Net Neutrality: You pay either way!

So I've been seeing this commercial off and on a bit, and it really annoys me, because it's extremely misleading. The voiceover goes like this:

Are you google-eyed with confusion over 'net neutrality? No wonder. It's all just clever mumbo-jumbo.

'Net neutrality is nothing more than a scheme by the multi-billion-dollar Silicon Valley tech companies, to get you, the consumer, to pay more for their services.

Forget all the mumbo-jumbo. 'Net neutrality simply means: you pay.

Those in support of 'Net neutrality are guilty of similarly misleading comments and I don't like it. To understand 'Net neutrality, you need to understand a few things:

Internet providers today are already compensated

Internet providers are simply companies that provide people with Internet connections. Those companies must then contract (peer) with other Internet providers, to ensure their customers can send and receive traffic to everyone on the global Internet. The Internet itself isn't really a single thing. All of these providers connect up with each other and relay traffic to/from each other, and they call that interconnected mesh "the Internet".

Every physical Internet connection costs money. When you subscribe to the Internet through your ISP, you get the benefit of connectivity. Your ISP doesn't really benefit from the connection itself. Consequently, the flow of cash goes one way: from you to them.

Your favorite web site, for example, is in the same situation. They must obtain a much larger Internet connection from an ISP. The ISP doesn't really benefit from having that connection per se, so the money flows from your favorite web site to their chosen ISP.

Your ISP and their ISP are in a different situation, though. If they aren't connected to each other, their customers aren't going to like it and will find another ISP who is. If your ISP wasn't connected up to anyone else, your ability to pull up any of your favorite web sites would be hampered, right? So if these two ISPs have roughly the same amount of traffic they want to pass to the other, they might agree to set up a connection between themselves, where traffic from one side balances out traffic from the other side, so both sides end up paying mostly just for the maintenance of the connection.

Opponents of 'Net neutrality like to say, "They're the popular web site sucking up all of this traffic. They should have to pay!" Except they do pay. Their connection with their ISP ain't free, and they're probably charged based on the amount of data they send/receive. If this traffic between their ISP and your ISP is no longer in your ISP's favor, that's their fault for not writing a better peering agreement. If your use of your "unlimited" flat DSL connection is going up and costing your Internet provider more, that's something you and your Internet provider have to work out between themselves. The reason flat rate Internet connections work is because the under-utilizers subsidize the costs of the over-utilizers, and the flat rate ends up being a rough average. If the average utilization goes up, it's a no-brainer that the flat rate has to go up to compensate. You can't try to keep your flat pricing low by pretending the increase is caused by 3rd-parties that you have no business relationship with whatsoever.

Quality of Service

The utilization "problem" is a red herring, though. The real issue is one of Quality of Service (QoS), and who pays for it.

When you make a request against your favorite web site, it might pass through a handful of different ISPs. These ISPs may have no business relationship at all to the content provider, or to you, the consumer. Consequently, these providers aren't going to care when you tell them that your live video stream shouldn't be interrupted and should take precedence over random pieces of e-mail that could be delayed a few seconds without incident. Neither you nor your favorite web site have any ability to guarantee the quality of the service they provide you.

Within a single ISPs network, though, that's not the case. If you're an AT&T customer, and you have a nice big IP connection from them, and they want to sell you live video on top of it, AT&T controls the entire network at that point, so they have the ability to guarantee the quality of service for that live video (TV) stream, and can say that TV takes precedence over file downloads and the like. This raises red flags for competitors, that want to sell you TV over the public Internet. Since they cannot guarantee that their own video stream will have a guaranteed quality of service, their live video will be treated just like other random Internet traffic. If you start downloading some software, your live video stream from them will start breaking up and be unwatchable, while AT&T's live video service will still look great.

This is a non-neutral Internet. The ISP is able to provide services that others are unable to provide. The ISP's solution (AT&T's position) is simply to sell guaranteed connectivity to these content providers, at a premium. If you want to guarantee the quality of service of your Internet traffic to their customers, you need a dedicated connection where everything between the provider and the consumer is QoS-aware, and special efforts to configure the AT&T network to guarantee that level of service all the way to your home. These specialized networks necessarily cost more.

The content providers, understandably, think it's ridiculous to pay extra for this type of thing, and if they have to pay more to deliver their services to you, they will pass that charge on to you. There's no such thing as a free lunch.

Net Neutrality

What these content providers advocate for instead, is a "neutral" Internet provider, one that does not give preference to their own IP packets, or allows 3rd-party providers to give themselves the same degree of preference without charging them extra for that ability.

The problem is that the latter capability is still going to cost something, costs they will pass on to you.

Either way, you pay! The battle between these two sides has nothing to do with whether or not you pay. It's all about who you pay (i.e. who the "bad guy" is that has to raise rates).

And, of course, this all makes the assumption that we even want guaranteed quality of service for the video we watch on the Internet. For stuff like Google Video and YouTube, we seem to be doing OK today without QoS. So who's upset about the situation? Those that want to provide TV service over the Internet. When you dial up Skinemax with your remote, you're not going to want to deal with 10 seconds of "Buffering..." every few minutes, or an episode of Lost that cuts out when your kids hop on Second Life. It has to work without disruption, and it has to work right now. Somebody has to pay for that no matter how "neutral" the Internet is, and ultimately, it's going to be you either way.