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Web Hosting And Net Neutrality In A Nutshell

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Web Hosting And Net Neutrality In A Nutshell

Web Hosting And Net Neutrality In A Nutshell

Net Neutrality is a phrase which is being sprayed all over the internet without providing a simple and clear explanation to the layman. Web Hosts are as affected by Net Neutrality decisions just like any ordinary internet user. Many people are quick to point out that Web Hosts also practice data discrimination and should be placed on the same guillotine as ISPs. However, this is not the case as there is a huge difference in providing Bandwidth and in providing a web hosting service. This article points out a couple of reasons why the Web Hosting industry also embraces Net Neutrality with open arms and why a comparison maybe equal to apples and oranges.

Low Entry Barriers

Unlike Internet Services in any country, it is pretty simple for a person to start a web hosting business. To become an ISP, there are several legal and business hurdles that one must cross. It’s not an easy task and needs deep pockets and great influence to start the business. It is on par with a Telephone Company or Electricity Supplier. On the other hand, starting a web hosting business can be done with little or no investment. Web hosting resellers don’t even need to own a server or commit any sales to start their business. A small or medium host can spend a couple of dollars every month and lease a hosting server. This means that to enter into this industry the cost is very low and regulation is negligible. There is no Government control or paper work that needs to be done to sell hosting space. This automatically increases the number of players in the industry.

Intense Competition

The low entry barriers cause such intense competition, that the ultimate beneficiary is the end user. If one web host starts acting restrictive, people can easily switch to another one without much ado. Due to customer-facing side of the business being virtual and online, there is easy accessibility and no physical hindrances  to switching. However in most places around the world, the number of ISPs are miniscule and in rural areas there may not even be more than one or two. This kills the competitiveness of the business and gives a dominant position to the ISP, which can be misused to exploit subscribers. Often, when there are only a couple of ISPs operating, it leads to a sort of cartel and price fixing which cannot be questioned. Anti-competition laws around the world prohibit such behavior and try to break up this dependence.

Cut-throat Pricing

Besides striving to offer the best service in terms of speed and resources, every web host aims to offer the best price too. The price-war is so aggressive that even customers find it hard to make a decision as they are spoilt for choice. This is exactly what ISPs don’t want. ISPs want to create restrictions among different website services or online facilities by throttling the popular ones and charging a premium for them.They may either recover the premium from the customers or may ask the web services to cough up that money. If a web host throttles traffic for a certain type of domain name and prioritizes traffic for one that he is selling Eg: .co domain names, then he will soon be out of business because all his clients will switch. As we have learnt from free online services, the consumer doesn’t like to be restricted. The more restrictions you place, the more they will shun your service.

Security and Convenience

Web Hosts do restrict certain type of traffic and also do some filtering, but this is not to create unfair competition or to get a dominant position advantage, but to ensure security and stability of their services. Eg: A host may limit simultaneous FTP connections from a single IP address to a maximum of 50. This is to prevent abuse of their FTP server and to ensure that other users on the same shared server are able to enjoy the service too. ISPs want to filter traffic to commercially exploit the end user, as they know that the end user has limited options for accessing the internet.

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