IP Democracy: Push vs. Pull Media & the Net Neutrality Debate

I was reading the Business Week article Cynthia posted about early today, and was struck by one word that seemed to highlight a key element of the net neutrality debate. Here’s an edited excerpt with the key word underlined:

[T]raditional phone companies like AT&T and Verizon…want the freedom to set fees for Internet companies such as Google and Yahoo! that push their own content over telco TV pipes.

Reading this I was reminded of a comment that I think came from Amazon’s Paul Misener in a congressional hearing. The point Misener (or whoever it was) was making is that, in the Internet model, content is not “pushed” over access pipes, it is “pulled” by end users that request it. This is a key characteristic that distinguishes the Internet from traditional broadcast and cable TV models.

Video content stored on the servers and available on the web sites of YouTube, Yahoo!, Google, NBC, etc. only streams to me via my local access pipe if I decide its valuable enough to access. And I get to choose from the ever-expanding video options on the web exactly what I want to watch, and when…subject, of course, to terms made available by content creators. If a new video or source of videos is created, I can immediately use the capacity available on my local access pipe to obtain access to that new content—no negotiations with broadcasters, cable operators or telcos required, by either the content provider or by me.

The technical quality of that content will, of course, be determined in large part by the local access data rate I pay for from my access provider. It will also be impacted by the server and Internet connection paid for by the content provider to support distribution to multiple users (i.e., if it doesn’t scale up that capacity as its user base grows, quality will degrade accordingly, which is likely to turn off customers).

In contrast, in the broadcast and cable TV industries, content is selected by companies that control the relatively small number of network distribution outlets (broadcast networks and local TV stations and cable operators), based on the dynamics of their business models and their negotiations with content providers. This distributor-selected content is then made available to end users, who get to select from the limited options made available by distributors, on economic terms (i.e., subscription fees and/or ad-support) largely determined by the latter.

And while the range of options has expanded from a handful of broadcast channels to several hundred cable channels and, most recently, to video-on-demand, the basic dynamics remain the same. Just because it’s called “video on demand” doesn’t mean I can watch any video that any content creator would like to make available. I can only “pull” from the options made available on my local cable operator’s servers, or other servers it allows me to access through its VOD offering.

The threat posed by the Internet model from the perspective of pipe-owners is that, to the extent this model is what people prefer, it turns their business increasingly into one of transporting bits, not selling and packaging combinations of access, content and services. As their business plans and the current net neutrality debate suggest, this would be an unwelcome development from the perspective of cable and telephone companies and, presumably, their shareholders.

Supporters of “neutral networks” are likely to argue that it would, however, be a welcome transition for most of the rest of the country. If this is the case, it raises the question of whether, in a market where the two overwhelmingly dominant access providers are both averse to becoming bit transporters, will the rest of the country get to choose which model it prefers and, if so, how?

Posted by Mitch Shapiro on July 5, 2006 4:30 PM to IP Democracy