Internet experts Tim Wu, Cory Doctorow, Farhad Manjoo and many others were just plain, flat out wrong about this, mostly due to their anti-capitalist mentality.
Source: Net neutrality, we hardly knew ye – Marginal REVOLUTION
This sort of conclusion shows that it really, really matters where you get your information from. In this case, the author has summarized from reading a Bloomberg article, that general supply and demand handled the lack of net neutrality without government intervention.
Cool. Cool.
Except, you seem to forget that in 2014, “the average speed of Netflix streaming video content delivered to Comcast subscribers has declined by more than 25%, according to Netflix” according to this article Time Magazine and Netflix’s own data as seen from the image below, published by Quartz.
So what did Netflix do? They bought speed.
The exact details of the deal have been private information, so everyone built their own estimates. One estimate from that time (2014 was before Net Neutrality rules) is that though they might be liable for about $400M per year, in reality, Netflix would be paying about $25-50M per year on a multi-year deal.
Note that every website pays for access. After all, they are the ones in demand and the ISP knows this. Your monthly home internet bill is just one source of funds for ISPs. They charge a much larger chunk to large companies like Google, Meta, Netflix, AWS, etc for the amount of data they upload to the ISP’s network. This includes general websites like this blog, but also anyone who is in the video streaming, or game server business.
That’s normal. What’s not normal is that Comcast was knowingly (or unknowingly, for my CYA) throttling Netflix’s speed, thus giving Netflix customers a much worse streaming experience. Instead of a technical fix to the issue, the two parties struck a deal whereby Netflix bought a Direct Interconnection with Comcast and started uploading directly to their network.
Later, Net Neutrality laws prevented such behavior, but I suspect that this was a multi-year deal built under the guise of a Direct Interconnect, so it survived the Open Internet Order by the FCC and probably continues on to this day.
Also, Bloomberg claims that –
Bandwidth has expanded, and Netflix transmissions do not interfere with Facebook, or vice versa. There is plenty of access to go around.
This is flat out lies and a very bad way of thinking about the Internet.
First, of course Netflix transmissions “interfere” with Facebook (and Instagram, and YouTube, and Comcast’s own streaming service Peacock). Everyone is a video streaming behemoth. They are all uploading a lot more than when they were web 2.0 darlings way back when.
Second, Net Neutrality may not defend big players like Netflix and Facebook, but it sure can protect smaller businesses or independent website owners.
Let’s say tomorrow I post a wildly popular video on my site. Suddenly, there’s a spike in streaming traffic to my site. My own server vendor DigitalOcean may not want to charge me for the spike, because its a one time thing or maybe I’m already paying for the bandwidth and am within limits. But an ISP like CenturyLink or Comcast can easily come to DigitalOcean and ask for a bigger payout for supporting this sudden but consistent burst of video traffic. They can threaten to reduce streaming speeds for traffic to my site, so that anyone coming to my site is forced to watch the video in 480p or lower, instead of the 1080p or 4K I’ve shot the video in.
This increases transcoding costs for me, thus making me spend time, money, and energy to convert the video to multiple formats, hosting them on my site etc. DigitalOcean may also decide to punt the costs to me, so now I’m on the hook for Comcast’s lack of net neutrality. Suddenly, I have to figure out a monetization strategy to pay for video streaming at proper speeds. A nice little moment of fleeting Internet stardom then becomes either a hole in my pocket or necessitates a conversion to ad-supported or a paid website. All because Comcast realized I’m streaming video from my blog.
You might think this scenario is far-fetched, and maybe it is. But that’s how many webservices start. Someone has an idea, they try it online, and in the 15 minutes of fame they get, they have to run to get funds to cover the costs of just being a nice netizen.
Then folks like… Tyler Cowen (an Econ professor at George Mason, no less) of marginalrevolution read a tainted Bloomberg opinion piece and think they know how the Internet works.