Friday, March 09, 2007

A Neutral Net Means More Capacity Investment

Telco lobbyists and think tanks have been busy suggesting that all of this network neutrality foot stomping will scare off bandwidth investment, resulting in capacity armageddon. In reality, core investment is booming. Telco lobbyists are simply trying to fend off laws that would prohibit them from creating a new revenue stream by charging a prioritization toll to content providers. Techdirt points to a new study that says retaining network neutrality will actually increase telco investment in bandwidth.

"The conventional wisdom is that Internet service providers would have greater incentive to expand their service capabilities if they were allowed to charge," says Professor Kenneth Cheng, in a study summation. "That was completely the opposite of what we found." That's not to say that network neutrality laws should be passed, since there's still the possibility that our existing lawmakers are too incompetent to construct functional legislation (that doesn't, say, outlaw VoIP prioritization).

But is it possible to retain network neutrality without laws?


My opinion: No, it is not possible to retain network neutrality w/o laws. Consolidation in the telecom's industry has made coopetion impossible. Investor led companies have no real incentive to do what is best for the public good. They are first and foremost responsible for returning a profit to their investors. Their motivation is to spend as little as possible while returning the greatest ROI.

Spending as little as possible means squeezing as much into what you already have in place as possible without spending any money. Thus the carriers have extreme onus to impose paid prioritization - in order to force people to pay or else get their traffic left behind due to lack of capacity for unpaid traffic.

Rest assured that carriers absolutely want to get into the bill-by-the-bit business. They abhore being treated like a "dumb pipe" or commodity.

Personally, I think all transit capacity should be regulated as if it were an interstate highway. It should be available to all comers at a set price with non-discriminatory access. Transit should be forced into wholesale only mode with the retail divisions of said operator being structurally and financially separated from retail and sales operations.