Back home in West Virginia, our Verizon phones have no 3G service. There’s no fundamental technical issue; Verizon and US Cellular just won’t enter a 3G roaming agreement.
This scenario captures a core net neutrality concern: are we moving to an Internet where our access is determined more by business agendas and less by technical issues?
Recently, streaming video demand has been forcing this issue. Netflix’s traffic has been growing, and measured throughput has dropped for some major ISPs (e.g. down 14% for Verizon in one month). Verizon is seeking payment to carry Netflix’s traffic, and Craig Silliman (Verizon’s head of public policy and government affairs) has said that Verizon’s policy is to require payment from networks that send more data than they carry in return. “When one party’s getting all the benefit and the other’s carrying all the cost, issues will arise”.
This is going to get more interesting.
Clearly, ISPs are maneuvering to “double dip”: subscribers pay for access to content, and now ISPs want content providers to also pay for access to subscribers. That’s not bad business if you can get it, but it makes you wonder if the ISPs are merely leveraging their powerful position. After all, Netflix is sending data to Verizon’s network because a paying Verizon subscriber asked for it!
The problem is ISPs sell “unlimited data” (effectively), but their networks are nowhere near the capacity needed for all subscribers using full bandwidth. The ISPs bet subscribers use only a small average bandwidth fraction. In the past, this model has worked well: legacy telephone and cable networks have relatively stable demand patterns.
Now, for the first time, these providers are surfing Moore’s Law and Metcalfe’s Law. Advances in computation and network performance (not to mention billions of people on-line) are driving exponential demand for bandwidth, as well as an expectation that services will be better, faster, and cheaper over time.
Worse, ISPs have been famously unimaginative about future applications and bandwidth demand (e.g. comments by Time Warner’s CFO that customers don’t really want gigabit speeds). Your next TV will likely be 4K with IP-delivered video. Don’t forget video conferencing: HD-quality cameras are cheap and 4K cameras are a few hundred dollars. At some point, we’ll be able to look around a remote location with VR goggles.
Even worse, most ISPs are fundamentally conflicted: IP-streaming video competes with their own proprietary video offerings. However, should they be allowed to slow down and tax these new competitors? And if they charge content providers like Netflix, can they discriminate or must they offer identical terms to any content provider?
As I said, it’s going to be interesting.