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How Washington Will Shape the Internet
WebHostingGuy writes "As reported by MSNBC, 'The most potent force shaping the future of the Internet is neither Mountain View's Googleplex nor the Microsoft campus in Redmond. It's rather a small army of Gucci-shod lobbyists on Washington's K Street and the powerful legislators whose favor they curry.' The article examines several pieces of legislation and lobbying initiatives which are poised to affect you and your rights online. Topics covered include Net Neutrality, fiber to the home, the Universal Service Fund, codecs, and WiFi bandwidth usage." From the article: "After years of benign neglect, the Federal government is finally involved in the Internet — big time. And the decisions being made over the next few months will impact not just the future of the Web, but that of mass media and consumer electronics as well. Yet it's safe to say that far more Americans have heard about flag burning than the laws that may soon reshape cyberspace."
Not at all. The market has three components. The core is an oligopoly with only a couple of major players. They get paid either way. The end user edge is a bunch of local or regional monopolies or oligopolies with millions of users. The content provider edge is a bunch of local or regional oligopolies that rarely overlap with the end user edge.
As I understand it, traffic billing from one backbone to another is based on the balance of incoming versus outgoing connections. Making an outgoing connection costs money, while receiving a connection gets money back. The theory is that the content provider is not the one benefitting from the content. With advertising, that's not always the case, but it certainly makes sense from a network utilization perspective that the party that causes the traffic to be introduced into the network should pay for it.
If two networks are fairly comparable in terms of how many outbound requests they spew into the other network, they set up an unmetered peering agreement in which the two parties don't bother keeping up with who makes more requests. It's just easier that way. If the two networks are imbalanced, the larger (generally more backbone-ish) network generally gets more requests from the smaller one than it sends to it, and thus, the other network ends up having to enter into a metered peering agreement.
Now the problem is this: most content providers do not introduce a large amount of traffic into the backbones. With the exception of outbound email, almost all content providers return data in response to a request. Thus, ISPs with a higher percentage of content providers tend to have more favorable peering arrangements, while ISPs with a higher percentage of end users tend to have less favorable peering arrangements, since they generally produce the vast majority of requests. The ISPs that have a greater percentage of end users don't like this arrangement.
The solution proposed by largely end-user ISPs is that they should be able to charge the content providers themselves for preferential access to their users, and that companies that didn't pay would get lower speed access. You will note that those content providers are not customers of those ISPs. They are customers of a different ISP that peers with a backbone provider, which in turn peers with those ISPs. You should quickly see why this is silly.
A more fair solution would be for both ends of the communication to pay equally, as both are equal parties in the communication. In such a scheme, an ISP pays if either endpoint of a connection is within their network. This money is paid to the first backbone. Because the backbones are all considered somewhat equal and all pass traffic for each other, no additional transfers are needed. In effect, this would work the same way as the internet does now, only the backbone providers would get paid in part by both ends.
The net effect of such a design would be that content providers would pay more of their fair share of the cost of operating the backbones, while end users would pay a less disproportionately large share of the cost. The most important part of my suggestion here, however, is that ISPs should only be allowed to bill their customers and peers, not the customers and peers of other ISPs. In other words, I am in favor of net neutrality laws, albeit laws that are more carefully crafted not only to prevent the end user ISPs from following through on their threat but also to reduce the disparity between the proportion of costs paid by end users and those paid by content providers.
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