The term network neutrality has been used lately to refer to a number of different ideas. One is that networks should be operated without any protocol filtering. Another is that the one and only business model for an ISP is one in which there is a flat fee for unlimited access at the specified line rate. And still another is that networks should be available to all, equally, regardless of their geographic location. There may even be more ideas wedged uncomfortably into this single term's common use.
No wonder we're fighting!
So, does net neutrality prevent ISPs from managing their networks? Does it mean that an ISP cannot favour some traffic over other traffic? Does it mean that some towns or homes, perhaps in rural areas, are guaranteed equal access to networks available in more heavily populated or wealthy areas?
First, I don't know anybody who argues that an ISP cannot manage its network. Monitoring for things such as link utilisation and how heavily taxed packet forwarding components (routers) are over time is a normal part of operating any large network. Responding to problems found in such monitoring by adding capacity, upgrading software or even re-designing networks are all normal parts of network management.
The real touchy point, when it comes to network management, is whether an ISP can decide that some application traffic does not get the 'hands-off' treatment that the user expects, that the ISP can instead slow some traffic down or stealthily terminate some sessions based on the application protocol or the user involved, in the interest of keeping resources more available to all. If the ISP does this without transparency to its users, that isn't network management. It's false advertising.
Then there's the subject of whether net neutrality allows for a business model in which some traffic is expedited. Those who oppose net neutrality because it would appear to preclude differentiated services are combining two issues in an odd way. Though I think the dishonest favouring described in the previous paragraph is ultimately a problem for users and for the development of new network services, I believe that expedited network traffic handling as a business arrangement, articulated in a service offering and an SLA and available to anyone willing to pay for it, can be a reasonable and fair business model.
Bandwidth and the consumer
The ISPs have traditionally operated more as bandwidth providers than as content providers (though some clearly want to play in both spaces going forward). The business model of being a bandwidth provider has its real challenges. There are ISP costs that really do scale with user load, but also a user community that much prefers flat-rate pricing to usage-based pricing. And as these users become consumers and producers of more rich media, global IP traffic is growing rapidly while ISPs revenue, linked more closely with the number of users, is now growing much more slowly.
ISPs naturally want their network investments to serve large communities in a cost effective way, and so count on significant statistical multiplexing. Many ISPs become concerned, quite reasonably, when network use by small numbers of resource-hungry users account for more than their 'share' of the finite resource, while the users maintain the reasonable belief that they paid for a certain amount of access bandwidth and just want to make full use of it some of the time.
In their bandwidth-provider role, ISPs have paid much attention in recent years to "file sharing" applications and users, and the response has sometimes been to manage their network to limit such use, despite not being crystal clear to their users that this is what they do. This part of the argument often gets emotional, probably in part because of the perception of illegal or immoral use of the network and also because there are third parties who have financial interests in some of the content being shared and they are motivated to apply legal pressures. But from a strict capacity standpoint, it's still really just a matter of finite resources and significant diversity in demand.
Can't the users just select the ISP who will treat their traffic as they expect? Unfortunately, time has shown that the market is not organically providing this solution, at least in the consumer area.
Many neighborhoods and regions cannot support two or more bandwidth providers competing on the strength of service and price, given the investments required to operate. Providers recognise this and either select their areas of operation accordingly or "compete" only half-heartedly in some spaces. Perhaps this situation will improve over time when high bandwidth wireless options become more available as an alternative, but I'm not holding my breath.