It is true that the depreciation in telcos impact substantially on their return on equity. The telco infrastructures are expensive to maintain, specially when the investment was ill judged during the 2000 boom. Few ISPs are covering their depreciation with capital investment fully. An unfortunate fact for telco shareholders and directors.

Telcos would generate better profits by abolishing network neutrality, at the expense of profits for society as a whole. Large telco companies, specially encumbent former state companies, are not known for the wealth creation abilities. Small entrepreneurial companies have historically been the biggest source of GDP growth.

Giving further market concessions to a mature industry sector with a poor track record, at the expense of the small entrepreneurial company sector is short termism at its best

Quoting Susan Crawford blog it is a question of trust:

Why should we trust them now? We’ve already given them incentive after incentive, access to rights-of-way (presumably in exchange for common-carrier behavior, as Dan Berninger points out), and the regulatory shirts off our backs.

Helping telco companies make more profits is good for society as whole, or just the unlucky telco shareholders?

An extract from Cisco’s letter to congress, Cisco on net neutrality, reads as follows,

“We strongly support the principle of an open Internet,” Cisco CEO John Chambers wrote in a letter to Congressman Joe Barton, who chairs the House Energy and Commerce Committee. “We must, however, balance the fact that innovation inside the network is just as important as innovation in services and devices connected to the Internet. Broadband Internet access service providers should remain free to engage in pro-competitive network management techniques to alleviate congestion, ameliorate capacity constraints and enable new services.”

I cannot help but think a good arms trading company would issue an identical statement on arm sales limiting legislation.

Martin Varsavsky is the ultimate disruptive innovator for the telecom’s sector. His companies have grossed billions of dollars in the retail end of the market. He diagnoses plain short term greed as telecom companies try and squeeze internet media companies for a part of the high margins.

In this case, it is fortunate that Europe regulates its markets more vigorously than the US. France is quoted as a good example of how IP transit business is forced to operate at arms length with its financial sales operation.

Dan Gillmor, the daddy of grassroots independent journalism on the net, has given a seminal speech
on the role of blogs in maintaining transparency and independence of journalism. In Dave’s words,

The cable and phone companies want to control not just the pipes through which our data moves. They also want to decide what will get delivered, in what order, and at what speed. They haven’t pulled this off yet, but they’re getting closer every day.

In this age of media consolidation, where newspapers and TV channels are owned by fewer and fewer companies, maintaining a free speech medium like blogs and the internet is imporntant for civil liberties.

Net Neutrality provides the freedom that has made the internet a great creative commons. It guarantees that the telecom carriers and ISPs do not interfere with the flow of information on the net; it stops them from interfering with the flow of data for profit. Telecom lobbyists are arguing that they should be allowed to sell different levels of service, at different prices. And CISCO is providing the equipment to filter internet traffic according to commercial rules.

Traffic to big corporate web servers would have the right of way over small company traffic. In clear corruption of the internet early values, as described by Lawrence Lessig , famous for his book Future of Ideas, calls it the end-to-end principle so essential for the internet to continue to be a creative commons, where anybody can connect anything from anywhere on the internet.

The future is being sold to industries of the past.

Yet, Net neutrality is so easy to take for granted. Like free breathable air, freedom of speech, freedom of movement. You only notice them when they are absent or taken away from you. I think many non-militant people will become radicals pro-freedom activists, when big business puts its first filters in.

Small business entrepreneurs are the first into the fray. As a technologist and entrepreneur it is unthinkable that new statups companies should have to ask permission and pay for the privilege of connecting my web servers to the internet. The loss of net neutrality will kill off hundreds and thousands of startups with enormous potential.

The political battle is currently ongoing in Washington. Recently the telecom corporations had a victory, as net neutrality legislation was set back Telecoms groups turn back plans for net price controls, a few organizations lobbying to maintain net freedom are

• The Struggle for Net Freedom
• Save the Internet Coalition
• Substrate Neutrality

There is so much we take for granted
Paul Elosegui