Author: Greg

[sc:internet-category ]Here’s a question, does the Netflix/Comcast deal break Net neutrality?

If you haven’t been paying attention, Netflix has entered in to an agreement with Comcast to ensure their traffic gets delivered to end-user.

But the stubborn part of the deal is that there are so few details as to what is in it.

It boils down to two possible scenarios in my mind:

• Netflix is paying for preferential treatment of its traffic.
• Netflix is paying for physical access to the Comcast network.

There’s an important difference here which must be answered before you can decide if Net neutrality is being infringed upon.

If Netflix is paying for preferential treatment, then that violates Net Neutrality and something should be done.

However if they are buying physical access (either by stringing a piece of fiber between the Netflix data center and Comcast’s, or renting space for a Netflix rack in the Comcast data center) then it probably doesn’t invoke any Net Neutrality issues.

Part of the basic design of the Internet is to allow for services to be distributed across a wide geographical area, but any good network designer would tell you that placing your data closer to your users only makes sense.

It may even save Netflix money in the long run, reducing their bandwidth requirements to deliver content to end users.

Either way, the Internet seems unlikely to come to an end any time soon.

[sc:internet-category ]The last few years have seen a major change in the way we view networks and service providers around the globe.  Before the Internet became the commercial powerhouse it is today, BBS’s reigned as kings of online access.  In those bygone days, different serviced vied for prominence and one of the key factors was the modem speed they offered.

Even back then they competed for business on speed and reliability.  Competition worked well because the underlying transmission system (the traditional phone line) was the same for everyone and the service providers didn’t own it.  It had to be as phone providers are consider common carriers and they CAN NOT interfere with the communications.

Today we’ve gotten ourselves in to a real problem as our data networks have moved to transmission systems that are not classified as common carriers.  This combined with the underlying economic barriers to entry from new participants means we’ve provided the Internet service providers the perfect storm to act in an anti-competitive manner.

Business always try to maximize profits.  They do this by offering the least amount of service for the high cost they can get.  Competition on the other hand always tries to minimize profits but forcing business to offer more service for less cost.

And so we get to where we are today, in most markets there are two primary service providers, the traditional telephone company and the transitional cable company.  Neither really competing with each other but instead finding a happy mid ground and just matching each other step for step in the market.

They have managed to become the only two games in town because they piggybacked on their existing infrastructure to build out their data services and now the cost of a new entrant in to the market is too high to offer real competition.

When I moved to cable for the first time, my service was a fixed speed but unlimited usage.  It was what most people expect from a service like TV or Radio or their local telephone line.  You use it as much as you want for a fixed price.

Unlike telephone server, the internet really doesn’t have “long distance”.  But that hasn’t stop service providers from trying to bring that pricing model in to play.  The first step was bandwidth caps and bandwidth throttling.  Both primarily in an attempt to maximize profits, though there were short-term technical reasons as well.

Net Neutrality suddenly became a buzz word and an idea that many people rallied behind.  The idea being that a service provider shouldn’t discriminate against or alter  traffic for any reason.

And so the great “Net Neutrality” debate has been ongoing.  But it’s the same debate we’ve had before, just under a new name.

In the telcom space it’s the reason for the common carrier rules.

In the business space it’s the anti-competitive laws that have been enacted.

What it really comes down to is that we want all companies to have to compete for our business.  It’s the foundation of the free market idea.

When Rogers added bandwidth caps to my service they did so unilaterally.  At the same time Bell did.  I had NO choice about it.  Calling them didn’t help as they didn’t even offer an option of a service without a cap.

That’s a clear indication of a lack of competition.

In a competitive marketplace I would have had an option to go to another provider that supplied what I wanted.  I might have to pay more for it, but the option would have been there.

When we talk about net neutrality we really should be talking about anti-competitive practices.  This is the right discussion to have and for that there is a clear precedent set, regulation.

Different countries do it different ways, but they all regulate their telecom providers.  It makes perfect sense as the cost of the infrastructure to deliver service is just to great to build out multiple times.

It’s time to talk about how to regulate Internet service, either as a common carrier or some other way, but in a why they restricts the anti-competitive behaviour that all major service providers exhibit to one degree or another.