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For my first substantive post, I’m going to write on something that could be an important issue going forward in the technology world: Network Neutrality. That’s right, the topic that pits such new giants as Google against such old giants as AT&T.

In this case, neither side is right. First of all, Google and other large content providers attempting to get the government to legislate the business practices of other companies is inherently anti-free market, and consequently shouldn’t be allowed. However, AT&T and the other large ISP’s trying to charge content providers like Google for “using” their bandwidth to the ISP’s customers is also incorrect.

The basic issue at hand here is that ISP’s have oversold their product. They’ve been very quick to expand and sell new, high-bandwidth, always-on connections that are in increasingly high demand from their customers. Now, however, these same ISP’s are finding their outside pipes to the internet clogged with every 13 year-old on the planet trying to watch the latest Britney Spears video on YouTube or downloading the latest movie on bit torrent.

The ISP’s now have an interesting conundrum. They see that most of their outside bandwidth is being used by a small percentage of high-bandwidth and high-visibility sites owned by sexy, high-revenue, tech company darlings riding the wave of the new opportunities provided by the bandwidth the ISP’s are straining to maintain. While these companies, like Google, YouTube, and other Web 2.0 sites, are getting all the glory and investing attention, the ISP’s that provide the major work-a-day services necessary for this Web 2.0 revolution get their stocks cut and their companies de-valued as their margins are squeezed ever tighter by the cost of maintaining and building the infrastructure that the internet requires to operate.

Admirably (to me anyway, since I’m a customer of several of these ISP’s), they are trying to combat this problem without raising prices to their customers. Rather, they thought to try to recoup their costs from the companies that are making all the money and that have the capital to help defray the costs the ISP’s are incurring to keep the engine of the internet running.

Unfortunately, each of these content provider sites already pays dearly for their bandwidth to the internet. Why should they have to pay multiple times for the same data? Once to their direct ISP who delivers the data to the network and then again and again for every ISP along the way? I don’t think they should have to, and I don’t think there is ample substantiation in the way the internet has been treated until now.

Until now, the internet has been treated as a single, large entity. Once your traffic is routed out of your physical site, past the “demarc” set by your ISP, it is no longer your personal responsibility to make sure it gets where it is going, and there is no question as to whether the other side would accept the data when it gets there. However, this new debate puts this whole idea in question. In addition, is it really a content provider’s responsibility to pay for the decisions made by its users? Because Johnny, sitting in his room in Toledo, OH decides to watch a particular movie, YouTube now has to pay an extra $.05 or $.50? No, that’s not appropriate.

Who the ISP’s should be looking to recoup their costs from are the people who are taking full advantage of the sweet deal the ISP sold them in the first place: their users. The ISP’s mistake was in selling unlimited high speed internet for cheap. In the old days, you could pretty much expect users to use their internet connection sparingly for simple web browsing, IM and email. The ISP’s thought that they could sell high speed internet connections that would be used for basically the same thing: they would provide the same basic services to their users and would remain idle the rest of the time. They didn’t anticipate the sheer magnitude of changes that Web 2.0, Ajax, and streaming media would wreak on the market. The didn’t anticipate the development of technologies that took full advantage of the newly opened bottleneck that previously blocked these sorts of applications: the final, direct connection to the end user.

Instead of going after content providers that already pay exorbitant prices for their internet connection, ISP’s need to rethink their pricing schemes that allow their users to use their bandwidth pipes wide open with no monetary impact. If a user decides to watch videos all day while downloading the latest movies on torrent, they should pay the price for that, not the content providers. The users are the ones who make the decisions about their internet habits, and they, in fact, *we* are the ones who should be responsible for the costs of those habits. That is the proper means of using market forces to curtail habits that aren’t in line with their appropriate market effect.