When the issue of Network Neutrality gets discussed in the media, usually we hear from the same cast of characters: ILECs and Cable MSOs on one side, and the most outspoken content providers on the other. But there are other voices amongst the competitive service providers that don’t fit that mold. One such voice is that of Dave Schaeffer, Founder and CEO of Cogent Communications – one of the few fiber operators out there actively supporting Network Neutrality.
TR: You have stated that Network Neutrality is good for ISPs. Nobody likes additional regulation for its own sake, so what benefits will ISPs get from it?
DC: ISPs and consumers will see new applications continue to be developed. These applications will drive more traffic and will enhance the importance of the Internet.
TR: Network Neutrality can’t be good for everyone, or else there would be no opposition. Who is it not good for?
DC: It is not good for the incumbent carriers who rely on legacy products, e.g. voice and traditional video, for the majority of their revenues. Only 10% – 15% of their revenues come from Internet access, but it accounts for more than 90% of their network traffic. This traffic is cannibalizing their legacy services and they just can’t compete on price.
TR: Traditional voice and video products are the textbook examples, but are you including private line and wavelength services as well?
DC: Yes, both of these services are being replaced by the Internet. ISPs must continue to allocate sufficient bandwidth and improve the quality of their service. As smaller companies begin to feel more and more comfortable with their service they are less likely to use private lines and will build their own tunnels over public infrastructure.
TR: If Network Neutrality becomes law, what effect will it have on internet traffic growth?
DC: Traffic growth will accelerate. Net Neutrality will assist in the trend of the Internet replacing other technologies to deliver content such as audio and video. Right now the Internet is not perceived as providing carrier-class quality because the incumbents are creating that perception so they can sell other products. That perception is beginning to change, and as we continue to see Internet connected Televisions and other devices traffic will continue to grow at a high rate.
TR: Are last mile providers right to worry about the mismatch between all-you-can-eat pricing plans and growing data usage? How much traffic can access networks economically support if over-the-top services are given free reign and consumers won’t pay more?
DC: They are right to worry if they are using antiquated technologies. The great thing about Fiber-to-the-Node is having a scalable network. You can always add more wavelengths to the fiber you have, and if there is enough infrastructure in the ground it shouldn’t have a problem handling the extra traffic on the network.
TR: What about wireless operators? Unlike fiber networks where you can always add more, spectrum is a limited resource. How can wireless operators cope with a proliferation of over-the-top services backed by network neutrality?
DC: Wireless is more difficult as there are limits to throughput because of spectrum scarcity and technological limits. Applications also will be separated from the network layer for wireless providers, but services will be sold with total volume pricing tiers if net neutrality is extended to wireless operators.
TR: Opponents of network neutrality often point to their need for regulatory flexibility allowing ‘reasonable network management’. As a network operator with an access network that supports an enterprise customer base, what constitutes ‘reasonable network management’?
DC: When it comes to Network Management Cogent does not prioritize packets. These opponents want to be able to prioritize their packets to ease the loads on their networks. Cogent’s network was purpose-built to handle massive amounts of bandwidth so we don’t run into this issue.
TR: If Network Neutrality is good for the industry, why do we need the government to force it?
DC: Because 70% of the world’s telecom spend is controlled by 27 companies who all operate Local Area Networks (LANs). It should not be up to these companies to choose what packets take priority. Local access is not an open free market. Regulators need to protect consumers from monopoly power.
TR: Thank you, Mr. Schaeffer, for talking with Telecom Ramblings!
DC: Thank you very much for your interest in Cogent.
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