'Nobody Rides for Free' Still is an Issue

By Gary Kim May 21, 2012

Comcast has stirred the network neutrality debate in a new way recently, by simply announcing a policy that states that the use of the Xfinity app for watching some cable TV programs on an Xbox will not count against the usage cap.

Oddly, the policy, which provides clear benefit for Comcast customers who already buy video entertainment, and then want to watch some of that content on an Xbox screen, has been called a violation of network neutrality, which essentially outlaws any packet prioritization on fixed network consumer broadband access services.

The latest conflict might not seem to many people to be a network neutrality violation, which prohibits packet prioritization, if all Comcast is doing is offering a retail pricing plan that exempts Xfinity streaming video from the Internet usage caps.

Competitors obviously complain about the practice for business reasons, not necessarily because what Comcast is doing is an actual network neutrality violation. The reason is that Netflix or other streaming consumption does count against usage caps.

Some might argue that Comcast has created a sort of virtual private network service to support Xfinity. Others might argue that Comcast’s packet tagging, which it has to do to know which bits count against a cap, and which do not, does involve packet prioritization, though that is uncertain, and Comcast says it is not prioritizing any packets, just charging them in different ways, based on a consumer’s other purchases of Comcast services.

Comcast argues the Xfinity streaming is an amenity offered to Comcast video entertainment customers, over its own network, and is therefore part of the video service. That matters, as regulations that apply to cable TV are different than those which apply to Internet access service.

 Aside from the immediate issues around network neutrality infractions, the dispute shows that the wheels of the Internet access business, though turning slowly, do turn.

 Back in 2006, when the network neutrality debate was in full swing, AT&T CEO, Ed Whitacre complained that “some people” want AT&T to act as a “dumb pipe that just keeps getting bigger and bigger.”

“If you build it, you have to make a return on that,” Whitacre said.  “Nobody gets a free ride, that’s all.”

 The issue, back then, was whether access providers should, or could, charge application providers for use of Internet access bandwidth, in any way, and whether access providers could lawfully use class of service or quality of service mechanisms for consumer broadband access services.

 The big issue for ISPs is that the cost of providing higher bandwidth is not currently matched by comparable revenue increases. In essence, the Comcast Xfinity service pricing attempts to create incremental revenue not by charging for streaming, but by making the cable TV service more valuable.

 ISPs might, as some fear, decide to make such features available to all other streaming video providers, which likewise will be seen as a violation of network neutrality, even if such practices are beneficial for end users.

 The issue, in that case, will not be packet prioritization, but business policies and practices. Conflict over such policies within the ecosystem is not unusual. Nor, given the disproportionate usage impact of video services, is it unusual that many efforts to monetize or control bandwidth consumption will come in the video area.

 It is not too hard to predict that, with further passage of time, streaming video providers might be offered business agreements that exempt their packets from caps, as well. Some won’t like that.

 But neither is it clear how all the new bandwidth people say they want can be supplied if the full cost of those network upgrades are born solely by end users. At some point, the equivalent of carriage fees, which are standard in the video entertainment business, might start to appear, in some form. 

That will simply illustrate that packet prioritization always was about business advantage for suppliers in the content ecosystem, not the “freedom” of the Internet. You don't have to agree with the "nobody rides for free" comment to recognize that further development of broadband infrastructure will require investments that must be paid for. The only issue is who will pay.

Edited by Brooke Neuman

Contributing Editor

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