The seductive fallacy of net neutrality

Net Neutrality
Net Neutrality


The question of net neutrality has proven an emotive and hotly contested issue the world over. Liberal sensibilities and, apparently, the prevailing view in geekdom (which may be one and the same thing 🙂 ) is that it is a principle to be preserved at all costs.

At risk of losing what little geek credibility I may have, I would like to suggest that, as in most of life, there is no one prescription for all situations, and our extremist stance to preserve the notion at all costs is likely to be more harmful to the equitable development of the Internet than it is helpful.

Allow me to begin this dissonant submission by qualifying my understanding of why the idea of net neutrality is so important to so many people. Essentially, most people are, rightly, offended, that the existing Internet behemoths (the likes of Google, Facebook and all) can afford to subsidise access to their services (as in free Facebook access to mobile subscribers on certain networks) for the general public, thus entrenching their monopoly and making it harder for competing start-ups to gain traction in the market.

This is a legitimate concern which, however, should not tar all network discrimination ideas and scenarios with the same brush. One particular idea I wish you to consider is the pressing need for the developing world to compete effectively with the same behemoths who so strike fear into the rest of us, and what role our regulators can play in improving our competitiveness.

The starting point for this argument is the understanding that, even though the Internet Protocol is vastly different from other long-established communications protocols, the manner in which these links are delivered is essentially the same as it has been for over a century. In the case of local (on-net) connections, the provider delivers a service that combines 2 essential functions at a low bundled rate. These are:

  1. Authentication, whereby the provider verifies your identity and confirms you have sufficient credit to establish the link you wish.
  2. Transmission, whereby they establish the link to the destination you seek and allow communication to proceed.

Where more than 1 operator is involved (as in cross-border or cross-network connections), the tendency has always been for the operator who provides the required supplemental transmission capacity to charge a premium to the authenticating/originating operator, presumably to offset the higher costs of administering and reconciling the charges.

Internet Service Providers, however, mainly because no-one thus far has dissuaded them from doing otherwise, have tended to charge all Internet Protocol traffic as if it is always terminating at the furthest possible endpoint. In developing markets, especially, there is a marked unwillingness to differentiate pricing for on-net, national, and transnational connectivity.

The net effect of this lack of discrimination (net neutrality) is that, for the end user in the developing world, there is no discernible difference between accessing a service hosted in your country of domicile and one hosted on the other side of the world. In an environment where the players on the other side of the world have achieved sufficient scale to price out any other smaller competitors, it is inevitable, then, that in the final count they will always have a more appealing price that their smaller, growing aspiring competitors in the developing world.

For this reason, the Zambian regulator, ZICTA’s much touted effort to ensure the adoption of cost-reflective pricing by data providers in the nation is to be much-lauded by Internet-dependent companies and providers (read – everyone). Our only hope is that they can carry the initiative to its logical conclusion, even in the face of the likely indignant outcry from vested interests about the betrayal of the principle of net neutrality.

Article by: James Mugauri