’Net Neutrality’ and Future Growth

Today’s N.Y. Times (reg. req’d) has a pro-"net neutrality" editorial:

If access tiering takes hold, the Internet providers, rather than consumers, could become the driving force in how the Internet evolves. Those corporations’ profit-driven choices, rather than users’ choices, would determine which sites and methodologies succeed and fail. They also might be able to stifle promising innovations, like Internet telephony, that compete with their own business interests.

Telcos and cable companies (correctly) perceive the Internet to be a threat to or, in some cases, already eroding their core businesses and are frustrated that their pipes are feeding the growth of their competitors. One of the not-so-hidden dimensions of these debates is the desire of some of those same providers to stifle or at the very least control the development of the Internet and thus protect their traditional revenue streams, which are more certain and generally predictable than their ability to compete in an open Internet marketplace.

While it’s not entirely clear how all this would play out, it’s quite possible that local and small business marketing online would likely be harmed by such fees. Yet in the same way that China will ultimately not be able to control the Internet and free speech (notwithstanding the current complicity of the big Internet brands) the ISPs/access providers will not be able to control the trajectory and growth of the Internet.

Just as soon as these potential fee structures were implemented, assuming Congress doesn’t intervene to prevent it, alternative access paradigms would emerge. There’s too much competition, too much consumer demand and too much at stake for it not to happen.

This Post Has One Comment

  1. Joe Hyde

    This is going to be a huge problem for all startups on the net. What I envision happening is the large backbone players (Verizon-MCI and AT&T-SBC) will start prioritizing traffic that is hosted in their data centers. That is, they will prioritize traffic from the SERVER end, not the user end. That way, they can tell Congress that they aren’t restricting the end-user who is "paying" for DSL/Cable access.

    The other play that will find itself even more restrictive is in wireless handheld broadband. Things like Verizon EVDO are more controlled in bandwidth that straight-up ’net access for laptops and desktops. EVDO customers may get preferred content providers, for example.

    All in all, this is the fault of telecom-friendly (and Republican*) FCC policy that started when the FCC basically ruled the Telecom Act of 1996 out of existence (and the Supreme Court upheld it in the BRand X Internet cases). It has been coming. Buy VZ and T stock now!

    * I am a Republican, but the Republican FCC policies are anti-entreprenuer, and this is one of the emerging problems of piss poor, pro-Bernie Ebbers FCC policy.

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