Now Net Neutrality Will Ban Ad-Based Network Business Models?

from the say-what-now? dept

We've been dismayed at some of the really questionable or outright dishonest statements made by those paid by the telco industry on the issue of net neutrality. They keep distorting the debate -- which is disappointing, because there are reasonable arguments against net neutrality legislation. We just don't seem to hear them from the think tankers and the shills (sometimes, though not always, they're the same thing). The latest is a long piece by Hance Haney, who is certainly quite knowledgeable and experienced on the topic, but who writes up a long post explaining why enforcing net neutrality as a condition of the AT&T/BellSouth merger will make it that much more difficult for the US to have "world-class internet infrastructure." Amusingly, he points to the situations in South Korea and Japan as evidence of why the US needs better, cheaper broadband, failing to include the bit about how heavily state-supported both of these efforts were. Considering that he's warning about how it will stifle growth here to have the government involved, it's pretty bad to see him raise up those examples as reasons why we need less government regulation. He also says that AT&T/BellSouth wouldn't block web sites or degrade service, despite the fact that they've said they wanted to in the past. Hance, instead, says it's no problem since AT&T's CEO has promised he'd never do that (going against his own earlier statements). Of course, we've seen the telcos go back on their promises before -- so forgive us for being skeptical.

However, the meat of his piece is to suggest that if network neutrality rules were put in place, it would mean that telcos would be unable to experiment with business models that involved using advertising as a subsidy. Of course, he leaves out the part where he explains why this is. He just states it as true, when there's simply no evidence to support that being the case. A non-discrimination clause (while problematic in other ways), would not limit a telco from offering broadband service that's supported by advertising -- and there were even attempts (which failed miserably) to offer such services in the past. He even makes it sound like Google and Yahoo are somehow taking money out of the telcos hands by being able to advertise without having to give up a piece of it to the telcos ("content providers like Google, Yahoo and eBay get to keep every dollar spent on online advertising.") That's because those providers already pay the telcos for their bandwidth and provide the actual pages on which the advertisers advertise. What they do with it, is none of the telcos concern -- which is the point the network neutrality folks keep trying to get across. While I'm still worried about any new legislation that gives the government more power to regulate the internet, it's disturbing to see the continued batch of bad arguments coming out in favor of the telco position. It doesn't help their cause at all. It just makes it look like they don't have a real argument.
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  1. icon
    chris (profile), 3 Nov 2006 @ 9:47am

    why do they need to advertise?

    i am already paying someone so that i can get on the internet.

    google is already paying someone so that i can get to them.

    why do they need ads in the mix there?

    i know they want more money, i just think that they could make it offering something useful that isn't at the expense of others.

    if they want to make more money for faster delivery they should offer a mirror or colocation service where websites can host servers at ISP's central offices. rather than put everyone's traffic on hold while you service your higher paying customers, why not just move your higher paying customers closer to your users?

    I.E. if you have covad DSL in vice city, florida then google could pay covad to host a server in the covad office in vice city. all of the covad DSL customers would be 1 hop from a google mirror and performance would be faster than reaching a google server on the west coast. there is no discrimination against yahoo or because their packets are delivered just like everyone else's, it's just that requests have fewer hops to make to google. if yahoo wants to host with covad vice city, they are certainly welcome to.

    with that approach, google pays to host servers around the internet (in liberty city and san andreas) in cities where it sees the most activity. it's a win for google because it can deliver better service to it's customers. it's a win for the telcos because they can get money for providing a new service. it's also a win for you and me because it will mean less internet traffic from large cities with millions of people.

    internet sites already do this with mirrors. you can download faster and the load is better distributed (usually) when you download from a server in your country.

    universities do this with internet2. if you are at a major american university, downloading from a mirror at another american university is way faster than downloading from a mirror in anywhere else.

    online games like world of warcraft do this by hosting servers in europe and asia, not just in the USA.

    with this service you don't hurt others to benefit your higher paying customers. your higher paying customers just get served first, naturally.

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