End of Net Neutrality

Over the last several weeks, the idea that everyone should have equal access to internet bandwidth has become part of history.

Traditionally the public internet adhered closely to the principle of “net neutrality.” This means that data packets are routed the same regardless of who is sending them and what type they are. The idea is to prevent internet service providers from setting tiered-pricing depending on the customer and type of data.

But much of that has gone out the window with the agreement between Comcast and Netflix to give Netflix streaming video traffic priority over the last mile of internet cable that goes into the viewer’s home. Cable companies often operate as monopolies in their local geography. With little or no competition, Comcast was able to force Netflix into this arrangement by demanding that Netflix pay a price to carry their traffic, which is sometimes 30% of all internet traffic. Contrast that with, say, YouTube which pays no one to carry their video. Instead, cable, wireless, and DSL internet service subscribers pay to receive the content; Google pays nothing to send it.

There is another changes that is challenging the idea of net neutrality.

The internet has traditionally operated on the basis of “settlement-free peering.” That means that backbone providers do not charge each other for sending data across their high capacity level 2 and level 3 fiber optic lines. The reasoning behind this is, for example, backbone provider A sends data across their network for their customers (internet service providers) and backbone provider B does that as well. So if they charged each other money for sending data, such charges would essentially cancel each other out as each company is charging the other for the same service.

Now Verizon has upset that model, because they have become a backbone provider company —with the purchase of the MCI backbone—as well as an ISP (Verizon Business Services also is in charge of assigning IP addresses for the TLD [top-level domain] “.com.” One wonders how one company can have so much control over the Internet in the US.)

Congent is a company that sells bandwidth to Netflix and others. They say that the Verizon network has not been able to keep up with Netflix traffic, because Verizon won’t upgrade their switches. Verizon wants Congent to pay for that, another violation of the idea of net neutrality.

Net neutrality was a guiding principle until it was coded into law in 2010 by US Federal Communications Commission regulations. But what allowed Comcast to wrestle Netflix to the ground over this was a court decision which tossed out the FCC net neutrality rules.
So how does this affect your business? You can acquire a dedicated link to your cloud service provider and avoid the public internet altogether. For example, Amazon AWS offers Amazon Direct Connect. But your users who connect to your applications in the cloud will need to get to there over the public internet. They might find their traffic throttled if the companies that control these links are able to charge usage fees.

For those who want to roll back these changes, Google is fighting against the practice. It is ironic that Google too is an ISP with their Google Fiber service available in a few markets.