ISPs want to kill Net Neutrality because they have to "recover costs" of building their networks. Here are five better ways for them to make money.
heads up: this is a pretty old post, it may be outdated.
ISPs want to make more money. They argue the best way to increase profits is to pursue new revenue streams – reconnaissance by charging the customers.
While I have nothing against capitalism, it's important to realize that the telecom industry, and ISPs in particular do not follow capitalistic principles.
Normally, a company should do what it likes with its product, but there are two major reasons against allowing ISPs to do so:
In a free market, companies shouldn't need regulation, however, the ISPs operate as a monopoly (or in rare cases a duopoly) environment. It is most likely ISPs abuse the power the monopolistic practices have lent them with intention to increase profits. While profit is good, it should not come at the short-term, non-monetary, expense of the customer.
The internet, as a communications medium has become essential to democracy, it is unacceptable for a country that values free speech to allow the Internet to become fragmented into separate networks. Publishing on the web means must mean the entire web.
ISPs argue that they need to charge more to "recover costs" of building the network infrastructure could be re-phrased as: we want to make more money. It's not the regulator's job to allow infringement of customer and citizen rights to help industry make up for a poorly planned business model and shareholders' demand for continual growth.
"Recover costs" is a straw man argument. If true, it assumes that ISPs are not capable of paying off the cost they incurred building their infrastructure and will eventually need to shut down their networks. Bullshit.
ISPs have very nice profits, and could amortize the cost of building infrastructure over the years that the network is in existence, budget to keep the networks active, expand the networks to accommodate more paying customers, and still keep up nice profit margins. Hell, that's what they are doing!
Not that anyone should deny ISPs the right to expand their businesses. Let me offer some alternatives to destroying the détente that is Net Neutrality:
Become a competitive industry. ISPs may think that current monopolies allow them to charge more and get away with terrible customer service, but it's harmful in the long run. Monopolies bequeath power, but entice stagnation. In any business – but especially the technology business – stagnation means the death. ISPs should compete with each other in the same geographic areas. There should be not one, or two choices, but six, seven, or eight. Failure to compete is valuing short-term monetary gains over long-term company health. Someone will disruptyou.
Get into the obsolescence business. Resume charging for modems and routers, then, upgrade your networks – constantly. Not maintenance upgrades that don't do anything but change protocols, but legitimate upgrades that give real increased speed. If networks followed Moore's law and doubled in speed every 18 months, you'd have a legitimate hardware business on your hands.
Go international. Hard yes. But ISPs in Europe do it. Not only does the international market have a huge number of new customers, but it would do ISPs good to see how the rest of the world actually competes.
Produce original content. Just because we don't want ISPs to favor their own content, doesn't mean they can't have, or make money from original content. Charge for access à la Fancast. Not seeing the adoption you like? Make the product a viable alternative to TV (see: Hulu Premium). There's a nut to be cracked around Internet TV, and it's really mystifying why the ISPs aren't all over this one.
Additional Links
The argument against Net Neutrality; and the proper responses:
Steve Wozniak, inventor of the PC, aptly demonstrates how ISPs have screwed the consumer before, will likely do it again on the Internet if given the chance.
The FCC, and the government as a whole, as proved many times that it fundamentally misunderstands the web and is letting industry set policy, action and law:
Rest assured that we're working on a full analysis of the FCC's major net neutrality decision today, but the Commission hasn't actually released the full...
Why everyone hates the new net neutrality regulations
Hacker News
The Atlantic
Engadget
Ars Technica