The most popular technology article in today's New York Times is Charging by the Byte to Curb Internet Traffic. The article reports on the news that several ISPs, including Time Warner Cable, Comcast, and AT&T, are considering a move to a "metered Internet" pricing model for consumers. That is, the more bits you download (or upload), the more you pay.

I suspect it's no coincidence that the move to metered pricing comes at the same time as more strident calls for network neutrality regulations. The current net neutrality legislation is so broadly worded that it would prevent ISPs from managing traffic on their networks. This will ultimately stand in the way of media convergence and force companies like Comcast to maintain separate networks for their Internet service and, e.g. television. This inefficient duplication of infrastructure is bad for everyone: consumers, ISPs, and content providers.

I'm certainly opposed to some forms of network discrimination, like charging content providers extra for Internet access, as Ed Whitacre of BellSouth famously proposed back in 2006. But the current, broadly-worded legislation creates a real danger of market fragmentation and inefficiency.

For a counter-example, look to Germany ... Keep Reading >>