Will Comcast crush internet innovation?

If you’ve been following the story about net neutrality, Comcast’s games with bandwidth throttling and the FCC rebuke of these practices, then you’ll really want to know about Comcast’s decision to place a 250GB per month ‘cap’ on your use of bandwidth.

My favorite blog that discusses this issue, Om Malik’s GigaOM, had these two posts that are a must-read if you care at all about this issue:

a) 5 Questions About Comcast’s New Bandwidth Throttling Plan by Stacey Higginbotham

b) Memo To Comcast: Show Us the Meter for Metered Broadband by Om Malik

While I completely understand that Comcast has a business to run, shareholders to please and profits to make, it is also crystal clear to even a casual observer that they now hold too much power in residential broadband.

If you don’t believe me and are in a Comcast-served area, just try to get bandwidth even close to what Comcast offers for a reasonable price and you’ll quickly find that you can’t. At my home, I have Comcast 768kbps upload/8mbps download speeds, but with their “Powerboost” technology I’m achieving ~2mbps up and ~16mbps down frequently. Qwest, for example, could offer me a flavor of DSL with 384kbps upload/5mbps download for nearly the same price. Slower is NOT better when it comes to broadband!

250GB’s per second might seem like a lot, but it’s not, and if you don’t care about what the ramifications are of this for you personally, then also consider how this will stifle innovation.

This is a defensive move by Comcast who makes their money off of distributing video (and increasingly video-on-demand). As more and more of us watch television online — and competing services from AppleTV, Hulu and others accelerate — all of that competing content will be flowing down that Comcast broadband pipe…and they won’t be making money on it in the same way.

From Comcast’s 2Q 2008 report: While High-Speed Internet and
Phone revenues have increased (though cable advertising remains flat)
Video delivery still comprises the overwhelming amount of Comcast’s revenue mix.

As we each deal with ever larger digital files like our own photos stored online, videos we post or operating systems updates or obtaining software we’ve purchased (e.g., when was the last time you bought software in a store vs. downloading it after purchase?), believe me you’ll care about bandwidth caps. If not today, within a year or so I’ll wager.

Internet Innovation
The internet is at the core of much of the innovation I write about and see all around me. It concerns me deeply that any one company (or even a handful, for that matter) can place restrictions on a fundamental infrastructure we all use and which are innovating on.

As I’ve been introduced to dozens of local entrepreneurs in Minnesota and been hearing their stories for my other publication, Minnov8, what’s become clear is that the open, unfettered, unrestricted access to the internet — and the promise of those on the receiving end having the same — is what is at risk with this move by Comcast and the very real possibility that it, as an obstacle and barrier to innovation, will become true.