Net Neutrality: Why the Internet will never be free. For anything. So get used to it

Call it Net Neutrality if you want, but it doesn't exist, nor is it required when you already have antitrust, regulatory and other local and state, and international law in place. Choice, innovation and open access are the principles in a free enterprise competitive market, not the halls of government.
Written by Doug Hanchard, Contributor

Call it Net Neutrality if you want, but it doesn't exist, nor is it required when you already have antitrust, regulatory and other local and state, and international law in place. Choice, innovation and open access are the principles in a free enterprise competitive market, not the halls of government.

Before I start, I wish to make clear that 'Law' is what makes our society what it is today. Without, we would have anarchy and society as we know it today would not exist. Also this is not your typical blog story, what follows is an medium depth look at the problems and challenges Net Neutrality would have on providers, users and government policy if implemented. It doesn't ask all the questions or give solutions to every aspect in fine detail but does give the reader a general knowledge and sense of issues.

Overview - Net Neutrality - a philosophy or set of regulations?

Your government will ensure Net neutrality with whatever they believe it is. You may not like it, but it is coming. I just don't know if the lawmakers know what they are getting themselves into. The world believes the Internet is open to everyone. Some are arguing and even demanding we need Law and the RIGHT to eliminate censorship and have choice in all its forms.  The Internet is the People's network and everyone owns it. Thus Net Neutrality would enable and ensure innovation, freedom, choice and access.

Information is money and money is power so the government will make sure that there is no monopoly of the Internet. There is a lot of Fear, Uncertainty and Doubt (FUD) about Net Neutrality. It exists because of many agendas. The FCC draft rules were released today and will have open dialogue with you. I encourage you to leverage it.

Neutrality - The Swiss are not gatekeepers, and neither is your government.

Government is a constant election. Your local favorite and rival politicians will voice their views on what the Internet should and can be, yet many don't have a clue what they are really talking about. The very concept of neutrality is completely absurd - it's already an open and innovative network that offers plenty of choice. It's a place where opinion, propaganda and information exists. It's filled with every media and means to an end - nothing more. The law of one country doesn't stop another countries law(s). Real wars occur via the Internet. You can buy and sell anything on the Internet; voice your opinion or take an education course (even if it is worthless in so many cases); or, hey, you can buy your degree from a few hundred different "universities" that didn't exist a week ago. But if your views are not accepted or goods or services not desired, that end point is out of your (government's) control; if it's blocked or capped, get over it. The Internet is open and it's buyer beware. Just because you want something from a provider doesn't mean your local ISP has to carry it or even allow you access to it. That's like telling Ford to buy GM parts because you want your Mustang to have a Camaro engine. Automobile Neutrality?, I doubt it.

It's a commercial network, not yours. You pay for access to specialty TV channels now. You're not guaranteed access to any of the thousands of stations around the world, just some of them. Did you know that you are actually regulated by what you can and can't watch on TV? The Internet never has been nor will be for social equality. It is a social enabled environment, but it's not something you can stipulate in law. The FCC did instruct Comcast to stop policing Internet (Bit torrent) traffic. The response was caps on bandwidth and charging extra. Advocates of Net Neutrality said this was just another way of blocking a user from accessing content. Wrong - this is addressing financial cost of operating the network and still being profitable. Did it really need government intervention and be in the middle? No.

Bandwidth charges have been around a long time, especially in Europe, Australia and Canada. This was coming whether you liked it or not. Transporting Internet packets cost money. You merely are renting a portion of it, cheap too. The Internet like the phone network, it's a ratio game. The dial tone on your home phone is not guaranteed dial tone. That's why every Christmas and New Years Eve the lines are literately busy and over subscribed. The Internet is designed the same way. Every Internet service provider out there doesn't even come close to building a 1:1 ratio to any one portion or all of the Internet. On Oct. 21st, the CRTC in Canada published new rules on traffic shaping & management and Internet Bandwidth Caps for providers of retail AND wholesale (resellers of Internet service) customers. Effectively allowing the primary provider to manage network traffic with the carrier having two choices, surcharges on bandwidth or caps as a last resort. The capacity is there to handle nominal traffic. It's managed commercial network it always has been. Simple and no further discussion is required on its construction, deployment or its design. The debate won't end there so there is further detail in the section Monopoly Myth #1.

If there's limited space to distribute various kinds of Internet traffic that is up to the Internet provider, not you. The good news is, that's how competition is born. In the Internet world, that's a great thing because it offers more diverse routes around that provider. Or does it. Many simply buy wholesale from the very provider you just walked away from. In logical terms the last mile is often repackaged copper, fiber or coax cable to their facilities that then (possibly) route to the Internet on a separate network infrastructure. And since they are start up competitors they do not have a lot of customers and the speed is faster, for about 6 months and then the ratio game starts for them. Hopefully they didn't make their prices so low that they can't afford to expand and keep their ratio lower than the big mean machine you just left. Sorry, all too often, that's not what happens and you wind up being right back were you started.

But if you really want Net Neutrality written into law, the Swiss are the experts on bureaucracy and make U.S. Congress's methods of writing law, look like they learned how in play school. There's a reason why your Internet contract or sales agreement is very limited in its description of terms and conditions (T&C's) or Service Level Agreements (SLA's). It's a best effort agreement and not a guarantee. Even large enterprise customers don't get an SLA on Internet bandwidth and they generally pay a lot more than you do. The Internet is not a place that has any controls on it. No government anywhere in the world can regulate an international network and get it right for your specific needs. I haven't even started down the path of Trade and Commerce Laws that this thing would collide with. In more than a few of my talk back comments, readers already know what I'm about to say. The lawyers are going to make a killing.

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Open today - it can be easily closed tomorrow.

Everyone that chooses to be on the Internet will join. The exploration, exploitation and saturation of the internet will happen. Not everybody is going to like what they see, let alone know what to do with it. It may be (you think) open for now, but there might be a time when people might just decide to close the door to the home office computer and say enough is enough!

How is today's internet created; By individuals or the corporate world? From a business point of view it's both. Individual users may see it differently for many different reasons. Net Neutrality will not enhance users experience and it's not required to do so. People will do what they want with it. Already there are signs of potential Internet user burnout. Yet it is becoming one of the services that many countries consider 'essential' for everyday life and is being recognized as such in many countries. Finland's political leaders are beginning that debate. The amount of hours people spend on the Internet is overtaking other forms of social activities. Is the Internet a fad, no it's here to stay, but we may see a threshold of usage.  The more this Net Neutrality point is argued, more people are likely to tune out or turn it off. I doubt it will happen, but everyone in the 1990's said GM would never go under, Facebook and the Internet might just be an electrical cord away from disaster.

Censorship -social truth occurs, but it is easily drowned out by the wave of silence or opposing views.

You post something online, a website, blog or newsgroup listing or place an ad to sell something. Great!!! But there's no guarantee that anyone is going to read it. In fact, there will always be some access points that will purposely never allow your post to be read. Google's argument (including Vint Cerf's) has been that a user must always have the freedom of choice. Choice in what? Everything? There were hundreds of newsgroup servers back in the late '80's. There were so many that there was no way that your ISP was going to access them all. The carriers subscribed to the ones that were closest to them to save bandwidth costs. There was no outcry then, why should there be one now? The Internet will never be completely open to the entire world and give each user EVERYTHING.

Net Neutrality over reaches the capabilities of all the Internet providers out there. And you want truth on the Internet too I suppose. If it's not going to be censored, you can write anything you want or sell anything you want, even bogus software that doesn't do anything except spy on you! If we blocked that material that would be considered censorship and nobody wants that. History will have so many different versions, I am so glad that it's impossible to archive everything that has been published on this network, put in daily time capsules and stored. Future researchers would have a billion different scenarios to write, and still not get it right. Petabyte data center now exists with more being constructed every year. Let's pray they don't build one even bigger, or that statement I just made about it being impossible to archive everything - just became a false prediction.

Geneva, London, Paris, Ottawa, Sydney, Beijing, Moscow, Washington D.C.  will never be the judges you want with respect to choice or censorship. Crime Laws already exist in most nations. These Laws already enforce statues where people break the law via the Internet. Racism, Fraud, etc.. We don't need more regulations or laws to operate the Internet, but simply enforce those that we have already where applicable. The truth is: Sovereignty always over rules Law and free speech that many think Net Neutrality requires in its definition of choice and prevention of censorship.

Free Internet; the air it consumes is free, but it also costs us, and is leaving a huge carbon footprint.

This is a commercial network a place where money is made and nothing is ever free. This isn't explicity requested by all in the Net Neutrality camp. But some of this group also thinks that throttling the network should be banned and that if you have a 5 MB network access point you should be able to get 5 MB,  7/24/365 and not pay 'extra' for it. That's not just realistic or even possible. Actually it is, but your cost for flat rate access would jump by about 500% and require a major upgrade in the core network of your city and network points to the Internet. More on this in the Monopoly section.

The only things that have been non-profit about it is ICANN and portions of the education sector. Your monthly Internet fee to your provider is a drop in the bucket towards the costs to construct, expand and operate the infrastructure. Corporations and your governments pay the commercial Internet providers most of the price tag that it takes to operate it. The ISPs will tell you, they can make darned good money doing so, thank you very much. The margins are lower than they were in the early 1990's and it's not improving.

Every time you start your computer, somebody is making money from you. Utilities love the Internet; it will be the economic engine for power companies in the future, unless we unplug our addiction to it. Google loves searches, look at all those ads in the right hand column advertising how YOU can make money doing the same thing. You could be rich after all. It's big business: Just look at Google's latest earnings - and you thought getting that billion dollar search engine access was free. I wonder how long it will take before Youtube's video pages begin to look like Google's search results pages. But is it something that requires mandatory access to and needs a law to protect it? Before we go to far, companies like Verizon are turning the table, putting internet applications on TV, like FiOS. Will we require TV Neutrality as well?

Connectivity cost money. As more people use it, the more long haul network is required. Your Internet access consumes millions of watts of power. That's billions of dollars and consumption of electricity. The Internet is just a networked set of computers. The U.S. Dept of Energy's Cray supercomputer consumes 12 Megawatts of power. There are over a billion PCs consuming 100  to 300 watts every second. Let me know when a barrel of oil drops 1 cent. Eventually Internet rates are going to rise.

Current service providers are evolving into more than just an ISP. Many have begun to offer the triple play as the industry calls it. Voice, Television and Internet. Right now, all three are usually delivered by separate technologies and divisions. In the near future it will likely be available to the masses. In some markets they already are. Providers want more of your disposable income and this is one way to accomplish it. Discount all three products and deliver all of them to your door. As separate technologies they are very inefficient. If all of them were delivered by I.P. the rationale is that it will be a low cost network to maintain, operate AND justify expanded network capacity. It's technically possible to do now, but in many parts of the world, the business case falls apart because of concern of sufficient demand to cover the cost of the rebuild of the network. But it will eventually occur. This is one area where Net Neutrality runs afoul. The laws overlap these segments with different rules. This is something that has valid complaint and may require regulators to review.

In Canada and other countries that process has already begun with VoIP. The Canadian regulator (CRTC) also came out with interim decisions on broadcasting t.v. signals over the Internet (live) and knocked them off the air because they did not have a broadcast licence and had an unfair advantage over existing operators. The same issues are going to hit in the FCC, Ofcom and others. Net Neutrality if applied will have significant challenges in this area to overcome.

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Monopoly; Three words: There is none. Three myths that should to be dispelled.

The only thing that is certain is that the network is not controlled by any one single entity, which is defined as majority interest in which network access, network traffic (global or domestic) is in the hands of a single entity. There are some very big corporations that have large footprints in last mile service to the front door of your apartment, house and community, but there are alternatives available. If you live in Yorkton, Saskatchewan or Wakita, Oklahoma, I'll grant you that your options might be limited or non-existent. That's okay though. Yorkton has a tonne of people looking for that imaginary line that says this is where the ice age ended  to keep busy and Wakita has more Tornado's tourist looking for where the F5 hit landed in the movie Twister. Some locations are simply not going  have competition for your business. The reality for those locations is that it is costing more to deliver broadband Internet to small town U.S.A. The current administration has offered grants to offset costs to upgrade these rural areas. I'm not sure that's a fair way to spend tax dollars, but that's what the current plan is.

Monopoly Myth #1

No single telecommunications carrier, regulator, or service will ever having managing control of the network. In its initial youth years, the Internet was primarily a North American and Western European entity. Today there are diverse routes around the world, that it is the only true interstate network in existence. AT&T, Verizon, British Telecom, Cable & Wireless have a fraction of the access and global network. Competition for access and long haul routes is fierce. Your local access provider has resource challenges of it own. They face rising capacity cost, financing and paying higher internet gateway fees, in addition to competing with other local providers such as capable and WiMax Wireless providers. In many cities there's over capacity of access (build and they will come business model) but lack sufficient urban exchange center bandwidth to get to broadband Internet gateways.

1995 through 2007, it was a deflationary market in some segments when borrowing costs were cheap. Those days are gone. Scaling appropriate network infrastructure of capacity to usage is one of the challenging aspects of operating in today's market. The network has expanded, and capacity during those years exploded in some parts. The network pipes began to fill up. The capacity ratio for one market's usage is often not transferable to another location. This creates significant provisioning and cost analysis problems that are not easy to circumvent or find solutions a telecommunications provider requires.

What many also fail to take into account is that fiber optic equipment burns out. The life expectancy of a fiber optic cable is not forever in all cases. It can last a lifetime but often it doesn't. It depends on the quality, how well it was installed, how many bends or curves it has along with what generation of optical equipment its attached to. Some networks will require upgrades both in fiber and equipment in the coming years and if bandwidth demands continue to rise, the equipment that connects to the fibre will definitely need significant upgrades at all the connection points regardless if they are worn out or not.

A city the geographic size of Chicago, St. Louis, Denver, Miami, Seattle (and others) would need significant capital to enable such an upgrade. Such cities have one thing in common besides large populations; urban sprawl, which requires extensive intercity networks. How many local providers are going to do the same upgrades in the same cities chasing the same customer homes?

The market pie has not increased as many thought it should. Instead all the ISP's and Telco's are chasing the same customers and simply moving revenue from one provider to another. Industry churn of less than 2.5% not caused by complaint is manageable. Anything above those figures cause significant cost increases that otherwise could have been allocated to infrastructure upgrades. Some markets exceed those figures by over double. If you truly want to know the health of the corporate players that are in this space, go the NYSE website and start reading their SEC mandated reports. In them you'll find their current subscriber and customer counts and year over year declining or improving market share. Right now it's pretty flat and those they do lose are simply moving to another carrier. The industry is not seeing a significant rise in net new users of the Internet. Long term, the internet should continue to see double digit growth year over year, particularly in Asia, Africa and Eastern Europe.

Monopoly Myth #2

Google is everywhere and it seems that if you want to find something, you go to Google. You can translate most common language to any common language. But that doesn't mean that we are in fact coming closer together. Google doesn't care what you search, it wants you to click on those sidebar ads.  The potential is there to dominate, but it's not occurring at the same rates as the revolution in computers are. Google may have the current majority market share in search technology, but nobody is forcing you to use it. And who wants 7 million search results back from around the world for something you need only 10? Google is the master in global search service. Nobody regulates how they index their results even though they are the single largest supplier in the search engine business. How does Net Neutrality impact that issue?

Google also complies to restrictions when asked, as they have to the government of China's requirement of banning certain websites from being searched. As described earlier, I do not believe that Net Neutrality will ever supersede sovereign law of a nation. Nor should Google be penalized for doing so.

If Google or any other similar sized customer wants to enter telephone service, then they need to play by the same rules as existing carriers. It's either a level playing field or not. Net Neutrality should not concern itself about access to everything or existing regulations and who can or can not get content. Competition does that already. If one carrier bans Youtube or file sharing, another provider will step up and the free market will function as it always has. That's because there has never been regulation or a requirement for Internet content. But if Google wants to terminate a I.P. phone call to the PSTN local dial tone network, it should adhere to the laws of wherever that call terminates. Like the CRTC decision mentioned earlier on broadcasting tv signals, the same types of regulations the FCC already has for telecommunications providers and should apply to Google or any other provider like Skype and Vonage, which already do comply. Customers do have choice and the concept of creating Net Neutrality law should not be used to overcome those that exist already.

There are exceptions where smaller communities have limited options or none at all. Consumers have to recognize that small providers can NOT afford high speed network trunks to Internet access gateways if the population consists of only a few thousand people. If you outfit every home in that community with a 5 Mb DSL access to the Internet, that provider now has to provision network trunks to the nearest Internet gateway, which are often hundreds of miles away, to handle what it believes is a reasonable amount of capacity on average. If the provider attempted to scale for peak hours only, the recurring costs would likely triple network costs, which are passed onto the consumer. If the customer is willing to pay for broadband capacity but there only a few  or there is very low market demand for the high performance (speed) version of the product, the costs will rise even further to you and the high usage user. You don't see 8 lane expressways in small towns. Just because big cities have them, doesn't mean you have equal right or are being unfairly treated and need to have one too. It's very unlikely that thee would ever be two large scale provides in a town this size and a monopoly does occur and will continue to do so.

Microsoft almost missed the boat by not taking seriously the web browser Mosaic, but that error will never happen again. Yet Microsoft doesn't come even close to having the controlling interest in how people access the Internet. New technologies in the wireless market are smart "X" gadgets and have exploded onto the market. Microsoft's piece of that visibility will be less than most realize and even Microsoft knows this is one challenge that they can not overcome. In fact, I think individual access onto the Internet is going to occur more often by wireless smart device than a laptop or desktop computer and exceed 50% of the market by 2011. The # 1 rule here is supply and REAL demand. If the two are not vetted properly, bandwidth capacity and access to the network infrastructure will always be challenged.

Monopoly Myth #3

The U.S. is the only military super power left on the planet but the U.S. doesn't control the Internet. If someone in Japan wants to talk, email or trade with someone in France it can bypass the U.S. and nobody would know it. If the U.S. government assumed control of every U.S. provider of Internet, it couldn't shut down the Internet around the world - unless it wanted to start a war and even then, the architecture of the network could fix that problem and bypass the U.S. in about a week. But let's not go overboard, the U.S. does not operate or regulate the Internet and nor does it desire a trade war if it were only ones that make the rules. ICANN has finally been separated from U.S. Government control this year.  U.S. Congress seems to want to rethink it's regulation of the Internet, and the FCC is in serious jeopardy of creating rules that would be impossible to enforce.

As an example, if a cable or telco provider was required by law to make sure that consumer's Internet access must be allowed to have equal right to capacity (to access that users 'choice' of content) and in any media form they want (torrent, mpg, video, youtube,etc) and those services resided in France, Australia or the U.K. and service was incredibly slow because the Atlantic fibre network that handles the traffic from Europe was saturated, does this give the FCC the power to regulate how that cable provider connected to those overseas locations? Does that give the FCC the mandate to tell the provider to find more capacity to Europe? If not, what difference is that compared to capping bandwidth to content no matter where it resides?

The Debate - samples of the arguement points

Google's and Open Internet Coalition's arguement are flawed. Using Google as another example, thier discussion point is it believes thier content is being restricted by providers. It certainly is being managed at destination point of entrance from the internet in your service providers network. After arriving from a Internet Long haul trunk, It has to be routed to your network node in your neighborhood. It might go through 1 to 5 different city core fiber rings before it actualy gets to your block.

Google has the budget to support massive amounts of bandwidth to enable global access for users appetite for multi-media content. That traffic then has to make it back to your providers network infrastructure which has to not only handle all the multi-media from Google, but email, and other internet traffic from around the world. Google is essentially lobbying the government to force that provider to build, rent, maintain, and manage more long haul and city core network - at your providers cost so Google can make money, all in the name of Net Neutrality.

Lawyers could keep this one in the courts forever if allowed to continue. I bet Google would lose. If Net Neutrality somehow became Law and only worked in the U.S. then a new trade war might start from abroad and vice versa if the U.S. government didn't like another country's version of Net Neutrality. There are so many hurdles that would need to be cleared like the WTO, GATT, NAFTA, let alone sovereign Law of another country. Are you sure you want Net Neutrality and it legislated by a regulator and enacted into Law?

Pay up, listen, be quiet, shut it off or start yelling...

Prepare to pay for everything (how does $250.00 / month sound), not be told the entire truth, the whole truth or any at all. And even though you think it's a free deal, there's always money coming out of your wallet when using the Internet and remind yourself that you'll never be able to see all of the Internet. Critical to anyone's understanding is that you as an individual will never be superior to anyone or anything in the world that is the Internet; you're simply outnumbered. In future blogs, we'll cover each of these groups of issues with questions; you can give your opinions and answers.

All the issues I've raised in this blog are about a product and  service that has no single definition or use. The thousands of existing and future applications available to a user will continue to expand. Some will fail and some will succeed. But it has nothing do with a guarantee or a right or choice. Users of the internet have to voice what they want and then listen to how it impacts them by those that provide those services. This is not rocket science. You want rocket ship speed to anywhere on the planet, pay up. There's no Law required to stop you from doing that. Today's FCC Comission Public Dialogue stated many of the same issues I've raised here.

I hope you want to make an argument for or against Net Neutrality, that's what this forum is all about. I hope you will and maybe, just maybe, everyone will listen.

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