There's been a lot of commentary over the last few months about Comcast and their filtering/traffic manipulation/smoothing/whathaveyou. In general, customers are up-in-arms about one of their one-to-two choices for high-speed internet doing things behind their backs to change the way the internet appears to them. However, there's also been a ton of fear-mongering (on both sides) about what this action, and potential FCC reaction, means to the future of the Internet.

From my vantage point (having been on the internet since 1985 and participated both in discussions and technology directly related to the internet for over twenty years now), this debate is interesting. I'm a free-marketeer and somebody who has made money from the internet for years (hardware, software, services, ISPs, security services, you name it, I've been involved).

There are two major issues at play with the Comcast traffic shaping: truth in advertising, and access. Depending on what you think is the "real" problem really determines which one of the federal agencies should be slapping Comcast. Make no mistake here, I think that somebody should be beating them up, and here are the two arguments:

Truth in advertising- Comcast (and they're not alone in this) advertises "unlimited" high-speed internet access to their service area. As we know, and as they now admit, this is not what they provide. They provide some high-speed internet services at some rate (which isn't a committed rate) based on usage by you, and your neighbors, and limited by "traffic management policies" which they state are completely reasonable.

Until Comcast was shown the statistics by external authorities, they had no interest in disclosing their use of technology to block certain kinds of traffic, and they still have no interest in laying out the true limits of their service. As such, customers are not given the opportunity to make a fair comparison based on advertising and service offerings between Comcast's services and those offered by their competitors.

In places where Comcast is up against Verizon's FIOS, I can't blame them (from a business perspective). Verizon has engineered so much network capacity into their service that there is no advantage to them to provide services that aren't neutral. If Comcast were forced to tell the truth about their access, they would have a hard time convincing customers who had a choice that they should go with their services.

In the end of the day, people in the US should get to know what they're buying. The FTC certainly would be a good place to start for labeling the realities of internet services and should have the enforcement power necessary to levy meaningful fines on organizations that don't live up to their obligations.

Access requirements- The other argument for regulation involves the FCC and is based on the idea that the current duopoly (at a max, assuming you have a phone and cable company servicing your domicile, and assuming that they can actually provide internet access) need a little "help" to provide appropriate services to everyone in the country. As much as the Republicans would like to claim that non-interference is the best policy for these corporate entities that shouldn't be regulated, they seem to completely forget the following facts: incumbent telcos are government-licensed monopolies in their areas of service, incumbent cablecos are generally government-licensed monopolies in their areas of service (I know... DC has 2, but that's strange), the Universal Service Fund (which we all pay for on our phone bills) has been used to subsidize both the construction costs and profits of these telecommunications companies. The point of all of this being: the government is already providing benefits to these companies, it is not unreasonable to make them abide by some rules.

By this argument, the FCC should be charged with guaranteeing that internet access is always restriction-free (except for those restrictions voluntarily applied by the customers) and neutral to the content that is being carried. As an entrepreneur, I'm not as comfortable with this argument as I am with the first one, but there's still some merit to it, based on the relative lack of choice in vast areas of the country.

As we sit today, most people in this country have limited access to high-speed internet. In my case, I've had access to 3mbps internet at home for a dozen years, but that's only because I've been able to afford a fee that most businesses wouldn't consider paying. It was only in recent months that high- speed internet from the cable company (Cox) was available in my area at speeds that are competitive with my current connection (and prices that are a lot more appealing). However, even in Great Falls, VA, our choices are: 20mbps down/3 mbps up from Cox or 1.5mbps down/384kbps up from Verizon. To add to the fun, in one of the richest counties in the nation, and less than 20 miles from the center of Washington, DC, we can get cell service from one carrier inside of the house (AT&T and Verizon are available outside of the house, but Sprint/Nextel is the only one with cellular towers close enough to provide service inside of the walls). As such, there's little hope for any kind of wireless internet service. And we're not alone. We don't know how many other people don't have real access, since (as I've detailed before) the government's statistics on internet service availability and broadband speeds are total crap. Thankfully, that's something that is changing going forward, so we should have some real information in the relatively near future (within a couple of years).

Hmmm... there you have my two regulatory arguments. I like the FTC option better mostly because it provides more choice, in theory. However, the FCC option may be necessary since the "choice" embodied by the FTC option is non-existent for so much of the country. Perhaps, the right option is to do both: make internet access neutral for now and also require that the companies who put limits on the amount of bandwidth you use tell you what those limits are. The result of this would be bandwidth caps and download/upload limits, but they would be honest and they would be applied without regard for the specific content that was being exchanged.

NTT in Japan has put caps in place on their fiber connections, they're unidirectional (upload only) and are set quite high (30GB/day--the equivalent of running nearly 3mbps 24x7) and I believe they're only for consumer services (since the economics of those are different than they are with business services). This is fine for the time being, but if you wanted to back up a large hard drive to an offsite backup service, this wouldn't work very well for you.

In the old days, it was common to do "burstable rate" connections for businesses that allowed you all the speed of the connection, but at a fraction of the cost of what the connection would cost you if you were running it constantly. The trick was that the closer you got to using it to its full capacity, the more likely it was that you'd pay more than if you bought an 'unlimited access" service. This is still done for most business services, and the rates are pretty reasonable (down to the level of $10-$25/mbps/mo). If you think about that, at $25/mo, you'd pay $75 for the 3mbps usage that NTT is capping people at. But, that'd be for uploading 900GB of data, something that even most businesses are unlikely to do on a monthly basis. If you accompanied that with a service that was capable of providing 100mbps in each direction (which NTT does, for a cost of about $42 a month, including bandwidth), you'd have insanely fast access with good caps, for reasonable prices...imagine the possibilities.