The cost accountant inside me always had a problem with "net neutrality". The world of activity based costing is one in which every resource you consume has a price tag attached. And that price tag ultimately has to be passed on to the customer. If a company is asking for preferential service from a vendor, say next-day-air delivery for a package versus two-day shipment, he can get it for a higher price.
Proponents of net neutrality say it is unfair for the cable companies to choose winners or losers on the web. That it shouldn't make any more difference who is using their services than the electric company cares what you plug into an electric socket. However, that ignores the fact that even if the electric company had two customers using 50% of their capacity and forcing the rest of the market into blackouts, they would step in and set some rules. Which is what we have today with Netflix and YouTube accounting for the majority of the broadband usage.
And furthermore, if a company wants to compensate the internet companies for "preferential treatment" we all win. The customers of the company willing to pay for that treatment get better service and the ISP's, with an influx of new cash, have more resources to expand their capital assets. We don't have a case of cable companies picking winners or losers, we have a tiered system of pricing for different levels of service no different from other movers of valuable commodities such as Fedex, UPS, or the airlines.
I'm not going to pretend to know all the ins and outs of net neutrality because it's outside of my area of expertise. But I do know that net neutrality is the latest way of saying government mandated price controls. And whether you're talking about prescription drugs, gasoline, or bread, they never work. In fact, they always have the opposite effect of hurting supply and stifling innovation. If you want to guarantee that the internet has a future rife with slow speeds and little change, demand net neutrality.
I ran across this great article from Reason.com this week that does a much better job of explaining the problems with net neutrality than I ever could. It's a good read.
How to Break the Internet
And furthermore, if a company wants to compensate the internet companies for "preferential treatment" we all win. The customers of the company willing to pay for that treatment get better service and the ISP's, with an influx of new cash, have more resources to expand their capital assets. We don't have a case of cable companies picking winners or losers, we have a tiered system of pricing for different levels of service no different from other movers of valuable commodities such as Fedex, UPS, or the airlines.
I'm not going to pretend to know all the ins and outs of net neutrality because it's outside of my area of expertise. But I do know that net neutrality is the latest way of saying government mandated price controls. And whether you're talking about prescription drugs, gasoline, or bread, they never work. In fact, they always have the opposite effect of hurting supply and stifling innovation. If you want to guarantee that the internet has a future rife with slow speeds and little change, demand net neutrality.
I ran across this great article from Reason.com this week that does a much better job of explaining the problems with net neutrality than I ever could. It's a good read.
How to Break the Internet
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