Can Net Neutrality Bring About Competition and Differentiation?

In the ongoing debate over net neutrality, brought to the forefront this past week by the Netflix, Comcast, Verizon deal, there is now increasing dialogue about what could happen if some form of real blocking and favoring starts to happen. For some this is the nightmare scenario: only popular and profitable services get capacity, because they can afford to pay. Rates go up significantly and niche applications are blocked or relegated to the slow lane. When you sign on with an internet service provider (ISP), you will then get access to only the restricted portfolio of services offered by the ISP. It will be just like signing on to a cable company and getting just the programming the cable company has chosen. What else should we expect? This is taming the wild west of the Internet and making it just the same as traditional cable TV. But, we have a right to ask, if service providers can adjust charging for the optimization of the increasingly scarce resource of bandwidth, what incentive is there for them to build more capacity? Why not just keep the network the way it is, and command higher and higher prices for the privilege of using it? Actually, the way things are today, with most households and businesses having no choice of supplier (or a choice of two, each with the same philosophy) the ISPs can do what they like, as long as they maintain transparency.

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