I'll be interested to see what Wes has to say on this as well.
Since I started the company in 1996 bandwidth prices have continued to drop
dramatically. The technology has improved and allowed this level of efficiency gains due almost solely to Fiber.
Fiber just flat out enables tons and tons of bandwidth over the same "wire".
The reason it is dropping is that providers that support the backbone want my business and everyone else's. Competition is driving everything.
The big picture of how the Internet works on the backbone, and that is what we are talking about when we are talking Net Neutrality, the backbone.
What is missed by the reporting media is the what the "backbone" really is.
The backbone is really a bunch of what is called peering agreements between providers. Everyone is connected to everyone else.. there is no big provider somewhere that is providing bandwidth to everyone. it is just companies hooking their fiber together in different data centers.
Normally these peering agreements are pretty simple. One provider has a lot of customers and they would like to connect their customers directly to a provider that has lots of servers, NetFlix lets say..The agreements are such that both parties agree to maintain their expensive routers and to each pitch in on the costs for connecting their routers... they don't pay each other for bandwidth. Just for the maintenance and upkeep of the circuit going between them, usually in the same data center. Simple right? if you as a provider have lots of customers you want to a peer or directly connect to providers that have lots of servers or what is popular to your customers. The entire Internet is really a series of agreements to hook circuits together.
These peering agreements have existed since the Internet has been in existence. It works really well, as evidenced by the enormous scale of the Internet that has taken place in a very short time.
There are fights. One backbone provider (the kind of providers I buy bandwidth from) might try to really lowball some bandwidth pricing (HE, Cogent and so on) and try to take advantage of their peering partners by vastly over selling their peering points and saturating the connections. No big deal though, the peering partners tend to figure this out and throttle the connections to keep the abusers under control. This all happens without much fanfare unless you are a networking person working for one of these providers.
Net Neutrality was born of one of of these fights.
Verizon tried to take advantage of NetFlix. They saw that Netflix was driving something like 40% of their bandwidth. The network engineers understand this but the management at Verizon really has no clue and became outraged and saw an opportunity to charge Netflix and make some bucks from that. I say clueless because this kind of thing happens on the Internet all the time.. one has to be patient and see if balance over time. Verizon started to throttle and punish Netflix in an attempt to get money from them.. They weirdly thought that Netflix was getting a free ride on their circuits, instead of looking at it as a trend and realizing that people were actually signing up for their service due to NetFlix.
Net Neutrality was
sold as consumer protection as if there was a monopoly forming somewhere on the Internet and everyone needed to be protected.
Never was true.
If it were true backbone bandwidth would become more expensive not less. It is becoming cheaper and cheaper and is driving for better Internet everywhere. Small companies like ours can now compete with anyone, including Verizon, Spectrum and so on.
The pro Net Neutrality argument echos the protectionist rationalizations of the early 1930's that got us to a phone company monopoly. Yes there really were hundred of phone companies in the US, hard as it is to imagine, it was unregulated. It is not consumers that benefit from these "protections" it is large companies. Through this type of regulation they can make it very hard for a small company with a better idea to even get started. It is the large companies that want regulation, they just hide behind the altruism of "consumer protection".
I don't want these "protections", I want these big companies like Verizon to make these mistakes so I can take advantage of it and offer better service.
Regards,
--Wes
