May 30, 2006

Net neutrality

Every so often the news media grabs onto an issue that has a potential impact on the public, generating an unprecedented amount of buzz, and usually spurring lots of debate and saber rattling in congress, hopefully piggy-backing off of the constituent grabbing concerns.  The latest buzzword ripped from the headlines and mired in a heap of mystery is “net neutrality.” 

 

Basically, what this issue comes down to is this:

 

When the internet was formed through government research, a decision was made to hand the backbone operations over to private companies.  As our government doesn’t like to be in business, particularly businesses that compete with private industry, and since the telecoms already had experience running network back-ends, this seemed like a relatively efficient decision. 

 

Flash forward to 2006.  The big telecoms are floating the idea of charging for the luxury of fast access to that back-end network.  The idea is this, maintenance of the network is expensive, and the people who use it more should pay more for it.  So, if Disney or CNN wants their website to load quickly, so that their many visitors don’t succumb to impatience, they’ll pay an extra 100,000.00 a year for “premium load times.”  If on the other hand, a company, large or small does not want to or does not have an extra 100,000.00 lying around to send to AT&T and friends, their pages will load at dial-up speeds. 

 

It’s a logical argument, but it’s one that’s entirely flawed, and without sounding too alarmist, threatens the very fabric of what’s normatively good about the internet.  First of all, right now, companies pay for hosting, and hosting companies charge them based on usage, including how much storage they’re using, and how much bandwidth individuals are using to access their site.  Larger companies that have their own hosting, already pay for the massive connections that hook their corporate presences up.  Big media sites such as ign.com and cnn.com have paid tiers for access to their most expensive (from a bandwidth perspective) content to offset the costs of oodles of downloads. 

 

The current net neutrality debate, actually adds an additional layer of toll collection to the internet, after all of those charges have been made.  The current issue is whether the back-end, or for lack of a better way of describing it, the interstate highway can discriminately charge certain companies, or artificially speed lock them, if they choose not to pay the additional toll.  This would be like getting on an interstate highway, but, everyone who drove a Honda had to pay an extra 5.00 a gallon for gas, otherwise they had to have a special device installed on their tires to force them to drive 20 mph slower than everyone else. 

 

The bottom line is this:  nobody is saying that the companies that maintain the back-end shouldn’t be able to charge for access to the freeway.  Interstate highways often have tolls for their maintenance. But, these companies already charge, what their proposing is a selective “premium” service to give an artificial commercial advantage to those companies who choose to pay for the boost, or rather, to avoid the cut.  Inarguably, this is an effect of free-market principals, and in a truly free-market situation, companies could simply bump over to a different back-end, if they were unhappy with the services or practices of this one.  However, the problem with applying a libertarian free-market attitude to this situation is that the telecoms that run the back-end were given the keys to the freeway by a taxpayer funded initiative that put the pieces in place.  Essentially, we have already paid for our access to the back-end, and while we all continue to contribute to its maintenance and expansion, there is a vast difference between maintaining what we built, and being asked to pay a discriminatory premium to take the skyway instead of the rural route. 

 

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