Do we need network neutrality, or will consumers decide?

There’s been a great deal of discussion over the past week following the VON conference about Qwest “net neutrality,” where consumers would have unfettered access to broadband internet services that don’t block traffic. Sure, you may pay for a tiered service (based on upload and downstream speed) as some ISPs offer today. But take a look at the blog entry I wrote about this yesterday on DVR services which includes a passing reference to John C. Dvorak’s recent column.

As Forbes notes in their article on network neutrality as a result of the VON conference last week, Qwest CEO Richard Notebaert said “I don’t think we ought to block anything on our network, and we won’t,” when the speculation that “the telcos will try to degrade the quality of competing services, such as voice-over-Internet Protocol market-leader Vonage.” (from Forbes) 

In ZDNet’s IP-telephony blog, there’s an interesting quote from Russell Shaw:

Not unexpectedly, we are seeing the analysts buy into this as well. Sanford Bernstein analyst Craig Moffett says that mandated net neutrality would “likely trigger a host of unintended consequences. Mandated ‘Net Neutrality’ would further sour Wall Street’s taste for broadband infrastructure investments, making it increasingly difficult to sustain the necessary capital investments.”

Now, consider Yahoo’s announcement yesterday to dump the Yahoo Plus service, when they said “it has become clear that Plus was not an essential service for Yahoo users.” OK, this premium service provided was a broadband-optimized portal, with premium video content and radio among other assorted bits. And it appears that there’s not a significant and contributing business for Yahoo to continue it: I would guess that if it was a barn burner on the profit front, they would continue to offer the premium tier.

So, a kind of natural selection of services and tiers. Customers don’t like it? Rethink the strategy. I would guess that we’ll see some of the benefits of the Plus service be available to all customers at no additional cost over time.

Will telcos and cable providers react the same way and simply provide commercially attractive offers that the market buys? Sure, that’s what happens today. If I work at it, I can get my high speed data provider to provide me incentives (matching the price of the competition) to stay with them rather than churn out and switch to their competitor. Locally, we already see the ads promoting the cost savings and bandwidth increases enticing consumers to switch from one ISP to another… just like the phone companies did in the past and mobile companies still do today.

It used to be that I paid a huge amount for long distance across the States and to Canada, Europe and other countries, but now I enjoy “free” long distance calling with in the States (it’s a small flat fee built into my basic services) and international calling seems to costs less than interstate calls were just a few years ago.

Just like phone services of the past, I’ll guess that internet broadband access will follow a similar path: as there is competition, consumers will also find tiers of service that meet their needs, ones that allow VOIP, video conferencing, streaming video content, high bandwidth on-line game with no premiums or blocks to access.

How frustrating would it be one day to come home and find that your phone service has been blocked? Or that your viewing of the latest Hollywood blockbuster stops suddenly because you max’ed out your monthly bit quota? How quickly would you reach for the phone and churn out to a competing service? Faster than you can say “Net Neutrality,” I’ll bet.

Consumers may not need a mandate from the government for Net Neutrality as their dollars will help chart the courses of pricing, access and service tiers. And to support choices, ISP and backbone competition should be encouraged and supported.

See also Jeff Pulver’s blog with Von coverage.

Tags: , , , , .