Monday, June 26, 2006

Network Neutrality for Dummies

There is an issue bubbling quietly in Washington called "Network Neutrality." Network Neutrality was initially raised as a telecommunications policy (stay awake, it will get better) to ensure that the big phone companies won't disrupt the current internet business model consumers and internet companies have operated under for the last 10 years.

Now, several things are going on with the internet. (1) at&t wants to return its former stature - something which Congress "in theory" tried to dissuade for the last 20 some odd years, (2) local telco's are losing big margin local phone lines (mostly to their own wireless companies - but at lower margins *sob*), (3) the phone companies want to get into the cable business. Maybe they will build it, maybe they will buy it. Who knows....

Let's just say - they would really appreciate it if the government just minded its own business (flag burning and gay marriage blocking).

So - does the phone company really care about network neutrality? No. I just don't think so.

What, what, what you say? All this lobbying, advertising, and fascinating CSPAN2 testimony coverage - for nothing?

Yes. You see if their real goal is to control costs they would prevent peer to peer traffic (old school Napster) or Newsgroups. It comprises about 33% of their current bandwidth (sometimes over 50%). It is easy (and cheap) to lock at the switch level. A simple on / off if you will.

If they wanted to simply make money, they could raise prices on access or buy up those pesky competitors who are selling business access at low prices. They can then raise prices to those pesky businesses.

So the telcos continue to threaten to clamp down on network access control and prioritize bandwidth based on dynamic consumer demands. But its not quite as simple as it sounds. It would require an enormous investment in systems to control the access, to manage it (without breaking it), and bill it. And even then - there is no promise they could even make their investment back. There is always cable for the consumers. So, they have a multiple billion dollar investment with no promise of a return.

You see, its a lot easier to get the GOP Congress to pass some laws ensured to leave you alone. Now you can get back to focusing on telling people why they should pay you $35 or more for 125 year old technology. Nice work if you can get it....


Thrillhous said...

Very interesting. So basically, this affects my porn downloading how?

Smitty said...

Thous breaks it down perfectly.