Net Neutrality - Looking for Monopolists in All the Wrong Places

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Consider this a PSA

The net neutrality argument heated up again this week when President Obama came out unequivocally in favor of reclassifying ISPs as utilities under Title II of the Telecommunications Act. Of course, the FCC is an independent government agency, not part of the Presidents administration, and Chairman Thomas Wheeler is in no way bound to act on the President's preferred policy, but it was nonetheless one of the clearest statements the government has made on net neutrality to date.

Net neutrality, along with things like freedom of speech, often leaves people a little unclear on what it actually means. But it's a very simple concept. It's the TCP/IP equivalent of 'Justice is Blind' - the internet doesn't care what a packet is, it treats them all exactly the same. It reads the routing information in the packet header and sends it on toward its next destination - that's the whole job of the internet and the definition of a neutral network. In contrast, a network that is not neutral would assign priority rankings to different packet types and sources and and give higher priority traffic a preferred status. In fact, that's the way most networks work, and indeed, there is a QoS (Quality of Service) functionality in modern routers to support exactly that kind of traffic prioritization.

But the internet is not 'most networks', and there are fairness and social justice questions that apply. But the way we use the internet continues to evolve, and the most important piece of that evolution was the explosive growth of streaming video. Netflix now accounts for more than one third of all internet traffic - add in YouTube and just those two sources account for more than half the packets on the wire. This is not your fathers internet. So there is no doubt that the major ISPs have had to invest heavily in capacity to keep up with demand being generated by two companies who had absolutely no part in actually delivering their product to their customers. So the big ISPs would like to be able to make very large upstream sources pay extra for the additional capacity they are demanding.

 And that would not be so bad. But it would also mean the net neutrality genie was out of the bottle. The same prerogative that would allow premium users to be charged premium prices could also allow for some nefarious acts, from slowing the packets of small sites to delaying delivery or degrading performance of competitor's data streams. Everyone is screaming that without net neutrality it's the end of the internet as we know it. So why am I not worried?

Let's get one thing clear right now. While the US doesn't have anywhere near the best internet performance or bandwidth there is, net neutrality is alive and well. Sure, I can watch Netflix, but that's not having any impact on me when I want to look at Thunder's butterflies or listen to the latest musical selections of my favorite un-dead DJ. In other words, there is currently capacity commensurate with demand, and even if large upstream data sources are having to pay extra for the bandwidth they are consuming, it's clearly not having a negative impact on the rest of the internet. And that should debunk the worst of the liberal fear-mongering - that small, startup sites might find their bandwidth throttled, that they might run slower, with delivery and performance issues that wealthier, more established sites can avoid by paying for full speed delivery. As the young man tells the crazy lady with the hammer in the commercial "That's not how it works - that's not how ANY of this works." HTTP traffic is very small. It doesn't require even a small fraction of the available capacity. If a site resolves in 80 milliseconds instead of 40, you are NOT going to notice. Again, whenever we are talking about bandwidth constraints and capacity limitations on the modern internet, we talking exclusively about video. Streaming sites and BitTorrent sites. That's where the bottleneck is, and that's the terrain being argued over in terms of net neutrality.

But here's the main reason there's very little to fear. The people who want to end net neutrality are some very large, powerful corporations - companies like Comcast, Verizon, AT&T and Time Warner. And it's true that they are rapacious organizations looking to increase their profits, with no interest in the well-being of the consumer. But this is that rare case where consumers are not all alone. Indeed, arrayed against the ISPs in this fight are even bigger names - names like Google and Microsoft and Apple, Amazon, Facebook and Twitter, to name a few. They depend on the internet being a useful, central part of their customer's lives, and if the ISPs start to degrade that model then there is nothing to stop these deep pocketed internet companies from setting up their own ISP businesses and bypassing the incumbents entirely. See, it used to be that the incumbent ISPs had leverage due to a trillion dollar investment in fiber in the ground. There was no quick way to roll out enough broadband capacity to compete with them. But now we've got a number of wireless broadband options, from satellites to long endurance drones to a metropolitan system based on terrestrial towers, that could begin pulling customers from ISPs within a year.

Believe me, the ISPs know the kind of money and resources they're up against. While they have no compunction in gouging customers for every dime they can, they are going to behave very carefully around the big boys who, if provoked, could put an end to the gravy train forever.  So while there might be no explicit guarantees of net neutrality, the practical economic reality is that as long as people want to use the internet and organizations are making billions offering web-based products and solutions, nobody is going to be permitted to interfere with their easy access.
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