Net Neutrality, as conceived in the Snowe-Dorgan bill and similar measures, is a subsidy to large bandwidth consumers such as Google and Yahoo. This is not to say to that these companies don’t pay anything for Internet bandwidth today as much as it is to point out that whatever they pay (and it’s far below market rates that you and I pay) doesn’t cover Quality of Service. Let me back up a little and explain what this is about.
The Telcos – principally Verizon, but to a much lesser extent AT&T and Bell South – are in the process of transitioning from old-fashioned DSL to systems that will enable them to offer cable-rivaling triple-play service. This means TV, phone, and Internet over a common wire. This can be done as the cable companies have done it, by partitioning the cable into slices of frequency for the different services, it can be done using strict time-division multiplexing a la the old days, or even better, by running IP across the entire bandwidth of the cable and segregating services with packet priorities. The latter means is the best way because it means in principle that you can use your entire cable for Internet downloads when you aren’t using higher-priority services.
The natural assumption is that they would be entitled to charge fees based on the service level a customer chooses, just the cable company does today. I can buy phone, TV, and Internet from Comcast separately or together. If the technology that Comcast uses to segregate these services changes, the economics don’t, inherently, so they should be allowed to continue pricing these services separately even if they’re all delivered over some form of Internet Protocol.
Google doesn’t think so, because they want their video and phone service to perform just as well as Comcast’s or Verizon’s without their having to pay anything more than base level Internet connection service prices.
So net neutrality amounts to this: even though Comcast or Verizon may charge their customers more for TV and phone service than they do for basic Internet service, Google should never have to pay more than a basic Internet connection fee for accessing Comcast customers at the highest level of service. Google wants to pay for basic cable and get HBO for free.
That’s what “net neutrality” really means. Mike McCurry wrote an op-ed for the Baltimore Sun that expresses this idea in a less-than-clear fashion, implying that Google doesn’t even pay for a basic cable, and the boyz at Techdirt whacked him around for it:
[McCurry’s] written up an editorial for the Baltimore Sun that doesn’t bother to mention his lobbying duties, or who has funded them. McCurry tries to make it seem as though the whole net neutrality thing is simply a ploy by Google to get “free” bandwidth. He notes, derisively, that “a $117 billion company like Google wants legislation that would drive Internet prices higher.” Of course, he doesn’t happen to mention that his viewpoint is funded by AT&T, who at close of business on Monday appears to be worth (oh, look at that) $117 billion as well.
Leaving aside the “grass-roots purity” angle, which is silly in a fight where Google’s side is represented by paid bloggers at Save the Internet, Techdirt has at best a technical point, not a substantial one. Google is seeking a subsidy, make no mistake about it.
And if that subsidy becomes law, we can more or less forget about any significant upgrades in the last mile, because there will be nobody to pay for them.
UPDATE: For the record, here’s the relevant part of Snowe-Dorgan:
(5) only prioritize content, applications, or services accessed by a user that is made available via the Internet within the network of such broadband service provider based on the type of content, applications, or services and the level of service purchased by the user, without charge for such prioritization;