Business analysis of Net Neutrality

The original appearance of this entry was in Danny Weitzner - Open Internet Policy

There’s an interesting view on Net Neutrality posted on Dave Farber’s Interesting People mailing list. Someone who has a background as a technical executive at several (now bankrupt) telecom companies goes through an analysis of the cost of operating an Internet backbone network and then asks:

Why shouldn’t telecom develop a QoS overlay network to the bulk rate
internet? Its akin to FedEx and the Post Office. If there are
applications/services that need better QoS why would we not want to
have them? If AT&T invested the capex into the network, Shouldn’t it
cost Yahoo more per unit to ship QoS than AT&T? How does AT&T recover
their investment and make margin on the capacity Yahoo uses if they
don’t get to charge them more? Why shouldn’t AT&T seen an advantage
from investing the tons of cash it’ll take to roll this out? So what
the fiber is in the ground? Everything above that layer costs money
too…

The rest is worth reading, too.

The commentor, however, confuses the question about charges in my view: it’s not about whether the network operators can charge for a service, but about whether those charges are discriminatory and whether the fee structure changes from one in which everyone pays individually to reach the Internet cloud, versus a radical view that ISP A (AT&T, for arguments sake) can charge anyone who is served by another ISP for the privilege connecting to ISP A’s customers. Quality of service standards are a great idea and people should pay for them, but there’s no need to disrupt the basic flow of fees (everyone pays their own ISP) to do that.