The Internet has always been a unique animal when it comes to what it provides. Unlike a lot of other services, you don’t pay for Internet usage, although you might pay your Internet service provider a fee for access. Even then, the fact that the Internet is almost free to use, makes it a powerful business tool. Well, like all good things, the era of free or almost free Internet usage may be coming to a close.
Two recent events illustrate the changing Internet landscape. First off, Comcast and Netflix settled a contentious fight that resulted from Comcast apply speed brakes to the flow of Netflix traffic through its network. Comcast was arguing that the amount of traffic generated by Netflix’s streaming service, almost a third of all Internet traffic carried on the Comcast network, was disproportionately impacting all the users on their network. The slow down, of course, impacted the users of Netflix’s service – think of buffering or those irritating “please wait” messages you sometimes see when you are connected to a slow Internet connection – so they were willing to pay Comcast a fee to take their foot off the brake and let Netflix traffic flow as fast as possible. This is an Internet first.
Comcast is also proposing to merge with Time-Warner Cable, which, if approved, would make them the largest cable provider in the country, which concerns some people because that means that Comcast would be providing Internet access to almost 50 percent of the United States, giving them unprecedented power to dictate terms, like they did with Netflix. This is especially troubling to advocates of something called Net Neutrality.
Net Neutrality is a concept that is supported by a significant group of Internet users. Their argument is that once I’m online, I should be able to get to any site I want to get to, whether it’s cnn.com, or Netflix.com or a small, local restaurant without any blocks or performance throttling. In their view, Internet access is an entitlement, almost a right, that should not be interfered with by anyone. Internet service providers like Comcast and Verizon, on the other hand, will tell you that they are running a business and., like any business, they should be able to charge what the market will bear, in particular by targeting content providers like Netflix and telling them that they have to pay a premium to make sure their customers get premium service.
And they are not alone. For a long time after the Internet exploded on the scene, content providers like newspapers and other media outlets provided their content online for free while still charging for their product to their traditional consumers. After many of these content providers ended up closing shop because their business model was not sustainable, you are seeing many content providers charging for their online services like they do for their other media outlets. And even this is riling the “Internet should be free” or Open Internet crowd.
The Federal Communications Commission is tasked with promoting and enforcing Net Neutrality but they were dealt a setback when the court struck down some of the rules the FCC was hoping to use to enforce a level playing field for consumers but the FCC feels they can revisit those rules and still get to where they want to get: an Internet where service providers can’t dictate speed and performance and instead have to adhere to the same rules across the board. Although that may appeal to those who advocate the Internet as a right, the reality is that the Internet is just a medium and those companies that want to do business there, will have to make money in order to keep the Internet up and running.
Alvarez Technology Group, Inc.
P.O. Box 965 Salinas, CA 93901
Toll Free: 1-866-78-iTeamLocal: (831) 753-7677
Fax: (831) 753-7671