Levels of Internet Service Providers - Dissertation Example

? Internet Service Providers Number Assignment Reference: BIS2/Jan11 Number of Words: 2,000 Q.1 Outline and discuss the various arguments for and against ISPs being allowed to offer differing levels of service based on what business customers are prepared to pay for. There are economic benefits associated with allowing ISPs to offer different levels of service based on what the business customers are prepared to pay for. By not treating the Internet traffic equally, ISPs can benefit from being able to charge premium rate on customers who are willing to pay more for better quality Internet services (BBC News, 2010). In the long-run, making it legal to allow ISPs to charge premium rate for “priority services” will open new business opportunity for ISPs to earn more money which eventually can be spent on further improvements on their existing Internet infrastructure or the need to build new fibber networks (BBC News, 2010; Blodget, 2010). On the contrary, there are also a large group of people and business organizations who will be negatively affected by implementing differential pricing on Internet services. For this reason, there are a lot of individuals who are against making it legal for ISPs to offer different levels of Internet services based on what the customers are willing to pay for. By allowing the ISPs to offer low market prices for poor quality Internet services, ISPs will have the edge to convince more people to pay more money for faster Internet access. It means that the end-customers will have to shoulder a large amount of money for using more Internet bandwidth (Blodget, 2010; Jarvis, 2010). Two-speed internet aims to charge premium prices on content makers and customers who are willing to pay more for “fast lane” access (BBC News, 2010). The problem with making it legal on the part of the ISPs to offer “two-speed” Internet connection is that only a few Internet users will be able to afford paying the top-tier Internet services. Since there will be millions of Internet users who will not be able to pay premium price for high quality Internet services, there is a strong possibility that the number of people who will access or upload their personal videos on YouTube or improve the current Internet services offered Google will negatively affected once the two speed internet connection is implemented (Jarvis, 2010). As a result, the number of audiences these online advertisers are targeting may eventually shrink. Net neutrality is referring to the principle wherein “data transferred through Internet services are treated with equal priority” (Stair, Reynolds and Reynolds, 2010, p. 275). It means that ISPs are obliged to collect equal payment from each of the Internet users regardless of whether or not the end-users are using more or less bandwidth. Implementing the two-speed Internet policy or differential pricing in UK can lead to the end of the Internet. Since it will be costly on the part of the Internet users to pay for Internet services, the overall expected Internet traffic will decrease. As a result, the business of content providers and online advertisers like Google and Facebook are expected to become less effective. This is the primary reason why Google and Facebook are strongly in support of net neutrality for landline and wireless networks (Maisto, 2010; McCarthy, 2010). Q.2 Discuss the extent to which it is valid and useful to treat all “data” as being equal in the context of it being transferred across the internet. Net neutrality serves as a guide in terms of preserving the users’ freedom to have access to an open Internet. In other words, the context of net neutrality requires all data being transferred across the Internet should be treated equally provided that these data are legal. As explained by Andersen and Gray (2008, p. 289), net neutrality requires all ISPs to avoid promoting discrimination among its customers by offering speed-up or slow-down access to Web-based contents. Morley (2008, p. 103) identified web-based data or contents in the form of “plain text, graphics, animation, photos, sound like voice over internet protocol (VoIP), videos, and the use of three-dimensional virtual reality objects”. Aside from being able to access unlimited websites, it means that the Internet users should be able to access data available on the Internet (i.e. access to online TV, listen to online music on Grooveshark, Last.fm, or Hype Machine, watch online music videos on Hulu, YouTube, or Vimeo, YM, Skype, access to online social network like Facebook or Friendster, and access to search engines like Google, Yahoo, or Bing) free of charge (Morley, 2008, p. 354). Although net neutrality requires all ISPs not to discriminate its customers’ decision to transfer data across the Internet, there are still some limits and considerations that need to be considered before making the process of data transfer valid. In line with this, Wu (2003) revealed that there are some ISPs that implements either contractual or architectural limits when it comes to data transfer. In most cases, ISPs could enforce their contractual policies which are often stated in their “terms of use” (ibid, p. 158). Data transfer that is not in accordance to the ISPs or content providers “terms of use” is considered less valuable data. Financial institutions like BSP offers a wide-range of online banking services which enables the customers to access their account using a computer, mobile devices, and electronic terminal provided that the customers abided with the “terms and conditions” (BSP, 2011; Comcast, 2011). With regards to data transfer, Wu (2003, p. 160) revealed that BSP reserves the right to restrict commercial uses of broadband Internet connection particularly with regards to the use of Virtual Private Network (VPN) services since this type of services allows the users to communicate with their business partners or customers using a secured connection. For this reason, BSP may end up charging the users with business-class prices (Wu, 2003). Comcast published its user policy when it comes to the use of high-speed Internet services as a way to control data transfer that are “illegal by nature (i.e. materials or data that are libelous, infringes intellectual property rights, obscene, or anything that promotes criminal activities), infringes the rights of other people, or interferes with or interferes with the enjoyment of the High-speed Internet services by others” (Comcast, 2011). Aside from preventing the practice of child exploitation through the use of high-speed Internet services, implementing the user guidelines or terms and conditions enables Comcast protect its customers from being able to receive or transmit unsolicited commercial data or messages which are classified as “spam” or unwanted advertising materials which can be easily circulated using Trojan Horse programs or encryption circumvention devices, viruses, and security attacks (ibid). Because of the need to highly regulate the use of the Internet services, ISPs are given the right to block, remove or censor contents that are being uploaded or downloaded by its valued customers. Since most of the ISPs are charging its customers with a flat-rate pricing, ISPs are being challenged to find ways on how they can effectively avoid congesting the network. In trying to improve the online Internet services offered by the global ISPs, there are some internet service providers that are currently imposing limits with regards to its customers’ bandwidth usage. Specifically the exclusive right given to ISPs in terms of regulating and controlling the information being transferred across the Internet is very much applicable when managing and regulating content forums, private chat, and e-mail concerning issues related to data or contents that can be offensive to other people including texts, photos, or videos that are indecent and disturbing (AT&T, 2011). As a result of interfering or monitoring the data transfer of its valued customers, ISPs like Comcast have the option to remove repetitive files that could only trigger network congestion. It is a common knowledge that the use of an open Internet promotes free market competition among the players within the IT sector. For business profit reasons, there are some telecommunication companies that are strongly supporting the blocking of VoIP or peer-to-peer networking because the presence of this particular Internet technology could significantly affect the decrease in demand for long-distance telecommunication services (Vonage, 2011; Wu, 2003). The same concept applies with regards to the business impact of publicly promoting the free access to online books as compared to the same books being sold in the local bookstores or the free access and downloading of music videos as compared to the CDs being sold in the local music stores. To ensure a safe and secured Internet service, it is understandable that ISPs should be responsible in monitoring and regulating the data transfers that its valued customers are uploading or downloading from time to time. However, allowing the ISPs to implement price differential in its services can be very costly on the part of the Internet users (Blodget, 2010; Jarvis, 2010). In line with this, ISPs like AT&T or Comcast will have the option to block the services offered by Google Maps or Facebook in exchange for additional fees on top of the monthly Internet connection fee (Ciarlo, 2011). By implementing price differential on Internet services, ISPs will have the power to block special Internet features or content providers or social networking sites in exchange of an added monthly services charge. To protect the welfare of the Internet users from abusive ISP companies, it is important and valid to treat all “data” as being equal in the context of it being transferred across the internet. Q.3 What do you think the impact of such differential charging for internet services would have on your current organization (or one with which you are familiar)? Founded back on February 2004, Facebook managed to become one of the most prominent and widely used social networking sites today. During the past few years, Facebook’s ability to capture the interests of millions of people around the world made the owners of this particular social networking site able to increase its annual revenues and profit from its valued advertisers (Carlson, 2011). In line with this, Exchange Wire (2010) reported that Facebook was earning as much as US$1.28 billion from its display advertisements as of 2010 and is expected to increase up to US$1.76 billion on 2011. Facebook does not directly charge its users a fee for its social networking service website. This is the primary reason why Facebook is able to continuously increase the number of its active users. As of 2011, the number of active Facebook users who spend more than 700 billion minutes each month has reached more than 500 million people in 190 countries all over the world (Facebook, 2011). Vara (2007) explained that Facebook is aiming at selling customized advertisement banners to its potential online advertisers. Because of the large number of active online users that goes in and out of Facebook website opens a new business opportunity on the part of the Facebook founders through online advertisements. Aside from inviting more online advertisers to advertise their products and services through Facebook, the popularity of this particular social networking website also leads to the development of substantial increased in its stock returns making Facebook able to increase its private placement up to US$.15 billion during the first quarter of 2011 (Christ, 2011). Most of the Facebook users who are strongly patronizing the use of this particular social networking site are mostly composed of the young individuals and unemployed or part-time employed individuals who have a lot of time trying to communicate with old time friends, playing online games, or simply spreading some video links or news reports that they find interesting or useful to read. Likewise, a large portion of these active Facebook users are spending time playing online games free-of-charge. Considering the British Government’s decision to allow the ISPs to offer a “two speed” internet service could adversely affect the number of Facebook’s active users. Even though the implementation of price differential could somehow increase the business profit of ISPs and Facebook, requiring the Internet users to pay more for fast internet access could make some of the Facebook users who could not afford to pay higher monthly rates for faster Internet connection may simply choose to limit their visit on Facebook. Online advertising is less effective when there is less traffic of people who goes in and out of a social networking site. As a result of a significant decrease in the number of active Facebook users, the ability of Facebook to earn more money from its online advertising projects may be adversely affected by these changes. This is possible because the number of Facebook’s active online advertisers may end up having less faith over the ability of Facebook to invite and convince more online Facebook users to consider purchasing the products and services being offered by Facebook’s online advertisers. *** End *** References Andersen, R., and Gray, J. (2008). Battleground: the media, Volume 1. Greenwod Publishing Group. AT&T. (2011). AT&T DSL Service—Terms and Conditions. [online] Available at: [Accessed 17th April 2011}. BBC News. (2010, November 17). Minister Ed Vaizey backs 'two-speed' internet. [online] Available at: [Accessed 17th April 2011}. Blodget, H. (2010, August 5). Business Insider. Stop Moaning About "NET NEUTRALITY" -- Of Course ISPs Should Be Able To Charge Higher Rates For Premium Traffic. [online] Available at: [Accessed 17th April 2011}. BSP. (2011). Retrieved April 17, 2011, Electronic Banking Terms & Conditions. [online] Available at: [Accessed 17th April 2011}. Carlson, S. 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