Killing the Internet One Innovative User at a time

Video killed the radio star, however Comcast is trying to prevent online video from doing the same to the overpriced and unnecessary cable industry. Comcast announced that on Oct. 1 it will begin capping broadband connections at 250 GB a month. Currently this is a huge amount of data with a limit that the average internet user (2 GB) would never even begin to approach. So why would Comcast make such a cap? It is all about the impending online video future.

The cap Comcast has put in place will directly impact online digital media growth and innovation seen through services such as Hulu, Netflix, On Networks and Move Networks. Their motivation is to protect its video on demand services and prevent ISPs from becoming commodities as 250 GB does not go very far if you are watching HD programming online like movies and live sports.

Our one hope lies in the hands of Congress providing the FCC the power to prevent metered access to the internet. The FCC just recently slapped Comcast on the wrist for degrading P2P traffic on its network which has brought about the consequence of the net neutrality double edged sword.  Metered internet access could irrevocably change the development of digital media and the online user experience.

Network Neutrality – the Double Edged Sword

On Friday the FCC ruled that Comcast had violated network neutrality principles last year through its traffic management of BitTorrent. The company was ordered to disengage in these practices and disclose to subscribers in advance any future changes to how it manages data. This should have been a significant milestone for unfettered, open internet for U.S. consumers, but I think it unfortunately may be the beginning of the end.

For starters, the FCC’s ruling has no teeth and can be viewed as just a slap on the wrist. It cannot be enforced by the agency and will undoubtedly be challenged because the Supreme Court has previously ruled that the FCC has no power to regulate “unless and until Congress confers power upon it.” This said conferring of power has yet to occur in regards to regulating how companies manage access to the series of tubes. Under this premise, Comcast has every right to fight the ruling and probably would win. The caveat here is that it may open the door for Congress to examine its role in regulating how internet access is managed, resulting in a net neutrality law enforced by the FCC.

While net neutrality protects against the tiering of traffic speed, ISP compliance could result in full adoption of metered consumer billing where users are charged for their total monthly data instead of simply access to the internet. Seems moderately reasonable until you realize it is structured to fight against online video. This model ensures that if you cancel your cable, you will still windup paying for content that would otherwise be free and ad supported. To the detriment of consumers, cable companies are slowing learning that the game is changing and that they have become a commodity. Consumers do not need to pay them for content anymore because it is legally available online. Whether net neutrality is accepted or not, consumers lose.

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