For the past few years, legislators and key members of the telecommunications industry in the United States have been working on updating the Telecommunications Act of 1996; largely obsolete due to dramatic changes in the industry - including the migration of voice and video signals to the Internet. This new initiative has created an explosive and controversial battle between access providers (such as AT&T and Verizon) and content providers (such as Google and Amazon) over access and distribution of content. Net Neutrality - "the principle that Internet users should be able to access any web content or use any applications they choose, without restrictions or limitations imposed by an Internet service or access provider". Maintaining the principle of net neutrality would keep broadband providers from discriminating against any forms of digital content.
Rejection of the principle of net neutrality would allow access providers to tier and potentially charge for the delivery of content. Division in Congress appears to be falling along party lines, with Democrats overwhelmingly in support of Net Neutrality and most Republicans siding with the major carriers. Joe Barton, a Republican who chairs the committee overseeing telecommunications law, says providers "may not block, or unreasonably impair or interfere with, the offering of, access to or the use of any lawful content, application or service provided over the Internet." Content providers such as Amazon and Google argue for Network Neutrality, which calls for companies that own the means of delivery (the broadband pipes) do not configure their networks in a way that benefits favourites. Web 2.0 (the new Internet following the burst of the dot-com bubble) is about content and participation. Some of the largest acquisitions include News Corp.’s $580 million purchase of MySpace (a leading community site), New York Times Company $410 million purchase of About.com (a leading content portal) and Experian’s $485 million purchase of PriceGrabber.com (a leading price comparison site).
Major U.S. carriers, including AT&T and Verizon have been lobbying both the House of Representatives and Senate in an effort to push through legislation allowing them to establish separate "tiers" of service on the Internet. These tiers would be used for the express delivery of voice and video services, as well as content. More controversial is that these carriers want to be able to charge for access to these tiers. Service and content providers which sign up to use the carriers’ "fast lane" would receive guarantees for "priority" delivery of their data. Access providers argue they should be able to collect access fees to off-set the cost of network upgrades (which would be necessary to facilitate the delivery and innovation of next-generation services).
During the past two years, and reminiscent of the exuberance of the late 90’s, there has been a dramatic increase in mergers and acquisitions within the online sector. Although this time around the industry is far more mature and stable, a major battle is taking place for the ownership and control of content. Companies such as News International have recognised the
Interactive mergers and acquisitions in the first quarter of 2006 totaled 54 deals worth $3.2 billion, up from $2.6 billion for 47 deals in the last quarter of 2005 (excluding the $1 billion swap of Yahoo China's assets with Alibaba), and up from $2.9 billion for 28 deals in the first quarter of 2005.
The battle for Net Neutrality boils down to the way rich content (such as video content) is priced, distributed and accessed (uniform access versus tiered access). The rejection of the Net Neutrality principle will without a doubt guarantee short term financial gain for access providers as they will not only charge consumers for the content but tag content owners with fees to distribute their content.
The outcome of this debate will undoubtatly reshape the way content is distributed and accessed online, with major content providers purchasing or partnering with access providers such as Comcast (with 21 million subscribers and is the largest such provider in the US) or Time Warner.
Imagine not being able to access Yahoo's Web portal as quickly from your Internet service provider, because your broadband provider (the company that owns the cable lines) has cut a deal with Google to provide their services exclusively. Imagine having to pay an extra 10 cents every time you sell an item on eBay or for downloading a movie from www.shockwave.com. The reality is the content providers, wil pass on any access fees to consumers. Furthermore, what are these ISP's companies going to do with this incremental revenue? Improve their customer service, provide free tools such as spam protection and virus protection? Unlikely. I encourage you to join the Save the Internet campaign to ensure Net Neutrality is kept and protected.