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Net Neutrality Doesn't Matter

Stocks in this article: NFLX T CMCSA GOOG

Last summer, Stacey Higginbotham of Gigaom examined her own bill. Her home has three PCs, two iPads, two smartphones and two set-top boxes, but no pay TV package. Her usage never went above 125 gigabytes per month

Compare this with my Comcast data cap of 300 gigabytes a month, charging $10 per month for every 50 gigabytes above that figure.

But let's say the carriers press their advantage and start trying to shake down content providers large and small. Can Internet denizens fight back? Yes. That's because the "last mile" data providers like Comcast  (CMCSA) and AT&T don't control the core of the Internet. The cost of "peering," moving data between competing networks, has been declining by about one-third each year since the century began, according to a 2010 white paper at the DrPeering web site. It should get below $1 for each commitment of one megabit per second, a constant stream at that speed, this year.

This makes it cheap for someone to compete with a service provider trying to use its monopoly power to squeeze a market. Simply find the nearest fiber and use a network of WiFi radios to move data around. If carriers squeeze too hard, this becomes an opportunity. Especially if a large network with a commitment to open access, like Google (GOOG), decides to get involved.

There may be ways for carriers to charge for low latency, something gamers covet very much. A guarantee of quick reaction time for people playing games thousands of miles apart could really sell. The Court of Appeals decision means this can now be offered. That's a good thing.

But video isn't an Internet-busting service any more. What Internet advocates fear is cable operators getting between subscribers and the video they want, charging monopoly-level rents to access it, favoring their own video offerings and using their market power to squeeze out video competitors.

If that should happen, the Court of Appeals ruled, the FCC could still decide to treat the Internet services of AT&T and Comcast as common carriers, subjecting them to all sorts of rules they would want to avoid.

Ultimately, very little is going to happen. While Internet advocates were in Washington, engaged in their net neutrality debate, I think the technologists of the Internet have moved beyond it.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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