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Net Neutrality-the lifeblood of the cloud

Cloud providers in the US should thank their lucky stars there’s a new guy at the FCC who is moving ahead with policies that will guarantee net neutrality.

What is net neutrality? Let me explain. No, there is too much. Let me sum up: the telco carriers that built and maintain the physical infrastructure of the internet want to charge more money for service to the biggest consumers, and throttle usage by their prix-fixe customers (home and small businesses) if those users actually try to use the bandwidth they signed up for.

In opposition to this is, naturally, everyone else. Prejudicial network pricing is precisely contrary to the expectations of a market-driven economy- you’re supposed to pay less and less as you buy more and more. It’s predatory and would be drag-iron for the entire online economy to say the least- imagine if HP actually charged more per server sold to its best customers? Now imagine HP was the only server vendor who served your zip code. Sorry for the horrifying thought, all you hardware buyers.

To put the fight in perspective, you could combine en suite, Microsoft, Yahoo, Google and Amazon and you’d have a company almost as big as Verizon. Verizon is only one of four major telecommunications companies in the US.

To date, the telcos haven’t been able to browbeat the FCC into letting them leverage their monopoly into predatory billing, partly because opposition is so stark and partly because there is a vestigial sense that utilities that provide a public benefit ought not to be allowed to victimize the public at large.

The implications of net neutrality for the public cloud are plain; because it’s basically margins-driven, any squeeze from carriers would hamstring providers. Amazon’s cloud success is driven precisely by the fact that using it is easy and costs about the same as running your own server, minus the investment.

If it became more expensive to run a cloud server than a real server, which prejudicial network pricing would assuredly do, cloud adoption would stumble badly. Little users would stick with hosting; enterprises might still move into private cloud, but there would be no compelling reason for them to stick appropriate applications and data in the public cloud

The true benefits of cloud computing– cheap, elastic and massively parallel computing power at the finger tips of the bright young things in industry and academia– would never be realized, since Comcast or Verizon would be lying in wait to pounce on data crunching projects and surcharge them.

On the other side, the SaaS explosion would fizzle if suddenly had to pony up for its millions of users, for instance- not a single free service out there would stay open a day past the day it had to charge to make up for overage charges, nor would the umpteen start-ups predicated around cloud, both using and selling, get off the ground if they had to plan for a crop share with their telco landlords if the business got popular.

Without net neutrality, in short, cloud would go where its ancestors — utility and grid — went, to the backwaters of research or in the vast wastes of enterprise, just part of the gaggle of professional services sold to the large corporations. Utility and grid ended up there because they lacked all the things that cloud realizes- speed, ease, availability and economy. Cloud computing is supposed to obscure the infrastructure layer; it needs a level playing field to do that.

So Amazon, Rackspace, Google and all the others should wipe their brow in relief that they’ve got at least 3 or 4 years to really let the whole idea take hold and become a mainstay in the economy rather than a sideshow.

That doesn’t leave much time for dilly-dallying.

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