Study Says Abandoning Net Neutrality Won't Improve Service Posted by Bob at 03/08/07 02:04 PM

A new study by researchers at the University of Florida says one of the primary arguments being used by opponents of net neutrality is not true.

Leading opponents of net neutrality -- mostly big Internet service providers such as cable and phone companies -- say they would have much more of an incentive to expand and improve their services if they started charging online content providers such as Yahoo! and Google for preferential access to their customers.

Not so says Kenneth Cheng, a professor at the University of Florida's Department of Decision and Information Sciences, who led a team that just finished up a fascinating study on the issue.

“The conventional wisdom is that Internet service providers would have greater incentive to expand their service capabilities if they were allowed to charge,” says Cheng. “That was completely the opposite of what we found.”

Cheng's team discovered that cable and telephone companies providing broadband to deliver the content of companies such as Google and Yahoo! are actually more likely to expand their infrastructure — resulting in quicker loading and response in a customer’s personal computer — if they don’t charge these companies for preferential treatment.

The findings are timely because of industry pressure on Congress not to adopt any legislation banning broadband service providers from giving preferential Internet service to online content providers willing to pay a fee. There is currently no "net neutrality" rule on the books.

The UF researchers, who took no position on the issue, developed an analytical model based on game theory to determine the winners and losers in net neutrality. It also examined whether the absence of net neutrality would give broadband service providers greater incentive to expand capacity, as many have claimed. Cheng says the study is pure academic research and was not sponsored by any company or interest group.

Not surprisingly, the researchers found that broadband service providers were the ones gaining the most in the absence of a net neutrality rule because they could collect fees from content providers. The content providers such as Yahoo! and Google, in turn, would be the biggest losers.

Consumers would “win” if their favorite online provider is the one paying a fee to the telephone or cable company because it comes with a guarantee that its site would have the opportunity to load faster than its competitors, Cheng said. But those consumers who prefer a content provider that paid no such fee will “lose” in having to endure slower service, he said.

More important, the researchers found that the incentive for broadband service providers to expand and upgrade their service actually declines in the absence of a net neutrality rule.

“The whole purpose of charging for preferential treatment to content providers is that one content provider gains some edge over the other,” says Subhajyoti Bandyopadhyay, who co-authored the study with Cheng. “But when the capacity is expanded, this advantage becomes negligible.”

Bandyopadhyay likens it to the expansion of a two-lane highway where drivers willing to pay a toll to subsidize road improvements are rewarded with exclusive use of a faster lane.

“If the road is upgraded from two to four lanes, with one express lane, these drivers might say ‘Three lanes are good enough for me. I don’t want to have to pay a toll any longer,’” he says. “So the desire to pay a toll when the road is expanded gets lesser.”

Simple, huh?

The experience of other countries also suggests that better service – up to three times faster – results when there is greater competition, Cheng says.

“In Japan and Korea, where there is net neutrality and much greater competition among broadband providers than in the United States, there are also higher broadband speeds,” he says.

comments (2)

1 Posted by Kevin at 04/11/07 06:51 AM

We are the most richest and powerful country in the world, but are way behind in fast and affordable internet service. This makes no sense whatsoever! When Japan and Korea have net neutrality, but we don't, that's where it becomes necessary to look at why we don't. One simple answer, greedy corporations! There is no reason why the US should be behind when it comes to offering higher internet speeds for less money. We should have gigabit internet service available here by now. There are other countries where the service is available, why not here? Broadband internet service (at one megabit per sec speed) should be available to consumers for $10 to $15 per month. But, no, the greedy corporations that rule with an iron fist in this country, would never think of offering internet service that cheap, (except for a POS dial up connection). Who the hell wants dial up anymore??

2 Posted by Gregor at 07/17/07 08:08 PM

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