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Discrimination and Transparency

  •  I am here in Zurich and happily waiting for my EasyJet flight back home… so I am in the mood to write my Blog.  Here goes….

    I have had a lot of discussion here around discrimination in telecommunication and cloud services – discriminating between consumers on how services are delivered and how much they cost.  I think most people react the same way – “this cannot be good”.  Adam Smith: “inefficient”.  John Locke: “regressive”.

    Then you begin to look around you and you see discrimination all round you.  British Airways almost revels in it.  You pay more for business class and having an attendant greet you by your name and if you are in economy you get the privilege of bowing your head as you walk through the business section in shame to the plebian section and getting your food back-handed to you by an attendant that reminds you of a bouncer.  

    Humiliating: yes. But is it “anti-competitive” or “undemocratic”? Well not really.  It comes down to getting what you pay for.  I pay less therefore I get less.  It is fair – and if I don’t perceive it as fair (i.e. I feel that I am paying too much to either smirk at the riff raff as I sip Champaign or too much for having my knees smashed into the seat in front of me – I can go elsewhere.  

    So if my telecoms or cloud provider charge me more for premium bandwidth, first choice on available CPU,  refundable VM reservations, etc. – in other discriminating on price and service – that is OK.  What is NOT OK is when I am not even given the opportunity to buy the service. In other words: “Your money ain’t good ‘round here” discrimination.  To the extent that giving up Net Nuetrality means real discrimination – where a service or quality of service is either made unavailable or at a different price for different consumers – Mr. Smith and Locke will be rolling over in their graves.

    An example would be where I own the network and I give my subsidiary preferential rates and service levels that are unavailable to anyone else.  The allocation of resources is probably neither efficient nor equitable.   In a capitalist system – the only thing that should speak is money and no one really should have the ability to refuse.  Of course, this assumes all customers cost the same to service… and this may not be true.  And if this is the case – discriminating by price or service makes economic sense.  But when it isn’t – it doesn’t.

    Unfortunately, when the Network is un-priced – in the case of “all you can eat” we do have a situation of “your money ain’t good around here”.  There is no way I can pay more to get more.  I believe that this is the real issue.  I would say Net Neutrality and “free” do not mix.  The movement to discriminate by non- market mechanisms addresses the symptoms not the disease.  The side effects are really NOT the interesting  problem.

    I wonder what Stelios would say?

    Douglas Zone
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