Saturday, 6 November 2010

Reports of Net Neutrality's death have been greatly exaggerated (for the time being)

The recent work list for the FCC fails to put any priority on Net Neutrality. Problem solved or vested interest kills progress? So lets look at the facts:

1. The operators need to invest lots of money in order to build the infrastructure to carry net traffic. True.
2. Without content providers there would be no internet. Almost certainly true. Cable operators aside (and even here the content came first), large carriers/operators have a dismal history of producing applications and content people want. Without the Facebooks, YouTube, Netflix there would be no internet and no line rental.
3. Its not fair that these guys can freeload their business model over the top. Not true. These guys do all pay to have access to the internet. They pay carriers/operators to connect large data pipes to their server farms. How is that not paying?

The truth is that carriers seem to be either blaming over the top players for not paying their way (when they set the fees in the first place) or they are trying to argue that they should get a share of the profits.

The first assertion is too ridiculously stupid to comment on as you can't blame someone else if you have screwed up your business model. The second is like saying that if you take your truck on a turnpike/toll road carrying goods for sale you should pay a toll and give up a share of your profits. Anyone in business knows that no company would ever accept these terms in a free competitive market and if it did occur then the market is functioning as a monopoly or a cartel.

Fortunately the market is working as this situation does not exist so Net Neutrality is working on the whole today. Once companies have to give up a percentage of revenue to cross the information superhighway it is not and regulators should move swiftly or see international competitiveness in the digital economy take a dive.

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