Everything You Think You Know About Net Neutrality Is Wrong

Ok, I understand I’m off on a rant here. This whole net neutrality argument is really pissing me off because it has been so misrepresented by proponents and everyone seems to be buying their argument with no effort to dissect it.

Now, it appears that the NY Times has bought into the arguments made by net neutrality proponents. It really is unfortunate that the wrong side of this issue has come up with the best messaging. I’ve said it before, and I’ll say it again. This is not a debate between the little guy and the big guy. This is a debate between content providers and access providers over who has to charge the little guy more for service. Period.

The NY Times piece is appalling for the fact that they’ve got it 180 degrees backward. Net neutrality language is all about the big guy sites and little else. If this was about allowing little guys to compete, why is it being pushed by Microsoft? When you’re taking the side of Microsoft, and think you’re doing the little guy a favor, you really need to rethink your position.

Sites run by little guys require very little bandwidth and will always be accessible. Sites provided by big guys (especially sites like Yahoo, Amazon and Google that want to provide massive quantities of video) require lots and lots of bandwidth, and require a certain quality of connection to work properly.

Big guy sites like Amazon, Google and Yahoo (who are also pushing this) are huge consumers of bandwidth. Believe it or not, there is now, always has been, and always will be a finite amount of bandwidth. The only reason it seems infinite is because of the investment that cable and phone companies keep making in their infrastructure. That temporarily raises the cap on bandwidth.

Over the last ten years, the cable companies have invested 100 billion dollars to deliver the Net to you over a significantly larger, faster set of pipes. Phone companies are finally doing the same by pushing fiber optic connections – though how fast they will do that remains in question.

Google, in that same amount of time, has spent very, very little to increase the capacity of the internet, but have found more and more ways to increase their use of it. They now offer video (often for a fee) but they’re not spending any of that money to help ease the burden their placing on traffic. Instead, it goes right back into company profits. Why do you think their stock value is so high? They have low overhead and huge profits because they rely on others to build the networks for them.

So getting back to the little guy argument, why should I pay more for my cable modem or DSL line when I’m surfing little guy sites? That’s what happens if cable/phone companies are forced to charge their customers more for the infrastructure to support Google. To increase capacity for Google’s low overhead, high bandwidth consumption operation, the access providers have to keep making investments and keep raising my rates to continually upgrade my connection.

Opponents of network neutrality generally make two points. First, Google should have to pay more for the tax they’re putting on the Internet. More importantly, my next door neighbor who is consuming video at Google should be paying for the bandwidth with the fees he’s paying Google for the service as opposed to charging everyone on my block to upgrade their service because of his Twilight Zone re-run habit.

Second, there is still a larger fundamental issue here. The Internet has grown and flourished because the government has kept its hands off. Some proponents argue that the government has always had a role in the Internet, but that’s just not true.

The Senate has been toying with the idea of extending USF charges to broadband connections (essentially an Internet tax). Both houses are toying with the idea of regulating the market forces that drive the interaction between access and content providers. That would be a fundamental mistake. It is unfortunate the Hill seems to be giving in to the temptation to start monkeying with a system that has proven the theorem that government is best when it governs least.

(Author’s note: Yeah, yeah, yeah… I understand that the government planted the seed for the Internet via DARPA etc. That does not change the fact that the Internet grew, and succeeded through the efforts of private investors, private capital, and entrepreneurial spirit. You can say what you want about the initial concept being a government project, but had we waited for the government to grow the Internet, we would probably just be getting around to hooking up the mid-size universities by now and you know it.)

Proponents of net neutrality have it all wrong. If they stopped to ask themselves some tough questions, they would realize that. The most important of these questions are:

What does Microsoft, one of the single greatest examples of anti-competitive practices, stand to gain from this?

Why are they pushing for this bill?

Do they think that its passage will make it easier for little guy sites to compete with them?

Do they think they are guaranteed competition from the next great idea if only the Internet remains “free”?

Or do they think this bill will cement their place on the Internet?

Do they think the future of their “Live” offerings is significantly improved – if not guaranteed – by this piece of legislation?

Do they think they can continue to take in cash without shelling out for infrastructure?

Do they think they can improve their position at the expense of the little guy?

Based on their past performance, I know my answers. For that reason, the larger point to my rant today bears repeating – especially for the editorial board at the New York Times and those on the Hill. If you are on Microsoft’s side, and think you are fighting for the little guy, it’s time to step back and rethink your position.