. . UNITED STATES: GOVERNMENT : INTERNET: ACCESS: NET NEUTRALITY : BUSINESS: CORPORATIONS: NAMED CORPORATIONS: GOOGLE, FACEBOOK, TWITTER, AMAZON: Why Google, Facebook, Twitter and Amazon Are So Wedded To The Idea Of Net Neutrality . . Why Google, Facebook, Twitter and Amazon Are So Wedded To The Idea Of Net Neutrality Tim Worstall 5/08/2014 @ 11:18AM Forbes http://www.forbes.com/sites/timworstall/2014/05/08/why-google-facebook-twitter-and-amazon-are-so-wedded- to-the-idea-of-net-neutrality/
. A shorter URL for the above link: . http://tinyurl.com/lls45wj . .In my mental model its not about disadvantaging some people: its about being able to charge some people more than others. And its exactly that which is making the fight so bitter.
.So, let us think it through. Weve this series of pipes through which all of the content produced by Google, Facebook, Twitter and Amazon flows. At the moment one rate and one rate only is charged for that traffic, thats what net neutrality means. And of course the people providing bandwidth hate this, it means that theyre supplying a pure commodity. And pure commodities can really only compete on price thus theres ever downward pressure on prices and thus margins and profits. People in this situation really dont like being in it. So much so that almost all companies that are caught in such a commodity market do their utmost to differentiate their product so that theyre not in such a market. It might be branding (We only use local electrons!), it might be customer service (not something that anyone with experience of broadband suppliers is going to believe) or, if anyone will allow them to do it, product differentiation.
.And the only real product differentiation possible is in the speed at which the packets of data are whistled around those tubes. Now, if they can do that then theyll gain some pricing power over the content providers: and we all know what pricing power means, it means that profits will move from the content providers to the bandwidth providers.
. snip .None of this really has any implication for the consumer: theres the same amount of money flowing around the system under net neutrality or not. What does change is who gets some of that money: the content providers or the bandwidth ones. And thats why the fight about it. And its also why youve got all of the content providers on the one side of the argument, they know that abandoning net neutrality and allowing differential pricing will bite into their revenues and profits.
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