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Comment by mrdrozdov | Hacker News Reader

Would this only effect up and coming telecom firms and high bandwidth services (video streaming, audio streaming, gaming, etc.), or also your every day SaaS startup?

Edit: how exactly would this have a negative impact on SnapChat?

Double edit: I think net neutrality is a good thing, and worth finding clear arguments to fight for.

Triple edit: Reasons I believe the net should be neutral...

1. Consumers should be able to use any internet service they choose.

2. Consumers should pay the same for data usage regardless of what the service is.

3. Businesses should be able to provide their service for the same data usage cost as any other business.

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If Facebook makes deals with cell phone carriers to have their traffic be free to the end user, it may incentivize SnapChat users to switch to Instagram for a comparable experience minus the data charges.

Luckily, most of the largest technology companies are incentivized in one way or another to keep net-neutrality as it is. Google, Microsoft, and Amazon literally sell cloud computing services to tons of companies large and small who could be negatively impacted. Apple wants new apps made in the App Store and would prefer these new apps hurt Facebook, Google, and Amazon in some way if possible. Facebook relies on third-party mobile applications and websites for collecting tons of data to feed back into their ad system. Google prefers an open web to index and serve search ads against.

I don't think the lines are as clear as Fred has drawn here. There are plausible reasons for major technology companies to come out in support of net neutrality that are in their own self-interest, not just good-will.

The opponents of net neutrality aren't those guys - it's AT&T, Verizon, Altice, Comcast, CenturyLink, Charter, TimeWarner, etc.

With net neutrality, they are essentially forced into a very low margin business of selling data pipes, where it's all very comoditized, and it's difficult to 'add value'.

Without net neutrality, they can pick and bundle services over the top and give them prioritised traffic on their network, so watching Comcast Video is prioritized, but watching Netflix buffers every 4 seconds. Offer subscribers a short term discount to try Comcast Video, and then watch as the money rolls in when everyone dumps Netflix and moves over to Comcast Video.

I can attest to this experience on Centurylink gigabit trying to stream Comcast's Xfinity Go, or streaming Netflix while on Comcast before they made the backroom peering deal. In the evenings, they would either run at the lowest quality, or buffer very often while running in potato vision.

To clarify, given the net is not neutral, Facebook will be able to provide better services because they pay internet providers some fee for extra bandwidth and reduced latency. While Snapchat would decide to provide worse services at a more reasonable cost to them.

This helps Facebook in the battle against Snapchat, but hurts Facebook in that they have to pay an extra fee. A similar argument could be made with other tech companies and their rivals.

Is this a correct interpretation?

The correct version of the argument is that Facebook can afford to pay for extra bandwidth and reduced latency, but new market entrants cannot. Snapchat has plenty of funding.

It also has knock-on effects in the allocation of financial gains of successful startups. The more money required to launch/scale a company, the more likely it is that investors (capital) get a larger share of the profits than founders or employees (labor). That's not necessarily a direct reason to oppose/favor net neutrality, but is worth considering alongside all the other data points.

> There are plausible reasons for major technology companies to come out against net neutrality that are in their own self-interest, not just good-will.

Sorry, just to clarify, are you saying that there are plausible reasons for major technology companies to support net neutrality because of their self interest?

(I found your statement a bit hard to parse.)

It was hard to parse because I didn't actually write what I meant! Sorry.

I meant these tech companies have reasons to support net neutrality besides good will.

Tech companies aren't the same as network providers, though. And Google didn't make it as an ISP. It pits tech against telecoms.

Without net neutrality there is nothing stopping Comcast from switching to a whitelist model where any destination IP outside their network is unreachable once it hits 0.01% of all outbound traffic. This would allow small one-offs like a doctor's office website but block just about everyone of even small size. Then you can pay Comcast for the "privilege" of being unblocked.

They don't even need to truly block traffic, just refuse to upgrade peering links at POPs and let continued growth of traffic do the work for them, which is basically what they did to Netflix.

If we unbundled the last mile and had true competition none of this would be a problem; people would just switch ISPs. Unfortunately we don't have competition. Don't tell Ajit Pai though; he thinks competition is "robust" because you can choose from metered wireless plans on already crowded spectrum. From the point of view of his paymasters that's true: Verizon would be happy to have you switch from Comcast so you can buy data by the GB on their wireless network. It is vastly more profitable for them! They inherited their core spectrum for a song and don't have to lay fiber to millions of homes. The capital costs are vastly lower than wired broadband and the scarcity jacks the prices.

If Republicans still gave half a shit about a free market economy they'd follow the Texas electricity plan: A heavily regulated company that owns the last-mile lines. It charges cost plus a margin for future capital upgrades. Terminate at the closest NOC/POP and dump the traffic on the ISP's network. You could go even further and just task the infrastructure company with providing unlit fiber from every home and business; let the ISPs compete in providing the ONT/CPE so you can get innovation there.

People forget: the federal government spent a ton of money to get electricity everywhere. Much of the power infrastructure wasn't funded by private companies. Even the trans-continental railroads (so lauded in Atlas Shrugged) weren't built by private enterprise. The federal government back-stopped the whole thing with money and soldiers.

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