michael favia

Network neutrality is a term that describes the way that Internet traffic should be treated equally as it makes its way around the world to your computer screen. Internet content providers (e.g. Google, Hulu, YouTube, Apple) use popular buzzwords like competition and discrimination to describe why it should be a national priority. Internet service providers (ATT, TimeWarner, Comcast) on the other hand oppose it en masse using phrases like "quality of service" and "peak demand" to convince you that they are acting in your best interest. The truth, surprising as it may be, is that neither of these companies care about anything but lightening up your wallet.

Unfortunately, the outcome of their battle does have a big effect on the quality of your Internet experience and the bad news is, you're not paying attention. That's about to change. While we have spent years trying to educate consumers on why Network Neutrality is in their long term interests, none of our efforts will compare to the effect that taking TV away from the American people will.

The "Great Recession" has caused a lot of Americans to reevaluate their discretionary household spending. When they sat down and did the math I can only imagine that they fell out of their chairs when they realized how much they were paying for TV each month. As they scoured alternative options for their daily media fix they discovered that most TV networks streamed their content online and that Netflix offered instant movie streaming as well. One by one these people pulled the plug and told their friends. Each month the numbers of people are deciding that it just isn't worth it anymore are starting to add up. This hasn't gone unnoticed.

To combat the lost revenue Time Warner recently rolled out tiered pricing for their Internet services here in Austin and other areas. The new system works a lot like your cellphone bill. You pay fixed rate each month to buy so many units of Internet and pay an additional fee for the amount you go over. We already pay consumption fees on every other utility (gas, electric, water) and its actually a decent pricing model for the Internet too. The problem with their new pricing system is 2 fold.

The first issue is the small amount of Internet included with your plan each month and the exorbitant amount they charge for that extra Internet when you go over. If the per unit fees approximated the real costs that the Internet service providers faced to provide it, you would no more think about the cost to download a Netflix movie then you do to water your plants or take a shower. But they aren't even close. The price to download a HD movie from Netflix under their new pricing scheme is around 4 bucks each. Each hour long Hulu TV show will run you about 50 cents. At these prices the internet service providers have essentially levied a tariff that only third party content has to pay. This has the direct result of discouraging your use of innovative and popular online services like Netflix, YouTube, and Hulu and its not a coincidence.

The second problem with the new pricing structure is that simultaneous capacity (aka throughput) not consumption is the major cost driver for Internet traffic and the current pricing models already reflect this. Consumption does cost money but most infrastructure investment is spent catering to the peak loads exactly like our electricity grid.

Free market proponents will argue that if the prices are arbitrarily high then competition will force them to their proper levels over time. What they would fail to realize though is that this market lacks a competitive force of any kind. Many of these service providers hold a monopoly over their customers and all of them have the same vested interests in television distribution as well. As is evidenced in Beaumont, TX the Internet service providers are content to collude in each market as they roll out these fees.

Monopolies on "line service" are common in the utilities arena because "line service" competition would mean making a mess of our roads and neighborhoods as each competitor rolled in new lines for service. Competition is still possible though if you address conflicts of interest by letting service providers compete to offer services over "common lines" that are maintained by a third party. Under such a system the line "types" (e.g. cable, telephone) compete with each other to ensure continual improvement of service.

For some reason our municipal and federal governments have granted our cable and telephone companies monopolies of service to deliver our information and also allowed them to compete in providing it themselves on both the service and content levels. This creates a conflict of interest inside the companies and obstructs competition on multiple levels. Vested holdings in television are maintained not because they continue to provide value but because they are existing lines of business.

Americas past is littered with antiquated distribution mechanisms (milk trucks, telegrams, snail mail, Hummers, etc). As traditional phones and newspapers fall to antiquity specialized television distribution networks are next on the list. That is, unless they are unnaturally and illegally propped up by the monopolies that own them.

This isn't something that a face book group is going to fix. Cancel your service when it comes, tell your friends, call or email a city council member or member of congress and tell them your problem or link them to this article if youd rather. Your government represents you and they give these companies permission to carve up your roads and merge together to form these beasts. This system of technology oppression fails without your politicians support and your politician fails without yours. If all else fails to convince you, go fight for your TV!