Friday, November 19, 2010

More on the Economics of Net Neutrality

I ran into a blog today by a telco analyst. His posts give a different perspective on the net neutrality debate. One of the most interesting posts I saw was A Grave of Their Own Making which uses a back-of-the-envelope calculation to estimate that Google probably makes about $1 per month per customer. His point is that it's not actually worth it to the ISPs to try to charge Google money to access their customers because even if Google paid it wouldn't be much money. Of course, if Google decided not to pay and an ISP cut off the service, the ISP would lose more money for each customer that left than Google would lose for 35 customers who stayed with the ISP and got cut off.

Another post, The Slow Suicide of Net Discrimination summed up this point and a few other arguments by the author to show that ISPs really shouldn't waste their time worrying about net neutrality. The author made some interesting points that I hadn't thought about before.

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