Monday, October 20, 2008

Another Network Company that doesn't get it

It's time to fire up Net Neutrality talk again, this time with someone that clearly wants to get to charge twice for content on their pipes. Vodafone will be moving to create the walled garden where the deep pockets get to your door fast, and everybody else gets to wait outside for the scraps. Pay to play, so to speak or Payola for the internet age.

The reason that I see this as them asking to be paid twice is ISP's enter into an agreement with me to provide me access to the internet at a set speed, and when I signed the contract there where no limitation on destination, or total volume I could transact(except the total theoretical volume my service could provide). I pay the ISP monthly to utilize this service, and for most content that seemed to be ok, so they keep selling this service until the service degrades I complain they add capacity (in theory) so I stay, but implicitly they are making money on the assumption that I will not/cannot make full use of the service I am paying for so the oversell of capacity (finite amount of bandwidth their current network can handle). The content providers also purchase internet service from other ISP's to move their content from their servers to the respective endpoints of their ISP's peering agreements. They purchase guarantees for service levels to their ISP's peering points and availability, (something most ISP's for consumers don't offer) and serve content as fast as they can. There is no free lunch going on as some people like to assert. On both ends there is someone paying for content to move from one end of the internet to the other, so I offer an alternative to the free lunch as Verizon and others have called it.

You don't like the game as it is played, then build a new internet. One that you don't get to use your state sponsored monopoly right of way for, one that doesn't get to have fiefdoms of protected coverage enforced by the Federal Government. I dare you to envision having to pay full price for the land that your equipment lands on, or not getting the benefits of increasing network capacity to lower your telecom costs and anathema of anathema's no monopoly for coverage areas. Imagine having to compete the way you have to compete in the Mobile sector. Agree to separate your Fed sponsored Monopoly Phone/Cable service and create all new infrastructure, ensure that one doesn't cross subsidize the other, and compete in a free market and then we will talk about free lunch. You might find yourself competing with Google the ISP, and the peering agreements would not be in your favor I promise you that in that future, you would beg to get back to the "free lunch" program of today.

I realize that this idea is just a thumbnail sketch of an idea, and the implication for the entire country would be vast, and allowing true competition for broadband by kicking the incumbents out is drastic, and I realize there is absolutely no equitable way to do this. Cable and Telecom companies were granted the right to build out Telephone and Cable Television networks in there charters, they naturally drifted into the Internet business because they were the best poised to take part in it (we would likely never have had the "Free business models" without it), but had it been chartered separately and never been handed to any of the incumbents of the day, and been forced to grow the way Telephone and Cable had to grow, we would not be facing bandwidth caps after a period of overselling and "Unlimited Internet" promises, we would have started with caps and be moving towards Unlimited ala the AOL dialup paradigm. The internet as we know it would likely not exist yet, but there might have been a chance for real competition and innovation rather than the BS we are being served today, of "We cannot keep up the pace we were on" or "The Network Effect and economies of scale are not in our favor anymore so we want to change the rules".

All of this to me sounds like crocodile tears from companies that are seeing the business that subsidized their failing monopolies is moving towards mature status, and they don't have anything to subsidize exorbitant profits with anymore as the internet can be everything, and encompass everything, so all new innovation will take place in that construct and will relegate the providers to being pipes, with not will of their own. This is the labor to not go quietly into that steady costs and rewards that was Telecom for 60 or so years, and where Cable Television providers were heading had the internet not fueled demand for their service.

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