Net Neutrality & Failing Business Models

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The current fight over Net Neutrality is critical to the openness of the Internet, long supported by some of us that helped make the Internet an every-day utility.  It is also the dying gasps of a very old business model - one between networks and end points/content providers. 

Quick History Lesson: 

  • Circa 1990s - a fight was breaking out between the networks (e.g, AT&T) and end-points (e.g, Microsoft) over control of information and intelligence.  AT&T wanted intelligence embedded in the network, in distribution.  Microsoft wanted intelligence embedded in their devices at the end of the "dumb pipes" (the network).  A few of us felt that if both sides kept an Either/Or mentality, the networks would lose, commoditizing themselves through price wars racing to the bottom.  If we took an And/Both approach, the user would have more choices and more capabilities over time.  We know how it turned out - dumb pipes and smart ends. That was 25+ years ago! (Think T-Mobile + Netflix as a way to gain T-Mobile users);
  • December 1997 ~ I had an 8 month old son and a paper for the Harvard Kennedy School's Information Infrastructure Project entitled "Internet Settlements Pricing Model and Implications."  Fun reading!  I was part of a team at AT&T, working with other Internet Service Providers (ISPs), to self-govern the Internet - including requiring all of us to move data between ourselves at the speed specified by the packet header (e.g., latency requirements).  If you were making a phone call (yes, we had VOIP in 1997) that crossed networks, it had to be delivered without delay.  This meant that if an AT&T user wanted to connect to cool content on, say, MCI's network, AT&T had to send it through at the required speed; AT&T couldn't throttle down the packets because it was going to MCI.
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Fast forward 20 years and deja vu! The challenge in 2017 is the same as in 1997 -  how does a network provide value if it's a 'dumb pipe' - if what adds value is what's at the end? if it's the destination not the journey? If the only way you add value to users and your bottom line (hence shareholders) is to throttle speed based on who owns the content, you have no value proposition and no business model.  In 20+ years, the networks haven't figured out a way to add value (for themselves) without putting gates around their content and only allowing in members.  If they haven't yet, kinda makes you wonder when, or if, they ever will.