The Wall Street Journal reported yesterday (paid subscription required) on talks between Comcast (NASDAQ:CMCSA) and BitTorrent, Inc. to make nice over Comcast's admitted blocking--excuse me, "delaying"--of bittorrent generated traffic.
At first glance it seems a rather ham-handed attempt to mollify Comcast critics. The WSJ and others are reporting it as a fairly straight up development, if something of a backpedal by Comcast. But these miss the point, I think, sidetracked by conspiratorial discussions of "net neutrality" and how the big bad telecablecos are angling to limit our choices, take over the world, and generally do evil.
Do I believe the big ISPs want to control content (or access to it) as well as the pipes? Absolutely. There's gold in them thar hills! None of them want to be limited to connectivity or bit delivery services. But will they succeed? Is the above fictional ad to be our broadband future? I doubt it. Anyway, it's beside the point.
There's another motive for ISPs to manage bandwidth on their networks--it's a finite resource. No, Virginia, there is no unlimited bandwidth. You can talk all you want about Moore's Law, etc. Bandwidth ought to be cheap. In a perfect world--or Asia--it is cheap. But not here, not without real competition.
The telecablecos have promised this always-on, flat-rate, high-speed internet access. It was a fiction created by the need for market share, and by consumer demand for a broadband salad bar. All-you-can-eat, with a fixed price. Sounds wonderful. But it could never have lasted since the infrastructure is largely shared and was built on the expectation that demand would be low (or at least intermittent).
Now the growth of video is stealing the condiments, and file sharers are sneezing in the salad.
There's no free lunch. So you do one of two things. Limit how many trips each patron can make for salad. Or charge them for each trip. Comcast has tried the former. My bet is on the latter.
You believe it's a fantasy? That no one will go for tiered or bit-based pricing? Think again--Time Warner (NYSE:TWX) is already trialing it. And the more successful we are at regulating the ISPs to ensure net neutrality (in the absence of competition), the more likely it is we'll see pricing by the byte.