Technology

Net Neutrality: Content Providers Will Lose Battle

By decade's end, big Web content providers will face tiered pricing from the cable, phone and satellite companies that carry their bandwidth-gobbling videos, games and music to consumers.

By decade's end, big Web content providers will face tiered pricing from the cable, phone and satellite companies that carry their bandwidth-gobbling videos, games and music to consumers. Customers at home who want the fast Internet speeds needed to deliver high-quality video, voice-over-Internet and other sophisticated features already pay more for Internet service than those content to wait patiently for downloads. Within a few years, as speeds increase and bandwidth needs continue to soar, Internet service providers (ISPs) will also start charging higher fees to heavyweight content providers than to those who tread more lightly.

And that, of course, spells rate hikes for businesses advertising on Google, MSN, Yahoo, AOL and other large content providers, since the Web companies will seek to pass on their increased costs. It's also likely to mean higher fees to consumers downloading music, video and additional Internet-based services.

Not surprisingly, the big content providers want to maintain the same rates for all providers—so-called Net neutrality—and are lobbying hard for Congress to guarantee that. They haven't succeeded so far, but have prevented lawmakers from issuing a firm "no" to the request, temporarily thwarting the phone and cable firms' desire to jack up rates for big bandwidth users. But the stalling act won't last forever, and in the absence of a clear congressional ban on a premium pricing scheme, these Internet service carriers will begin testing the waters within a few years.

Ultimately, the courts are likely to cast the deciding vote. Failing support in Congress, big content providers will take their case both to the Federal Communications Commission and eventually to court, seeking a ruling against the carriers.

Regardless of how the issue plays out, the bottom line will remain the same: Web users will see prices go up. Even if the phone and cable companies don't get their way, they'll still have to find a method to foot the bill for adding the bandwidth-boosting infrastructure. If they can't collect from content providers, phone and cable firms are sure to raise their prices for telephone, TV and Internet subscription services.

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