Network neutrality is a principle of network design. It asserts that, in order to promote innovation, network service providers such as telephone and cable internet companies should not be permitted to dictate how those networks are used (i.e., not permitted to ban certain types of programs, to ban certain types of devices connecting to the network, or to favor traffic to certain web sites over others).

The U.S. Senate Committee on Commerce, Science & Transportation on 7th February 2006 discussed to end the Network neutrality principle. There is a 2,5 hour webcast about this hearings. Vinton Cerf speaks (30:00- minutes in the stream) during this hearing about the design of the Internet (and the ISO/OSI-Model of course). He says:

»Nothing less than the future of the Internet is at stake. […] We must preserve neutrality in the system in order to allow new Googles, new Amazons and new Yahoos to form. […] We risk to loosing the Internet as catalyst, for consumer choice, for economic growth, for technological innovation and for global competitivness.«

Read this comment by Om Malik here:

The desire of AT&T, Verizon, et al to end network neutrality and assert fees for access to connected customers represents a death wish. Imagine the prospects of an info tech industry without “software neutrality” where Intel charged a fee to enhance software performance. Pay Intel and your applications run faster. The incentives driving Moore’s Law disappear in this pay-to-play model. Intel’s profit maximizing incentives become serving the interests of software companies willing to spend the most on “enhancing software performance” not the end users of computers. The meritocracy driving competition between software companies disappears as Intel picks winners and losers based on willingness to pay. Innovation becomes permission based at Intel’s discretion.

What does that mean practically?

AT&T (or any other ISP) could decide how much to charge you depending on how you actiually use your Internet connection. They could charge customers if they want to access concurrent services that compete with their offerings. The payment of the access to the net currently is independent (neutral) from type of content and its provider. Ending the Network neutrailty principle would allow access providers to create any kind of price model for what you actually do with your capacity. They could charge for Voice-over-IP differently than for Internet-TV. They could charge for access to ebay.com and offer rebates for own bidding systems.

Think of the energy provider charging different prices for energy depending on the type of device you plug into the power sockets. Or British Petroleum building own highways because they can charge anyone that drives on them with gas not bought from them. Or think of Intel charging a monthly fee depending on how much CPU cycles you actually used of your hardware.

So of U.S. congress is dropping the neutrality principle it is a matter of trust in the promises of the service providers. A Verizon representative during the hearing:

»If a customer wants to call Sears we don’t connect them to Macy’s. […] Public policy must encourage and reward investment in networks«.

Read on at News.com: Democrats lose House vote on Net neutrality.

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