Debunking yet another bought-and-paid-for report on the need for non-neutral net

Ars Technica's Nate Anderson has some excellent analysis of a new telco-commissioned report on net neutrality. Consultancy A.T. Kearney was paid by Euro ISP giants Deutsche Telekom, France Telecom, Telecom Italia, and Telefónica to write a report on the future of Internet provision. Kearney accordingly produced a report that repeated the telcos' talking points: ISPs need to charge more, meter bandwidth, triple-charge (by charging companies like YouTube and YouTube viewers to connect to the net, then charging YouTube again for the right to reach those viewers) and using Egypt-style "deep packet inspection" to filter out or limit customer-traffic that the ISPs don't like.

He quotes skeptical telco consultant Paul Budde:

In the world of the Internet nobody gets a free ride. The only way you can connect is if you pay, and the more you use the network the more you pay. The good thing, however, is that the customer can choose who they spend their money with. In principle, the more customers an ISP has, the lower its costs will be, and the lower its prices will be. So ISPs and content providers alike try to get more customers, and to get global connections at lower prices.

If they can bypass their national incumbent network supplier and get lower costs by connecting directly to other (competitive) networks on a different continent, they will. A good example is Google, which became part of a consortium that is laying a fibre optic cable across the Pacific–in the long run this investment of hundreds of millions of dollars is cheaper than using the networks from the incumbent national telcos.

This puts pressure on the network providers to continue to reduce prices, and to do this they need more customers and lower costs themselves. This is how normal business works. However incumbent telcos are very worried about competition, since in the past they had little or no competition and were able to charge what they liked.

Canada's lame telco regulator, the CRTC, has just approved "usage-based billing," which incumbent telcos wanted specifically so that they could limit their customers' use of services that competed with their own, like Netflix and Skype. Canada's regulators have set back Canada's competitiveness capacity for innovation by decades, ensuring that no new Canadian service can get off the ground unless they do a deal with the telco giants who currently enjoy monopoly rents on infrastructure that the Canadian taxpayer has subsidized for more than a century. Nice one, eh?

Huge ISPs want per-GB payments from Netflix, YouTube