Net Neutrality Retreat Threatens Cloud Growth

I'm about as pro-capitalism as one gets. Nevertheless, I believe there are instances when the US government must step in and impose regulation on industries with near monopolies. Our Internet carriers are one example of a near monopoly. That's why I'm very much in favor of net neutrality to protect customers from being shaken down by a handful of carriers.

However, the FCC is wavering in its commitment to support a full-blown net neutrality policy by considering a proposal to allow ISPs to sell tiered services to businesses like Google and Netflix for preferential treatment of their Internet content on backhaul links. The plan, though sounding capitalistic in nature, would create artificial barriers to entry and could slow cloud growth.

The concept that the FCC and several ISPs are pushing is often referred to as "fast lane" traffic. The idea is that Internet backhaul service providers would be able to charge extra for favored treatment when transmitting data over the Internet. Businesses that didn't pay the fees for preferential treatment would have to wait a bit longer for their data to be sent.

This effectively would create a competitive advantage for those willing to pay extra for improved speeds. It's a slap in the face of the entire net neutrality concept, which attempts to preserve the Internet's openness and fairness.

When artificial competitive advantages and barriers to entry are created, they often have unintended consequences. Cloud computing is largely popular because it's allowed even the smallest companies to compete against the big players. Massive amounts of capital are no longer needed to build an online presence. Small businesses can leverage a fraction of a larger infrastructure and expand/contract as needed. But with a proposed (and likely expensive) added cost to match larger competitors, small companies and startups would either wither and die -- or not even try to compete in the first place.

I completely understand the concern of ISPs looking into the future and wondering how they're going to pay for the underlying Internet backhaul communication. Over the next five years, Internet traffic is expected to skyrocket, and someone has to foot the bill for backbone upgrades.

Still, in my opinion, forcing online businesses -- creators of most Internet content -- to pay is not the wisest choice. In fact, I'd rather see consumers pay extra for content consumed in the form of data caps and added fees for exceeding them. This gives control to consumers to use their bandwidth as they see fit. It also allows businesses to compete on an even playing field. By doing so, businesses battle against one another based on product/service alone. Then it's up to consumers to decide which choice is right for them.

It's dangerous to create fast and slow lanes for Internet traffic. If the net neutrality stance were to capitulate on any one measure to pay for the expected Internet growth spurt, the best solution (and the one that would truly promote capitalism) would be to push the cost down to the consumer.

If we essentially expect businesses to pay for a manufactured competitive advantage, it could heavily impact competitiveness on the Internet and almost certainly would erode cloud use by small businesses and startups. That's a dangerous road to travel, and it would create a net that is far from neutral.