Internet isolationism is bad for business

28.06.2006

We've got a problem here.

The status quo on the Internet is something referred to as network neutrality. This basic idea -- that it's the Internet's job to move data, not to inspect and select and ultimately reject it -- has worked quite well. What members of one particular sector of the Internet are suggesting is something rather different: Internet isolationism. They wish to redefine their customers as a captive audience, suppressing the free trade of packets to them unless as-yet undefined tariffs are paid. They propose to isolate their customers behind an ever-shifting web of favored providers, special partners and mutually beneficial arrangements.

This was, of course, the model of both America Online and Minitel. Neither achieved anything close to the explosive growth that the Internet did.

The broadband providers have said this is about creating an Internet that can move video faster. But if this was what the providers wanted, why not deploy reliable multicast technology, which is actually designed to allow millions of users to efficiently consume video, next-generation games, and security patches? They've said this is about allowing Web sites to compete. Imagine if China's Baidu.com paid dearly to be the only search engine that could be accessed at broadband rates. Can anyone imagine the trade war that would erupt? No, these efforts must be about something else entirely.

Internet isolationism is actually about holding telecommuters ransom from the companies that employ them. According to Broadband Week, the size of the U.S. telecommuting market in 2004 was 40 million people. As commutes increase and oil becomes scarcer, the ability for knowledge workers to have full access to corporate resources no matter where they happen to be is critical to the success of U.S. business. If telecommunications providers could extract just US$100 more a year -- under $10 a month! -- from each of the 40 million users, that'd be $4 billion of additional revenue per year.