[LINK] Australian ISPs offer US advice, smugness, on net neutrality

[Glen Turner]

You got to look at what is being capped.

In Australia, a cap exists to put a limit on the use of undersea
capacity. This is the most expensive variable cost in Internet
provision.

In the US ISPs don't have an undersea component. (Or if they do
then it's to pay 50% of cheap US-EU capacity not 100% of expensive
US-AU capacity. And offshore content is a trivial amount of the
user's bandwidth.)

So technically, a cap from a US ISP exists to delay router upgrades
and to prevent major backbone transmission upgrades.  That means the
cap is of a different order of magnitude, as it takes a lot more
traffic for those costs to bite.

The US cap also has a marketing aspect which is mainly missing in
Australia. The notion is that the consumers are attracted by a low
fixed monthly charge. Everyone realises that this means that low-use
subscribers are overcharged whilst high-use subscribers are undercharged.
But the number of high use subscribers keeps growing, thanks to the
new P2P applications. So the ISP can either cap that activity or
raise prices. But apparent low prices pull in customers.

The question is -- is limiting the use of P2P as shortsighted as
those ISPs which use to block web traffic because of its excessive
bandwidth use. That is, will customers leave and get a "real" Internet
experience from some other provider.

Also, the USA lacks effective national consumer protection regulation.
A lot of the heat from the debate is missing in Australia because ISPs
here are forced to be open up-front about any conditions on the word
"Internet" and can shop around on that basis.  Compare that with the
amount of pain it took subscribers to find out what restrictions
Verizon was placing upon their subscriber's Internet use.

Also, regulators in the US are much less advanced than elsewhere
about differentiating transmission from Internet service.  So in
some areas the only offering at a particular data rate will come
from one ISP. That adds a lot more heat to the issue if you want
a P2P Internet experience and your ISP doesn't want to sell that
as they want to offer a lower price to web users.

-- 
  Glen Turner   <http://www.gdt.id.au/~gdt/>