Thursday, March 15, 2007

 

Net neutrality is bad for business

Computing CanadaI think an editorial in the most recent issue of Computing Canada misses the point on the impact of net neutrality for businesses.

The editorial laments the fact that net neutrality has been handed losses in the US Senate and it is disturbed by statements from Industry Minister Bernier. Still, Computing Canada believes its readers' voices need to be heard to convince government to pass laws requiring all Internet traffic to be treated the same by ISPs.

Net neutrality is indeed an important issue for business users large and small. If anything, the business community needs to clearly shout its rejection of net neutrality. While superficially, the objectives of net neutrality may sound noble and democratic, its effects are bad for business. Not only should carriers be concerned, but customers too.

Among the most problematic statements in the column:
As enterprises shift to more Web-based applications for everything from sales force automation to self-service customer tools, the need for a level online playing field is more important than ever.
In fact, the last thing companies deploying Web-based enterprise applications should want is vanilla-flavoured net neutrality restrictions.

Business-grade web-based applications often have to perform better than average. Enterprises and applications providers are happy to pay for the performance that matches their requirements. Enterprises often demand flexibility to leap-frog 'best-efforts' internet. Businesses want their applications to be handled in a discriminatory manner.

Net neutrality restrictions would preclude preferential treatment.

Enterprise customers don't just want a two-tiered internet; they demands two, three and more tiers. Business requirements dictate a complete spectrum of internet services, a continuum of performance metrics, variable business models.

The editorial says
This is not the same thing as choosing between a T1 connection and dialup service: this is putting a premium on some URLs over others, a cost and legal burden that would not easily be borne in a country made up largely of small businesses.
Small businesses are precisely the kinds of customers that should oppose net neutrality.

Net neutrality would provide no better service for hosted banking than for movie downloads. Travel agents looking to grab a seat for their clients will compete with every other application on the internet, because net-neutrality will prohibit the reservations system from securing preferred treatment. Work at home virtual call-centre agents would have no choice but to put up with voice quality that may be less than acceptable, because net neutrality would forbid assigning a priority for that integrated application.

If net neutrality is imposed by legislation, large enterprises will return to more costly private networks to ensure their competitive edge. As a result, it is small business that could suffer the most. The answer isn't for small travel agents and SOHO operations to be forced into dedicated data access lines. The answer is to let carriers and their customers work it out in the marketplace.

It is precisely because Canada is so dependent on the health of Canada's small business engine that enterprises, large and small, should be so strongly opposed to net neutrality legislation.

Minister Bernier fully understands the importance of net neutrality, not just for carriers, but for the economic performance of Canada's business community. That is why the Minister of Industry, charged with the responsibility of policy to support an information economy, understands why he cannot support net neutrality.

It's more than just bad for business; net neutrality is bad policy.

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Comments:
Mark,

You must get dizzy with that much spin.

Do you really believe that with Net Neutrality, the Internet will be allowed to devolve into a state of fundamentally not working?

If your home VoIP call center worker, cant muster the 67.6kbps of bandwidth on the Neutral Net, do you really think anyone would use the Internet?

Would anyone pay 39.99 for less than 100kbps of service?

No, obviously it's infinitely more liklely that the battle for internet speed will continue, that the cost of bandwidth will continue to fall, and that with net neutrality, instead of auctioning bandwidth to the highest bidder the ISPs will simply build more so that they can sell more.

What Net Neutrality advocates want is to not have to pay Shaw an extra $10 a month to be able to chose a different VoIP provider despite already paying for a whole lot more than 67kbps of service bandwidth.

What businesses need is the ability to raise capital for dotcoms. Without Net Neutrality, do you really think anyone is going to invest in a dotcom without the ISPs prior-blessing? I wouldn't, because if you ever became successful, the ISPs would jump out of the woodwork asking for 'preference' fees, which is pretty much equivilent to tony soprano's fire insurance.

The ISPs are already waxing poetic about transmission tariffs and putting fees on iTunes and Amazon video downloads. Do you believe that this will make the internet cheaper for the average user, or allow them to access the products and services they want to?

Come-on Mark. Net Neutrality is _good_ for business and bad for duopolistic ISPs.
 
I agree with the anonymous commenter, Net Neutrality gives small internet businesses a fighting chance to compete against big name companies like Verizon and Optimum online. Some of these small businesses actually provide better customer service than their superior competitors.

T1 Line Price Quote
 
OK. so one of the commenters (cipher) is at least honest enough to say that net neutrality is an attempt to use legislation to handcuff the carriers. I understand that - get the government to impede the competition. Like trying to get the government to put retraints on any successful business icon to give small guys a chance.

The other commenter (the one who won't give a name) seems just plain confused. Not sure where the 67.6Kb comes from. The issue isn't the bit rate. It is whether the bits get delayed - latency - hence the need for prioritization, such as QoS or other schemes.

As to the question of whether people will invest in a dot-com without net neutrality, I think the answer is pretty obvious. The investment community isn't asking for net neutrality and hasn't made that an issue since the beginning of development of internet applications.
 
Net neutrality gives life to smaller high speed internet service providers such as http://showmethebroadband.com
to show the quality of their service.
 
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