A happy new year indeed for network neutrality
Big news last week in the ongoing network neutrality debate. Over the holidays, AT&T (T) hashed out an agreement with the FCC for its merger with BellSouth in which AT&T agrees to abide by some of the principles of network neutrality (The primary document). This is a major development for an issue that's pitted Internet companies (Google (GOOG), Yahoo (YHOO), et al) against the telcos. And the Internet companies seem to have won this latest round.
First, a quick primer on network neutrality. Network neutrality is the idea that internet service providers can't discriminate between data packets based on their content. For instance, Google's data has to be treated the same as Yahoo's, and telco companies can't create tiers of service in which some sites can pay to have their content delivered faster and with greater reliability than others. (FORTUNE ran a 60 Second Briefing on this last year. And if that's still too reductive, see Wikipedia for more.)
There were bills floating around Washington in the last Congressional session that sought to put some of these principles in writing, but none got passed. This FCC agreement is in essence the first time the government will be trying to enforce net neutrality, and AT&T gets to be the guinea pig. The FCC agreement prevents AT&T from discriminating between where data comes from—but leaves room for AT&T to prioritize certain kinds of data (for instance, delivering video faster). This seems like a win for consumers.
But the Browser has a question: how will the FCC detect discrimination and enforce this policy? Edward Felten, head of the Center for Information Technology Policy at Princeton, raised just this point in a paper last year, following a scenario in which consumers discover they're having jitter problems with their VoIP services:
The most challenging possibility, from a policy standpoint, is that TelCo didn't take any obvious steps to cause the problem but is happy that it exists, and is subtly managing its network in a way that fosters jitter. Network management is complicated, and many management decisions could impact jitter one way or the other. A network provider who wants to cause high jitter can do so, and might have pretextual excuses for all of the steps it takes. Can regulators distinguish this kind of stratagem from the case of fair and justified engineering decisions that happen to cause a little temporary jitter?
Maybe the Browser is missing the nitty gritty technicalities here, but it seems like decisions about how to priotize data—conscious or otherwise—have to be made all the time when managing a network. One might imagine a circumstance where one network provider has an infrastructure that favors data packets from one VoIP provider over others just by virtue of the engineering. Does AT&T have to rectify that on behalf of the other VoIP companies? How can we tell the difference between pernicious discrimination and the types of network failings that are just the price of doing business?
Google meets AT&T. While AT&T did not get it's dream concession with FCC, it was still a big win. The new AT&T is focused on ADVERTISING. Look at what they own compared to Google. Now AT&T will offer discount bundles to own the 3 major advertising paths to consumers: internet, cell phone, and tv. Definitely not now (thanks to FCC), but in the near future, AT&T will own more dominate paths to the consumer. I beleive they are light years ahead of Google thinking.
I think the real damage here will be to those consumers who do not download large files such as video, music, software, etc. Our service levels will decrease because deep pocket companies like Google, Yahoo, Vonage, Apple, Microsoft, ... won't pay to have their products delivered. I wish Amazon could get UPS and FDX to deliver packages for free!!!
I echo your sentiments - why should a small-volume internet user reading news have to fight for bandwith, equally, with someone streaming humongous HD movies? One HD movie contains enough info for me to read a whole week of blogs and news, etc. Net neutrality is wrong - the ISPs control delivery to consumers, and where else in business are companies forced to do that for free? It's like a mall that doesn't charge tenants rent based on floorspace. I love how people are worried about "the small guy", but here's my question - why should consumers pay for the ability for other companies to make money off them? The same way Google provides free search to billions to earn revenue on a slice of that, shouldn't the moneymakers of the web be subsidizing internet service to the masses so that they can keep making money? Show me where, in business, one company provides a 100% vital component to another company...and doesn't get paid. Google owes their life (and billions) to Comcast and AT&T and Earthlink and AOL....yet feels they do not have to pay them a cent. It's like demanding to be listed in the Yellow Pages AND delivered to every house in the city for free.
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