Net neutrality: a stab in the dark?

As you emerge from what in some European countries is often an extended period of excessive chocolate consumption while slumped in front of the telly, the thought of yet more opportunities to become a couch potato with a permanent attachment to a TV remote might be enough to send you running to the nearest gym…where of course you can continue to feed your TV addiction thanks to on-demand viewing, streaming video and multi-screen technology.

One company responsible for some people's growing TV habit is Netflix, an Internet subscription service for films and high-profile television series. "For one low monthly price, Netflix members can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen," says the company on its web site.

Such services rely on a good Internet connection of course, and Netflix has been increasingly frustrated by poor connectivity that affects the quality of its services to end-users. In the U.S., the company has struck a deal with Comcast and is widely believed to be paying the ISP for a direct interconnection to ensure Comcast customers subscribing to Netflix get a good service.

Netflix is now rumoured to be in negotiations over a similar deal with Vodafone. However, the company is clearly far from happy that it has to try to negotiate these deals at all, and has called for "strong net neutrality rules" that would force ISPs to provide sufficient access to their networks without charge.

On its blog in March, Netflix said that without strong net neutrality, "big ISPs can demand potentially escalating fees for the interconnection required to deliver high quality service."

ISPs argue that they need to be able to charge extra for services that burden their network more, and ask how they are expected to continue to fund network upgrades to cope with these heavier burdens. Some industry experts such as John Strand from Strand Consult also argue that the proposed net neutrality rules by the European Union would have serious implications for deals like the recent WhatsApp tie-up with German operator E-Plus.

It's a war of words that will continue, and there is clearly a great deal at stake for both sides. However, beyond the commercial bun fights over who should pay and how, much more needs to be clarified. As pointed out in a recent report by Analysys Mason, many of the basic questions about what net neutrality really means are still unanswered.

For example, Analysys Mason said the need for regulation to deliver net neutrality is still in debate, while the actual aims of net neutrality are also disputed: "Before asking whether intervention is needed in order to 'protect net neutrality', regulators and policy makers first need to ask whether net neutrality is worth protecting, and if so, why," noted analyst Nico Flores, who also added that "discrimination is essential to a wide variety of business models across the economy in which players can freely choose with whom to transact, and on what terms."

Netflix will certainly tell you why net neutrality is worth protecting. Just go and read its blog.

Meanwhile some companies such as AT&T, whose fibre network was the subject of Netflix' wrath this week, are starting to take the matter into their own hands: AT&T has just announced plans to spend more than $500 million (€361 million) with partner Chernin Group to buy or build video-streaming services in order to compete head-on with Netflix.

This debate is set to run and run.--Anne

 

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