls, and one expensive rate for businesses and long distance…until along came MCI which used microwaves to offer business better long distance rates. I guarantee that if the baseline is too slow, or the high speeds rates too high, there’ll be a whole new breed of arbitragers and wholesalers who’ll buy capacity and parcel it out in fresh and unimaginable ways. Simultaneously, a zillion new business models will erupt to slice the bandwidth pie in endless ways. 

This is the wonder of capitalism. Without it there would be no Internet as we know it today. Let’s not cripple its future glory.

Jeffrey Young, author of iCon Steve Jobs : The Greatest Second Act in the History of Business, sent me his take on MovieBeam, a video on demand service spun out of Disney and backed by Cisco and Intel.

Topic: Browser

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