David Talbot

A View from David Talbot

A Net Neutrality Riddle

If Netflix has to pay tribute to Comcast, then shouldn’t Comcast pay tribute to cloud storage firms?

  • March 21, 2014

Here’s an interesting way to look at the often abstract topic of “net neutrality.” Let’s say you are an online storage vault like Carbonite or Dropbox, which has 200 million users and a $10 billion valuation (see “Hiding All the Complexities of Remote File Storage Behind a Small Blue Box”).

Now, further assume that your company’s major technical activity is data inhalation. Petabytes of pictures, video, and so forth are uploaded to your servers every day. And you can’t help noticing that the major sending party is a Comcast, the giant Internet service provider (ISP).

Outrageous. They’re paid by their customers, and now they are sending you all of this data, forcing you to upgrade your connections to handle the upload volume. So in addition to whatever subscriptions you charge your customers, shouldn’t you also charge Comcast a toll for sending you all that traffic?

It’s an absurdity. But it’s an intriguing piece of the argument that Netflix CEO Reed Hastings articulated in a blog yesterday on why he feels the United States needs a strict form of net neutrality, the idea that all bits should be treated roughly equally, with no tolls for certain kinds of content or for traffic that moves more in one direction than another.

Big ISPs such as Comcast argue that network congestion is inevitable; surely they can’t be expected to pay for special equipment just to serve a few companies at a few periods when those companies send massive amounts of data (like when half the country sits down to stream the Netflix series House of Cards). They want companies like Netflix to pay. And Netflix, which has been chronicling slower and slower speeds their users were experiencing thanks to ISP congestion, recently agreed to pay Comcast a so-called “interconnection” charge to speed things up.

But Hastings said this was done with great reluctance, and that there was little basis for interconnection fees based on heavy one-way traffic:

Interestingly, there is one special case where no-fee interconnection is embraced by the big ISPs—when they are connecting among themselves. They argue this is because roughly the same amount of data comes and goes between their networks. But when we ask them if we too would qualify for no-fee interconnect if we changed our service to upload as much data as we download—thus filling their upstream networks and nearly doubling our total traffic—there is an uncomfortable silence. That’s because the ISP argument isn’t sensible. Big ISPs aren’t paying money to services like online backup that generate more upstream than downstream traffic. Data direction, in other words, has nothing to do with costs.

Hastings’s argument comes as the U.S. Federal Communications Commission is working through possible new draft regulations that would control or ban discrimination in data-delivery, following a pair of court losses (see “Net Neutrality Quashed: New Pricing, Throttling, and Business Models to Follow”). In addition to ISP toll-charging, a number of companies are dreaming up ways to charge content-providers extra for premium service: AT&T’s sponsored data would allow a business like ESPN to subsidize its bits so you aren’t worried about watching on your phone, and wireless carriers are working out “fast lane” technology (see “Akamai’s Plan for a Wireless Data Fast Lane” and “Verizon Plans a Fast Lane for Some Apps”).

One simple argument in favor of net neutrality is that if people are paying lots of money for fast Internet service, they should get the speeds they are expecting, no matter where the data is coming from. After all, if some providers put a heavy load on ISPs, it’s also prompting people to pay those same ISPs for fast connections in the first place. Some who argue against strict net neutrality say it would block subsidized approaches to getting people online in the first place (see “Around the World, Net Neutrality Is Not a Reality”).

Current and future information-intensive industries need clarity on whether a high-speed and reliable information infrastructure will actually be there for them, and how much success might end up costing them.

Tech Obsessive?
Become an Insider to get the story behind the story — and before anyone else.
Subscribe today

Uh oh–you've read all five of your free articles for this month.

Insider Premium

$179.95/yr US PRICE

More from Connectivity

What it means to be constantly connected with each other and vast sources of information.

Want more award-winning journalism? Subscribe and become an Insider.

  • Insider Premium {! insider.prices.premium !}*

    {! insider.display.menuOptionsLabel !}

    Our award winning magazine, unlimited access to our story archive, special discounts to MIT Technology Review Events, and exclusive content.

    See details+

    What's Included

    Bimonthly home delivery and unlimited 24/7 access to MIT Technology Review’s website.

    The Download. Our daily newsletter of what's important in technology and innovation.

    Access to the Magazine archive. Over 24,000 articles going back to 1899 at your fingertips.

    Special Discounts to select partner offerings

    Discount to MIT Technology Review events

    Ad-free web experience

    First Look. Exclusive early access to stories.

    Insider Conversations. Join in and ask questions as our editors talk to innovators from around the world.

  • Insider Plus {! insider.prices.plus !}* Best Value

    {! insider.display.menuOptionsLabel !}

    Everything included in Insider Basic, plus ad-free web experience, select discounts to partner offerings and MIT Technology Review events

    See details+

    What's Included

    Bimonthly home delivery and unlimited 24/7 access to MIT Technology Review’s website.

    The Download. Our daily newsletter of what's important in technology and innovation.

    Access to the Magazine archive. Over 24,000 articles going back to 1899 at your fingertips.

    Special Discounts to select partner offerings

    Discount to MIT Technology Review events

    Ad-free web experience

  • Insider Basic {! insider.prices.basic !}*

    {! insider.display.menuOptionsLabel !}

    Six issues of our award winning magazine and daily delivery of The Download, our newsletter of what’s important in technology and innovation.

    See details+

    What's Included

    Bimonthly home delivery and unlimited 24/7 access to MIT Technology Review’s website.

    The Download. Our daily newsletter of what's important in technology and innovation.

You've read of free articles this month.