Internet is under threat from network companies that are increasingly inclined to engage in ‘traffic shopping’. ‘Traffic shopping’ or prioritization of certain data (traffic) over others is creating what scholars have called a ‘two-tiered Internet’. The move to craft a tiered arrangement is largely driven by the narrow profit motives of telecommunication firms, that cross own telephone companies, which are trying to protect their revenue stream under assault from Voice Over IP (VoIP) applications like Skype and Vonage by delaying or even barring these services from their networks.
Michael Geist, researcher in Internet and E-commerce Law at the University of Ottawa, Faculty of Law in his BBC article says -
“In the developing world, where there is frequently limited telecommunications competition, many countries have begun blocking internet telephony services in order to protect the incumbent telecoms provider.
This approach, already being followed in countries such as Panama, Oman, United Arab Emirates, and Mexico, reduces competitive choices for telecommunications services and cuts off consumers from one of the fastest growing segments of the internet.
In Europe, some ISPs have similarly begun to block access to internet telephony services. For example, this summer reports from Germany indicated that Vodafone had begun to block Voice over IP (Voip) traffic, treating the popular Skype program as “inappropriate content.”
European ISPs have also faced mounting pressure to block access to peer-to-peer systems such as BitTorrent, which are widely used to share both authorised and unauthorised content. ”
There are also reports that Hotels providing high-speed internet access are blocking VoIP. “Cable operators have already prioritized their own network data such as Internet telephony over the data of other services.” ( Read More.. )
FCC has taken on the role of good Samaritan - “As a condition of many of the recent mergers, the FCC has made sure that companies agree to observe “Net Neutrality” which argues that “owners of phone and cable networks can’t dictate how a consumer uses the internet or discriminate against any internet content, regardless of source” (WSJ).
“To drive this point home, a Bellsouth spokesman in this WSJ article complains about Google’s freeloading ways as follows: “During the Hurricanes, Google didn’t pay to have the DSL restored. We’re paying all the money.”
If like me you thought that the $30-$80 you send to your phone company every month for basic service constitutes “paying for it”, think again. What telecommunication companies want to do is start charging services like Google and Vonage big piles of money so that their content gets to consumers in a fast carpool lane while the content providers that don’t pay up (and their customers) gets stuck on a less glamorous road with more traffic, fewer lanes and perhaps a few potholes.
Telecommunication companies are also looking into other ways of generating revenue including charging for free roaming application layer applications like Google that sap network bandwidth.
Today the technology exists to actively identify, select and prioritize Internet traffic. This model of prioritizing “traffic” can have vast ramifications on application level development and overall creativity. Application level development has been fueled by the guarantee of network neutrality. “Websites, e-commerce companies, and other innovators have also relied on network neutrality, secure in the knowledge that the network treats all companies, whether big or small, equally. That approach enables those with the best products and services, not the deepest pockets, to emerge as the market winners.”? BBC: Towards a two-tiered Internet
Dr. Barbara Van Schewick, working at Center for Internet and Society, Stanford Law School, in her paper on the topic of Two-tier Internet, “Towards an Economic Framework for Network Neutrality Regulation” argues that
“calls for network neutrality regulation are justified: In the absence of network neutrality regulation, there is a real threat that network providers will discriminate against independent producers of applications, content or portals or exclude them from their network. This threat reduces the amount of innovation in the markets for applications, content and portals at significant costs to society.
While network neutrality rules remove this threat, they are not without costs: Apart from creating the costs of regulation itself, network neutrality rules reduce network providers’ incentives to innovate at the network level and to deploy network infrastructure. Thus, regulators face a trade-off. As the paper shows, due to the potentially enormous benefits of application-level innovation for economic growth, increasing the amount of application-level innovation through network neutrality regulation is more important than the costs associated with it.”