I’ll try to keep this simple to avoid getting confused.
There was a time when men were men and they signed information exchange agreements in bars over a beer, writing the terms and conditions on a napkin over a handshake. Returning down through UUnet and PSINet and the old MCI, etc. & etc., these grandfathered arrangements continue to be the backbone of the Internet.
As a result, as well as internet transit providers recklessly bowing to competitive pressures, the wholesale cost to connect to the backbone (internet transit) is around a dollar per Meg today, maybe less. Winners? YouTube, Hulu, Netflix, Internet TV that use the highway massively at a price / Meg that can connect them with the consumer, but has no connection with reality. Netflix alone occupies 40% of the Internet capacity; think about that.
At the other end of the internet, where the wholesale network ends and customer delivery begins, cable companies and mobile operators (MNOs) have to keep updating, increasing performance, and reducing costs to keep up with the onslaught of content flowing over wholesaling. network to meet customer demand. Meanwhile, the video content provider is paying a dollar a mego to its ISP and nothing to the cable provider or MNO that carries its content.
An added irony: Cable operators and MNOs that don’t pair directly with content providers, pay their ISP to flood their network with content, and then pay more to grow the network and handle the flood. The only way to recoup the cost is from the end user who has reached the end of his tether anyway. ability to pay. Mobile network operators were informed last year that their mobile internet costs had to drop to 0.1 US cent per MB to remain profitable. This is when Netflix, Hulu, and Internet TV videos have yet to become a major part of mobile Internet streaming, as they will in a few years. A few years from now, this is also when users will no longer want to be tethered to WiFi to watch their movies, but will instead insist on doing so while on the go. Good luck, Mr. MNO.
Now I am not a fan of cable monopolies or any monopolies and as a consumer I am supporting real net neutrality. However, net neutrality should not amount to a subsidy. The merger between Comcast and Time Warner is potentially more damaging to net neutrality than Comcast charging Netflix to carry its content and thus taking some of that burden off the landline consumer (that’s me!).
Similarly, AT & T’s sponsored data service provides a bigger highway for the video band, as well as RT apps in exchange for payment, rather than passing that cost on to the mobile consumer (that’s me again!)
So, if the FCC is really serious about consumer protection, here’s what you can do: Allow the ISP / cable guy / MNO to charge the content provider. However, once a content provider is charged for access, then there should be no double-dip and Comcast or AT&T cannot charge the consumer more for viewing the same content.