Net loss.

It’s astounding how quickly the idea of net neutrality – the idea that all bits are created equal and should be treated as such – was spun as a demand for government regulation of the internet. And it was spun that way by telecom carriers, the very folks who make their revenue courtesy of government regulations. Yet suddenly they didn’t want any regulation.

They were concerned that they wouldn’t be able to afford to provide us even more bandwidth if they couldn’t charge companies more for their internet bandwidth; sometimes even for bandwidth the companies are already paying for.

They likened differential or priority services to the US Postal Service. After all, it costs more to deliver a first class letter, doesn’t it? But the US Postal Service is a monopoly; they guarantee delivery, and they control the entire end to end transaction. And they actually provide a different service for a different price.

But telecommunications doesn’t work like that. It’s more like a water pipe, and the carrier only controls a piece of the pipe. But they want to charge different prices depending on who is using the pipe. Can you imagine if your city started to look at every drop of water, and charged you a different price for carrying your water than it did for a large company in your town? What if they charged a special surcharge for companies that sold water to fill your pool?

So why is it acceptable to look at bits and charge a special surcharge to VoIP companies whose phone calls are flowing over the pipe?

We’re talking about a pipe. Clearly you should charge for consumption, but why does it matter what you use the water for? Or the bits?

Just like Mitch Radcliffe says:

Farewell, open networks and open standards. Soon every packet will be subject to inspection and surcharges based on what it carries and who sent it or where it is going.

The reason the internet has become as useful as it is, is because it doesn’t discriminate. As soon as it starts to discriminate, it loses its value. So telecom carriers will see a huge undeserved surge in profits. And then internet use will start to die, and those profits will dry up. And I promise that we will never see the carriers’ promised increase in bandwidth, but in a year or two will will hear that the internet just isn’t generating enough revenue to add that promised capacity – again.

But the profits they generate will allow them to fight any competition, because competition will just be overcharged to death. But there will never be another Google or Yahoo! because as soon as a new company’s traffic starts to climb so will the surcharges.And you can say good bye to YouTube. But the telecom companies will roll out plenty of radical new services. Like voice mail or call display, probably the last radical new services they rolled out.

The funny thing is that no matter what you pay, you still don’t get a guarantee of anything because nobody owns the internet end to end. Except in the U.S., where it looks like the government is about to hand the keys to the carriers. I guess it just proves what P.T.Barnum said. Maybe sometimes you can fool all of the people.


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