Who Benefits From A Non-Neutral Net?

    June 29, 2006
    WebProNews Staff

The new question on Net Neutrality is “who benefits?” There’s been a lot of talk on both sides of the issue, and it can be difficult for those outside the Internet industry to get a handle on what’s true. Perhaps if we look at who is talking, and from what pedestal, we can better understand.

When The Washington Post Online and the Chicago Tribune both published editorials oposing Network Neutrality legislation, Michael Masnick, president and CEO of Corporate Intelligence, asked “why is there so little honesty in the Net Neutrality debate?” Mike has been diligent in weeding through the rhetoric on both sides of the issue, stripping away “hyperbole” to find truth.

On his company’s weblog, TechDirt, he seems especially disturbed by the editorial staffs’ misrepresentations of that truth, which read like they were “written by pro-telco lobbyists.” He takes pains to debunk assertions about questionable FCC numbers, loss of bandwidth, lack of competition, and comparisons to FedEx expressed in the editorials.

But the question of why these editorials read like telco talking points still remains unanswered. And perhaps it will stay that way, but a little research reveals some interesting facts. They may not have been telco talking points, but cable talking points.

Fact #1
The Washington Post is owned by the Washington Post Company. The Washington Post Company owns broadband internet provider Cable One, operating in midwestern, western and southern states.

Fact # 2
The Chicago Tribune is owned by the Tribune Company. While the Tribune Company (to my knowledge) offers no internet access services, it is heavily involved with the cable industry as a content distribution agent (owning the distribution rights to popular cable shows like South Park), and an extensive relationship with AOL Time Warner (19 of 26 Tribune-owned TV stations are WB affiliates). The Tribune also owns a significant stake in AOL.

It is entirely possible that the editorial staffs of these publications came to a consensus about the issue without any type of pressure from their parent companies with conflicts of interest. But their intimate relationship with the cable and ISP industry is interesting nonetheless.

Sifting Through The Rhetoric

Verizon, energized by the default “no” vote on Net Neutrality protections in the Senate Commerce Committee, urged the rest of the Senate “to act swiftly” on Sen. Ted Stevens’ Communications, Consumer’s Choice, and Broadband Deployment Act, which will soon be up for a vote on the Senate floor, as delays “will cost consumers billions of dollars a year in higher cable bills.”

Verizon is a big fan of “rhetorical excesses.” But why the rush? If the issue is that important, shouldn’t it be discussed as thoroughly as possible in true democratic form? Perhaps time is quite of the essence now as the company notices that awareness of Net Neutrality has boomed from nearly nil to over a million petitioners in favor of its protection in a few short months.

Just weeks after pro-Net Neutrality legislation was slaughtered in the House, the Senate Commerce Committee vote was 11-11. SaveTheInternet.com hasn’t needed much time so far to garner support.

“They thought the public wasn’t paying attention. They thought they could shower key members of Congress with campaign contributions, that this issue would fly below-the-radar, and that the public would never hold their elected representatives accountable on this issue, ” MoveOn.org and the Christian Coalition wrote in a joint editorial for the Washington Times.

MoveOn was kind enough to relay a chart of telco contributions to Commerce Committee Senators, courtesy of OpenSecrets.org.

Isn’t it interesting that the senators proselytizing most about free-markets and lack of government interference just happen to be on the same side as their largest contributors? But of course, just like with the Post and the Tribune, it is quite possible they’ve come to these interesting views on competition and free markets on their own.

Senator Ron Wyden (D-Ore) isn’t buying it either. Unfortunately for Verizon, Wyden has promised to filibuster Stevens’ bill, which Stevens doesn’t have enough votes to break.

Who Benefits and Who Is Affected

So we’ve illustrated that the loudest voices opposed to Net Neutrality have been telecommunications and cable companies, election year legislators with telco and cable contributors, spokespersons for telcos and cable companies, and editorial staffs with parent companies heavily involved in the cable industry.

Who is in favor of Net Neutrality? Pretty much everybody else, stragglers aside.

This week Hitwise released some interesting numbers showing how important a neutral internet is to business owners and content providers on an international level.

This issue is as likely to affect Asia Pacific Internet website owners and users as much as those in the US. In Australia for example, 57% of all online visits were directed to overseas websites, for the week ending June 17, 2006

To be exact, in the Australian market, there were 617,881 websites measured for the week ending June 17, 2006. Traffic Distribution analysis indicate that the Top 500 websites accounted for 50.3% of all Internet visits. That means the remaining long-tail of web properties, i.e. 617,381, accounted for the remaining 49.7% of traffic. The spread of traffic share over this number of websites is one indicator of the shear diversity of Internet content today

This democracy is essential to the major search engines which rely on the multitude of small and medium publishers for contextual search revenues, such as Google AdSense. The large spread of visits across all websites and low concentration of overall clickstream traffic may be further considered a symptom of the rise and popularity of consumer generated media. Businesses are still exploring the marketing applications of this, and it could be a great shame if this was nipped in the bud by lack of legislation to protect net neutrality.

In short, a tiered system is bad for the little guy, and very, very profitable for a few Congressmen and a handful of multi-billion dollar corporations.


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