I agree that net neutrality, as the FCC is currently trying to impose it anyway, isn't a good idea.
On the other hand, I disagree that some things the major ISPs have done is a simple result of lack of competition. Of course, the ISP market is in bed with the government. Of course, they get away with things they probably wouldn't in a less monopolistic market.
On the other hand, if the market were more open, who's to say favoring content or metered billing or whatever wouldn't emerge as optimal strategies. There are "private content network" companies out there who do precisely that - favor content on their networks - and the idea does not strike me as an inherently bad one.
Look at the problem posed by Netflix. They are a key driver in many of these discussions, because the bandwidth consumed by their online video services almost certainly is more costly than what they actually pay (and hence they can get away with charging customers far less than the cost of delivery). Yet, the government says ISPs can't "discriminate" against Netflix traffic by charging Netflix higher rates. What will end up happening is that the ISPs will just charge all of their users higher prices to make up for the bandwidth Netflix is using (see here for a good discussion: http://seekingalpha.com/article/238107-netflix-now-we-re-coo...)
Is that really the best solution? What if users had the ability to access an ISP who solely provided Netflix content and perhaps a few other services, and blocked traffic for anything else? In that case, they might pay for a basic internet subscription, and then some amount more for access to the private network. At least in that case, only the users who want access to Netflix content would pay more for it. I am sure the commenters here could think of many other problems with that business model, but it would be better than having everyone pay higher rates so that high bandwidth users can avoid "discrimination."
I am pretty sure that Netflix pays to ISP's properly for all the outbound traffic from their data centers, problem mainly originates when a bunch of users from same area hog up the network with streaming services - then they might want to charge those users.
And I don't understand why they want to do that also. They are enjoying near monopoly and are getting paid by the mild users also. ISPs should monitor spikes in usage and adjust the infrastructure accordingly.
Well you're right in a sense that Netflix probably pays the appropriate amount purely for what's outbound from their servers, but that last cost does count and the cost will be borne by someone - either by what Netflix pays the ISP for its data in particular, or by the users that use it. The problem with Net Neutrality is that you're basically saying "everyone should pay for what some content providers provide to some users." Either ISPs "discriminate" against the content provider or the end users, or everyone ends up paying more. Currently IMO, the best world would be to allow the ISPs to charge Netflix properly for the total cost of providing it, which would build in to Netflix's subscription price and properly reflect to end users the true cost of Netflix's services.
Currently IMO, the best world would be to allow the ISPs to charge Netflix properly for the total cost of providing it
How is that better than charging customers directly for the bandwidth they use? The problem with the recent Canada fiasco wasn't (IMO) the concept of metered billing itself, but trying to charge hundreds of times the actual cost.
It may be more of an aesthetic preference, but the pricing signal makes more sense to me on a per-service basis than it does on a tiered internet service basis. Tiered bandwidth plans are inexact - should I buy the 250 MB plan or the 5 GB - and require a lot of thought as to what you will actually use. If the charge is per-service, you know exactly what you're buying with each additional service you consume. That's my thinking anyway.
Tiered bandwidth plans are inexact - should I buy the 250 MB plan or the 5 GB
That's still more accurate than charging you a Netflix access fee whether you download one movie or 20. And charging per-service opens the door to all sorts of anti-competitive agreements.
and require a lot of thought as to what you will actually use.
That seems like a feature. The alleged problem isn't "customers accessing netflix.com", it's "customers using lots of data". If you want to use pricing signals to correct that, then charge directly for the scarce resource.
IMO, the best world would be to allow the ISPs to charge Netflix properly for the total cost of providing it, which would build in to Netflix's subscription price
This effectively introduces M*N billing relationships (every ISP to every content provider), which would have significant transaction costs.
> "On the other hand, if the market were more open, who's to say favoring content or metered billing or whatever wouldn't emerge as optimal strategies."
Dial-up ISPs ditched hourly billing and went to flat rates as competition proliferated.
During the brief moment that phone networks were classified as Title II, and DSL technology and market penetration exploded, no-one went to metered billing.
As long distance competition flared up in the 90s, it too abandoned metered billing for monthly rates and overages.
As cell phone usage expanded in the US, it became quickly dominated toward monthly rates and overages.
History suggests that metered billing [1] is not something that plays well in the US market.
[1] Where 'metered billing' includes monthly packages with usage caps so low that metered charges dominate the average monthly bill.
On the other hand, I disagree that some things the major ISPs have done is a simple result of lack of competition. Of course, the ISP market is in bed with the government. Of course, they get away with things they probably wouldn't in a less monopolistic market.
On the other hand, if the market were more open, who's to say favoring content or metered billing or whatever wouldn't emerge as optimal strategies. There are "private content network" companies out there who do precisely that - favor content on their networks - and the idea does not strike me as an inherently bad one.
Look at the problem posed by Netflix. They are a key driver in many of these discussions, because the bandwidth consumed by their online video services almost certainly is more costly than what they actually pay (and hence they can get away with charging customers far less than the cost of delivery). Yet, the government says ISPs can't "discriminate" against Netflix traffic by charging Netflix higher rates. What will end up happening is that the ISPs will just charge all of their users higher prices to make up for the bandwidth Netflix is using (see here for a good discussion: http://seekingalpha.com/article/238107-netflix-now-we-re-coo...)
Is that really the best solution? What if users had the ability to access an ISP who solely provided Netflix content and perhaps a few other services, and blocked traffic for anything else? In that case, they might pay for a basic internet subscription, and then some amount more for access to the private network. At least in that case, only the users who want access to Netflix content would pay more for it. I am sure the commenters here could think of many other problems with that business model, but it would be better than having everyone pay higher rates so that high bandwidth users can avoid "discrimination."