The Reality of the New Non-Neutral Net

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So the FCC has repealed the regulations that mandated that all traffic on the Internet must be treated equally. The telecom/Internet Service Provider industry has touted this as a good thing, as there will now be a “fast lane” for most traffic and a “faster lane” for so-called priority traffic.

The regulations in question are long, wordy, complex, and unfortunately boring as hell. So what does this new non-neutral net mean in the real world? Let’s take a look:

If you are a tech company:
First, unless you’re well established and have rock-solid relationships with bandwidth providers, you’re in trouble. You *will* be paying more to get your traffic prioritized in a world where everything else online is going to drive up latency and bottlenecks. This means more budget for bandwidth for the life of your product line, and that means you need to start lining up additional funding right now. The impact of the regulatory change may take a few months or a few years, but it is indeed coming – start planning.

If you don’t want to pay for prioritization, then be ready to accept the fact that everyone who did pay will get lower latency and faster throughput – especially during peak operational times for your type of application or platform. So for consumer apps, your performance is going to absolutely suck from about 6PM through about 12AM local time for your customers. For business applications, the 9AM to 5PM local time frame is going to be a nightmare for you and your clients.

While non-latency-dependent or bandwidth-light applications won’t have too much of a problem, if you are streaming anything at all, this will impact your bottom line. If you’re starting up a cloud platform (especially IaaS), just give up now.

If you are a consumer:
Get ready for your Internet Service Provider (ISP) and Mobile companies to charge you more. If you are a heavy user of streaming services (Netflix, Amazon Prime, Apple Music, Spotify, and several dozen more), then you’re going to need prioritized service. After all, if everyone else in your neighborhood pays for it and you don’t, all you’re going to see is the “buffering” message or “please wait” audio prompts as their traffic gets to their devices ahead of yours.

ISP’s are already charging for high-bandwidth users, and in a world of streaming video and audio services we’re pretty much all high-bandwidth users now. If you work from home and are constantly on company applications and VPN connections, your bandwidth profile goes even higher. Have a VoIP phone or a micro-cell for your mobile phone? Higher still. Want to use that VPN for personal or business use – you’ll probably have to pay more for that privilege. There is no end to the nickel and diming that’s now available to ISP’s that they could have only dreamed of before.

A history lesson:
In our history, we have seen that giving corporations – even non-monopolistic corporations – the ability to pick and choose winners and losers exclusively by their ability to control supply doesn’t lead to good things. The punch-card era of IBM is a wonderful example. You see, while anyone could physically produce punch-cards to program and manage IBM accounting machines, only certain vendors were permitted to do so by IBM. Anyone who wanted to get into the market would have to be certified by IBM (an expensive proposition) – even though a punch-card is just a stiff piece of paper of certain physical dimensions. Eventually, other technologies got a toe-hold in the accounting machine market and overcame that restriction – but that took a generation, and caused many businesses who would have competed with official IBM punch-card vendors to go under. Since any vendor selling IBM punch-cards would not have a financial reason to produce them for other brands of accounting machines, this also meant that IBM gained the ability to become a virtual monopoly – no other machines could get anyone to make their punch-cards. Customers also got shafted, as they had to pay a premium for the officially-certified cards or risk their service contracts being voided. To put that in perspective, if your service contract was cancelled, your accounting machine pretty much stopped working.

What’s the correlation? Well, now any new business that wants high-bandwidth, low-latency throughput will have to pay to receive the blessing of an ISP above and beyond what they’re paying for that same service right now. Based on recent history, any user who wants to get the service as intended will also have to pony up some cash each month, making the actual cost of the new platform or service higher still. This will lead to situations where newer technologies may not even be developed, since it will be fiscally difficult to bring them to market successfully. The inventors won’t have the budget to pay for premium connectivity, and the end-users will be reluctant to get better cable/fibre packages to use them.

Recent innovations will wither and die when these new bandwidth fees and/or restrictions exceed their budgets; making it impossible for them to compete with players in the market who can more easily afford the fees by passing them on to their already sizable user bases, or just absorbing them as a cost of business. Google will be able to hold power over online video sharing where a newer company like Twitch may not be able to absorb the extra bandwidth costs. Amazon and Azure will ensure they have little to no competition because any cloud startup will be bankrupted by these premium fees, which would be required for things like Infrastructure as a Service to even function.

Yes, in time, newer bandwidth technologies will be created, and ISP’s will find themselves on the same losing end as the old Bell System did when it got shattered. But, ask yourself, how many innovations and new frontiers took decades longer to develop or were entirely lost when “Ma Bell” controlled almost every telephone line in the country? By allowing a very limited number of bandwidth providers to dictate fees at will – with no regulation to keep them in check – we’re quickly approaching the same situation we had with the Bell Network back in the 1980’s. Will we need to wait several decades for ISP’s to become irrelevant before we’re out of this nightmare, and how much progress will be sacrificed in the meantime?

Our government – in the form of the FCC – has sold us out. We are all going to be poorer in both actual money and in lost innovation and discovery for it.