Friday, May 11, 2012

When the rules do not apply equally

Imagine a network of private highways that reserved a special lane for Fords to zip through, unencumbered by all the other brands of cars trundling along the clogged, shared lanes.
Think of the prices Ford could charge. Think of what would happen to innovation when building the best car mattered less than cutting a deal with the highway’s owners.
A few years ago, Tim Wu, a professor at Columbia Law School and a leading thinker about the evolution of the “information economy,”warned members of the House judiciary committee that this could be the fate of the Internet.
Companies offering broadband access, he said, should not be allowed to discriminate among services online.
If they did, the best service would not always win the day.
“It’s not who has a better product,” he explained.
“It’s who can make a deal with AT&T, Verizon, Comcast or Time Warner.”.
That world may be right around the corner. Last month, the online video powerhouse Netflix started a political action committee to complement a budding lobbying effort in support of the idea that all content must be allowed to travel through the Internet on equal terms. Netflix is trying to build a coalition of businesses to make the case for this open access, also called network neutrality.
“Net neutrality has broad consumer and voter support,” Reed Hastings, the chief of Netflix, said in an interview. “It is important for the sake of public access that the rules apply equally.”
Netflix’s immediate concern is Comcast, the biggest broadband provider in the country, whose cable brings the Internet to one in five connected homes. In March it announced that watching its Xfinity TV service on the Microsoft Xbox 360 would not count against subscribers’ broadband data allowance of 250 gigabytes a month.
This, Mr. Hastings says, will give Comcast’s television lineup an edge over rival shows streaming through the device, which will consume subscribers’ data allotment. And nobody cares more than Netflix, whose movies and TV programs account for about a third of the peak online traffic.
“If I watch last night’s ‘S.N.L.’ episode on my Xbox through the Hulu app, it eats up about one gigabyte of my cap, but if I watch that same episode through the Xfinity Xbox app, it doesn’t use up my cap at all,” Mr. Hastings wrote on his Facebook page. “In what way is this neutral?”
Comcast argues that its Xfinity move is not subject to the Federal Communications Commission’s neutrality rules because the video travels exclusively on its network and not on the public Internet.
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