But don't be fooled into thinking supporting network neutrality is about standing up for internet entrepreneur David against incumbent Goliaths of the technology world.
Fifteen years ago, sure. Ten years ago, maybe. Ten years ago the internet was still dominated by the telcos and equipment manufacturers. But the real service operators - not the ISPs but the companies providing services via the internet - were already on their unstoppable march to supremacy.
Whilst the established giants of the software world were figuring out what to do with the internet a new breed of tech companies started to colonise cyberspace. Amazon.com formed in 1994 and launched in 1995. A mere 15 years later and only two other retailers - Wal-Mart and Home Depot - were larger in terms of market capitalisation.
And the "old" guard of software manufacturers were quick to wake up to the challenge. In terms of corporate size both Microsoft (3rd) and Apple (5th) beat Wal Mart - the world's biggest retailer - in in this year's FT Global 500 list of the worlds largest companies by market capitalisation and Google, although at number 30, is set to continue its climb up the rankings; its marcap at time of writing is over $50bn higher than quoted in the FT Global 500. With Google at number 30 this year it's worth nothing that Apple shot 28 places - from 33rd in 2009.
By contrast (and excluding China mobile with its state-sponsored "selective capitalism") AT&T is the world's largest communications service provider, yet can only reach 24 in this year's global ranking (down 17 places from 7th in 2009) and Cisco as the world's largest telecom equipment manufacturer is 3 places below at 27.
Controlling the audience
So why do the dominant forces in the technology world like Google support network neutrality - equality for all data - when they already have the batting power to demand the bandwidth they need?
The answer lies in the way that the new gatekeepers control the audience. A survey of US sites in March this year found that the top 10 most popular websites accounted for around 32% of all internet website visits.
In a survey of UK traffic in July this rises to 39%, with Facebook taking a staggering 16.7% of all page views.
Update 22-Nov-2010: Mashable report Facebook now accounts for a staggering 25% of all US page views.
Having a neutral internet that affords small websites and services equal priority simply doesn't bother the incumbents, they've already built their castles from which they control the audience share.
Take a look at the strategy of Facebook - the dominant site on the internet. When a friend posts a YouTube or Vimeo video you don't have to leave Facebook to view that video. In fact I'd say you're actively encouraged to view the video embedded in your stream.
The battle is for control of the audience, not the networks, yet the network operators hold a trump card that worries the giants. ISPs could abuse their control over the data carried on their networks to force their subscribers into using their own "portal" services.
But that's only a small part of the story behind support for network neutrality.
There's more than one way to keep the little guy down
In parallel, tech companies are actively harvesting the products of the little guy deluded by dreams of online equality. The giants have actively transformed network neutrality from a threat into an opportunity. Small-time developers are encouraged to develop products, services and apps that integrate with the offerings of Apple, Twitter, Facebook, etc. and get their own slice of the pie in terms of revenue or subsidiary traffic.
But this symbiosis is a very one-sided relationship. Whether through onerous legal agreements, technology lock-outs or media clout there's no chance of the micro-organism ever growing into a problem for those at the top of the food chain. Personally I'd think very carefully before investing in a company developing a product solely reliant on Facebook, Twitter or any other established service operator; there's only one of four possible outcomes:
- The product fails, you lose money, the service operator is unaffected
- The product succeeds, the service operator is impressed and buys you out before you become too powerful
- The product succeeds, you refuse a buy-out from the service operator, but they go on to develop their own version of the product and/or freeze you out via Ts & Cs, shutting you out in one way or another
- The service operator goes bust and everyone loses out
The weapon of free
In fact the cynic within tells me the gold rush era of the internet is already coming to a close, and the days of rags to riches stories of internet entrepreneurs are limited - even if one avoids the pitfalls of working as a tiny parter to a giant. Sure, the internet still has many millionaires to be made, but billionaires? Not since the weapon of free was invented.
Contrary to the opinion of some the internet is not about free. It's about mass markets and low margins, or reaching new audiences for niche markets: these are the territories for sustainable businesses, whilst free is the new anti-competitive weapon at the big companies' disposal.
Take the example of any web service available for free at the point of access. These basically fall into three categories: (i) ad funded, (ii) promotional for other corporate offerings, eg a premium pay-for service ("freemium") or consultancy and customisation sold off the back of the free service; or (iii) torpedoes
I see very little difference to the possible outcomes for any new innovative web business launching a new product - the next big thing:
- The product fails, you lose money, the world continues
- The product succeeds, an existing web giant is impressed and buys you out before you become too powerful
- The product succeeds, you refuse a buy-out from a tech giant, but the giant goes on to develop their own free offering and/or freeze you out via Ts & Cs, abusing their market dominance to torpedo your own product
- A national regulator steps in - note: questions over jurisdiction in a global market.