The players in the net neutrality playground

The FCC, despite being told to back off, is still trying to figure out how it can regulate the I’net. That is appealing to those in with the socialist leanings that government is needed to hold the evil big corporations at bay. For a more realistic description of what is going on with I’net businesses, see Steve Schultze’s effort Trying to Make Sense of the Comcast / Level 3 Dispute.

Steve defines three I’net business entities, the retailers, the movers, and the sellers. In addition to these business entities, there is the end consumer who drives the whole mess.

The retailers are the people you deal with who set you up with an I’net connection via cable, DSL, or some sort of wireless. The movers provide the backbone to connect regions, countries, and continents together so you can get web pages from anywhere. The sellers have content that they are trying to get to end consumers. In addition to these basic commercial functions, there are the brokers and others who arrange deals and make special arrangements to help sellers like Netflix gain access to consumers at lower cost.

Now look at the commercial transactions. Movers sell I’net access to retailers and to content sellers. Content sellers sell to consumers and may buy access to those consumers from retailers or via movers. Retailers sell network access to the consumer, buy access to the I’net, and sell access to their consumers to those who want to deliver content.

A current sticking point is that sellers are trying to bypass the expense of the movers by getting content close enough to retailers to be able to bypass (most of) the backbone. That way, they can charge the retailers part of what they would be paying the movers. But the movers don’t like this because it cuts into their revenue. Retailers object to paying twice for the same service.

Since video traffic, as from Netflix, is taking up a large volume of I’net traffic, it has become the stimulus for much backbiting and business creativity in I’net business management. That is the conflict that the FCC and net neutrality proponents are using to feed their views. Meanwhile, the businesses involved are trying to figure out how they can get things done and still make a profit. All the political shenanigans are doing is to add uncertainty about the environment for any potential solutions. That ups risk and that increases costs.

One thing that can be seen from Steve’s description is that much of the net neutrality proponents’ argument is falsely based. That is a clue as to the validity of their argument that should be carefully considered.

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