Net Neutrality debate: No free lunches, so why ‘FREE BROADBAND’?

Posted on September 7, 2008  /  12 Comments

We pay for other utilities (electricity, water, phone services) by the amount utilised, but usually a flat rate for broadband depending upon the bandwidth. I have earlier compared this to paying for water based on the diameter of the pipe, instead of liters consumed.

The following letter by a reader to USA Today highlights similar concerns – may be in another context.


James Lakely – Chicago

Federal Communications Commission Chairman Kevin Martin’s reference to the phone industry exposes the weakness of his argument to provide free broadband access in the USA.

Yes, copper phone lines were, for decades, “the main means of communication for millions of Americans.” But the government didn’t invent that technology, nor give it away for free. The market provided, and Americans paid for it via private transactions. Even if one views broadband as a public utility, why should it be free while Americans pay for basics such as water, garbage and, yes, phone service?

The FCC’s proper role is to regulate as lightly as possible so the market can develop innovative technologies while competition keeps prices affordable. Just as there is no free lunch, there is no “free” broadband.

(Open to comment)


  1. This is the thought process of a selfish member of the affluent elite.
    Take away the fixed rate broadband, and I drop out of the net. That the bottom line for me. Now let others have their say.

  2. The issue in the US was that Comcase tried to impose caps on connections given to customers as ‘unlimited’. They should not be allowed to change the conditions of the package after the customer has subscribed to it.

    Indeed the FCC should allow the market to develop. In a market full of ISPs the one’s who impose arbitrary and unreasonable caps will eventually fail or fail to grow similar to what happened with Dialog WiMAX and its FUP.

  3. Janaka,

    I will give a detailed response to your comment elsewhere, but two quick questions now.

    1. Do you seriously think 250 GB an ‘unreasonable’ cap (even for a power user in USA)?

    2. If the market takes care of the operators’ so called ‘discrimination mechanisms’ as you say, why we need further regulation? Why bring govt to the equation?

  4. Ever heard of a all-you-can-eat-buffet?

  5. Dear Chanuka

    The market WILL take care of the operators’ ‘discrimination mechanisms’ but after paying for one ISPs service we need the regulator to ensure that the ISP does not try to rip off the customer and imposing a cap is certainly that.

    Someone had said not so long ago that 640k should be enough memory for anyone! How can you say 250GB is ‘reasonable’ or not? One subscribes to an ‘unlimited’ package to get unlimited use and no one should be allowed to change the game from a test match to a 20/20 mid-game.

    FYI, its not free lunch they people want. Buffet lunches do exist and people who PAY for them expect a buffet and would not accept restrictions on the number of visits to the buffet table or on the amount of chicken they can serve themselves. If they sell the package as unlimited then how can they ethically change the conditions (even though the small print says they can)?

    Like in any field we need regulators to ensure that no anti-competitive practices take place either.

    I wonder if you can remember our ‘pioneering’ ISP, Lanka Internet. They were pioneering in more ways than one. They offered a dial-up package (circa. 1996) which was proclaimed to be unlimited for Rs. 1500/-. After sometime they realised the stupidity in offering a service for that price and started to profile users and shift high users to a different modem pool (which had TWO modems). The idea was to frustrate them to unsubscribe and they succeeded. LISL got a lot of bad rep among users because of this.

    Sometime later Celltel offered something called an Office Package with rates that were the lowest at that time and after a period they suddenly announced that they were moving ALL the users to different (much more expensive) packages. They had realised that people were using their phones a lot because of the cheap rates.

    In both these instances the govt. did not do anything to protect the consumer. The users were inconvenienced and had to pay to get new packages as it was not possible to continue on the same packages.

    Lanka internet is no more now and Celltel is relegated to 3rd place from its market leader position in the late 1990s. Maybe the attitudes of these companies were wrong and they deserved what they got but one needs the regulator to protect us in the short term.

  6. Good point. But a buffet is always a cross subsidy. Those who eat less subsidie gluttons. However it does not sound too unfair because this subsidy is not large.

    When it comes to Internet the difference in consumption can be massive. So when the bandwidth is limited the only way the operators can allow it is by reducing quality. (We have seen this from our research. The quality of limited packages is always superior to that of ‘unlimiteds’)

    The analogy is the hotel compromising the quality of food so that everyone consumes ‘unlimited’ quantity. Is this fair by those who eat less? Why should they face a quality drop in their food for somebody to eat more?

    Also note that buffets are possible only under certain conditions and not always. It is feasible only above a certain level of demand and only when supply is high enough. Will a hotel ever run a buffet with limitations in the supply? I doubt.

    Let me ask a question: Is there anything seriously wrong in asking everyone to pay depending upon the quantity of food they consume?

  7. Janaka,

    Net Neutrality is nothing about operators not keeping their promises, as many have misunderstood the issue. We all agree if something is promised that has to be delivered. No doubt. (However, first it is worth looking what is promised. Not many offer comprehensive SLAs)

    The fundamental question I have been asking is why make companies promise what they practically cannot deliver? The outcome, as we have seen, will be serious quality drops for everybody.

    So we either let:
    (a) Everybody suffer by opting for Net Neutrality or
    (b) Majority of the users (the light users) get acceptable quality making heavy users pay for what they use

    This is a common situation with all common resources. They cannot be handled the same manner as public goods.

  8. There’s nothing wrong. We’ll just be going back in time.

    Up until the Internet, humans were always playing zero-sum games with eachother and the environment. But with the abundant nature of the Internet, communication became more of a free thing. And we all know, the rules of game theory change drastically from selfish intentions to collective wellbeing when communication is involved in the game.

    That’s why me (and many others) hold the concept of Net-neutrality so sacred. We are looking forward and hoping that it will bring forth a new era in human civilization.

    If we allow it to become another product of the market, well, it’s more or less like selling law enforcement/justice in an open economy. I definitely don’t want to include the price of the Internet in my life’s sensitivity analysis.

    I’m not going to write an essay about this, but it’s sad to see people in the telecommunication industry not seeing the Internet’s true potential.

  9. Me,

    Pity that you still fail to get my fundamental argument. You keep talking about ‘the abundant nature of the Internet’. This may be true to some extent (it is changing) in west where they have enough infrastructure built already, but definitely not in the part of the world I live.

    I will be grateful if you can show me some data how abundant Internet is for us. Do you have any idea how limited (and thus costly) the international bandwidth for South Asia and some South East Asian countries like Indonesia?

    I repeat, as far as we are concerned Internet is a common resource with serious limitations, NOT a public good as law enforcement and justice. Appreciate if you understand the difference.

    If I see anyone behave selfishly it is only the heavy users who conveniently expect others to subsidise their heavy use in the name of ‘Net Neutrality’ If this is not selfishness what is?

  10. Notice to the Public………….!

    Hi People, Dialog is introducing unlimited broadband via HSDPA
    But pls dont fall for their mis-leading ads. Because the actuall bandwidth under 3.5G (HSDPA) is less than 2MBPS even though they advertised as 7.2 MBPS.

    If they cant give 7.2 why do they advertise it. At least 3 MBPS would be reasonable. But its just 1.5MB most of the times under 3.5G network.

    And you cant even browse a web site properly when it comes to GPRS. Pls be very very carefull if you are planning to go for dialog HSDPA unlimited broadband. Pls tell this to everyone you know. Rental is 3000/- bucks AND if you are ok with 1.5 MBPS and that is also only under 3.5G network, then go for it. others pls be aware.

    MBPS = Mega BITS: you have devide the value by 8 to get the actual data rate)

    KBPS = Kilo BITS per second, again you have to devide it by 8 to get the actual KB/s value.

  11. Our policy is to keep as much as possible, and not delete, comments (unless there are too strong reasons to do so). True for the above as well – though it refers to a particular operator.

    We offer right of reply to Dialog Telekom and sincerely hope they would take it in the right spirit and respond.

  12. I think you must be getting old, Chanuka. I for one am willing to sacrifice my present to see a brighter future. And I am hopeful to see that change within my lifetime.

    But this argument is not fair to you because I’m hiding behind my anonymity. So I’ll stop here.