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Network Neutrality - Colocation America
The topic of network neutrality will have critical impact on the interconnection facility market in the coming years. In short, the concept of net neutrality is that the Internet will now handle all traffic the same manner, regardless of traffic type, origin or destination. Cable and telecommunications companies including AT&T, Verizon, Comcast and Time Warner have argued that they should have the authority to bill content providers for expedited forwarding - mainly Internet prioritization. Critics mention that this prioritization is not useless, except if the general Internet services deteriorates.
Critics also point out that Internet service provider networks were built under the auspices of monopoly, which makes their effort to abuse their local loop affair. Supporters of the Bells contend that such network management would be anti-business, and if the past is any guide, most likely inadequate. Providers also argue that without the extra revenue from priority service, they will have difficulties delivering high-quality bandwidth to residential broadband users in the future.
There are three potential outcomes for the existing impasse neutrality:
1. Legislation enforcing network neutrality is passed, which closes the service providers from enacting prioritization. The regulation, though, also limits the Internet network from the establishing new and groundbreaking services.
2. Net neutrality legislation is defeated and Internet providers make an effort to impose its will on the big content providers. Barriers to entry increase and it gets harder for startups to exploit the Internet, since any effective Internet content source would command involvement in a complicated settlement ploy and the acquisition of a authoritarian staff.
3. Network neutrality legislation is passed, but is held up in court, or fail to pass, but operators fear to move forward. This scenario in effect locks in the status quo for several years, preventing both potentially destructive regulation while maintaining an level Internet playing field.
Needless to say that the second scenario, the performance of the carrier prioritization is not a net positive for interconnection facilities and their operators. Any barrier to entry for Internet-related activities will result in fewer and fewer interconnecting global interconnections, as a result sinking revenues. That would be partly countered by suggestions of carrier-neutral data center providers could act as arbitration agencies for the RBOCs and content networks. Still, it is highly speculative. NeuStar and VeriSign are much more ready to fill this function.
The first scenario, enforced network neutrality, would not likely have a considerable bearing on interconnection. However, any Internet regulation is a net negative. Significant changes to the Internet for security purposes, such as viruses or attacks reduction, would probably require complex regulatory endorsement. This sluggish response sequence would be degrade Internet performance may perhaps slow adoption of other Internet services.
The third scenario (the status quo for some time) is the optimal case for operators interconnection facility. The present economic and regulatory environment is very positive for the interconnection facilities, as evidenced by high Internet data center occupancy. It is extremely unlikely that the additional regulation imposed by either state or parastatal monopolies, would improve the corporate environment.
In August 2008, the FCC upheld a complaint against Comcast, ruling that the company had illegally kept its broadband users from using file-sharing software. The FCC set a precedent in that judgment that Internet providers were disallowed to dictate in any way how customers utilize providers' networks.
Status quo is maintained for the most part, with continued control action. The precedent of that sentence with Comcast would allegedly imply that the first possible outcome would win. Innovation will probably suffer, and for this reason we continue to envision the third scenario occuring - with the status quo be maintained until 2011.
