Amazing news this evening about an incredible victory for net neutrality. According to Harold Feld’s Tales of the Sausage Factory, AT&T has submitted a new 20-page letter outlining the conditions it will accept in order to secure FCC approval of its merger with BellSouth. And they amount to a wholesale acceptance of the principle of net neutrality for both broadband and wireless.
If you’ve followed the merger issue, or the net neutrality issue at all, you really have to go read this. I’m stunned by how big a victory this is. If I didn’t know Harold to be a stand-up guy, I’d think this was a hoax.
Update: Oh dear. They only last for two years. That’s not so good. Although it does take us into the next administration…
This whole net neutrality thing is missing the point.
The real problem here is the lack of competition in the local loop due to the capital costs of laying cable/fibre to the home and in many cases municipaly convered cable monopolies.
The idea that Comcast might successfully strong arm Google into paying settlements neglects the fact that Google has the bargaining power here. Comcast’s customers are paying to contact Google, if their Google service is slow they are going to demand that Comcast rather than Google fix it. Google could easily insulate itself from partisan bandwidth provisions by setting up Google Benchmarks, a site that shows in real time which network providers are delivering the best service and which ones are not providing the service that subscribers paid for.
Getting the service that was paid for is the real point. If a subscriber pays for 0.5 Mb/s service and gets 0.5 thats fine. If they pay for 2 Mb/s and only get 0.5 unless the content provider pays for settlements there is a problem.
The point that seems to be missed here is that as a deliverer of broadband content it might be advantageous for me to pay the broadband provider for a temporary bandwidth increase from 0.5 MB/s to 2 Mb/s or more so that I can sell them a video on demand movie. The cost for this temporary bandwidth increase (25 cents say) will of course be passed on to my customer who might well want to avoid the charge by paying the broadband provider $10/month extra (say) flat rate.
The problem here is not the idea of charging different amounts for different types of service, the real problem is that due to the lack of competition in the local loop the broadband providers may employ functional pricing and unfairly extract monopoly (or duopoly) rents.
The current Internet infrastructure delivers almost but not quite the level of performance required to deliver high quality live video to the home. YouTube only works because the resolution is poor and the clips short. It is unlikely that more than 5% of the subscribers on one cable drop are watching YouTube clips at the same time. In the future cable TV (and Satelite) are dead as are DVD (HDDVD and Blue Ray are already buggy whipped) everything is on-demand.
It is going to take a significant investment to move from our current situation to the one we all want. Someone has to pay for that infrastructure. The question is how to allow ISPs a fair way to recoup costs without ending up in a monopoly situation.