Thursday, January 04, 2007

Net Neutrality and Market Pricing

I was recently published in Network World (12/11/06):

"I usually agree with Johna Till Johnson, but her article 'Nuances Matter in Net Neutrality' left me perplexed.

[She asks] Why would Google support net neutrality regulations? They developed Google video, purchased YouTube for 1.65 billion dollars, and signed content agreements with Universal, Warner Music Group, Vivendi, the NHL, and others. But with AT&T offering Internet television on demand in their Homezone package, can Google compete? Only if their content is not further degraded.

Johna is right that net neutrality is still a vague concept. There's almost no way to tell if content is being intentionally degraded and it may be difficult to enforce legislation specific enough to address real world problems. However, it is important that we have a fair and level playing field. Whether content is charged per bit or per packet, the price should be the same for any player. A typical market incentive is volume discounts, not volume overcharges.

Net neutrality may end up being decided in myriad individual court cases relating to anti-competitive practices, or in government antitrust action. But the idea that carriers such as AT&T are investing billions in a "money-losing endeavor" is ridiculous. Video is the next phase of the internet, and it requires infrastructure expansion and investment. Net neutrality means that all players in the video over internet market receive a fair price as well as reasonable and enforceable quality of service agreements."

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