Why the big carriers won't build out their networks

Congestion on the Web means more profits for providers -- and less bandwidth and higher prices for us

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To be fair, carriers do invest to some extent because, even though competition in the wireless market is limited to just a few carriers (AT&T Wireless, Verizon Wireless, Sprint, T-Mobile, and in the voice sphere Metro PCS), they fight to win new customers and retain existing ones. Therefore, they have to offer something. On the wired side, the vast majority of the pipes that constitute the backbone are owned by just four companies: AT&T, Verizon, Comcast, and Cox. They too compete in the backbone market.

Net neutrality is defined in a lot of ways, "but it usually means that broadband service providers charge consumers only once for Internet access, do not favor one content provider over another, and do not charge content providers for sending information over broadband lines to users," according to the Florida/Notre Dama researchers.

We're not talking about politics or some notion that a company would restrict free speech. That's highly unlikely. The issue is the ability of everyone -- from the tiny startup with a new type of application to giant content providers like Google, Yahoo, and the New York Times -- to move whatever type of content they choose across the network with no surcharge or delay.

The providers and carriers, not surprisingly, argue that Net neutrality will stop them from investing. The money from fees levied on content providers, they say, would be an incentive to improve and expand infrastructure.

That's an argument they made to Congress this month as they tried to throw out rules by the FCC that favor Net neutrality. They didn't succeed. But late last year, their lobbyists managed to convince the FCC to exempt the wireless space from those rules and even weakened the rules covering wired broadband. Given that the future of the Internet is mobile, the FCC's decision is very troubling and will likely cause significant problems for users and content providers in coming years.

It would be trite to urge you to write your representative and senator. But you really should. The argument over Net neutrality speaks to a broader view of the rule of government in the economy. Because the market for Internet services is no longer competitive, it makes sense that the government protect the rights of all of us.

Writing about Net neutrality and the FCC's refusal to take a stronger stand, my colleague Paul Venezia said it well: "If we let this outright thievery happen, we probably will get what we deserve: a castrated Internet, where innovation will be difficult at best, at least in the United States, and where the very basic delivery of content over the Internet reverts to the handout-based model of cable networks. You'll get your Facebook, your Twitter, and your other small-bandwith services, but beyond that you'll pay -- dearly."

I welcome your comments, tips, and suggestions. Post them here (Add a comment) so that all our readers can share them, or reach me at bill.snyder@sbcglobal.net. Follow me on Twitter at BSnyderSF.

This article, "Why the big carriers won't build out their networks," was originally published by InfoWorld.com. Read more of Bill Snyder's Tech's Bottom Line blog and follow the latest technology business developments at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.

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