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How Tom Wheeler's FCC plan will wreck your Internet

Mike Elgan | May 19, 2014
FCC Chairman Tom Wheeler's proposal is brilliant because it takes the U.S. as far away from net neutrality as possible by presenting the killing of net neutrality and making it sound like the opposite.

But the real damage from Wheeler's proposal isn't sufficiently appreciated.

With net neutrality, ISPs are under pressure to constantly upgrade the speed-price ratio. Under the old rules, it was impossible for ISPs to improve Internet connections for any data source without improving it for every data source. The incentive was to keep improving service for all data sources.

With paid prioritization, ISPs have the opposite incentive. They get paid more when data sources are unhappy with unpaid performance. They make data sources unhappy by making customers unhappy. And you do that by gaming the expected rise in network performance.

See the genius in that? Let me give you a simple example. Let's say a person signs up with Comcast to get 10 Mbps speed connectivity. Both Netflix and Amazon movies are delivered at up to 10 Mbps. Then Amazon comes along and pays Comcast to deliver only Amazon content at 20 Mbps. Comcast can prove that nobody was harmed because the customer is paying for 10, but in one case they're getting 20. What's the harm? The Amazon speed is frosting on the cake.

That might even sound reasonable, until you consider the fact that we have an expectation that Internet connection speeds will keep going up. I should expect to get 20 Mbps next year for the same price I get 10 this year. Companies like Netflix and Amazon keep increasing the quality of video and other content based on this expectation of rising performance.

But if key companies are paying Comcast to provide that level of service, Comcast wins by keeping the base data rate low while raising it only for data sources that pay up.

Consumers don't know what specific data rates really mean. All they know is they pick a plan and, when they watch streaming TV shows and movies, boy that Amazon is much better than Netflix. Might as well just cancel Netflix.

Amazon wins. Comcast wins. The Internet loses. We end up with de facto paid prioritization and the death of net neutrality.

ISPs would have an incentive to make last-mile connections unacceptable for data sources that don't pay. The incentive is to improve service for those who pay, and to not improve service for those who don't.

That's the worst part of Wheeler's proposal. If approved, it will slow the rate of progress for Internet performance in the U.S. for all data sources except the big, rich companies that pay.

Customers expect steady increases in network performance. Wheeler's proposal will give ISPs incentives to deliver on those expectations, but only for the companies that pay special rates for priority. Over time, the customer perception is that progress is being made, but that startups and nonprofits and other types of information just don't seem to be keeping up, for some reason.

 

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