Observations of an Internet Middleman (Level3) (was: RIP Network Neutrality

Mon May 12 13:02:28 UTC 2014

On 10/05/2014 22:34, Randy Bush wrote:
> imiho think vi hart has it down simply and understandable by a lay
> person.  <http://vihart.com/net-neutrality-in-the-us-now-what/>.  my
> friends in last mile providers disagree.  i take that as a good sign.

Vi's analogy is wrong on a subtle but important point.  In the analogy, the
delivery company needs to get a bunch of new trucks to handle the delivery
but as the customer is paying for each delivery instances, the delivery
company's costs are covered by increased end-user charges.

In the net neutrality debate, the last mile service providers are in a
position where they need to upgrade their access networks, but the end-user
pricing is not necessarily keeping pace.

There are lot of ways to argue this point, depending on whether you're the
user, the access provider or the content provider.

>From a financial point of view, the content providers will say that access
providers need to charge their end users in a way which reflects their
usage requirements because let's face it, it's the users that are pulling
the traffic - they're not sending traffic to arbitrary IP addresses just
for the fun of it.  The end users will say that they're only going to pay
market rate for their services, and they won't care whether this covers
their costs or not.  The access providers will say that they're only
upgrading to deal with the additional requirements of the larger content
providers, particularly the CDNs and the video streaming services, and that
the going market rate doesn't allow them to charge the end users more.
Besides, it's a whole pile easier to chase a small number of companies for
a large amount of money than it is to chase a large number of customer for
a small amount of money.  Even better, if you chase the the content sources
for cash, you can do this without increasing customer prices which means
you can stay more competitive in the sales market.  So from a business
perspective it makes lots of sense to deprioritise the large companies that
don't pay in favour of the ones that do.  Those who pay get better service
for their customers;  seems fair, right?

>From the proverbial helicopter viewpoint, we are walking towards a
situation where the short-term business actions of the individual companies
involved in the industry is going to lead towards customers being hurt and
this means that the likely long-term outcome is more regulation and
legislative control imposed on the industry.  It is another tragedy of the
commons.

Nick