Let me preface this blog entry by stating that I do work in the Telecom industry and I do own stock in Telecom companies. I am but a worker be in the Telecom industry and what I am about to write is in no way to be taken as anything other then my personal view on Network Neutrality.

There have been a lot of analogies thrown about when talking about Network Neutrality. The one I am going to use is that of the Postal System. In this analogy the Postal System is the Internet. Both systems transfer packages (or packets of data) from one place to another. Both systems also have a very limited number of “big players” as well as having a large infrastructure support cost. Though you may not know it, both systems also allow for inter-connecting with competitors who offer the same service.

In Telecom we have; AT&T, Verizon and Qwest as the big, well-known companies. We can also throw in Charter and Comcast (even though they are cable companies) because they are often seen in the same light in regards to Network Neutrality debates.

In the Postal, or package delivery, System we have; USPS, FedEx and UPS as the major players. Minor players (for the purpose of this discussion) would be; Deutsche Bundespost and Royal Mail.

When you ship a package via the USPS that goes to another USPS customer you can expect the package to go entirely through the USPS system and never touch another carriers system. If you ship a package to an address in the United Kingdom there will be a hand-off (at some point) to the Royal Mail. The opposite also holds true for packages coming from the United Kingdom into the USA.

Now, how does Royal Mail get compensated for their end of the delivery service? They do it much the same way Internet backbones do it, through Peering Agreements . All though I am not privy to the exact fee breakdown between parcel carriers I’m fairly certain it is on a “per item” basis due to the severe imbalance you would have if it was no-cost in both directions. In fact, the USPS offers “last mile” services to other package delivery companies for a small fee. That is why you occasionally find packages in your mailbox that were shipped from a company other then the USPS.

So, we have now established that both the Internet and the Postal system are essentially about shipping packages from point A to point B and they sometimes have to cross onto other systems to get there. When they cross over to someone else’s system, a fee is often paid to defray that cost. At this point, everything looks fairly simple.

Here is a set of examples:

1) Sally sends a letter to Bob, who lives within the same postal system. She puts a stamp on the envelope, drops it in the mail, and several days later it arrives at Bob’s address.
2) Mark sends a package to Bob, who lives within the same postal system. Mark’s package is large and bulky so he has to pay a bit more to send his package to Bob.

Wait a minute, your thinking! Why does Mark suddenly have to pay more for delivery then Sally did? Why that’s highway robbery! Not so. To send anything through the Postal System you have to pay based on the weight of the item. Otherwise some wise entrepreneur might set up a shipping company right next to the post office and offer special shipping rates to popular shipping destinations. He could then, theoretically, put them all in one big box and have the post office ship it for the same price as a letter. When the box arrives at the destination, his other shipping office could unpack the big box and distribute the letters. This would be very unfair.

Now, the above system is not illegal. Why? Because the shipping companies charge by weight of the package. So, yes, some smart guy could do what I described above and potentially make some money but it would be more of a hassle then a money maker.

So, now we know that shipping companies charge you not a flat fee but a fee based on the weight of what you are shipping. Do ISPs do this? Yes.

ISP’s offer you several options in regards to “shipping” packets across their network. They don’t charge “per packet weight” pricing anymore (They used to in the days of ISDN) but instead offer you a series of plans based on the bandwidth you wish to purchase.

If you only need occasional access you can buy a dial-up plan. If you want fast access but do not need to download many large files you can purchase a low grade broadband connection. If you need to transfers lots of large files you can purchase a higher grade broadband plan. If you need to have an always-on connection for the purposes of business you are free to purchase T1s and faster links.

The key thing with broadband plans is that they are geared towards the consumer rather then the business customer. They often lack things a regular consumer does not intend to use or need. They are a way for the general consumer to get high speed connections to the Internet but are not designed to be used 24-7. They are designed for “burst” traffic. The key idea being that most users will get a burst of data, read for a while, and then get another burst of data. They are not designed for a continuous stream of traffic in both directions at peak bandwidth. If you want that sort of thing you need to invest in a T1 or better service. Unfortunately I can not show a good comparison for this in regards to package shipping until later in this discussion.

So, whereas a package shipper will charge you for every package shipped an ISP gives you a pipe and you are free to shove as much through it as you can for a set monthly fee. This is great for the consumer, but what does it mean to the business?

To the package shipper, an “all you can fit in this box” service could be disastrous! The USPS does offer this service in the form of “flat rate priority shipping” boxes. There are currently only a few different sized boxes and envelopes for this service and I often find that unless something is small and heavy I’m better off paying by weight. Sometimes though, I can save a bundle! It probably all evens out for the USPS because they ship so much stuff and, with the set box sizes, they know it can’t be overly abused.

So, up to now I’ve described things as they currently are. Now let’s get into the meat and potatoes of what Network Neutrality is all about.

Network Neutrality is the idea that the ISPs should not be allowed to change, in any way shape or form, how packets are delivered over the Internet unless, they offer the changes to everyone at no cost increase.

What Network Neutrality is not about:
1) Blocking websites – This would result in an ISP being sued and/or customers leaving for an “unfiltered” Internet experience.
2) Extorting money from existing web users (and web companies) to keep the ISP from throttling their connection to the Internet - This would lead even faster to a lawsuit which the ISP would lose.
3) Making web users (and web companies) pay twice for the bandwidth they already purchased – This would never work, all it would take is Google, Amazon or Microsoft to say, “go ahead, disconnect us. Then get ready for the ton of support calls you are going to get when your customers complain they can’t reach our websites.”

The root cause of the whole debate can be traced back to one individual; Ed Whitacre of SBC/AT&T:

How do you think they're going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?

The Internet can't be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! (YHOO ) or Vonage or anybody to expect to use these pipes [for] free is nuts!

- source arstechinica

That man should have his salary docked the full expense that has been spent to deal with the fallout of his comments! Why he has not been removed from the leadership of at&t is beyond my ability to understand.

Now, what the ISPs are talking about doing is injecting a “Quality of Service” system into the Internet. The basic idea is that some data is more time-sensitive then other data. So, why not offer a customer the option of paying for better/faster/more reliable delivery of that data across the network if they want to pay for it? If a company does not need specialized delivery then they can just continue as they are now.

The Package delivery companies already do this and no one cried foul! If you go into your local post office you have a wide variety of delivery options to choose from. You can get overnight, two to three day, bulk rate and a plethora of other shipping “add-on” items. The choice is yours as to how important it is to get the package delivered. This is especially important when you are late sending something out and you must have it there the next day!

This is what the ISPs want to do. They want to offer options for faster/better/more reliable transmission of packets over the network. I know what you are thinking. “The post office can do it but don’t the ISPs all interconnect? How will they offer such a service when my data may cross many networks?” They will do it the same way the Postal Service does it, with their peering agreements!

Have you never noticed that certain shipping potions are not available to certain destinations? Have you ever wondered why? It’s because if the system you are shipping with can not guarantee their local affiliate or partner can fulfill the promise of delivery they will not offer the promise to you. You can’t buy delivery confirmation for most places outside of the USA when shipping via the USPS.

How will the ISPs deal with this? Simple, they will just lay out to their customers the way their QOS system will work. The customer will be made aware of what networks they have QOS agreements with and the customer will have the choice whether to purchase the QOS offering or not.

Now, with Network Neutrality the ISPs would be forced to give QOS away to everyone or not offer it all. What would happen if the USPS was suddenly told it had to give everyone overnight delivery guarantees or not offer the service at all? I suspect they would either drop the service or they would only keep overnight and everyone’s shipping rates would be the same… the overnight cost!

Two examples of Network Neutrality applied to the USPS:

1) Bob goes into the post office to mail a letter and is told it will be there on the next day and it will cost him $15. Bob does not care if it takes a week to get there, he's just not interested in paying $15! The clerk tells him he has no choice, the government passed a law restricting the post office from offering "tiered delivery services"...

2) Sally goes into the post office, she has a letter that must be delivered the next day. The clerk tells her all letters cost $1 to mail but they take a week to deliver. Sally is willing to pay more to get it there overnight. The clerk tells her he has no choice, the government passed a law restricting the post office from offering "tiered delivery services"...

Now, the other question is, “why do they want to offer a service (QOS) that almost nobody wants or needs?”

The answer to that is quite simple. The big Telecom/Cable companies do not care if anyone else buys QOS! They want it simply because they desire to roll out specialized VOIP and VOD services to their existing broadband customers. This QOS thing is not meant to be purchased by anyone, they want it solely to provide reliable service to their customers along the part of the network they own.

This is where the “undiscovered problem” of Network Neutrality lies. The big Telecom/Cable companies are moving from the world of “infrastructure” to the world of “distribution” at a rapid pace. They know where the money is. They want to run their new services over the network to reach customers. The Internet has matured enough to take the place of the Telephone System as we have known it. Many people today have a cell phone but no land line.

As to the “undiscovered problem” it is as follows:

The big Telecom/Cable companies are moving into direct competition with their customers. I don’t consider that to be remotely fair. It would be akin to UPS opening up an online book store to compete with Amazon! Why would UPS do such a thing? Well, if the money was there they could easily offer the same prices on books but undercut Amazon (who is a customer of UPS) on shipping charges as they own the shipping system!

Please take a moment to look at the “big picture” of the Internet today. It’s not about QOS and extorting money or blocking websites. It’s about the big ISPs entering the competitive services markets on the Internet. That’s why so many web companies are scared. No one wants to compete with the company you buy services from. No one wants to open up a store and then have the manufacturer of the products you sell open up a factory outlet store one block down the road.

Google is heading into the video on demand business, they do not want to be indirect competition with the companies that help distribute their videos.

ISPs have a lot of unused bandwidth on their networks. It costs them nothing to utilize it for VOD services to customers who are entirely within their network. It does cost Google to connect to their network to distribute content to the ISPs customers. They will not be charged double or have their packets throttled but… with that said, Google’s pipe is finite, the ISPs is finite too, but it is finite to an exponentially larger number and they have a lot more unused bandwidth in their pipe, bandwidth that is not being utilized. Google does not have that, if they did they would be throwing money away by purchasing unused (and unneeded) bandwidth.

Your comments are welcome.