Very Hot and Cold on Net Neutrality

[imgbelt img=net-neutrality-monop320.jpg]Craig Settles explains why nobody’s neutral on the issue on Internet “neutrality.”


[imgcontainer left] [img:netneutralold320.jpg] [source]Save the Internet

Net neutrality requires Internet providers to equalize the quality of service to all customers, big and small.
Net neutrality has become a contentious issue within the media, among pundits and in Congress, generating an edginess on par with healthcare reform discussions. But what does this debate mean to Smalltown, USA, and rural America?

On the face of it, net neutrality is a fairly simple issue, but beneath the surface complex potential benefits and competing interests are churning up a lot of turbulence. In particular, incumbents – the large telecom and cable companies such as AT&T and Comcast, with existing Internet access services – are not happy.

Recently Federal Communications Commission Chairman Julius Genachowski laid out six principles that, he believes, will ensure that the Internet remains a neutral communications medium. “Net neutrality” fundamentally means that everyone receives equal treatment in accessing and delivering data, services or applications over the Net.

Genachowski wants these six principles to have the force of law:

have institutional customers – like local governments, school districts, and hospitals — that transmit and receive huge amounts of data; for this heavy use of the network they would pay a sufficient price to offset much of an applicants’ network operating costs. Individual subscribers who live on YouTube may pay more than people than those who just check their e-mail. The heavy network users aren’t getting a free ride or harming operators’ revenue.

Content providers such as Travelocity, WebMD and applications yet to be born connect to the Internet via other service providers (imagine the server capacity that Travelocity requires). They pay big bucks for access, private infrastructure and others expenses to enable their content to reach subscribers of grant applicants’ networks. They’re not getting a free ride either, nor are they impacting grant applicants’ operating costs since local institutional and premium customers pay for the capacity to receive the content.

Net neutrality doesn’t change these dynamics. It just ensures that if Joe’s Local Hardware Emporium and Smallville Data Storage Co. both want to move 500 gigabits of data through a provider’s network to the Internet, the provider can’t show favoritism moving either company’s data. If Smallville is moving 500 gigabits and Rural Telemed is moving 100 gigs, it’s ok if Smallville pays more, but under net neutrality the operator cannot arbitrarily slow down RT’s data traffic because they’re the smaller customer.

Detractors claim that net neutrality will lead to the demise of investment and innovation. Incumbents played the death-to-innovation card when they didn’t submit stimulus proposals. But 2,200 proposals from local governments and smaller service providers prove plenty of others are willing to step in with plans to build networks and offer innovative services without being tripped up by this rule.

a list of 10 communities I compiled from dozens in the U.S. that have built their own networks or partnered with private companies reveals some interesting numbers about wireless networks.

Franklin County, Virginia’s wireless network gives you a max of 3.5 mega bits per second (mbps) down to consumers’ computers, 2 mbps up from the computers to the Internet. Prestonsburg, Kentucky, with its humble city-run WiFi network offers 3.5 mbps. Cambria County, Pennsylvania, offers 15 mbps. Allegany County, Maryland, offers commercial users up to 100 mbps on its wireless network.

The large cellular wireless companies worry about capacity (and thus network neutrality) because the most data speed their networks offer is less than a third of the slowest among the community networks listed. These communities don’t worry about throttling content because their networks’ wireless technology enables capacity that exceeds subscribers’ need for speed.

Expect the stimulus program to produce a lot of wireless networks with faster speeds than cellular networks. Of the 1,130 last-mile proposals for federal broadband stimulus money, 60% are for wireless networks, many designed to use technology similar to what the aforementioned communities are using now.

So don’t let the incumbent PR blitz fool you. Net neutrality, applied fairly to big and small Internet service providers is good for consumers, businesses and providers.