Anything that has a fixed level of capacity is vulnerable to too much demand. What do we do when the Internet is crowded?
Last summer, Comcast Corp. (Nasdaq: CMCSA, CMCSK) offered its own arbitrary (and inexpertly administered) solution, by slowing down customer use of BitTorrent and other peer-to-peer applications. When the Federal Communications Commission (FCC) denounced this approach, Comcast said it was testing a program to slow down customers using the most bandwidth, regardless of their purposes or the programs they used, when the system neared congestion.
Is Comcast’s the best solution? Not by a long shot. The best solution is to let users determine what speed and reliability are worth to them. Different Websites will value speed differently, and for different reasons. An online stock trader or a health clinic with real-time patient monitors will think every increment of speed and reliability is worth it. A new competitor to Google (Nasdaq: GOOG) might value speed highly in order to compete with the incumbent by being faster. Some sites are simply going to be willing to buy the right to priority for their site’s traffic when the Internet gets crowded.
Proponents of “Net neutrality” oppose this vision of a competitive Internet. They argue that the Internet would lose its open and vibrant nature if this were allowed. But it’s hard to see how. For example, some people send their mail by priority overnight, some send it by second-day delivery, and some with a regular stamp, but all the mail gets through. And some businesses have 24/7 live customer service lines, some have them only during office hours, and some respond to email the next day. Businesses decide what that level of service is worth and act accordingly… and so, too, do customers.
Why should the Internet be any different? Neutrality proponents point to the Internet’s epochal character and its potential to bring together all of humanity in a new and profound way. No one argues with that. But the singularity of the Internet doesn’t tell us what to do to use it in a way that does the most good for the greatest number.
And when the Net gets congested, the best answer probably isn’t the one neutrality proponents favor: everybody being slow together (even though that’s at least “neutral”). Besides, that’s not what happens now anyway. The big sites -- Google, eBay Inc. (Nasdaq: EBAY), and so on -- already have big speed advantages due to more and better equipment (including caching) that smaller guys can’t get.
That’s why they’re the money behind neutrality -- because neutrality preserves their advantages.
The FCC has yet to approve the principle that some Websites can buy faster or more reliable service from Internet providers. In its September ruling that Comcast endangered the “free and open nature of the Internet” by slowing down customer use of BitTorrent, the agency suggested that it might not approve the use of rules to manage congestion, either. That is because companies need to employ techniques such as deep packet inspection in order to apply rules in a non-discriminatory and transparent manner. But those techniques are not acceptable to the FCC.
So where does the FCC leave us? One option is to let the market sort it out – i.e., a competitive Internet. Neutrality advocates don’t like that. Another is to allow broadband providers the ability to implement rules (when needed, and transparently, to be sure) to manage congested periods. But neutrality advocates don’t like that solution, either.
That leaves the third option: letting everyone tough it out and share the misery. This is the same option that gives us highway traffic that doesn’t move, airplanes that sit on tarmacs, and brown-outs during the summer heat. To some advocates, this may be in keeping with how they construe the egalitarian character of the Internet. But for users, it’s a blueprint for an Internet that cannot sink but will not swim.
— Ev Ehrlich consults on economic matters to a broad range of organizations in the financial, accounting, pharmaceutical, technology, professional sports, and other industries.