Daily Archives: July 13, 2007

Thoughts On Net Neutrality

I am thinking more about Net Neutrality these days. These are only some of the thoughts like a devil’s advocate and not finalized opinions.

I see two types of proponents of Net Neutrality. Those that don’t want either the content providers to pay nor the consumers to pay additional fee to the ISPs. And, those that don’t want content providers to pay to ISPs, but agree to ISPs providing tiered pricing to consumers. I frankly don’t understand the first category, since I don’t think installing and operating a network is not free and some one has to pay for that work. So, I want to explore if the second type of proponents are correct.

Now, take YouTube for example, which generates a lot of bandwidth requirement due it’s video streaming. It’s free for end users and the service makes money through ads. Any good service can never be free and some one got to pay for it. A different model for YouTube would be to charge the consumers a minimal fee and not have ads at all. However, YouTube wouldn’t want to do this because, they know that it’s possible to make far more money by making the advertisers bid for their ad space than charging a flat-rate to consumers.

Basically, everyone knows it’s usually much more profitable and have higher margins in a B2B model than in a B2C model. So, these very Net Neutrality proponents who justify that the ISPs should make their additional money to operate additional network bandwidth by charging the consumers based on their usage and hence essentially suggesting a B2C model, themselves want to go with a B2C model.

Think about it, Google could have chosen to make search as a subscription based service to consumers and let the various businesses to put their ads in the search results for free instead of making them to bid for their position.

If content providers have the desire to make their content reach the end user without having to pay to the ISPs, even by bandwidth alone and let alone by bidding to that bandwidth, wouldn’t every website have the same desire to reach the consumers through the search engine?

In the above analogy,

Content Provider = Website
ISP = Search Engine
Consumer = Consumer
ISP Subscription = Search Service Subscription (note, the price of ISP need not be same as Search Service price).

If the search service providers (SSPs) don’t want the websites to have a free ride of their precious page-view bandwidth, why would an ISP want content providers to get a free ride of their network bandwidth?

Let me know how the above thinking is flawed or can be reinforced with tweaks.

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Filed under AdWords, Google, ISP, MSN, Net Neutrality, SSP, Yahoo!, YouTube