Consumers rate Verizon Fios

Verizon customers who pay $70 or more for "unlimited" FiOS broadband Internet service are becoming very familiar with the little "loading" graphic that appears much more frequently lately, when the video and audio pause because of network congestion -- or, as conspiracy theorists suggest -- purposeful throttling.

One longtime FiOS customer in the Washington, D.C., area said he had never seen the "loading" graphic on Netflix until this month. 

Why now? One potential explanation is that a federal appeals court ruled last month that the Federal Communications Commission (FCC) does not have the authority to impose net neutrality rules requiring that Verizon and other carriers treat all traffic equally.

The idea behind the Internet when it was founded was that everyone could transmit and receive data on an equal basis, limited only by the speed of their local connection to the Internet. 

Disappointed Dilberts

Telephone and cable companies -- who once imagined that they would be the movie and entertainment titans of the future -- find this irksome and have been arguing that major content distributors like Netflix should pay more for using so much bandwidth.

The content distributors reply that they pay millions of dollars for their Internet connections, while consumers collectively pay millions for their local connections through Verizon and other companies and that the "backbone" costs are the responsibility of the carriers. (This is vastly oversimplified but a more detailed explanation quickly becomes yawn-inducing).

An argument conveniently overlooked by the carriers is that if Netflix suddenly went away, most of its subscribers would likely switch to Hulu, Amazon Prime and other video distributors, generating just as much traffic as currently exists but perhaps spreading it out over more distributors.

While technically, backbone issues aren't covered by net neutrality -- which formally applies only to "last mile" service -- the debate over who pays for heavy video usage is only likely to get worse and seems certain to play a role in the Comcast-Time Warner merger, which would create a broadband collossus with a great deal of power over what consumers are able to see ... and how many "loading" graphics they have to endure in the process.