Monday, September 21, 2009

Net Neutrality

I'm constantly amazed by the misperceptions that otherwise knowledgeable people have about certain things like Net Neutrality. For example recently this article was published on the PC Week website. In it, David Coursey talks about new proposed rules that the FCC is expected to pass in October that will prohibit carriers from discriminating against different types of data traffic. Mr. Coursey says that these rules will "take away the carriers control of development of the Internet."

He continues: "my take is that this is a great day for the Internet and it will be an even greater one when the FCC takes a formal vote. It is a win for the future in a battle against the established telecom interests as well as a move toward making the Internet a level playing field for developers.

Lacking these new rules, the carriers would be free to charge companies more to carry certain types of Internet traffic or to not carry it at all. There could be no uniformity between networks, meaning that an application that worked on one might not work on the others."

I'm no fan of carriers that put governors on Internet data speeds for certain customers, adopt per megabyte pricing models, or use other antiquated approaches to business. But to think that creating regulations that promote net neutrality will be a win for consumers is at best optimistic.

In the end the cost of building nationwide high speed data networks, like any capital costs associated with any business, will have to assumed. Whether this is in the form of increased charges to end users including residential and business customers or though taxes charged by the government to subsidize these build outs, consumers will pick up the tab. There's no such thing as a free lunch and we don't get modern, high speed data networks for free.

Preventing access to applications does not help carriers at all. If no content or applications are available, and carriers are certainly not positioned to develop every application or content source that anyone might ever use, no data traffic growth will ever occur. Thus there is an incentive to promote new application development all while optimizing the pricing model to encourage continued adoption of arguably the main engine of growth for carriers.

Let's let market forces determine what will prevail in this case, instead of just creating additional rules that will surely be a greater problem than a solution.

Comments are welcome.

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