Net Neutrality is a critical topic that must be considered with less passion and more pragmatism.

Most of the operators are held by private investors. They invest in network infrastructure and sell services that are supposed to give them decent ROI. I’m afraid the Net Neutrality joint to the boom in Mobile Broadband traffic will lead to the bankruptcy of the liberal telecom market model. Then we go back to the minimum servicing Post and Telegraph Telcos.

The unpredictable and surprising growth of the mobile broadband traffic has surprised most of the mobile operators. In fact, the radio technologies, even HSPA+ and LTE appeared as incapable to satisfy the new capacity requirements. Operators all over the world are seeking for smart ways to offload the broadband traffic from wireless to fixed-line through Femtocell and Wifi in order to release their networks and their pockets.
Furthermore, network suppliers are working on new architectures that will revolutionize the wireless networks by relying most of the load on wireline networks and deliver the switching and service functions on cloud computing datacenters. The goal is also to release the expenditures and propose more flexible and scalable solutions to the suffering operators.

So, calling for Net Neutrality on the Wireless field will squeeze very hard the MNO business. Imagine that the statistically planned radio networks get flooded by P2P file sharing, video and skype traffics. Under a crisis situation, operators will either continue spending more and more on capacity upgrades; which will exhaust their budgets and decrease the profitability of their business without even solving the problem. Or, they will join hands to lobby for raising prices and finding new ways to charge more, not only end users but also content houses (facebook, google, why not?). Because with Net Neutrality and without one of these two solutions, MNOs will just hit the wall.

For fixed-line the picture is not less dark. In fact, for business balance purpose, the fixed-line broadband networks have always been built considering statistical traffic planning and estimation. Yet, if Net Neutrality is imposed, P2P file sharing and video traffic will overtake huge parts of the bandwidths, compromising HTTP, SLA professional services and so on. What should the operator do is even rougher than Wireless in somehow. There will be a whole chain of land gears to upgrade or swap: from access to aggregation switches to the backbone. Even without Net Neutrality, wireline operators cannot afford the traditional flat rate price packaged Internet (type 30$/month) and they’re even lobbying to charge the content providers such as Facebook and Google (yes, lion is being grabbed by its tale for business necessity!). And the irony is that they accepted to negotiate in order to avoid future crisis.

Net Neutrality is an ethical concept that can be considered as a citizen right in some point of view. However, the telecom market has been liberalized since at least a decade allover the world; and network operators act under a license contract and serve under pragmatic business plans. Net Neutrality is a critical variable that can compromise the whole business profitability. It must be present in the license conditions and contract as a clear clause. I’m saying so while being sure that if this happens, no investor will bother to buy telecom operation license, and we will see the PTT Telco model reestablish again in many markets.

If governments insist to apply the Net Neutrality, network operators will most probably lobby together and raise the prices in an extraordinarily way, and here end user will neither enjoy neutrality nor keep the advantageous flat rate prices.

I’d like also to look at the story from another angle. As has been reported recently by the WHO, there is more and more proofs that radio waves, precisely the case of mobile handsets, cause cancer, brain problems and nervous diseases. This is still a shy news until now, but it will develop and may cause serious economic crisis later.

Joining the Net Neutrality squeeze job to the health concerns to the difficulties in keeping steady business models will threat in a very dangerous way the telecom operators and the whole telecom industry. And therefore the risk of a more serious financial crisis has to be considered.

Posted by akkeri | Report as abusive

A very good read, but it seems as usual, its the consumer who will take it in the shorts.