"We could see the Internet’s doors shut to entrepreneurs, the spirit of innovation stifled, a full and free flow of information compromised. Or we could take steps to preserve Internet openness, helping ensure a future of opportunity, innovation, and a vibrant marketplace of ideas." Julius Genachowski, FCC Chairman, 2009The issue of "net neutrality" is a recent one. Yet even though the term is new, the idea is not. The Internet was founded to be available to anyone. Right now, it is a commercial enterprise, with commercial companies like, Comcast, Verizon, AT&T, and others, providing the "gateways" to the Internet for a fee. But the Internet has become almost a necessity. If it is not a necessity now, it will be in the future. It is an information highway, much like a physical highways. These highways have to be kept open to all. In fact, it could be argued that like physical highways, it should be the government that should maintain them to ensure fairness to all. This will likely not happen, due to the massive profits being made by the media conglomerates like Comcast. First, if you are still not sure about just what "net neutrality" is watch this video:
Arguments against Net Neutrality:
The telecommunication companies, want to convert the present Internet fee model into the electrical billing model. You pay for what you use. So the more Internet data you upload or download, the more or less you will pay. They argue, that this additional money, would be used to pay for technological improvement and for increased broadband access to more consumers in far away places. Of course this argument is based on the idea that these companies are not making enough money, and therefore, need to adopt this business model to make a reasonable profit. Let us then analyze how much Comcast, Verizon and AT&T have made in profits, compared to expenditures.
According to the Huffington Post, Comcast in the first quarter of 2010 had a rise in overall profits of 12%, amounting to 866 million dollars. If that margin continued it would equal a yearly profit of 3.4 billion dollars. In case those numbers, are hard to get around your head, let us put it another way. This first quarter, Comcast made in profits, after expenditures, $6,682 a minute, or, 111.36 dollars a second! This hardly seems like a company that "needs" more money for expansion. In fact, they still profited this amount after all their infrastructure expenditures.
Verizon in the third quarter of this year, according to the New York Times, had a 25% drop in profits compared to a year ago. They only made 881 million dollars in profits this last quarter. At this rate this would be a yearly profit of 3.5 billion dollars. This would bring them to 6,797 dollars in profits, after expenditures, per minute, or 113.29 dollars per second for the last reported quarter!
The third quarter of 2010, AT&T posted 12.3 billion dollars net profit This would mean that AT&T made 95,592 dollars a minute this last quarter in net profits, or 1,593 dollars a second! Does this seem like a company that needs to raise rates more to make ends meet?
Do any of these companies seem to you to need additional rate increases to make additional profits? In this kind of economy when so many Americans are out of work and losing their homes, does it not seem obscene for them to request additional ways to raise the rates of the American people?
All the telecom companies say that the fear of certain unwarranted. They state that they have no intention of filtering any service that is legal from operating in their offerings. Has there been any evidence of attempts at excluding services which might compete with a telecom's services? Yes.
There is a practice called traffic shaping. In 2009 T-Mobile announced that it was blocking Skype. The reason was not because Skype consumed to much bandwidth, because it does not. It was because Skype competed with T-Mobile's telephone service. In 2007, Comcast was found blocking certain types of "peer to peer" file transfers. These transfers are often used to upload and download illegal copies of software, movies or other copyrighted materials. It is also used for legal purposes such as distribution of files by an owner to people he wants to share it with. Comcast complains that these BiTorrent file transfers account for anywhere from 50-90% of the Internet traffic. To block or reduce these file transfers by Comcast, is called, "traffic shaping." It is widespread among Internet providers. This traffic shaping involves the slowing down of some forms of traffic, such as file sharing, while giving others priority. In Comcast's case, it was not just slowing it down, but stopping it altogether. It was also doing it by deceptive means, such as appearing to be the user who was sending the data.
History of Net Neutrality
In 2005, AT&T, suggested that it desired to charge some Web companies more for preferential treatment of their traffic. Google and Amazon objected saying that all traffic should be treated with equal preference. The government allowed AT&T to buy BellSouth Corporation only if it agreed NOT to implement any preferential traffic business models for two and half years. Since then, many groups have emerged standing against this business model of Internet usage.
President Obama has taken a position in favor of net neutrality. He appointed Julius Genachowski, someone strongly in favor of net neutrality as the chairman of the FCC. There is currently legislation being considered that would legislate net neutrality. In other words, this regulation would prevent the Internet providers from regulating who gets more bandwidth and who doesn't. As you will see from the next two videos we post, this issue has become a political one. It has become part of the battle between corporate interests and the government's job to be guardian against monopolies.
The Internet is not the exclusive property of the companies that provide services to it. Like the the telephone, it has also become a public trust. The Internet has vast implications for how society works and communicates. The influence that the Internet has on the daily lives of billions, not only in the United States, but in the entire world is only now starting to be felt. Therefore, it cannot be left solely to the Internet providers to determine how it will be used and how much it will cost.
Corporations of course, do in theory not want ANY regulation. They would like to have complete freedom to determine what is best for them. The only problem with this model is that what is best for them, is not necessarily what is best for America. One must remember, that the only purpose a corporation serves, according to its charter, and the most important consideration in all of its activities is, to increase the profits of its shareholders.
We believe that at this point, the telecom companies are making a sufficient profit to expand their services and expand their profits. We hope they are very profitable. They are now. But we think they should make their profits not by raising their rates, but by providing additional services that people will wish to pay for. This is the way they began in the first place, we think they should continue this fine tradition. If they need money to innovate, let them use some of the large sums they are already making.
The Internet will be shaped no matter what happens. Even if there is no rate increases, and there is complete equality for all who use it, this is itself a shaping of it. The question is who will shape it? Will a few megacompanies shape it or the much broader business market shape it? Is not a free market economy that all these megacompanies support, free from monopolies? Do monopolies support a free market? Do monopolies support innovation? It is true that massive increases of data are coming to the Internet, in the order of exabytes not gigabytes. Are the pipelines of the Internet ready for this? Probably not. But this is not a problem of the people of the United States, it is a challenge for the megacompanies who have become rich from managing the Internet bandwidth. Let them innovate like they say they can. Let them innovate the good old fashioned American capitalist way...by making products cheaper and better than they were before.