Opponents of network neutrality argue that innovation will suffer if Internet access is restricted only to “best effort” delivery. One example of potential impact could come if network neutrality concepts are extended to zero rating or even carrier interconnection and linear video and voice services.
That might seem absurd to some, but the logic of “no packet discrimination” might be applied to all of those scenarios.
Facebook (News - Alert), for example, wants to promote use of its app in 14 developing markets, as do other leading app providers, where the cost of mobile data is a barrier to app use.
In Asia, Airtel (News - Alert) (India), Reliance (India), Indosat (Indonesia), Smartfren (Indonesia), Axis (Indonesia) and XL (Indonesia) are working with Facebook to support the access.
In Africa and Middle East, Viva (Bahrain), STC (Saudi Arabia) and Etisalat (News - Alert) (Egypt) are participating.
In Europe, TMN (Portugal), Three (Ireland), Vivacom (Bulgaria), Backcell (Azerbaijan) and Tre (Italy) are working with Facebook.
In South America, Oi (Brazil) is doing so as well.
In such cases, Facebook has offered access to its app at no incremental charge to end users, when mobile service providers want to partner with Facebook to do so. But that is illegal under Chilean net neutrality law, depriving end users of free access to Facebook.
By the same logic, toll-free phone calls would be illegal. Perversely, network neutrality, as applied to zero rating, makes it harder to create sustainable business models for mobile Internet access in the developing world.
But even traditional broadcast TV and radio, it could be argued, are examples of zero rating of bandwidth consumption. “Why should users have subsidized access to IPTV (News - Alert) or cable TV or satellite TV bandwidth, when other apps do not get such treatment?” some might argue.
The traditional regulatory treatment of such cases has been that “managed services” are exempt from Internet access rules. But the wedge is the use of a common Internet Protocol access and transport network used to deliver all services, including Internet apps and managed services.
Recently, some have argued that traditional carrier interconnection also be subject to network neutrality principles, such as not incorporating highly-differential traffic flows when creating interconnection agreements.
Perversely, net neutrality rules that are supposed to protect innovation can harm it.