Reverse Network Discrimination

by on August 16, 2007 · 0 comments

A TLF reader points me to this interesting story of a network neutrality violation in reverse:

Recently, several people have been writing about ESPN360: a website that attempts to block subscribers arriving from an ISP who is not a subscriber. Essentially, they are trying to replicate the cable subscription model (get your ISP to pony up money so that you can see this stuff) only on the web.

It would be hard to overstate just how foolish (and wrongheaded) this is. But the entire escapade makes some very important points in the debate about net neutrality. That debate was never about some mythically “neutral” network, but was rather about the ever-shifting balance of power between content and eyeballs. Content providers (Google, Yahoo, BBC, and evidently ESPN) believe that users want their content more than their content wants the users. And so, a new battle is begun. Who has move leverage: the pretty pictures or the glassy eyeballs?

Now, I’d be willing to bet money that ESPN’s scheme will fail. ESPN’s ability to charge money for its old cable channel was largely driven by the paucity of cable sports channels on the market, which in turn was driven by the high costs of producing and delivering the channel. Technological change is undermining that situation in two ways: by driving down the costs of producing and distributing video content, and by making it possible for users to reach a lot of news sources that they weren’t able to reach in the old days. That will put substantial downward pressure on the prices ESPN is able to charge for access to its content, and may make it infeasible for ESPN to charge at all.

Still, it does raise an important point: the standoff between content companies and residential broadband ISPs is in many ways a symmetrical one. An Internet connection isn’t very useful without access to content, and a website isn’t very useful if users can’t reach it. So in a negotiation between, say, Google and AT&T, each side has some leverage. It’s not immediately obvious why AT&T would be able to charge Google for access to its customers, rather than Google charging AT&T for access to its search engine. And it’s perfectly plausible that the most stable equilibrium is the one we’ve got now, in which neither residential ISPs or website operators pay the other for access to their networks or content.

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