This is a
commentary on net neutrality, a current issue of significance between the
internet service providers (ISP) and the large web companies that subsequently
drew in the regulators. It originated
from the US in the mid-90’s but is now a global issue, However it is much more intense in the US and
Europe but I expect increased attention in Asia in a year or two as bandwidth
consumption continues to rise sharply. Because
it is ‘regulatory’ in nature, it has ramifications across the entire online
industry. Because it has a cost element,
it’ll ultimately affect consumers. In
Asia, many governments are still trying to bring down the cost of access so if
the ISP (in Asia, the largest ISPs belong to incumbent telcos) attempt against
net neutrality wins, it may make it so much harder. It potentially raises costs. For those who subscribe to the view that the
economy is better off with the notion of an open internet, this issue is
sacrilege! On the other hand, the ISPs
have a legitimate reason as usage is escalading, affecting costs.
This issue arose
during the dot.com run-up when internet usage shot up and now continues with sites
like YouTube and Facebook that not only attracted hordes of new users but
increases the time spent online. The
ISPs have to increase capacity to catch up.
The adoption of smartphones made it worst. They want those responsible, in their view, the
popular websites and even the smartphone makers to bear some of the costs of
the constant capacity upgrading. The
websites were obviously aghast. Some
ISPs, mostly from incumbent telcos have threatened to throttle or even block
content from high usage sites. Many did
to some degree. Critics countered that
such actions would curtail innovation.
Many fear consumers will have to pay more.
The FCC (Federal
Communications Commission), a regulator in the US stepped in, arguing that the
internet is still a developing ecosystem and based on the principle of the open
internet, decreed circa 2005 after a period of consultation, a regulation that
networks must be neutral (thus net neutrality).
It means that all internet traffic be treated equally. They probably also suspect that some ISPs may
be opportunistic. Many regulators around
the world have followed the FCC to impose their variation of net neutrality on
the industry.
Net
neutrality is the principle that all data on the internet be
treated equally. Normally directed at the internet service providers it means
they should not discriminate or charge differently by user, content, service or
site. No discrimination means they
cannot charge a user differently from another.
They cannot charge a different rate to carry different content ie. they
cannot charge a voice service like Skype or a video site like Hulu different bandwidth
fees. They cannot discriminate against certain services or content by
prioritizing or impeding access to any particular site through blocking or slowing bandwidth. They cannot advantage
their own service by treating competitors’ similar offerings differently. So if an ISP allows subscribers an unlimited data
plan for its own iptv service while levying a data cap plan meaning they pay
more for another video streaming service, it is against net neutrality
regulation. They cannot block content (except
banned content like child pornography) from any content provider. So content such as Skype VOIP cannot be
blocked, common in some Middle East countries. It is to prevent unfair discrimination
by the ISPs. It
is the
preservation of an open internet for content, important
for the ecosystem with the argument that this egalitarian approach
is the reason for the free flow of ideas and inventions and by association good
for the economy.
In Asia, some
countries allow ISPs to strike deals with content providers to deliver their
content faster. This is an
interpretation of net neutrality which purest would surely rant about. Unlike the US where politics gets in the way,
in Asia, it tends to be more business-oriented.
As long as the general principle of the net neutrality is adhered to, as
long as it benefits the consumers and it is within anti-competition rules, variations on its interpretation are allowed. Some Asian telcos however simply ignore net
neutrality or rather the fine details!
In the next
post, I’ll explore if the telcos have a case.
©Chen Thet Ngian, InternetBusinessModelAsia.blogspot.com
(2012, 2013). Unauthorized use and/or
duplication of this material without express and written permission from this
blog’s author and/or owner is strictly prohibited. Excerpts and links may be
used, provided that full and clear credit is given to Chen Thet Ngian and InternetBusinessModelAsia.blogspot.com
with appropriate and specific direction to the original content.
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