As Internet Pipes Fill, Can ISPs Stay Neutral?

The Journal ($) takes a look at the Internet’s potential capacity crunch as bandwidth-heavy applications like peer-to-peer transfers and video grow to clog more and more of service providers’ pipes. The story cites a January report from Deloitte Touche Tohmatsu, which says “One of the key possibilities for 2007 is that the Internet could be approaching its capacity.”

The story argues that equipment manufacturers like Cisco will help ISPs keep up with demand by making smarter routers and switches that manage Internet traffic better than today’s gear.

“Cisco and others are producing new gear aimed at better managing Internet traffic by prioritizing which bits of data are transmitted across the network. That contrasts with older equipment, which fulfilled a more basic task of moving vast amounts of data between countries and cities.”

Packet prioritization already exists — like the way T-Mobile’s VoIP routers make sure that your phone calls aren’t interrupted by someone else’s movie download.

One potential problem: prioritizing bits of data, even if beneficial to both ISPs and Internet users, conflicts directly with the “net neutrality” principles hawked by consumer groups and big content companies like Google and Amazon. Net neutrality backers maintain that ISPs must not prioritise any sort of network traffic, as speeding up certain types of bits inherently slows down others.

No net neutrality laws exist today, but AT&T, the largest U.S. telco, agreed to uphold to some net neutrality principles — not to market any sort of tiered service offerings, where it could charge a content company for priority access to its pipes — for two years as part of its $85 billion deal to acquire BellSouth. We bet that we’re unlikely to see any real net neutrality legislation — the telcos have a lot of lobbying weight. But if we did, it would throw a road block in the way of Cisco and other gearmakers — and perhaps, Internet users.