“In 2006, YouTube alone consumed as much bandwidth as the entire Internet in 2000.”

This stat has been cited by some of the Net’s shrewdest commentators (Michael Dell, Robert McDowell, us) to show video’s impact on the web. But while it’s catchy, this fact masks a key transformation involving consumer habits and video over the Net.

YouTube works on the HTTP protocol to stream its videos. But like everything else on the Net, the trend in video sharing is toward a more decentralized P2P system. Think of Joost and other emerging HD providers.

Since P2P is almost by definition a more inefficient distribution method than HTTP, this trend will chew up network capacity – which in turn makes broadband more expensive for the consumer – in a way that’s completely unnecessary.

Now look at this Wired article. Representatives from the ISPs and some P2Ps are trying to work out a solution creating for a more efficient (read: less costly) use of the network.

It’s a logical approach since each side has a vested interest in the other’s concerns: more P2P applications and less costly broadband.

And net neutrality? If the FCC is charged with overseeing an “all data is equal” Internet, then solutions from a common-sense effort like this will be lost. The law would undercut this kind of effort even if carriers are allowed to prioritize by application because emerging P2P apps inevitably will not fit into FCC-approved categories.

So here’s the reality:

• Consumers continue to enjoy an open Internet but are making demands – more applications, cheaper broadband.
• Multiple parties are working together to meet these demands.
• A net neutrality law threatens this progress.

The prosecution rests.

Yesterday, Rep. Ed Markey held the latest of his series of hearings into the future of the Internet, titled “Digital Future of the United States.” The first one was a mild disappointment, with World Wide Web inventor Tim Berners-Lee as the lone guest. The latest hearing was something else altogether, with representatives from YouTube, TiVo, Disney and HDNet — and the subject of “net neutrality” was on everyone’s minds.

The hearing was a big deal in the blogosphere. Because the theme for yesterday’s hearing was “The Future of Video,” Markey held up a digital video camera to capture the first-ever YouTube video taken from the perspective of a House committee chairman:

Things like this are a lot of fun, and another reminder of how far the Internet has come in the past decade. However, the rapid growth of YouTube and other video-sharing services should put us in mind of expanding broadband capacity.

Yesterday, in the video below, Cuban lamented the fight over “net neutrality” issue, which he rightly sees as a distraction from the truly important goal — bringing the United States’s broadband speeds up to the level of our trading partners in Europe and along the Pacific Rim.

As he said yesterday:

This issue goes away completely if bandwidth constraints go away.

Unlike Mr. Cuban, we don’t think that the need for QoS necessarily will go away – guaranteed packet delivery will always have its place – but we agree the “net neutrality” cause could disappear tomorrow and the world would be the better for it, so long as there was much greater broadband capacity and greater competition for providing that broadband for the consumer.

With 100 million views per day and counting, YouTube takes up much more of the limited capacity than AOL chat rooms ever did — and this is especially an issue that Mark Cuban raised over a year ago, in a post at his Blog Maverick site, “Hey Baby Bells & Cable, We need multiple tiers of service.”

And now with TV-like online video services like Joost coming online, it makes even more sense to make last-mile fiber a priority. We’re not at the moment of crisis yet, but considering the ever-growing demands on our nation’s broadband networks, we should be investing now.

That includes making the broadband market more attractive — which also means putting hypothetical worries about “neutrality” aside and building the capacity that will prove it irrelevant.

Thanks to our new friends at Save Teh Internet (read that again closely) for opening our eyes to the real issues surrounding the net neutrality debate.

According to their website, Save Teh Internet serves at the forefront of “the Fight for teh Internet Freedom — Freedom in this case meaning the coercive force of government regulation.”

We highly recommend viewing their “net neutrality” PSA below:

How can you see that and not want to save teh Intarwebs?

As noted previously, there’s a new episode in the Net’s long-running soap opera, “Which Side Of Its Mouth Will Google Talk Out Of Today.”

Most recently, Google is trumpeting the fact that its YouTube subsidiary pumps out 100 million video streams per day.� � That’s almost equal to what techies call a petabyte - 10 to the 15th power - every day.� Yowza!� But then it sends out a senior official to tell the world that the Net isn’t scalable for video.

Actually, if you interpret his comments narrowly, he’s right: An IPTV product can’t really touch the public Internet without losing the level of quality consumers demand.

But the problem with Google’s position here is that conflicts with the company’s position in Washington.� There, Google’s advocating neutrality regulations not only for the public Internet, but also for virtual private networks.� These include the networks that telecom companies are building precisely because the public Internet doesn’t offer enough capacity.

It’s a convenient two-step and it may have something to do with Google’s overall business model, which is based on making a fortune by paying for less of the expensive Internet backbone than it uses.

Incidentally, there’s a wonderfully humorous part in this soap opera too.� That’s when certain bloggers belatedly recognize that Google’s decision to jump into bed with the cable guys is also its first step away from funding the Net neutrality LOBBYING movement (or “funding Net neutrality lobbying efforts”).

Rest assured, this first step won’t be the last.

Does Google’s right hand know what its left hand is doing? That’s the obvious question given this article from Reuters:

New Internet TV services such as Joost and YouTube may bring the global network to its knees, Internet companies said on Wednesday, adding they are already investing heavily just to keep data flowing.

Google, which acquired online video sharing site YouTube last year, said the Internet was not designed for TV.

It even issued a warning to companies that think they can start distributing mainstream TV shows and movies on a global scale at broadcast quality over the public Internet.

“The Web infrastructure, and even Google’s (infrastructure) doesn’t scale. It’s not going to offer the quality of service that consumers expect,” Vincent Dureau, Google’s head of TV technology, said at the Cable Europe Congress.

The phoniness is so obvious, it’s eye-rolling! Google paid the princely sum of $1.65 billion to acquire YouTube precisely to increase video traffic online. Now the company is objecting to Internet-based television because it… well, increases video traffic online.

Everyone knows that consumers’ TV habits are changing. In January 2006, not a single major network streamed its programming. Today, they all do. Add in YouTube and iPod downloads and you see why commentators have been using the phrases “TV viewers” and “paradigm shift” in the same sentence a lot.

Google’s obviously staking its claim to consumers’ eyeballs by planting scary stories designed more for public consumption than serious analysis. Honestly, you can’t get more transparently self-serving than this.

Check out the blog Kung Fu Quip and this incisive explanation of the facts behind net neutrality:

The proponents will tell you that net neutrality has always been - based on a law that applied to 40% of the broadband connections carried by DSL lines. It never applied to cable - which accounts for about 60% of the broadband connections. So NN was never “the founding principle”. It was a hindrance to DSL, and the lack of it allowed cable to arrive on the scene and steal the market (well, that and the fact that cable had faster lines and a $100 billion network investment to make it better).

These are facts the advocates of Dorgan-Snowe and their Internet allies have no answer for. They’ve never even tried. Kung Fu Quip also delivers more pointed questions with Shaolin style:

Net Neutrality argues those pipes should just sit there and let e-mail spam duke it out with YouTube to see who gets there first.

Read the whole thing.

“Who are you going to believe, me or your own eyes,” Chico Marx once asked.

We already know that Google perfected the Washington Two-Step: It signs a sweetheart access deal with Sony Ericcson to corner the market on searches in the quickly growing cell phone market, while pushing the Feds to prohibit similar deals in the wired world.

Wonder why? Well, here’s a possible response, courtesy of Stanford’s Larry Lessig from this month’s Gilder-Forbes Telecosm Summit:

“There’s of course an advantage that eBay and Google have because they have very fast caching servers located all over the world. So their ability to serve content is better than their competitors.”

As Orwell might have put it, neutrality regulation would make everyone equal – though eBay and Google would just be more equal than everyone else. To Lessig’s credit, he added that this was “exactly the kind of preference we ought to be encouraging in a competitive market.”

But unfortunately that distinction seems lost on the rest of the pro-regulation crowd. Congress’ neutrality proposals go in precisely the opposite direction, extending rules designed for the simple copper wire onto the fiber optic network. As George Gilder observed in the same debate, such regs support competition “so long as nobody wins or makes any money.”

Indeed, as Gilder later noted, there’s a larger ironic twist. The FCC’s proposed four basic freedoms of the Internet “depend on building out the broadband network. Those freedoms will be denied if the network is not built-out. So the question is, how do you create incentives for building out these vastly expensive fiber and wireless networks all across the country?”

The answer’s clear: The Internet has become a data-rich entertainment medium where freedoms can only be maintained through exponentially growing bandwidth, not regulatory and judicial fiat.