Understanding Net Neutrality


#1

I don’t know about most of you, but I was confused about Net Neutrality until I read this article. It’s actually not that difficult to understand.

Thanks to everyone here who posts articles from FEE. I visit their site daily now.

With market-based pricing finally permitted, we could see new entrants to the industry because it might make economic sense for the first time to innovate. The growing competition will lead, over the long run, to innovation and falling prices. Consumers will find themselves in the driver’s seat rather than crawling and begging for service and paying whatever the provider demands.

The old rules pushed by the Obama administration had locked down the industry with regulation that only helped incumbent service providers and major content delivery services. They called it a triumph of “free expression and democratic principles.” It was anything but. It was actually a power grab. It created an Internet communication cartel not unlike the way the banking system works under the Federal Reserve.

Net Neutrality had the backing of all the top names in content delivery, from Google to Yahoo to Netflix to Amazon. It’s had the quiet support of the leading Internet service providers Comcast and Verizon. The opposition, in contrast, had been represented by small players in the industry, hardware providers like Cisco, free-market think tanks and disinterested professors, and a small group of writers and pundits who know something about freedom and free-market economics.

Here’s what’s was really going on with net neutrality. The incumbent rulers of the world’s most exciting technology decided to lock down the prevailing market conditions to protect themselves against rising upstarts in a fast-changing market. The imposition of a rule against throttling content or using the market price system to allocate bandwidth resources protects against innovations that would disrupt the status quo.


#2

Net Neutrality was a deliberately twisted mess and it was impossible for the consumer to see whether it was good for him. The solution is to see who’s supporting each side and to choose the opposite of the evil guys.

Unfortunately, evil guys support each side…this article helps but I’m still struggling tbh.


#3

Netflix, Amazon, and the rest don’t want ISPs to charge either them or their consumers for their high-bandwidth content.

An excellent example:
Imagine that a retailer furniture company were in a position to offload all their shipping costs to the trucking industry. By government decree, the truckers were not permitted to charge any more or less whether they were shipping one chair or a whole houseful of furniture. Would the furniture sellers favor such a deal? Absolutely. They could call this “furniture neutrality” and fob it off on the public as preventing control of furniture by the shipping industry.

The only problem that we may see is if the provider begins selling bandwidth instead of access service, much like cell phone providers did. Now because of competition they are forced to have unlimited bandwidth plans. It will stimulate competition however may cost more initially as providers charge more because they can.


#4

What I’m confused about is whether this will do anything to break up the Comcast internet monopoly. My only choice for internet is Comcast - and they suck. It’s expensive and works when it feels like working.


#5

The monopoly was set in place by your local government who authorized the initial cable in your area to minimize costs.

Another factor is property trading. Cable companies play monopoly trading properties for other properties with cable companies.

I worked for a cable company and it was common.


#6

The argument will have to be that the internet is a Public Good and can be regulated to ensure necessary access for citizens.

The neutrality I would have enjoyed in early times would have servers that did not dump slow connections to service the fast ones, so I could read my lowly text-based information, which is still the best information. I would have loved a side channel for us dial-up users, or us DSL holdouts, so we did not have to wait for the folks who were downloading porn or TV shows.

I would be fine with bandwidth-based pricing, because the most important things one does on the internet are not pixel-laden active pages but web forms, government pages, the library, emailing one’s congressman, finding out how to apply for a new driver’s license, etc. My main use of streaming is to listen to radio stations.

The problem I see is that we can’t un-mix the data from the drivel.


#7

Of course we can. It’s trivially easy to separate out by class of service or point of origin. The real question is should we. And that answer is definitely not.

Internet service is a public utility, just like telephone service. It’s fine for ISP providers to charge different rates for the quantity of the resource consumed, either by speed of connection of amount of data consumed, but changing based on type of content is definitely not fine. If I want to consume 1GB of data for streaming media or downloading every phone book in the history of the United States, that’s not the ISP’s business.

What net neutrality is really about is allowing an ISP, the vast majority of the largest ones also being content producers or providers, to decide how to advantage or disadvantage content. Comcast owns NBC. Think they might want to favor NBC content over, say, Netflix? No? They’ve already done it before. When they were strong arming Netflix to cough up millions of dollars, Comcast throttled the speed of data coming from Netflix to their customers to reduce performance. This is akin to AT&T refusing to let you telephone Verizon or only allowing Verizon customers to call you over 3G. Nobody would stand for that and nobody should stand for this.


#8

If some ISP starts misbehaving (for example by favoring their own content) there will be such an outcry they will quickly regret it and backtrack. Even then they will be hit by a mass of cancellations.

I controversially believe net neutrality is something of a red herring except maybe in small towns with only one ISP.


#9

This is exactly right. Net Neutrality at its heart stifles innovation. Netflix business model was always about forcing local ISP’s into building capacity to carry their traffic while being able to keep their service offerings artificially low. It is time for the next round of innovation to circumvent the ‘last mile’ chokehold held by companies like Comcast. Forcing the actual cost of services to the consumer will push new products and new methods of delivery… or kill products that actually wouldn’t exist without government protection…


#10

All that regulation isn’t free is it.


#11

Net Neutrality sounds good on paper, but then again, the road to hell is paved with good intentions. This sounds just like another socialist scheme the Obama’s admin was trying to push, just like the other two he successfully pushed: the “affordable” care act, and the Dodd-Frank Act (another 1800 pages document) , where it over-regulates banks, especially smaller banks, to consolidate bigger banks into tightly regulated financial blocks under their thumps.

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#12

Wishful thinking at best. I live in Las Vegas, and you have a range of choices which include Cox or…nothing. They already hose us, do you actually think they’ll be better?


#13

I used Century Link when in LAs Vegas.

Poor but acceptable service.


#14

This graphic shows you why net neutrality is a bad idea… I have said for years that without the government forcing ISP to foot the bill for expanded capacity, Netflix business model would dry up and blow away… Netflix depended on the government forcing its throughput costs on the ISP’s and prohibiting them for charging for that excess used… Netflix CEO’s compensation is 23million plus this year… a 40% bump year on year… why?.. Its not because of his relatively simple business model… its because he knew how to push ‘net neutrality’ buttons in Washington…

Of course he isn’t concerned about net neutrality any more : > Speaking with Recode’s Peter Kafka at the Code Conference today, Netflix CEO Reed Hastings explained his position on the current net neutrality debate that’s happening at the FCC. Or, more to the point, he addressed the fact that he’s been awfully quiet about it compared to how loudly he defended net neutrality in previous fights.

“It’s not narrowly important to us because we’re big enough to get the deals we want,” Hastings said. It was a candid admission: no matter what the FCC decides to do with Title II, Netflix isn’t worried about its ability to survive. Hastings says that Netflix is “weighing in against” changing the current rules, but that “it’s not our primary battle at this point” and “we don’t have a special vulnerability to it.”

He does believe that smaller players are going to be harmed if net neutrality goes away, saying that “where net neutrality is really important is the Netflix of 10 years ago.”

Now of course he has changed his focus… Tax considerations and how it is ‘crushing’ his business compared to Amazon…


#15

To address the OP, here is a really good and recent take and detailed and comprehensive explanation on NN