Today Senator Al Franken spoke at the South by Southwest conference about Net Neutrality. He drew from his experience as a performer – going back to the days when he was a performer looking to be heard – to make comparisons to people who currently use the Internet to get heard “without selling out”. You can see his talk on The Uptake web site.
Representative Collin Peterson sent a letter to Congress asking them to “protect jobs and the open and free Internet” by preventing the “FCC from regulating the Internet and Reclassifying broadband under Title II.”
As I said last week, if you have feelings on Net Neutrality, it’s a good time to contact your policymakers to let them know how you feel. Minnesota is featuring predominantly in this chapter of the discussion.
When it comes to Net Neutrality… Be careful what you wish for…
First of all, the disclaimer: I work for a communications company whose ISP business does not shape our customers’ internet traffic but manages upstream bandwidth for about a dozen other rural ISPs in Minnesota. Therefore, I should be considered a biased opinion! Also, this note contains my opinions and predictions only and does not necessarily represent the opinions of my employer or anybody else!
My prediction: If real Net Neutrality regulations go into effect that are technically enforceable and they survive court challenges, the ramifications could be significant. In rural areas, they would likely eventually include:
1) Price increases on existing internet services;
2) Replacement of most “unlimited” usage internet packages with ones that have a cap, similar to what is happening in the wireless industry;
3) Possible degradation of VoIP/video conference type services.
Items #1 & #2 would be most likely and most noticeable in rural areas that are a significant distance from major internet peering points.
Why the “Doom and Gloom” predictions?
Internet usage in Minnesota (and presumably elsewhere in the US) has been rising much more rapidly than usual during the past several months. The majority of this growth appears to be due to the massive growth of online Video-On-Demand (VOD) type services line Netflix, Hulu, etc. This requires ISPs to purchase additional transit bandwidth or to peer directly with organizations providing online VOD services or their Content Delivery Networks (CDN). Transit bandwidth costs money, the more an ISP uses the more they pay. The peering options often provide the bandwidth free, but the closest large peering location is Chicago. Of course, it is expensive to purchase large transport circuits to Chicago from rural Minnesota. Fortunately, transit bandwidth and transport costs have been steadily declining. Unfortunately, that rate of decline is nowhere near the rate of increased demand for internet traffic.
These costs affect all types of ISPs: private, municipally owned, cooperative, etc. Some ISPs use traffic shaping to help reduce those costs. (Paul Bunyan Communications does not traffic shape our customers’ internet traffic). By shaping traffic, transit costs can be reduced. Almost all ISPs are billed based upon 95th percentile usage. An ISP that can “spread out” the peak usage will lower that 95th percentile number and thus their cost. It also lowers the size (and cost) of the circuits that are required to handle the peak load. In many ways it is similar to the load management techniques utilized by electric companies.
Traffic Shaping is a tool that some ISPs use to reduce their costs to purchase bandwidth. If Net Neutrality regulations limit the use of that tool, I suspect items #1 and #2 will happen shortly thereafter.
The new MICE (http://micemn.net) exchange in Minneapolis is continuing to grow but does not have any CDNs connected yet. If video providers connect to MICE it will help some companies reduce their costs.
Be careful what you wish for…
Steve,
Funny enough I just had lunch with Mike Horwath yesterday and I’m working on a post on MICE.
I think it’s great to hear all sides. Thanks so much for posting!! Ann