Net Neutrality advocates tell us that, if ISPs are allowed to pick and choose what kind of bandwidth they throttle the most, they'll, of course, discriminate against their competitors. Being the giant, evil, corrupt corporations they are (this is Microsoft and Google talking, BTW), they can't be trusted to play fair. They've already proven this by discriminating against people using P2P services.
The ISPs in question answer that those are evil people who are illegally sharing copyrighted music (every one of them), so who cares? Besides, if they didn't discriminate against those pirates, you'd never get your email. So they need to set up a special premium service where they can sell you enough bandwidth to actually watch high-quality video over the 'Net. Video that they'll sell, of course.
The problem with this particular smoke-and-mirrors round of this fight is that anyone with some sort of broad-band is already paying for premium service.
The problem with their new "super broad-band" level of service is that their infrastructure can't support the bandwidth they've already sold.
They've built their infrastructure on a sharing model. Take 1 pipe, that can handle 1,000 thingies (whatever a "thingie" is) a day, and hook it up to 4 different houses. Tell each home-owner that I'll let them use 1,000 thingies a day. It works, because Milton works from home during the day, then turns his computer off, Mildred uses her computer in the evenings after work, Martha always works late and uses it late at night, and Michael wakes up early in the morning and uses it before work.
That is, it works until Michael (the evil fiend) starts sharing his home movies on some P2P network. Now he's connected and using bandwidth (that he's already paying for) all day long. This interferes with Mildred, Martha, and Milton.
A big part of the fight is about the "last mile": where the lines snake out from the telephone poles and go to your house. That seems to be where "the pipes" get clogged up. Even if you have a ton of other companies push into the picture and add more options there, you'll still have congestion where all of their "pipes" meet to connect with...whoever their ISP is. Ultimately, everything's running through huge "back-bone" lines, most of which are owned by either AT&T, Verizon, Sprint, or a company named Level 3.
We probably don't have to worry too much about them throttling down on your music sharing so the cable companies can sell their customers smoother video. But do you want to bet that they won't take the money, if the cable companies offer?
Here's the flip side of the coin: ISPs can charge (for example) YouTube a premium, to let their videos stream faster and more smoothly. Their competitors (do they have any?) can't afford to pay that premium. They go out of business.
To a web company, the internet is basically just a public utility. If that company uses more bandwidth, it also pays a premium already. If a company bases its business model upon a particular technology, and then ISPs start penalizing that technology (because they weren't foresighted enough to realize that, someday, people would be presumptuous enough to actually expect to use the premium bandwidth they were paying for), it can destroy that business.
That is the situation, as I understand it. ISPs want to charge a premium for something we're already paying for. Google and Microsoft want the government to add new, unworkable regulations that will almost certainly be obsolete before the ink finishes drying.