Startup general interest

I’m starting to think network operators should be allowed to charge content owners for carriage

By April 27, 2011 11 Comments

Neelie Kroes, the European Commissioner responsible for the ‘digital agenda’ which includes broadband targets is considering allowing network operators to charge content owners to transmit content over their networks.  This would be an abandonment of the principles of net neutrality that have served us all well over the last 15-20 years, but I am starting to think it might give us the best chance of getting improved broadband speeds going forward, which is probably more important than anything else.  That said, it is also critically important that charges are regulated and we don’t end up with a two speed internet where wealthy companies are able to buy fast transit and cash strapped startups struggle.

Here are the facts as they look to me at the moment:

  • Faster broadband speeds are the over-riding objective
  • Significant investment in networks will be required to maintain and improve speeds
  • That investment needs to be funded somehow
  • Broadband providers aren’t able to charge consumers more
  • Therefore content owners are the next best place to turn

The best solution would be if the fourth bullet above was incorrect and broadband providers were able to charge consumers more for higher speed connections and fund their network capex that way, but I just don’t see it happening and time soon.  Part of the problem may be a failure of local competition (which is what proponents of net neutrality argue) but I think the bigger problem is that no-one has been able to explain clearly to consumers why they should pay up for extra bandwidth.  If there was an easy fix for these issues that would be the best way forward, but I haven’t heard of one.

The other important point here is that the net neutrality regime is already creaking at the edges as network operators shape traffic to limit services that are bandwidth hungry and/or compete with their other services – e.g. Skype over mobile.  It may be better to get it all into the open.

Finally, as I hinted in the first paragraph any charging regime would have to be regulated to avoid a two speed internet.  I don’t think the regulation needs to be complicated as charges could be directly linked to bandwidth, but the price per megabyte should be the same for everyone.  That wouldn’t be a problem for most startups as their traffic requirements are limited until they have proven success.

These are very much emerging thoughts, and the simple act of writing them down has been helpful, but I would love to hear other views.  Here is one counter view.

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