Net Neutrality - a alternative approach
Posted by Ian Holsman
In today’s slashdot they mention Ramprate’s take on the online gaming industy, saying how net-neutrality is a bad thing for them, equating it to the mob and standover tactics:The battle over net neutrality is really a battle for latency (and jitter). It is unlikely that an ISP will make the mistake of repeating Canadian ISP Telus’ attempt at outright censorship2. Rather, the ISP’s gentle nudge towards the preferred offering or provider is likely to come in the form of slow and inconsistent network performance for services that refuse to pay what amounts to “protection money” to an ISP.
The official name is business strategy terms is “Hold Up”, and it isn’t necessarily a bad thing for all companies.
Why?
It increases the barrier to entry. While this might really suck for a small startup trying to break in, it might be seen as a positive thing for several ‘players’ in the industry.
- The existing sites. They (Google, WoW, Skype) have the money to pay it. While it sucks to them that they have pay money for something they used to get for free, they have the money, while smaller startups don’t. This makes it harder for smaller sites to get established and to threaten the status quo.
- The VC market. I’ve been reading lately on VC-chat how people are saying it’s hard to be a VC, as no one really needs their money anymore. Things are too cheap.. 2 guys in their garage can get a site further down the pipeline without needing huge wads of cash to buy things with. Charles River’s Quickstart program is a acknowledgment of this. With a barrier like net neutrality making it harder to get a site established, the VC is required again.
- (Possibly) more competition in the ISP/Backbone space. I say possibly, as I believe there is a lot of unused capacity out there and it will take a lot of $$$ to lay more fiber, but if they can get paid more money for each mile they will start laying more.. making for faster/larger pipes.
So while it might seem that the sky will fall if net neutrality ever came in, It would fall hardest on new startups, and might actually make the established companies more profitable. (as well as the Telco’s naturally)
As for the end user, he might have less diversity, but I’m not convinced that he won’t be paying less for his ISP connection.