Tech Faceoff: Net Neutrality, In the Eye of the Beholder
Sunday, July 2, 2006
From Capitol Hill to Silicon Valley, it's become one of the most controversial and confusing topics to hit the tech industry this year: network neutrality. The term is confusing, the ad campaigns have further clouded the issue, and it's no longer easy to tell who's for it and who's not.
Whatever becomes of the concept could affect what you pay for connectivity, the sites you'll have access to and the types of services (think video, music and Internet phone offerings) you'll be able to use.
Net neutrality is the push to prohibit a pay-for-speed Internet pricing structure that the cable and phone companies -- those that provide high-speed Internet connections -- have proposed.
To better understand it all, go back to the old "information superhighway" analogy, where the phone and cable lines that connect your computer to the Web are the on-ramps to that highway. Should the companies who built those on-ramps -- Verizon Communications Inc. and Comcast Corp. in the Washington region -- be allowed to impose a toll system that charges Web companies such as Google Inc. a higher fee to reach your computer faster than its competitors, such as Yahoo Inc.?
Is that the essence of a free-market system? Or is it one that creates inequality on a road that should have no tolls at all? The jury -- in this case, Congress -- is still out.
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Q Why should I care about net neutrality?
AThe absence of a net-neutrality provision in a revision of the Telecommunications Act could result in fewer choices, according to proponents. Currently, similar Web sites take about the same amount of time to load in a Web browser. If Congress takes no action, the "load time" for some sites -- those that don't pay a premium, for example -- could be longer than others. Likewise, Internet service providers could favor partners that offer music or video downloads, Internet calling or online shopping, slowing access to competing sites. Big companies, such as Google and Microsoft Corp., will be able to pay higher fees to have their sites come up more quickly. But this could stifle innovation and start-up Internet companies, especially those that have little revenue but require a lot of bandwidth, such as online video site YouTube.
Net-neutrality opponents, however, argue that these scenarios aren't happening now and that net neutrality attempts to solve a problem that doesn't exist. From a business perspective, opponents say, Internet providers understand that customers won't tolerate that sort of treatment of the Internet. It's in their best interests to keep all Internet traffic flowing at an equal speed.
Could the number of Web sites I can access be limited?
On this point, both sides say yes -- but for different reasons. Proponents say that without net neutrality, inexpensive free-speech vehicles such as blogs and social-networking sites could be stifled. Likewise, Internet start-up companies would have a tougher time competing for a presence on the Web against the big players. Opponents believe, however, that a government-regulated Internet would deter deep-pocketed technology companies such as Google, Microsoft and Yahoo from investing in a more robust Internet infrastructure. Video and voice features, which take up more room in the Internet pipeline, clog the networks and decrease the speed for everyone. If the tech companies don't pitch in for upgraded networks, the congestion will slow things down for everyone, opponents say.
Would net neutrality affect my ability to download music, watch videos or make phone calls over the Internet?
It could. Proponents cite a scenario in which your Internet provider launches its own music- or movie-download service and puts it on "the fast-download lane" in front of competing services such as iTunes, Yahoo Music and others. More importantly, they say, we've already seen this sort of abuse with Internet phone services. Last year, the Federal Communications Commission sided with Vonage when it complained that a small Internet service provider based in North Carolina was blocking its service to customers. The decision made clear that the FCC won't stand for phone companies blocking their competitors, but current rules don't prevent them from giving their own service priority or charging higher fees to their competitors.
Net-neutrality opponents make the same "congested Internet" argument on this point. But they enhance their position by noting that today's non-neutral market keeps the Internet competitive, forcing iTunes, YouTube and others to invest in an upgrade of the network. Regardless of how you get your Internet service, Web sites could differentiate themselves from other sites by finding new ways to offer speedy delivery. That, in turn, could lead to further innovation and more choices for consumers, they say.
Would net neutrality affect my choices for an Internet provider or how much I pay?
Both sides say no. But those who favor net neutrality worry that if phone and cable companies start charging tech companies for enhanced speeds, the costs could be passed on to the consumers -- in the form of increased prices for music downloads or service fees on online retail sites. Those against net neutrality argue that if the tech companies help pay for the future upgrades needed to deal with increased traffic, then the cable and phone companies won't have to raise rates to offset those upgrade costs. Likewise, they also could create pricing structures that give consumers a choice for the levels of Internet service they want. Heavy users could pay more, while light users could opt for a lower-priced plan.
What happens next?
The net-neutrality issue has been included in a larger telecommunications bill being considered by Congress. The House has already approved its version, but it's unclear whether the bill has enough support in the Senate to move ahead.
As of now, the bill favors telecommunications companies that want the FCC to monitor the issue of access to the Internet. Many Democrats oppose the current bill unless it includes tougher language that would make it illegal for telecom firms to impose a priority pricing structure. It's unlikely that they'll reach a compromise before September, but many lobbyists and lawmakers say the net-neutrality issue could prevent the entire telecom bill -- which includes other provisions such as new rules for cable franchises -- from moving forward until next year.