Life in the fast lane

It’s quite a while since I last mentioned the thorny topic of net neutrality.  Then as now, however, my view has been that the internet is a quirky (‘two-sided’) economic beast and that the emergence of alternative charging models was both inevitable and welcome – particularly at a time when parts of the internet value chain are facing new costs to upgrade capacity.  It therefore came as little surprise to hear that John Malone, the ‘born again’ cable mogul, is involved in just such a paradigm shift between major content owners and some broadband carriers …. 

According to a recent report in the Wall Street Journal, Malone is urging the US cable operators to act collectively in order to flex their muscles in dealings with the content owners – notably Netflix and YouTube (who together account for roughly 50% of peak-time broadband traffic).  Apparently, Malone’s vision of the future is a world in which consumers are able to buy tiers of broadband connectivity bundled to ‘various levels of access to over the top video services’. 

Clearly, the implication is that content owners would have to pay towards the cost of network capacity, a development that has been anticipated elsewhere but thought not – by me, at least - to have been effected.  However, and again according to the WSJ, such arrangements  already exist, leading Web suppliers such as Microsoft, Google and FaceBook paying the broadband providers ‘to get faster and smoother access to their networks’.

The article confirms that this sort of arrangement, content owners paying for enhanced network delivery, is legitimate under the FCC’S ’open Internet’ rules but would the same apply in Europe – where the net neutrality debate has been a little more opaque?  Happily, Neelie Kroes provided the answer last month in an interesting speech entitled "The EU, safeguarding the open internet for all".  It contained a number of proposals, including the following:

“First, we should allow innovation. The new services round the corner depend not just on content, but on high-quality connections...If someone wants to pay extra for that, no EU rules should stand in their way; it's not my job to ban people from buying those services, nor to prevent people providing them. If you don't want to buy them that is also fine, and you should absolutely continue to benefit from the ‘best efforts’ internet".

With a green light as clear as that, how long before we see two-tier internet delivery in the UK?