Every time this issue comes up in an online forum, at least one commenter will pop up passionately defending this position. You can easily tell who it is in this submission (it's not you). The thing is, that's an economic perspective, but net neutrality is the name for a technological state of affairs. Focusing on the economic side of the issue subtly undermines the discussion by hiding the real problem before it can even be factored in.
Yet this is mainly a technology-oriented community (as far as I know), so let me try to convey my understanding of why internet pioneers, network engineers, startups and small businesses overwhelmingly support net neutrality (in addition to the afforementioned large online service providers such as Netflix or Youtube). Please bear with me if I write things you already know, and kindly correct any mistakes I make.
The Internet is a collection of thousands of smaller networks, many of which are international. It can only function as a whole because those networks peer with each other all over the globe and exchange information. This means John Doe, customer of ISP A in the US, can communicate with any other internet user - such as Hiro Nakamura, customer of ISP B in Japan, or Raj Singh, customer of ISP C in India. When a company or organization deploys their own network, they can join the internet by finding one or more peers who are already in it and entering a peering agreement with them. ISPs are classified into tiers based on the answer to the following two questions:
- Do I have to pay anyone for them to carry the traffic I generate?
- Does anyone pay me for me to carry the traffic they generate?
ISPs with a more valuable network - who own more actual long-distance capacity (bandwidth) in physical network infrastructure - are more likely to be paid and less likely to pay others, simply because they are providing infrastructure to others. But regardless of the economics of the peering agreement, usually the agreement entails carrying all traffic sent by the peer network to (presumably) recipients in your network, or your other peer networks. The traffic sent by the peer network doesn't necessarily originate in the peer network, but you treat it as if it did - this ability for traffic to traverse multiple networks that are not directly connected to each other is the only thing that ensures we have a single internet, rather than an endless amount of smaller international networks. This decades-old state of affairs, in which a network does not discriminate against traffic sent to it from another network by looking at where it came from, is called net neutrality.
When a company wants to be an ISP and sell internet access to the end user, they have to join the internet in the manner described above. After all, internet participation is always bidirectional - end users generate some traffic themselves. A new commercial ISP can join the internet simply by peering with a single existing network in a single location in such a way that the new ISP pays for all traffic they send over the network. In return, they can receive traffic from everyone else. They make a few access plans for the end consumer with as low an amount of upload bandwidth as they can get away with and price them in such a way that they'll be able to make a profit after paying their upstream provider and other operating costs. For redundancy and quality of service, they can peer with more networks at the same time and charge a little more.
But in the long run, as you can probably imagine, this is not cost effective. Assuming you are going to grow and have a very large participation in the internet (large geographic coverage, millions of users, lots of traffic), then you get a much better return by deploying your own network. By having a larger "network share" you are in a better position to negotiate peering agreements in your favor, not to mention all the traffic you carry within your own network doesn't have to be paid to a third party (or is subject to bandwidth limitations due to you only having purchased a limited amount of upstream bandwidth). Ultimately, an ISP like AT&T owns a backbone so large (currently 660000km of fiber according to their website), they're a substantial enough portion of the internet not to have to pay anyone for peering - it's mutually beneficial for them to peer for free with other large networks and make their money by charging smaller ones and having a bigger profit margin on their own customers, which makes them a so-called tier 1 network.
Enter american ISPs like Comcast. Comcast seems to have grown through a primarily end customer oriented strategy. They grew their last mile business very quickly and became a near monopoly for commercial internet access in many parts of the United States, serving millions of customers, all the while purchasing as little upstream bandwidth as they could get away with from larger networks with a strong presence in the United States, such as Level3 (now CenturyLink). This technologically short-sighted business model did not immediately fail because they "carefully oversold" their upstream capabilities (this is perfectly normal - you sell bandwidth based on your average network load expectations, not based on the assumption everyone will be using 100% of what you sell them at all times), engaged in p2p blocking and traffic shaping, and had a really good customer retention plan ("oh, you're not happy with your service? maybe you can try our competitors... wait, there are none? oops...")
The problem is that, as they years went by and the capacity of the internet grew around them, consumers' bandwidth demands escalated. People now want to download 10s of gbs worth of games from digital retailers every month, and watch streamed high definition video at all times. If the average household would before average 500kbps on their 20mbps connection, suddenly they were averaging 5mbps, and ISPs like Comcast could no longer cope. They were in the unenviable situation of having to make their internet access plans several times more expensive and having to explain the situation to their customers (literally impossible; customers would flee en masse), or losing billions. Deploying their own network would take many years and be a very complex, very risky project. As pesky businesses like Netflix grew and became a noticeable portion of the amount of bandwidth running down Comcast's upstream faucet, there must have been talks about direct peering (large content providers, nowadays usually through content delivery networks, benefit from peering directly with large ISPs because they can then ensure their traffic flows as smoothly as possible to the end user). I imagine the conversation went a little like this:
Comcast: "Hey Netflix. It's important to your business that you are able to reach our customers right? Without us you'd go bankrupt. Pay us $<money> for the agreement because we're really starting to sweat around here."
Netflix: "Hi Comcast. Even though we generate a lot of traffic, our profit margins are low because we have a lot of licensing costs. Besides, that's not how the internet works. Your customers are the ones who want our goods. It's in order to access our services and others that your users even buy your services in the first place. They're paying you for it already. Without us you wouldn't have a business, because the free market would ensure that customers would get to us through a different company or route. We can't pay you $<money>."
Comcast: "Sorry, no $<money>, no deal."
Netflix: shrugs "Okay. That's too bad, but we'll just peer with your upstream providers such as Level3 and they'll deliver our traffic to your customers as usual, under the terms of your peering agreement with them. It will be a little slower but what can we do?"
Comcast: "Wait what? I thought the internet was like a truck, but it turns out it's more like a series of tubes?"
Comcast (which, let me stress, is merely an example here; this situation occurs with others as well), cannot extract $<money> from Level3 under the net neutrality model, because Level3 has a much more valuable network. If Level3 did not peer with Comcast, Comcast would not function, because Comcast users want to reach a lot of users and services elsewhere on the internet. Comcast might peer with someone else, but they'd always have to pay them, because the situation will always be the same: Comcast has the traffic demands of millions of users, but a relatively small amount of people outside Comcast actually want to send traffic to Comcast. Any other upstream peer will shove Netflix down Comcast's throat, because there is a single internet.
Without net neutrality (and I repeat, I'm talking about NN's actual meaning, not about the temporary US federal regulation that was in place for two years with the purported intent of protecting NN), Comcast can look at the traffic they are receiving from Level3, examine it and say: "Okay, customer, you can have these packets from Google but these packets from Netflix... Hmm, maybe later." This gives them leverage when negotiating with the likes of Netflix, protecting their business model (and, I'm sure, a lot of jobs they generate). They can pass this off as "free market friendly" because it's allowing ISPs to do whatever the hell they want. In that sense, it certainly is - it's free ISP market friendly. But what does it mean for the internet itself?
It means that, when a user pays for "internet" access from a commercial provider, they can no longer trust that to mean anything. If an end provider can make demands based on where traffic is coming from, and presumably block some of it, then from the customer's perspective all "internets" are different. The "Comcast internet", with no Netflix, would be different from the AT&T internet, the Verizon internet and so on, since the ISPs, who are free to do as they please, will provide distinct services from each other. Think about it. When one of the millions of users or companies connected to the internet someplace in the globe generates traffic, they have no easy way of knowing which networks that traffic will end up crossing. Before the moment a request is made and a server delivers a response packet/frame to a very specific IP address, the server did not know it was going to be doing that. When a small business puts content "on the internet", that content is available to every participant of the single, global internet who wants to ask for it.
These participants can be making the request through thousands of end-user ISPs. If a single of those ISPs could demand money for "traffic protection", so to speak, what's stopping all the others? Why wouldn't Deutsche Telekom AG follow suit and start asking businesses to pay them to ensure the business's traffic is delivered to german customers? What about Shaw? Talktalk? Telefónica? But if you're a small business, you can't afford to pay off all these people, so you have to pick and choose which target customers receive quality traffic from you, further eroding the fabric of the internet.
Proponents of your position have told me in the past that this is not a problem, because CDNs (or "cloud") providers have enough business volume to take care of paying everybody off, so a small business can put their website in the cloud and it will reach everybody, just like the old days. But centralization of control over the internet under a very small amount of cloud providers is already a problem, and that would only worsen it. If no business can make use of the internet without a middleman, the word "internet" loses its final shred of meaning. You can put your website up "on amazon" and it will reach <list of ISPs>. That's all.
>maybe you can try our competitors... wait, there are none? oops...
>Without net neutrality, Comcast can look at the traffic they are receiving from Level3, examine it and say: "Okay, customer, you can have these packets from Google but these packets from Netflix...
You dont need net neutrality to fix this, you need to undo regulatory capture, government granted geographic monopolies, and foster last mile competition. If my mom wants to buy cheaper internet that just has facebook and netflix, and I want to buy "unfiltered" and there are competing last mile services offering both, you dont need more laws telling the isps what they can and cant do, or what we are allowed to buy. The companies that own the lines should be neutral utilities, and the companies selling the service to end users should be allowed to come up with creative business models. At that point netflix could even start offering its own service, upon other companies rented lines.
Every problem you spell out in your post exists because the customer doesnt have the choice to leave a shitty company. Last miles should be be open to any company willing to pay market rate.
The answer to regulatory capture, is not more regulatory capture.
I think you completely missed the point. The internet has value as a digital market, communications platform, tool for free speech and human rights preservation and a lot more, and much of that value comes from the fact that any participant, no matter where they are (obviously assuming they are not blocked or restricted for malicious activity intended to disrupt the service in the first place) can send a message to any IP address and that message will get there. So:
> the companies selling the service to end users should be allowed to come up with creative business models
No, they shouldn't; not if this requires breaking the global internet. It's not worth it. Why should the fact that it's possible to work around specific resulting issues in the USA mean it's desirable to go down a path that benefits ISPs and (dubiously) a small subset of consumers, and literally no one else? You might tell me it will benefit most consumers (as in, ISP customers), but that's shortsighted. The loss of flexibility incurred from the destruction of the system and the loss of the global digital market will have negative consequences for almost everyone down the road.
Or to put it in other words, stop looking at this as if it was a primarily economic problem tied to the availability of internet access choices for the customers of certain ISPs. Those things hardly matter in the bigger picture. They certainly do not matter to me, an european citizen. We have real net neutrality legislation in the EU. But it still matters to me if my business (should I have one) cannot reach american users and customers properly. It matters to me if it's hard for me to exchange ideas with americans, like we're doing right now. It matters to me if I can't play videogames against my american friends. That's worse for the economy and worse for consumer choice.
Every time this issue comes up in an online forum, at least one commenter will pop up passionately defending this position. You can easily tell who it is in this submission (it's not you). The thing is, that's an economic perspective, but net neutrality is the name for a technological state of affairs. Focusing on the economic side of the issue subtly undermines the discussion by hiding the real problem before it can even be factored in.
Yet this is mainly a technology-oriented community (as far as I know), so let me try to convey my understanding of why internet pioneers, network engineers, startups and small businesses overwhelmingly support net neutrality (in addition to the afforementioned large online service providers such as Netflix or Youtube). Please bear with me if I write things you already know, and kindly correct any mistakes I make.
The Internet is a collection of thousands of smaller networks, many of which are international. It can only function as a whole because those networks peer with each other all over the globe and exchange information. This means John Doe, customer of ISP A in the US, can communicate with any other internet user - such as Hiro Nakamura, customer of ISP B in Japan, or Raj Singh, customer of ISP C in India. When a company or organization deploys their own network, they can join the internet by finding one or more peers who are already in it and entering a peering agreement with them. ISPs are classified into tiers based on the answer to the following two questions:
- Do I have to pay anyone for them to carry the traffic I generate?
- Does anyone pay me for me to carry the traffic they generate?
ISPs with a more valuable network - who own more actual long-distance capacity (bandwidth) in physical network infrastructure - are more likely to be paid and less likely to pay others, simply because they are providing infrastructure to others. But regardless of the economics of the peering agreement, usually the agreement entails carrying all traffic sent by the peer network to (presumably) recipients in your network, or your other peer networks. The traffic sent by the peer network doesn't necessarily originate in the peer network, but you treat it as if it did - this ability for traffic to traverse multiple networks that are not directly connected to each other is the only thing that ensures we have a single internet, rather than an endless amount of smaller international networks. This decades-old state of affairs, in which a network does not discriminate against traffic sent to it from another network by looking at where it came from, is called net neutrality.
When a company wants to be an ISP and sell internet access to the end user, they have to join the internet in the manner described above. After all, internet participation is always bidirectional - end users generate some traffic themselves. A new commercial ISP can join the internet simply by peering with a single existing network in a single location in such a way that the new ISP pays for all traffic they send over the network. In return, they can receive traffic from everyone else. They make a few access plans for the end consumer with as low an amount of upload bandwidth as they can get away with and price them in such a way that they'll be able to make a profit after paying their upstream provider and other operating costs. For redundancy and quality of service, they can peer with more networks at the same time and charge a little more.
But in the long run, as you can probably imagine, this is not cost effective. Assuming you are going to grow and have a very large participation in the internet (large geographic coverage, millions of users, lots of traffic), then you get a much better return by deploying your own network. By having a larger "network share" you are in a better position to negotiate peering agreements in your favor, not to mention all the traffic you carry within your own network doesn't have to be paid to a third party (or is subject to bandwidth limitations due to you only having purchased a limited amount of upstream bandwidth). Ultimately, an ISP like AT&T owns a backbone so large (currently 660000km of fiber according to their website), they're a substantial enough portion of the internet not to have to pay anyone for peering - it's mutually beneficial for them to peer for free with other large networks and make their money by charging smaller ones and having a bigger profit margin on their own customers, which makes them a so-called tier 1 network.
Enter american ISPs like Comcast. Comcast seems to have grown through a primarily end customer oriented strategy. They grew their last mile business very quickly and became a near monopoly for commercial internet access in many parts of the United States, serving millions of customers, all the while purchasing as little upstream bandwidth as they could get away with from larger networks with a strong presence in the United States, such as Level3 (now CenturyLink). This technologically short-sighted business model did not immediately fail because they "carefully oversold" their upstream capabilities (this is perfectly normal - you sell bandwidth based on your average network load expectations, not based on the assumption everyone will be using 100% of what you sell them at all times), engaged in p2p blocking and traffic shaping, and had a really good customer retention plan ("oh, you're not happy with your service? maybe you can try our competitors... wait, there are none? oops...")