I lifted this question from John Carroll at ZDNet: Net Neutrality: Will Netflix destroy the Internet? [1] But the basic discussion is, how can internet carriers afford to pipe unlimited video at the same price that they charge to support slow and relatively sparse packet data like email and pictures?
Back around Y2K I was a doubter about the ability of a packet network to supply everybody with video. Crappy video needs a couple of megabytes a minute. Good, full screen video needs a megabyte a second or more. Also, the broadcast principle was that there was one transmitter for every million viewers. With the web, every viewer essentially needs a separate transmitter, and a separate wire or wavelength to run the route. Some networks can set up proxies so that (for example) all the Florida viewers of a live webcast might actually be seeing a retransmission from Florida, rather than requiring all those millions of channels to pipe through from L.A. or Prague, or wherever.
NetFlix delivers high definition video on demand. Every viewer commands their own transmitter from the nearest NetFlix server farm. The network (AT&T, Verizon, Sprint, etc) simply has to pass it through. But bandwidth does cost money. Less every year. But with the rising popularity of online video, the demand is rising exponentially faster than Telco’s can afford to enlarge.
How could a provider get away with charging people proportionally? A typical household might now be using a few dozen megabytes a day, excluding video. A two hour DVD movie is over 4,000 megabytes. It can be streamed with some compression. But that is still a lot of data. Now try Hi-Def.People want to keep paying the old text-web-with-some-pictures rates for full video.
Net Neutrality is important. But in the short run, it may take a hit as powerful companies try to stay afloat while giving people what they want.
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