New study: abandoning net neutrality won't improve service

Study Says Abandoning Net Neutrality Won't Improve Service Posted by Bob Williams, Hear Us Now

A new study by researchers at the University of Florida says one of the primary arguments being used by opponents of net neutrality is not true.

Leading opponents of net neutrality -- mostly big Internet service providers such as cable and phone companies -- say they would have much more of an incentive to expand and improve their services if they were able to charge online content providers such as Yahoo! and Google for preferential access to their customers.

Not so says Kenneth Cheng, a professor at the University of Florida's Department of Decision and Information Sciences, who led a team that just finished up a fascinating study on the issue.

“The conventional wisdom is that Internet service providers would have greater incentive to expand their service capabilities if they were allowed to charge,” says Cheng. “That was completely the opposite of what we found.”

Cheng's team discovered that cable and telephone companies providing broadband to deliver the content of companies such as Google and Yahoo! are actually more likely to expand their infrastructure — resulting in quicker loading and response in a customer’s personal computer — if they don’t charge these companies for preferential treatment.

The findings are timely because of industry pressure on Congress to consider legislation that would allow broadband service providers to give preferential Internet service to online content providers willing to pay a fee. That would, in effect, end the current practice of “net neutrality.”

The UF researchers, who took no position on the issue, developed an analytical model based on game theory to determine the winners and losers if net neutrality were abandoned, as well as whether the practice’s demise would give broadband service providers greater incentive to expand capacity. Cheng says the study is pure academic research and was not sponsored by any company or interest group.

Not surprisingly, they found that broadband service providers were the ones to gain the most from ending net neutrality because they could collect fees from content providers. The content providers such as Yahoo! and Google, in turn, would be the biggest losers.

Consumers will “win” if their favorite online provider is the one paying a fee to the telephone or cable company because it comes with a guarantee that its site would have the opportunity to load faster than its competitors, Cheng said. But those consumers who prefer a content provider that paid no such fee will “lose” in having to endure slower service, he said.

More important, the researchers found that the incentive for broadband service providers to expand and upgrade their service actually declines if net neutrality ends. Improving the infrastructure reduces the need for online content providers to pay for preferential treatment.

“The whole purpose of charging for preferential treatment to content providers is that one content provider gains some edge over the other,” says Subhajyoti Bandyopadhyay, who co-authored the study with Cheng. “But when the capacity is expanded, this advantage becomes negligible.”

Bandyopadhyay likens it to the expansion of a two-lane highway where drivers willing to pay a toll to subsidize road improvements are rewarded with exclusive use of a faster lane.

“If the road is upgraded from two to four lanes, with one express lane, these drivers might say ‘Three lanes are good enough for me. I don’t want to have to pay a toll any longer,’” he says. “So the desire to pay a toll when the road is expanded gets lesser.”

Simple, huh?

The experience of other countries also suggests that better service – up to three times faster – results when there is greater competition, Cheng says.

“In Japan and Korea, where there is net neutrality and much greater competition among broadband providers than in the United States, there are also higher broadband speeds,” he says.

article originally published at http://www.consumersunion.org/blogs/hun/2007/03/study_says_abandoning_net_neut.h....

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