It’s been framed as a fight for freedom but Net Neutrality is really a battle of business models. The outcome will almost certainly affect We The People’s wallets or/and Internet experience so we’d best keep a wary eye on everyone who is trying to “help” us.

The latest skirmish began last Thursday when the Federal Communications Commission voted unanimously to begin work on formalizing a set of rules that would, among other things, bar (PDF link) Internet service providers from blocking legal content or altering the delivery speed of content based on who owns it, who created it or who wants to access it.

The FCC has stated that Thursday’s vote simply opens the subject for official discussion, with the goal of codifying principles that have been applied on a case by case basis over recent years. Many, many months of discussion are expected before anything becomes law. But the battle lines have been drawn.

ISPs argue that they own the infrastructure that delivers the bandwidth, they have to maintain it and support their customers and therefore should be able to manage the services they provide in order to reduce network congestion and maximize profits. Internet Application companies, businesses who offer services and content via the Internet, are usually in favor of Net Neutrality because they want to get their stuff to customers without having to pay more to do so.

One of the ways an ISP could ramp up profits is to make deals with Internet Application companies who would pay more to provide consumers with an optimum experience. If, say, your company streams video you could pay an ISP to ensure that viewers can access your service at the best possible speeds. So the people watching your videos will be happily munching popcorn while your competitor’s viewers are throwing their popcorn at their computer’s screen in frustration.

Pay-for-optimum-play service agreements would also affect small businesses and entrepreneurs. If you are a kid in a dorm room with a few bucks and a plan for the next Google, Twitter, YouTube or Facebook you may find that a big corporation can deliver a less-innovative offering more effectively because they can afford to pay ISPs for first class delivery service.

Net Neutrality rules are intended to ban such speed machinations but the FCC’s Net Neutrality proposal specifically does not block the practice of “throttling,” which typically involves reducing the quality of service provided to the ISP’s most active users after a predetermined amount of data has been downloaded. Most ISPs tend to slow P2P or other resource-hungry network activity.

The FCC’s Net Neutrality proposal specifies that broadband providers would be allowed to “engage in reasonable network management” as long as ISPs are open about the fact that they are throttling. ISPs would also be able to “develop and deploy new technologies and business models, including by offering managed or specialized services that are distinct from traditional broadband Internet access service.”

There are good arguments to be made on both sides of the Net Neutrality argument, but those who are currently shaping the conversation have apparently decided not to simply present their business case to the general public. Thankfully no one has yet figured out a way to tie Net Neutrality to Protecting The Children, but tried and true concepts like “Freedom” and “Government Interference” and “Greedy Big Business” plus “Jobs” and “Innovation” are being flung about with great abandon.

The National Cable and Telecommunications Association did a great job of hitting all the right points in their response to the FCC’s vote:

“(the organization) support(s) a free and open Internet. However, we continue to believe the broadband marketplace is an unparalleled American success story and already offers consumers an open Internet experience. So, we welcome the opportunity to make our case that investment, innovation and consumer welfare are all enhanced by continued government restraint. Given the tremendously high stakes, we hope the Commission will approach these issues with a healthy skepticism of hypothetical harms, and with a full understanding of the very real consequences that regulatory action may have on investment, job creation, and the continued expansion and improvement of next generation networks.”

The freedom from government interference rallying cry has been echoed by Sen. John McCain (R-Ariz), who just happens to be the biggest beneficiary of political contributions from telecommunications companies according to data provided by the Sunlight Foundation. Last Friday McCain introduced the Internet Freedom Act, which would prohibit the FCC from “proposing, promulgating, or issuing any regulations regarding the Internet or IP-enabled services.” in order to keep the Internet “free from government control.”

It’s easy for a tech-loving person to dismiss McCain, who admitted that he, according to an interview printed 7/13/2006 in The New York Times, has never “felt a particular need to e-mail.” But arguments made by the other side are equally self-serving and shrouded in rhetoric. As thirty venture capitalists stated in an open letter to FCC Chairman Julius Genachowski:

“The promise of permanently securing an open Internet will deliver consumers and innovators a perfect free market that drives investment, job creation, and consumer welfare. These principles should apply across all Internet access networks, wired or wireless. Investment and innovation at the edge of the network will create not just jobs but also new tools and opportunities for communication, education, health care, business, and every other human endeavor.”

Since everyone is beating the patriotic drum it might be best to reflect on what our founding fathers -- the folks who initially developed the protocols that power the internet -- have to say about Net Neutrality. Their beliefs are laid out in an open letter (PDF Link) from Vince Cerf, Stephen D. Crocker, David Reed, Lauren Weinstein and Daniel Lynch to the FCC.

This letter states that the FCC’s “network neutrality proposal’s key principles of ‘nondiscrimination’ and ‘transparency’ are necessary components of a pro-innovation public policy agenda for this nation” noting that “successful companies have deployed their services on the Internet without the need to negotiate special arrangements with Internet Service Providers, and it's crucial that future innovators have the same opportunity. We are advocates for ‘permissionless innovation’ that does not impede entrepreneurial enterprise.”

The letter then states that “One persistent myth is that …network neutrality would forbid charging users higher fees for faster speed circuits. To the contrary, we believe such features are permitted within a ‘network neutral’ framework, so long they are not applied in an anti-competitive fashion.”

Critics of Net Neutrality have warned that if ISPs aren’t allowed to extract money from Internet Application companies they are likely to start charging consumers on a per-gigabyte-usage basis. We’re far from any final word on Net Neutrality, but don’t be shocked if the combatants ultimately all agree that pay-for-play is fine as long as consumers are the ones who are paying.

For a hilarious take on the current state of Net Neutrality, check out the clip from The Daily Show below.