Net neutrality as an issue has recently come to a head, but I talk to many IT managers and leaders and it is clear not many have a true grasp on the implications this issue really has on the Internet and on the marketplace as a whole. As a result, I wanted to spend some time breaking down the issue and pointing out that while you may not have cared about net neutrality before, you absolutely need to care now.
What is Net Neutrality?
Essentially, net neutrality at its core is the principle that a packet is a packet is a packet when it traverses the Internet. Internet service providers adhering to net neutrality standards do not particularly care whether a packet is streaming video, an e-mail, an upload to SharePoint, or an FTP download. It is just traffic and to them, all traffic is the same. In addition to not caring about traffic, net neutrality refers to data being accessible to all customers with Internet access regardless of their provider, without the provider discriminating access or service quality between sources of traffic.
The issue of net neutrality has been around for a while but it has become increasingly mainstream as more and more services are delivered over the Internet and world wide web and not over other types of networks and transmission systems. What you are finding is that so much content is being delivered over the Internet that it is saturating the existing interconnect capacity between network providers, and many network providers are reluctant to incur the expense of expanding that capacity to favor only a few sources of that congestion.
Combining Internet and Entertainment
A very worrying new development, at least in my personal opinion, is the merger of Comcast and Time Warner Cable. I have never had Comcast service, so I cannot attest personally to it, but the company is regularly voted The Most Hated Company in America, and results so consistent must somehow be grounded in reality. I harbor absolutely no love for Time Warner Cable either after two billing snafus nearly wrecked my recent home purchase and mortgage application (in the interests of full disclosure, both issues have been rectified). Putting the two together has got to be the worst idea for consumers in a very, very long time, and honestly I would be very skeptical the merger would even make it through government scrutiny were it not for the fact that the cable plants for each of the respective companies do not overlap at all due to the nature of the local municipality sanctioned business monopolies each enjoy.
The problem is that NBC Universal, a company created in 2004, merged with Comcast in 2009 through a complicated buyout scheme that has resulted in a huge entertainment company that also serves millions and millions of broadband access customers with its Internet service provider business. Owning all of the movies that Universal produces, and owning the popular major broadcast network NBC, and controlling the only home Internet access most of their customers have, offers NBC Universal an unprecedented opportunity to control the distribution of information and entertainment to their customers. It is not hard to envision a world where Comcast promotes and offers NBC content preferentially to its customers, perhaps even to the detriment of other entertainment sources that its customers might choose but that would need to be delivered over its network.
In fact, Comcast is already putting this opportunity to work by striking deals with companies like Netflix to offer service with less interruption and more availability to its own customers. Previously, Comcast customers had complained that streaming Netflix video was choppy and at times unusable. Indeed, a Wall Street Journal analysis found that Netflix’s primetime performance over major ISPs dwindled even over a period of three months from as around 2 megabits a second to as low as 1.5 megabits a second, mostly due to congestion because of the service’s popularity. Instead of that being Comcast’s problem to actually provide the service they are already taking money from their customers for, Comcast refused to really permanently fix the issue, announcing that it believed Netflix should bear the cost of delivering its content to Comcast customers. Netflix acquiesced, making a deal with Comcast that resolves this congestion. Reed Hastings, CEO of Netflix, said recently that he felt his company was forced to make this arrangement for faster delivery of its service “because the deal was better than the prior state. We felt we had to.”
If you take even a couple of minutes to really think this situation through, it become clear that it is patently absurd from a logical perspective. Comcast’s role as an Internet service provider is to provide Internet service to their customers, which they do in exchange for a monthly payment. To then attempt to strike deals to be compensated for alleviating bottlenecks on their own network from companies on the other end of the pipe is nothing less than greedy double-dipping. Comcast wants to be paid by customers for access to the Internet and then by Internet facing companies for access to its network customers. As Hastings says, “they want the whole Internet to pay them for when their subscribers use the Internet.”
How is this a good development for the Internet? How does this not result in a “fast lane” on the Internet, where bigger players with big pocketbooks continually provide payola to ISPs to make their content available faster (or even at all) while smaller companies with a potential to disrupt—you know, the startups that make the Internet an amazing marketplace—are edged out because they cannot pay the toll?
This is a really big deal, folks. If you are in any sort of communications, entertainment, or service provider business, consider this risk here. Assume for a moment that Comcast decides in order for their customers—your customers, too, of course, but simply the set of your customers that use Comcast to access your services—to get unfettered access to your site or your service, you have to pay them a private peering fee. Or what if Comcast decides, with a broader stroke, to tier services so that your business is in a “category” that by default does not receive an allocation of bandwidth sufficient to properly provide access to your service for your customers? What if Comcast competes directly with your business and decides that no way no how are they going to let their customers even have access to your service?
This is the power that monopolies have, and while you could argue that perhaps over time they would not get away with this sort of nonsense because the regulators would eventually step in, your argument is weak. Our government can be very slow to respond. Lawsuits are not timely and they are very expensive. They require resources from many parties. Startups and other disruptive companies by their very nature seek to cause change massively and quickly. Their premise and promise could easily be shut down by a Comcast or a Time Warner Cable or an AT&T, and even if that behavior were later considered illegal, the damage would already have been done.
You might also argue that consumers have a power of choice if one ISP decided to act in this nefarious way; however, unlike other markets, most consumers have only one choice for home wired broadband connectivity and many wireless broadband solutions have data caps or are otherwise unsuitable for sustained regular use within the home.
So while the title of this piece indicates net neutrality is something that you do not have time to care about, you really need to make the time to be involved in this debate. What the issue boils down to is whether the companies that offer service on pipes on the Internet, the last mile of service between a user and the greater Internet, should be able to exert control over the traffic that goes over those pipes. Weigh in on this issue. Write your congressmen. Write to the Federal Communications Commission. Direct your business where you can to companies that favor the strongest exercise of net neutrality principles. Otherwise, you might find yourself competing to reach your customers not only within your own industry, but also with your customers’ service providers.
This article originally appeared, with edits, at CIO.com.