The Potholes in Net Neutrality's Fast and Slow Lanes
It's a simple problem to understand, really. Less capacity across networks means less use of technology that demands that capacity.
The FCC's comment deadline on Net Neutrality wrapped up on July 18, with a deadline of September 10 for responses. If you're interested at all in technology innovation, this controversial topic demands your attention.
Let's be clear: This isn't about "fast lanes" and "slow lanes" on the Internet. Net neutrality opponents could throw some real potholes in the way of effective video conferencing, unified communications and collaboration. They're doing that by throwing money at redefining an open Internet.
A report by the Sunlight Foundation showed that from 2005-2013, opponents of net neutrality consistently outspent supporters. From 2012-2013, the deepest pockets in the game were the National Cable & Telecommunications Association ($18.89 million), AT&T ($17.46 million), Verizon ($15.02 million) and Comcast ($14.68 million). That's just shy of three times what pro-neutrality companies spent in the same period.
With today's ever-present smartphones and tablet computers, we've begun to take for granted that we will always have the Internet in our pocket or purse. And consumer demand is not slowing down one bit. A report from IHS Technology estimates that production of connected devices will jump by 6% in 2014. The supply of these devices has created new media powerhouses like Netflix and YouTube, which feed our continually growing need for streaming audio and video.
On the one hand, you can't blame Internet Service Providers (ISPs) for being a bit galled by the emergence of new media companies. The ISPs built the infrastructure, and they don't like seeing companies make billions on the coattails of their effort.
On the other hand, the hunger for video on the Web isn't just a need of well-heeled hipsters and movie fans. Wainhouse Research estimates that nearly 75% of organizations plan to introduce mobile video conferencing, and 61% want to tie that technology with a unified communication platform.
Businesses demand video and collaboration technologies as large companies continually deal with the needs of a mobile workforce, a global supply chain, and offices in far-flung corners of the world.
Small companies have been able to make use of video over the Internet with lightweight or proprietary services like Google Hangouts, Skype and even FaceTime. They've come to tolerate the freezes, dropouts and poor image quality that comes with those services because their usefulness outweighs the intermittent service problems.
Now, what happens when the ISPs start to demand premium prices to content or collaboration companies to access the pipelines of the Internet? Are the companies that put up with occasional performance glitches going to suddenly spend more time looking at frozen screens than actually communicating? It's more than likely, if the services remain free.
More importantly, what about companies that have graduated from lightweight services to cloud-based systems that cost considerably more? It's annoying enough when you're dealing with a free service, but when you're paying money for poor service, that's a whole new world of irritation.
And most importantly of all, what will this mean for technological innovation?
Netflix may bend to demands for premium pricing for premium service, but the implication for businesses overall is that it could simply solidify the status quo. Startups with limited capital but great ideas will need huge financial backing just to get parity with the big boys to deliver their services. It's not hard to imagine that these companies will have to spend more money on distribution than innovation. When that happens, it's game over for the innovators.
We shouldn't kid ourselves. ISPs aren't going to overbuild existing networks for greater capacity. There's no profit in that. They'll make the business choice to prioritize some services and customers (the ones that have money) at the expense of others (the ones that don't). If your competition suddenly needs more bandwidth and can pay for the VIP section, what do you think will happen to the speed of your digital communications?
It's a simple problem to understand, really. Less capacity across networks means less use of technology that demands that capacity. Less use of video conferencing and collaborative technology, even in the face of demonstrated demand for that technology (because of unequal capacity) may cause the business to slow, and innovation to falter.
The solution, unfortunately, is less easy to understand.