Two reasons why cable companies would oppose Internet neutrality

In responding to our last few newsletters covering Internet neutrality, one reader asked us why a cable company (multicable system operators) would oppose ‘Net neutrality. He believes that MSOs should hold the same position as a Verizon or an AT&T.

We suggest there may be two reasons for MSOs to support ‘Net neutrality: a technical reason and a marketing reason. First the technical reason: cable providers typically lag traditional telcos when it comes to deploying QoS enforcement at every possible point in the network.

For example, traditional telcos built out their ATM and are now completing their MPLS backbones. Both ATM and MPLS offer multiple classes of service. Furthermore, the carriers have had more experience in offering differentiated classes of service with multiple product offerings and they have done so on an end-to-end basis. Telcos are quite experienced at using Layer 2 and Layer 3 protocols to differentiate service on a per-flow basis.

On the other hand, while some cable operators have deployed QoS-capable backbones, they don’t necessarily have the homogenous QoS enforcement points from end-to-end on their nationwide networks when compared to the telco networks. However, as the cable operators upgrade their end-to-end data capabilities, the telcos’ network advantage may be minimized.

The other reason cable companies may take a different view is because they have traditionally offered higher speed access to the Internet vs. DSL-based providers. Consequently, the cable companies have had a higher revenue rate per user for data access than local phone companies. So the cable companies’ strategic market advantage has been their cable modems’ higher speeds vs. DSL. However, as AT&T and Verizon move forward with their respective upgrades to offer higher bandwidth speeds, the cable marketing advantage may be minimized.

So the bottom line… If the technical reasons and the marketing reasons for a public policy position become increasingly blurred, maybe one day the cable operators will be changing their tune on ‘Net neutrality – especially if the telcos start to make real money by charging for preferential traffic handling.