Why Net Neutrality cannot survive without fibre to the femto and interoperability

We have a rash of publicity claiming that the latest FCC position on Net Neutrality will destroy the Internet as we know it. From the US Library Lobby to the Startrek Lobby there are a wide variety of views but the success of Netflix challenges the cartels which control our access to the Internet (from Telcos and Cable Companies through Operating Systems and Browsers to Search Engines and Content). It undermines their business models – including the illusion that take-overs and mergers (the latest is AT&T and DirectTV) to create vertical integration (triple and quaduple play) will return better value to shareholders – let alone better service and choice for customers. At the recent INCA conference we heard from the head of BBC Digital that Netflix already generates significantly more UK Internet traffic than the BBC iPlayer – and both are in their infancy. Meanwhile the markets have stopped growing. Players appear to be competing for share of a finite consumer and business “budget” (alias willingness to pay from static or falling disposable incomes) for communications and content

The current tangled web of crapband (cheap, slow, overloaded, copper circuits), fibre to the cabinet, urban wifi and national 3G networks is groaning with overload while consumers expect the levels of service claimed in the adverts. Of course we need to better address the way that conflicts betwen recommended security products and the tracking software used by ISPs, advertisers and others can result in users experiencing more sluggish performance over faster lines. But, even so, the case for fibre to femto (whether on a mast or in a domestic router) would be overwhelming – if those who put up the funding reaped the reward.

Instead we have a “net neutrality” debate, with varying definitions of “net” and “neutrality” as current and would-be monopolists try to eat each others lunch: telcos call for cheap content,  content providers want cheap carriage, advertising funded players want both and those with more money than sense pay fancy prices to take each other over, vertically integrate and cross subsidise [thus deluding themselves as well as regulators and others as to what is actually profitable while they try to lock in their customers]. 

In the US the FCC is considering striking down laws in the 20 or so States that block local municipalities from building fibre networks to challenge the local crapband monopolies of cable operators who are charging Netflix a premium as part of a locally regulated, ever upwards, price spirals. The FCC can see that model of the Chattanooga Fibre Choo Choo (funded by the electricity company as part of a local smart metre and grid programme) is steaming off into the distance as an engine of local economic regeneration.

Meanwhile in the UK, George Soros is backing Hyperoptic and Sky and Talk Talk have linked up with City Fibre to explore a variety of “risk free” roll-out models, underpinned by demand from the residents of up-market apartment blocks, the tenants of business parks and commercial centres and the operators of 4G networks. Other business models include that used by Hammersmith and Fulham to grasp the opportunity to cut the cost of service delivery at the same time as meeting economic dvelopment and job creation objectives at little or no up-front cost. And the approach to rural broadband is about to be transformed in the area serving the Prime Minister’s constituency.    

Meanwhile the EU Court has mounted a long overdue challenge to those who believe they have a “right” to collect and collate our personal data, including our browsing and viewing habits, and refine it into the new oil of information, without obtaining our informed consent, let alone paying us a royalty. I like to think that the tools now being promoted to supposedly foil the surveillance operations of GCHQ and the NSA will find their true use in protecting our privacy from the customers of the Reform Government Surveillance alliance. That may, of course, already be their true target market, but those offering privacy enhancing services appear more scared of being moved down the search engine rankings of the monopolists than of being blacklisted by the NSA.  Meanwhile the energy companies are supposedly creeping into the same market as are the suppliers of a growing range of consumer devices and those hacking into their communications , siphoning off some very personal data (alias “oil”) before it is refined.

Christmas is coming and yesterdays young Turks, today’s Turkeys (alias incumbent monopolists) may be about to get stuffed as markets and customer choices and priorities change and voters turn against attempts by governments and regulators to protect the present, let alone the past, against the future. That is why the Internet giants of today are the biggest spenders on lobbying in Washington, Brussels and Westminster – fearful of what would happen if users (alias voters) really were permitted an informed choice. 

Those who think that the time has come to do to Google what was done to Standard Oil, should remember that the greatest single beneficiary of that break up was the Rockefeller family. The surge of growth that followed meant the value of their shareholdings in the newly liberated companies soared. The future, like the past, is another place. Many of the  Googlettes might well similarly thrive once freed from the suspicion of being part of a monopolist that uses search engine rankings to enable its acolytes to invade the markets of others.  

Last week I spoke to a BASDA event on why healthy, open and competitive markets are critically dependent on inter-operability standards at all levels and between all levels.  Later this week I hope to make time to ref ormat that script as a blog entry.