The last mile became important again…

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Many people may have heard of the concept of “network neutrality”, but may never have understood what that meant.  The Washington Post released a very informative article on how Netflix has agreed to pay Comcast to ensure that their video traffic travels smoothly over the Comcast network.  

This is a landmark decision that most people will not notice, and it is huge in terms of how the internet works.  There have been periodic fears that the internet will become a network of “haves” and “have nots” based on what internet service you use and how much you will pay.   

For now, you pay Netflix for your right to have access to their content.  Imagine what might happen when Comcast hands you an additional bill or fee for using Netflix, Hulu, or Youtube. The way that network service providers have organized over the past few years makes this a distinct possibility which could be chilling to innovation and rich (ie video) media.  

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In the Netflix example, their connection to the internet was through Cogent (a Verizon owned company), who asked Comcast to upgrade their network connection.    Comcast basically said no, and the only want you’ll improve the service to “our” customers is for you to pay for it.  This brokerage model early on encouraged the growth of internet service providers and spurred competition, but now they are stuck as “middle men” without leverage.  Their customer (Netflix) needs more bandwidth at Comcast locations, and Comcast said, “Only if you pay me”.  While the reality is that Netflix is consuming a huge amount of bandwidth, and it makes sense that they should pay more, by setting the precedent for “faster service”, it potentially creates a monopoloy situation where Netflix wins and every other video site loses.  Or maybe Comcast buys Hulu and only allows Hulu content on their network connections.  

It might give Netflix a competitive advantage over other video sites.  Or it might just force them out of business.  Reminds me of the bad old days of AT&T, when you got whatever they decided to give you, at whatever cost they wanted to sell it to you for.

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