Copowi! Kablooey! An ISP dons superhero tights

How much would you pay for an Internet connection from an ISP that guarantees a neutral network, bills itself as a "social enterprise" instead of a traditional business, and sends free Ubuntu CDs to every new customer?

In the US, the battle over network neutrality has captured the public imagination in a way that it has yet to do in Europe or Australia. Debates over network neutrality occur in the media and in Washington, but new ISP Copowi wants to give customers a way to vote with their dollars as well. When it opened its doors for business two weeks ago, Copowi billed itself as the country's first ISP to guarantee network neutrality, and it now hopes to prove to other ISPs that the issue matters enough to consumers to provide a competitive advantage, even if prices are higher (and they are).

Copowi already offers service in 12 Western states, but "absolutely" wants to go national—even international. Copowi senior partner George Matafonov tells Ars that he sees no reason why the company couldn't eventually expand into Australia, Canada, and the UK.

But for now, with a few hundred subscribers, selling service in Australia looks a long way off. I spoke to Matafonov (an Australian himself) about Copowi's business model, its challenges, and whether it will really remain neutral if a handful of peer-to-peer users start slurping up most of the available bandwidth.

Your gateway to a neutral 'Net

Copowi's main pitch is a fully neutral network, which it defines as one that provides "equal access to all web sites and online services." The idea is that usage will be unrestricted and traffic will not be shaped, throttled, or prioritized. According to Matafonov, the major telecommunications companies want to "privatize the Internet" because greater control leads to greater profits. The eventual outcome could become something more like cable television than like the open Internet we know now, and Copowi strongly supports SavetheInternet.com's campaign to preserve an open 'Net.



George Matafonov

But Copowi doesn't own any "last-mile" lines to people's homes, which means that it needs to lease DSL lines from local telcos out west in order to offer service (interesting side note: although companies like Verizon and AT&T scoffed at the idea of offering part of the 700MHz band as a "wholesale-only" license, both firms run thriving wholesale businesses of their own already). This puts Copowi at the mercy of the telcos that it leases lines from and means it has only limited control over its network neutrality guarantee.

Matafonov says that Copowi has had no problem in its negotiations yet, though. The telcos have so far been happy to provide unregulated access if Copowi is willing to pay for the bandwidth.

Because of this, and because telco wholesalers rarely resell lines at competitive prices (they don't want to create their own competition), Copowi's service runs toward the pricey side of the broadband spectrum. Users in Colorado, for example, will have to cough up a staggering $33.95 a month for a 256Kbps DSL connection—expensive by any standard (except perhaps in Kazakhstan).

Copowi's higher-end plans are actually far more competitive when it comes to price. A 1.5Mbps connection is still not cheap at $49.95 per month, but a 7Mbps link isn't a bad deal at $59.95 a month.

Matafonov admits that high wholesale rates are "one of the key questions" that the company faces, but he hopes that a small niche of customers will be willing to pay the premium for a guaranteed neutral connection. He also hopes that prices will drop as subscriber numbers grow and Copowi can negotiate better contracts. For now, though, Copowi targets those who don't make "cost" their primary concern when choosing an ISP.