Can someone explain "Net-Neutrality" to me?

[Newtons Bit]

Last I checked nobody got their webhosting for free.

My webhosting is free. I run it off my own computer.

 

[Almo]

I think it should be none of the ISP's business what is in my packets. Packets should be treated as a commodity. This egalitarian treatment of packets one thing that has made the internet great.

 

[WildCat]

Why isn't network transparency enough? That is, why isn't it sufficient for ISPs to disclose what if any preferential policies they use, and let consumers demand neutrality if it is valuable?

In an internet where the number of potential web sites approaches infinity, how could an ISP list it's policy for every one? How could a consumer compare? And wouldn't it be sure to change tomorrow, or even next hour?

Also, is this a temporary problem? Are Internet speeds increasing such that within a few years, bandwidth will no longer be effectively limited?

Why increase bandwidth when you can stifle competition by limiting it?

 

[blutoski]

I am suspicious of net neutrality because I have a general suspicion of increasing government regulation to limit private companies from deciding what products and services to offer their customers. As long as ISPs cannot be deceptive, I don't see a reason to regulate their resource usage.

This is essentially the reason there is a debate.
These networks are almost entirely private property, but there is a credible argument that they have become an essential utility with distributed benefit, like public utilities such as roads or bridges.

Due to high cost of entry and history of consolidation, the relatively small and shrinking number of competitors creates a credible risk of yield maximization through what may be antitrust.

To put this another way: transparency does not necessarily put consumers in control. It might simply reveal the details of the frustratingly ubiquitous bad offers.

 

[AvalonXQ]

Is there any way for the government to facilitate the entrance of competitors rather than limiting existing ISP behavior?

 

[blutoski]

In an internet where the number of potential web sites approaches infinity, how could an ISP list it's policy for every one?

They probably wouldn't have to do it at that level of detail. The priority would be to identify major competitors and negotiate a deal for passage.

How could a consumer compare? And wouldn't it be sure to change tomorrow, or even next hour?

Basically, caveat emptor.

Why increase bandwidth when you can stifle competition by limiting it?

That seems to be the thought. Or at least: if Google is profitting to the tune of billions of dollars a year from the ISP's customer base, maybe they could chip in for network build, maintenance and upgrades.

 

[AvalonXQ]

In an internet where the number of potential web sites approaches infinity, how could an ISP list it's policy for every one?

How does an ISP have a different policy for each website? If they have a more general policy on how to serve different sorts of websites with different criteria, that is what would need to be public.

 

[blutoski]

Is there any way for the government to facilitate the entrance of competitors rather than limiting existing ISP behavior?

That may not solve it if the competitors all determine that network traffic shaping is more profitable than not shaping. If it's a universal fact about the industry, it will be what it will be.

It also means building multiple, redundant parallel networks. If you want 5x the competition, you have to build 5x the networks. Who's going to pay for that massive deployment? Answer: the customer pays for everything. Redundancy may diminish economies of scale (increasing prices) and multiply the cost of the nation's network (increasing prices) more than trigger declining prices just because there are several players. If all the players have higher costs, prices go up.

 

[blutoski]

I think it should be none of the ISP's business what is in my packets. Packets should be treated as a commodity. This egalitarian treatment of packets one thing that has made the internet great.

My thought is that if the ISPs want to have control over packets based on content... then go for it. But they will also be responsible for the content of all packets on their network. ie: not neutral carriers anymore. They would have to be willing to give up their traditional immunity from, say, libel or fraud claims for content that they allowed passage.

 

[AvalonXQ]

That may not solve it if the competitors all determine that network traffic shaping is more profitable than not shaping. If it's a universal fact about the industry, it will be what it will be.

... and in a world where it can never be profitable to be net neutral (i.e., it's not important enough for customers to pay for), why do we care enough to preserve it by fiat?

 

[blutoski]

... and in a world where it can never be profitable to be net neutral (i.e., it's not important enough for customers to pay for), why do we care enough to preserve it by fiat?

It may be that it's necessary in a deregulated environment, but unnecessary in a regulated environment. If the corporate profitability is the same either way, but the community benefits from a regulated scenario, it's rational and ethical to pitch for regulation.

That's why an important part of economic analysis and policymaking is the employment of game theory.

One logical fallacy that skeptics should recognize is the fallacy of composition. It's the belief that what's good for the individual expands to being good for all individuals. Sometimes regulating behavior against competitive struggle produces an overall improvement.

An example is standing up while watching a movie. If there was no punishment for standing up in a theatre, there'd be no point in installing seats. Everybody would be standing because if you sat down you couldn't see past all the other standees. So we accept that ushers can expel somebody who's standing.

In the case of net neutrality, it would mean that this revenue source would be closed, but it would be closed for all competitors. The 'need' to seek these revenue sources to outperform their peer ISPs could disappear, if their competitors are also restricted.

 

[Francesca R]

Is there any way for the government to facilitate the entrance of competitors rather than limiting existing ISP behavior?

Yes there is (might be mobile link).

It also means building multiple, redundant parallel networks. If you want 5x the competition, you have to build 5x the networks.

Incorrect and something of a pro-regulation canard (like when people object to the idea that there can ever be competition in gas and electricity supply by insisting you would need multiple wires and pipes to every address)

 

[Francesca R]

They probably wouldn't have to do it at that level of detail.

Even if they did have to, one would only need a relative few marginal consumers to effectively set prices, and the majority could remain rationally ignorant (in the same way as only a few shoppers are responsible for the checkout queues being almost identical length)

 

[Francesca R]

If there was no punishment for standing up in a theatre, there'd be no point in installing seats.

Er, really? Very doubtful indeed.

 

[dirtywick]

Such as with me. There's only one cable company here. There's also DSL, satellite, or that cell phone as a wi-fi station thing, but none of them can provide the same bandwidth I have. I'm not even using the highest level.

They are treated like utilities in a lot of the US. It's a franchise agreement, meaning a cable company has an exclusive contract with an area, but is under certain stipulations and pays the city.

 

[Kestrel]

They are treated like utilities in a lot of the US. It's a franchise agreement, meaning a cable company has an exclusive contract with an area, but is under certain stipulations and pays the city.

That used to be true. But after the cable systems had been built and a monopoly established, Congress "deregulated" the industry and prohibited local governments from enforcing most of the terms of their contracts.

Following deregulation, cable bills have increased far faster than the rate of inflation. A few people made a lot of money and the rest of us got screwed.

 

[Kestrel]

One logical fallacy that skeptics should recognize is the fallacy of composition. It's the belief that what's good for the individual expands to being good for all individuals. Sometimes regulating behavior against competitive struggle produces an overall improvement.

An example is standing up while watching a movie. If there was no punishment for standing up in a theatre, there'd be no point in installing seats. Everybody would be standing because if you sat down you couldn't see past all the other standees. So we accept that ushers can expel somebody who's standing.

I was at a concert once were people started standing up, then standing on their chairs, then standing on the backs of their chairs. The end result was a dangerous situation, but everyone had about the same view as they had while seated.

 

[Taarkin]

This is essentially the reason there is a debate.
These networks are almost entirely private property, but there is a credible argument that they have become an essential utility with distributed benefit, like public utilities such as roads or bridges.

Isn't telcom infastructure subsidized?

... and in a world where it can never be profitable to be net neutral (i.e., it's not important enough for customers to pay for), why do we care enough to preserve it by fiat?

In what world is net neutraility never profitable?

 

[ponderingturtle]

In the UK, it is.
Probably but transfer speed and volume is not yet too cheap to meter. Also, the demand curve has moved to the right almost as fast as the supply curve, which puts a brake on the price falling.

And where will the internet be with out big money being able to kill their competition? Why bother with netflix when hulu has paid to be the only high speed streaming content your ISP provides by contract?

 

[ponderingturtle]

How does an ISP have a different policy for each website? If they have a more general policy on how to serve different sorts of websites with different criteria, that is what would need to be public.

They wouldn't need a policy for each website, just those who pay for access and everyone else who gets whatever they feel should be left for them.