Monday, August 25, 2008

The delusions of net neutrality

[Another excellent paper by the famous iconoclast Andrew Odlyzko. My only
comment is that I believe that soon there will be little or no revenue
opportunities in delivering video or other services over the Internet, with
or without deep packet inspection. The revenue opportunities of using QoS
and Deep Packet Inspection will pale against the revenue potential of the
"over the top" providers such as Hulu, Google, Skype etc. So how does a
carrier make a buck and pay for the infrastructure? As Andrew points out
customers want connectivity much more than content. My suggestion is to
bundle broadband with resale of energy, where it is in the carrier's
financial interest to give away the Internet and applications and make money
on connectivity-]

The delusions of net neutrality

Andrew Odlyzko

School of Mathematics, University of Minnesota

Minneapolis, MN 55455, USA

odlyzko at

Revised version, August 17, 2008

Abstract. Service providers argue that if net neutrality is not enforced,
they will have sufficient incentives to build special high-quality channels that
will take the Internet to the next level of its evolution. But what if they do
get their wish, net neutrality is consigned to the dustbin, and they do build their
new services, but nobody uses them? If the networks that are built are the ones
that are publicly discussed, that is a likely prospect.

What service providers publicly promise to do, if they are given complete
control of their networks, is to build special facilities for streaming
movies. But there are two fatal defects to that promise. One is that movies are unlikely to offer all that much revenue. The other is that delivering movies in
real-time streaming mode is the wrong solution, expensive and unnecessary.

If service providers are to derive significant revenues and profits by
exploiting freedom from net neutrality limitations, they will need to engage in much
more intrusive control of traffic than just provision of special channels for
streaming movies.