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CactusTechnology writer, Peter Svensson, wrote an interesting story called "Will video break the Internet?". From a technical point of view there are many factors to consider. If a large number of web "surfers" were using the Internet as their primary way to watch TV, there would be a problem. More capacity is clearly needed, especially as HD-TV becomes more prevalent. The pessimists — and some telecommunications operators — see rising fees to pay for the bandwidth expansion. Optimists know that various technologies such as multicasting, caching, digital video recorders, etc. are dramatically improving the Net’s ability to deliver video content and in parallel the cost per unit of technology continues to decline. History would suggest the optimistic view is the right one.
During the 1996 Olympic Games in Atlanta there was a bomb blast. Native Atlanta ex-patriots living in Japan and Germany and other parts of the world wanted to get as much news coverage as possible about the status but had few choices (there were no blogs then). The Internet Technology team at IBM in Southbury, Connecticut was running a large web infrastructure for the Games at the time and one of the engineers, Andy Stanford-Clark, got the idea to "stream" a local Atlanta radio station over the Internet using an IBM technology called Bamba. It was a very successful project but only a handful of people could listen simultaneously due to the limitations of the technology and the Internet. Some people thought that if there were large numbers of listeners "audio would break the Internet". Today millions of people consider audio over the Net as commonplace. (Listening to crystal clear classical music from KUSC-FM in Los Angeles through my Sqeezebox as I write this). Based on the tens of millions of daily visitors to YouTube, it is clear that video has also become commonplace. Another leading indicator is what is happening on campus. A number of universities have decided to use the Internet to deliver cable TV to their dormitories.
One of the issues Mr. Svensson raised in his story is "net neutrality", a term that means different things to different people. The fear is that the really large telecommunications companies that provide parts of the "backbone" of the Internet may decide to not only raise fees but also to be discriminatory. In the extreme it would mean that Verizon would block access to Google because they made a deal with Yahoo! or visa versa. The telcos have never been successful in getting into the content business so a new angle for them might be to make deals with content providers that would make their video move through the Internet backbone at a higher priority in return for fees. These fears have gotten the attention of lawmakers who are now talking about legislation to insure net neutrality. Legislation is the worst possible way to address the issue.
What is really needed is more competition. In Japan, the Internet service available to consumers is significantly faster than in the U.S. and significantly less expensive. For example, Yahoo! Broadband offers 8 million bits per second for about $20 per month. Up to 100 million bits per second is available. What technical breakthrough have they had? None. The breakthrough was to separate the various infrastructure elements of Internet service and allow "Adam Smith’s invisible hand" to go to work. More competition means higher speeds and lower prices. In the U.S. we have legions of lawyers and lobbyists at work doing their best to gain protections for themselves and to slow the spread of innovation such as municipal wireless and voice over IP. Will video break the Internet? No. The biggest threat to freedom of choice for content at competitive prices is a lack of competition.
Misguided or overly-prescriptive legislation can have unintended consequences. It can often fix one problem and create two new ones or add yet another layer of protectionism. Mike Nelson, former Director for Technology Policy at the Federal Communications Commission (and former colleague at IBM), says "a lack of competition which lets companies exert monopoly or duopoly power is probably the biggest damper on innovation". Not all legislation is bad. It is possible to use it to increase competition and decrease regulation, to fund e-government pilot projects, “connect the unconnected,” or fund university education and research.

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