https://docs.google.com/document/d/1...t?hl=en&pli=1#
With video streaming we are still seeing regulators and policy makers locked into antiquated thinking about goods delivered in the physical world where there was a clear relationship between consumption and costs. While some small vestige of that phenomenon still exists in the digital world it is almost negligible in comparison. Also inapt are comparisons between broadband networks and older utilities like water, electricity, gas and oil in which products are physically “consumed” by end users to the exclusion of others.
These analogies betray notions of scarcity and exclusivity that simply do not apply in the Internet ecosystem. Rather the broadband Internet is characterized by abundance, non-exclusive access and use, and rapid innovation in services and network capacity. Beyond the local broadband duopoly wireline bottleneck, these characteristics are driven by dynamic innovation and robust competition. Regulators should take note.
If there are genuine problems with traffic volume and congestion because of the downloading of streaming videos from Netflix and similar services then last mile network operators have a suite of tools for dealing with the problem, which are trivial to implement. The fact that they regularly implement these solutions for their proprietary video streaming services without passing costs to the consumer through UBB, underscores the message that perhaps UBB applied against Internet consumption is being used for some other purpose.
Given the fact that the Internet consumes so little bandwidth on cable or telephone networks, because it is largely a non-rivalrous technology, compared to the proprietary rivalrous video streaming solutions deployed by the cable or telephone company itself. Yet, in terms of bandwidth allocation, it is sold at significant premium to those same services – on top of which are applied surcharges for bandwidth overage that are not clearly related to cost.
Moreover as we have shown video streaming services such as Netflix, Hulu and others delivered through CDN networks actually reduce the costs of Internet transit and last mile networks for the telephone and cable company. Any inordinate bandwidth consumption or congestion can easily be handled at virtually no cost by reallocating the bandwidth or channels assigned from the operator’s proprietary video streaming service or enabling deep deployment of competitive content distribution services.
In this context, the effectiveness of UBB in dealing with the issues it purports to address, and its impact on the end-to-end Internet value chain demand close examination. This practice reduces consumer demand for broadband services, may undermine competitors and may create disincentives for network investment. So who benefits from UBB? The significant risk is that UBB is really a mechanism to protect the market dominance of former monopoly local network operators and to help them leverage that dominance into the Internet ecosystem.