Net <strike>Neutrality</strike> Regulation
By Pat Cleary Posted in Miscellanea — Comments (177) / Email this page » / Leave a comment »
Heard a presentation by Jim Gattuso of Heritage yesterday. He's the author of this backgrounder on the nearly-incomprehensible -- and incomprehensibly-named -- topic of net neutrality.
Here's what we gleaned from that session: "Net neutrality" = "net regulation." If you want to regulate the net, you'll love net neutrality. Net regulation will require a one-size/one price fits all approach to the net. Today, you can spend more to get a better car, house, iPod, whatever. Even the US Postal Service allows you to spend more to send a letter or a package faster. So why is it bad for companies to be able to charge more for faster and more complex Internet service? If you don't want that, you'd pay less. Makes sense, no? Remember the market?
We wrote about this a while back. Someone sent us an article comparing this debate to the Post Office, noting the different rates for mailing a post card vs. a bicycle. Under net regulation, the government would require that you pay the same for both. Guess what happens to the price of mailing a post card?
Another point made by one of the attendees at yesterday's session, cutting through the clutter of what net regulation meant was this: "Who do you trust to manage the development of the Internet -- the private sector or the US Government?" Only one answer to that one. Glenn Reynolds make the point in his excellent book "An Army of Davids" that had the Internet been a government mandate, it'd still be stuck somewhere in dial-up land, no doubt. It was precisely because government got out of the way that the Internet proliferated at a rate not predicted by even the most ambitious seers.
In any event, speaking of The Examiner (see below), there was a good piece in there yesterday on net regulation by former Congressional Budget Office Director and resident wise man Douglas Holtz-Eakin.
So when you hear "net neutrality", think "net regulation." From there, the picture gets quite clear.
[UPDATE]: Here's an editorial on the topic from today's Examiner, and here's a letter the NAM sent to Sen. Ted Stevens on the Senate bill.
Cross-posted on ShopFloor.org.
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Net <strike>Neutrality</strike> Regulation 177 Comments (0 topical, 177 editorial, 0 hidden) Post a comment »
But look at it more like this. You can buy whatever kind of car you like, a beat up 1970s ford or a brand new 'vette. This is an important freedom.
However, once you own that car you travel basically the same speed as everyone else. You shouldn't have to pay extra money to travel in the fast lane, or be penalized for not paying and be forced to travel in the slow lane.
Next thing you're going to tell me is that we shouldn't build toll roads and toll bridges. After all, don't we have a constitutional right to drive wherever we want for free? (warning: sarcastic content)
"You shouldn't have to pay extra money to travel in the fast lane, or be penalized for not paying and be forced to travel in the slow lane."
This kind of liberalism where everyone should be equally miserable sickens me!
Your comment that you shouldn't have to drive more to drive in the fast lane isn't an accurate analogy since all of the lanes of a single road are identical and maintained by the same provider.
If you want to use a road analogy ask would you pay more to drive on a road that moves faster and is better maintained? Here in Orlando, FL we have an extensive network of toll roads that lots of people are willing to take to move faster and lots of people aren't to save money - it's their choice.
I am undecided about this whole thing for a couple of reasons.
I firmly believe in allowing the net to be unregulated (e.g. status quo).
However- I abhor having to pay extra just download features like flash video and other things which are common now. That would hurt the whole purpose of the internet.
I mean - if I would vote - I would vote for keeping it the way it is NOW.
Maybe someone could explain who pays for what under what the phone companies are wanting to do.
I mean we already pay for bandwidth via our DSL/cable bill - what else are they wanting to charge us with? What else is there?
Is there some new and breaking technology?
My gut tells me that part of this is in response to companies like Vonyage and Skype using voice over IP.
Anyways. I am simply confused about this matter.. but if the phone companies are trying to make it to where if you want to go to site X and are offered to go to site y first (because site x's hosting company doesnt pay for what ever) - that would really tick me off.
I want to go to site x and i mean it.
So could someone clear things up? Thanks.
This is, respectfully, ridiculous.
I'm totally open to being charged more for faster service. I'm there. I've been working on that system since I started accessing the net commercially, i.e., after my bbs days. I'm generally a big fan of the free market, though I should add, not nearly to the point of idolizing it.
However, I'm against these lumbering telcos charging me for using their service (at tiered rates!) and charging the content providers a shakedown, excuse me, service fee too. Thus, iTunes won't take loss immediately, they'll pass the cost on to the paying customer, which is to say, I get to pay again for the same service. And it gets better: iTunes simply isn't profitable on a tune-by tune basis, it's a low-margin high-volume operation. Tack $.06 onto each song and you destroy the margin. Apple loses the incentive to offer the service, because they'd have to bring the cost per tune up to the point where their marginal profit is destroyed. We lose the variety of goods and services the net has to offer because it gets priced out of folks' reach (and the market for those items disappears, which means the items aren't offered), all because some of these companies have the business acumen of hydrocephaloid lemurs.
If the complaint is that these inefficient, mouthbreathing dinosaurs can't actually turn a buck on the service, they either need to exit the service, or just charge their customers more for the service, or offer a tiered access program. Ta freaking da. But they won't do that, because then their customers will leave for other service providers who do not in fact need lower abdominal surgery to have an unobstructed view of the universe. So instead, they'll just mess up the online economy and community.
And let's dispense with the "net regulation" canard, shall we? The net exists because of connections across millions of land-wire lines that are themselves the subject of regulation, and at any rate, the freaking FCC already has standing regs about this. What we're really talking about is a different kind of regulation, one that favors a group of service providers who can't keep up with the marketplace.
It has nothing to do with improving service. It has nothing to do with offering different levels of service.
The opponents of net-neutrality (telcos and cable companies mostly) want to protect and extend their monopoly with the use of anti-competitive practices. Specifically, they want to kill off VoIP and VoD services (except for theirs, of course). Net neutrality would prevent them from doing that. They don't have to block either one out-right to cut them off from their subscribers. They could simply screw up the level of performance for those sites. Streaming video or audio requires a minimum amount of network performance to be usable at all.
The other upside is that the big providers can extort money from content providers. It is a legal protection racket. They pay their protection, and they can be assured there their user base won't encounter any accidental performance problems. This is strictly a bonus, however. The real point to all this is protecting their monopolies against VoIP and VoD.
The post office analogy is horrible and completely off-point. We already pay for varying levels of bandwidth. I pay $60 a month for residential wireless high speed service. I could pay anywhere between $40 and $100 depending on the level of service I want. Symmetrical connections (where upload speed is not severely limited) and higher speed connections cost more from my ISP. The content providers already pay for their bandwidth as well. The more bandwidth they want and the more redundancy they want, the more coin they have to shell out every month. Nobody is getting a free ride. This is not what net neutrality is about, anyway. This is what the telcos want you to believe it is about, though, to get you to defend their abusive and monopolistic business practices.
The telecoms aren't going to be building any new lanes.
like the "net neutrality" idea is splitting into two ideas.
One -- preventing companies from impacting my ability to access certain sites by downgrading performance
Two -- everyone should pay the same amount for their internet service (and/or get it free) and get it at the same speed
I'm willing to hear more about One. I'm 100% against Two.
Do you REALLY trust the phone company any more than the government?
Spot on. Some of my worst consumer experiences have been with phone and cable companies. I trust them the least to do the right thing.
that Sen. Stevens is closely associated with Alaska Communications Services, a provider here for phone and wireless service, as will as Internet.
I'm sure he's insulated far enough to comply with ethics rules, but it is a very closely held company and many of the bigs in it have the same last name as the maiden name of Ms. Senator.
As you might have noticed, I'll vehemently defend him on some things, but I have no illusions about him.
...and about the Japanese and Koreans for that matter. One constantly hears that foreigners have better, faster and cheaper web service than we do.
- Is this true?
- To what do we attribute this to? Bad government regulation? Sluggish private sector monopolies?
I'm honestly confused about the whole issue, and find it very difficult to make up my mind about which position to support.
"I would abridge the 1st mendment to have a cleaner government" McCain More?
You trust Pelosi and Dean and Specter more?
No thx. I'm on Bill Gates' side on this one.
But I do not think #2 has anything at all to do with the bill in congress. #2 would better be described as "commie net access" as opposed to "net neutrality."
Why do the proponents of a tiered internet always insist this is the best way to do it? The telecoms were given tax breaks to put in new cable, to increase bandwidth, instead they pocketed the money, so it seems to me the telecoms are just attempting to use legislation to avoid having to pay for what needs to be done.
As someone noted earlier, a lot of this has to do with VOIP, but it also has to do with them overselling bandwidth. Offering unlimited bandwidth for a residential customer, in the hopes that those customers wouldn't use much, was absolutely short-sighted stupidity. In an age of 250 GB hard drives, lots of fun media (video, audio, flash), and of course P2P networks, it makes no sense to give your customers unlimited bandwidth and expect it to not be used.
I see no reason why I or anybody else should have to pay for the telecoms' mistakes. At this point, as much as I get the willies with anything resembling socialism, maybe local governments should just start taking that cable, and renting it out to the telecoms. It's all there under eminent domain anyways.
Verizon is currently executing a Massive overhaul of their cables, adding and, in many cases, outright replacing with fiber-optics...
Of the Japanese and Koreans. But the geographyBut net neutrality isn't about all that. Neither supporting it nor opposing it will get you better, cheaper, and faster internet service.
I'm not even concerned about the cost of internet access. I get a whole lot more out of the $60 I pay for internet service than I do out of the $55 I pay for TV. I would pay $100 for broadband if I had to. What I am concerned about is having services I want to use blocked by my ISP because they have a competing service they want to force me to use instead.
Was supposed to say "But the geography is probably the biggest factor, there."
And Microsoft, are on the side of Net Neutrality, then again, I'm really not sure where you were going with that, just thought I'd clarify.
Shameless link whoring here but appropriate. Here is a "Primer for the Rightosphere":
http://www.onlyrepublican.com/orinsf/2006/04/net_neutrality__2.html
I will have some response to specifics above as soon as the boss leaves my office.
The editorial above is right. Even if you don't like the telcos, the gov't is way worse. The idea of neutrality is fine, but having the government try to define it and enforce it is a disaster. It is an attempt to make the Internet into a public utility. Yeek.
As best I can figure:
Google and similar companies are worried that access to their sites and services will be hampered by slower transmission speeds and other such issues as part of a grand conspiracy by the telecom companies to put them out of business and promote their own services.
So they want the Government to step in and protect them.
Thanks for pointing that one out to me, forgot about them. It seems like they're the only ones bothering to do what's needed, and they deserve credit for it.
Their customers as much as they want for that additional bandwidth, under net neutrality or not.
What i heard on the news yesterday, when i was introduced to this whole boondoggle was that they were against Google and Vonage who are apparently the main forces behind the "net neutrality" lobby.
Eh, it was the news, they get things wrong all the time.
Still, I do NOT stand beside regulation on this.
But didn't the FCC previously have regulations in place dealing with this issue? Where all packets are treated equally? I remember reading something about the rules being done away with, and that's what helped bring this issue to where it is today. As for the internet being a public utility, in some ways it always has been. It certainly started off as something akin to that. And remember, those cables that all your data travels along were able to be put in place through eminent domain. That does make it a sort of public utility, or at least it should, depending on where you stand on Kelo.
People keep arguing what the consequences of the actions are:
Status quo -- we know what this is, 1 big pipe everyone pays to connect to the pipe.
Telecom idea -- put up a partition in that pipe to isolate premium from inferior connections.
So lets look at the possibilities just to get a sense of things,
- if no one pays for this 'premium' service then we have the status quo still.
- if everyone pays for this 'premium' service then we have the status quo still, but more expensive.
- if some people use the 'premium' service, then the people paying for basic service get degraded service as a result, less product for same money.
Hmm, this seems like an odd happening, if we all do something then we get nothing, if we do nothing we get nothing, if some people do something the rest of us get hosed. This sounds like a tie-lose-lose situation.
Now I think the telecom's idea is a horrible idea, i.e. not good, not good at all, but still I don't think the government should regulate it. I have never seen a technology advance as fast as have computers, and I haven't seen an industry less regulated than the computer industry. I don't think this is an accident.
I would like to think that he has his usually steely grip on at least what the bill itself says and that he will make the Right choice.
But I just don;t know enouh about AKs Telecom situation...
#1 is what this debate is about.
#2 is not what net neutrality advocates are calling for.
I have heard 65 different definitions of net neutrality. If it's what's described in comment #2 as people in this thread seem to agree on, then the telecos wouldn't be able to charge different prices for different services. That would greatly diminish the incentive to upgrade the infrastructure to fiber.
zuiko, I know you're probably already aware, but for everyone else, I am working with the Hands Off the Internet coalition and we are opposed to legislation mandating net neutrality.
solution to this be, to charge users for bandwidth used? Just as we pay the electric co. for kwh's and the gas company for cubic feet of gas, internet users ought to pay by the MB, both upload and download.
As for the telcos', they seem to be in an awkward spot due to their status as quasi-state bodies. On the one hand they are publically traded companies and accountable to their stockholders. They also hold these assets (basically, the internet) which are potentially priceless but which they cannot fully leverage because of their public utility role. They need to beome either fully one or the other, either part of government or part of the free market.
The logical outcome of the current system is that MS buys Verizon, Google buys Qwest, etc. That seems to me like a worse outcome than allowing the telcos to make money off their service.
We can already buy or pay for different speeds. I have Cox cable and can pay for 1 mb, 2mb, 3 mb per second etc. However the issue is if Cox offers Phone IP which they do. Can I still use Vonage or Skype phone over their net connection. Some local ISP's have already been caught and slapped by the FCC for blocking use of Vonage or Skype over their local cable cause they offered their own service. This is what the issue is really about. CISCO wants to sell special Discrimination routers to the ATT and Verizons so they can purposely throttle CERTAIN bits. They can "See" what the bits are you send. They can send THEIR bits AHEAD of your bits etc. They can also tell if they are Google bits and slow or speed them unless Google pay up. This is what its about NOT just your access speed etc. As long as the ACCESS providers such as the cableco and telcos controll ACCESS and CONTENT you will be screwed. The best situation would have been to turn them all into common carriers utilco and then let us pick and SERVICE we want. That would have only required ONE fiber cable to our home. Now we are going to have Cableco 1 pulling cable, Telco 2 pulling cable etc to our home, along with any other that may come along. DSL etc. But as long as each has its own separate cable and is contrlled by that provider you will likely have discrimination.
Think if GM owned the interstate. They could charge Fords more or throttle them to 50mph unless you paid more. That is why the Interstate (think net here) should be open (thin net neutral here) You can by a 10,00 dollar car or a 200,000 dollar car but you dont get special lanes for you cause of it. Yes you can use a toll road with either car. But not be held back because of it.
but what if regular service gives you access only to VOIP from your broadband provider and blocks or degrades other VOIP solutions, while the premium service gives you access to any VOIP provider? if there is only one or no other choices for broadband access, what is a consumer to do?
this is what net neutrality is to me: bits is bits is bits. the service i'm using shouldn't matter when i've already paid you for the bandwidth. we wouldn't need that legislated if there was some decent competition in broadband. the problem isn't the unregulated computer market, its the idiotically regulated telco market.
There seems to be some misunderstanding here about what net neutrality is all about.
It only indirectly affects the end user, and, if it happens, there will be nothing the end user can do to counteract its effects.
What is about to happen, and what net neutrality wants to prevent, is that the providers of bandwidth want to start charging web publishers to have their content delivered more rapidly. If a website owner pays, his content goes in the fat pipe and gets there faster; if the website owner doesn't pay, it goes in the skinny pipe, and the end user gets to sit and wait for the page to load.
No one is proposing hitting the end user up for money, and there is nothing the end user can do if his or her favorite website doesn't pay up and so loads slowly.
Understanding what it actually is, there are some issues worth debating:
- Is there a free market here to even talk about? The local phone companies who own the lines were historically monopolies, and still enjoy monopoly or duopoly status pretty much everywhere. The cable systems are in a similar situation - you only got to dig up the streets to lay cable if the local government chose you as the cable company of choice. These are quasi-public utilities who have enjoyed and will enjoy enormous subsidies from every level of government. In a purely competitive market, you can have new entrants if the ultimate customers don't like the service they receive. Here, even if folks came along with the tens of billions of dollars necessary to join the party, it's unlikely they would get the necessary governmental permissions. In such a case, whether you even can release the issue to the "free market" for resolution requires a step back from slogans and a bit more economic analysis. Maybe three or four players and enormous barriers to entry can give you a free market, but I'm not ready to accept "free markets" as an end of game argument until someone who understands economic analysis as well as the issues at stake explains it to me.
- The public policy issue is whether charging publishers for preferred access will squeeze out new and diverse voices. Sites like this website, which are pretty far down the long tail (Alexa rank over 20,000) and don't seem to be tapping into the major ad dollars, are exactly the kinds of voices that might get squeezed out. You can assume that CBS, the New York Times, the Hollywood studios, and so on, will be willing and able to pay the surcharge. Even Kos, with an Alexa rank under 2,000, would be better able to step up and pay. If your favorite brilliant but lightly trafficked blogger suddenly starts loading as slowly on your maxed out broadband connection as if you were running a 1200 baud modem, you will have net neutrality to thank, and there will be nothing you can do about it.
- On an ironic note, I will note that some of the talking points above come straight from the files of Mike McCurry, former Clinton flack and current flack for the telcos on this issue. Politics and money make strange bedfellows sometimes.
In terms of full disclosure, I will note that I own some smaller websites, and could conceivably be affected by this. Mitigating that, it's not as if I need any financial contribution from those sites to pay my kids' private school tuition.
But
(1) I already said something like this;
(2) I don't worship the free market;
(3) There are other policy concerns at issue here; and
(4) I don't think we're communicating about the same things.
is that it assume that the telco's are public utilities. Which they are in a sense, but they are also private companies trying to make money for their stockholders.
If a private company owns I-95 then there is no particular reason why it should not charge different amounts of money for different types of traffic; more for big trucks, for instance.
Your argument basically is that the internet should be taken out of the hands of private industry and become part of government, like the roads are.
Yes, Powell's 4 principles are important, thanks for the link. Here is a proposed Internet bill of rights to be attached to Stevens' bill.
It is important to realize that cableco's have never been subject to neutrality regulations as far as I know. Several years ago they were deemed an information service, and thus are exempt.
I believe the telcos were given parity in that regard last year, which kicked off much of this kerfuffle.
I don't believe the FCC ever said "all packets equal" precisely, rather that ISPs could not deliberately degrade certain services. This is where it gets dangerous...
I believe ISPs should have every right to sell premium services, which means prioritizing packets (aka QoS). It is good for consumers both technologically and from a market choice perspective.
Unfortunately, neutrality proponents believe that prioritizing packets means degrading others. That is technologically incorrect (here).
The public policy issue is whether charging publishers for preferred access will squeeze out new and diverse voices. Sites like this website, which are pretty far down the long tail (Alexa rank over 20,000) and don't seem to be tapping into the major ad dollars, are exactly the kinds of voices that might get squeezed out. You can assume that CBS, the New York Times, the Hollywood studios, and so on, will be willing and able to pay the surcharge. Even Kos, with an Alexa rank under 2,000, would be better able to step up and pay. If your favorite brilliant but lightly trafficked blogger suddenly starts loading as slowly on your maxed out broadband connection as if you were running a 1200 baud modem, you will have net neutrality to thank, and there will be nothing you can do about it.
...is why I can't understand why conservative bloggers would ever be against net neutrality. Many ndependent and unpopular voices will be hindered and possibly silenced if net neutrality isn't preserved. Its not only blogs who will be affected though. Local news sources, small businesses, church groups, etc. will all be edged out of the "premium access market".
so no need for the disclaimer.
- Clearly, great minds think alike.
- Neither do I.
- What are those other issues? Sorry if you have posted on this at length elsewhere.
- I thought we were discussing the advisability of allowing the telco's to charge different rates for different traffic?
I can't disagree that the telcos (and cablecos to a lesser degree) are too closely aligned with government. The market should be freer.
That's the question -- do we regulate further? If the goal is better competition, let's put laws in place (or remove them) to encourage this.
Neutrality legislation adds bad laws on top of bad laws, and does not promote competition. It is a salve for the perceived lack of competition.
Competition is actually in decent shape, but of course could be better. The trends are generally in the right direction. Things like WiMax will open it up further.
In any case, the FCC has the power to police abuses, as does the FTC on antitrust grounds. We really don't need new laws.
I have no problem with the providers charging their direct-users -- their customers -- for different access levels. They do this already, it's been part of the game since the early 1990s, who cares. I have a problem with them then charging the content providers who are not their customers, but whom their customers are trying to reach, an access fee, because, first, you're attacking supply, not demand, and second, the consequences stand to be awful.
This won't affect, say, Wal-Mart, because their business model is offline, with minimal offline stuff (and a horrible online presence to boot). It will affect things we've started to take for granted, like Google, iTunes, and Amazon, because those folks will either have to raise prices or accept higher costs, which means they'll do less, which means we all suffer.
I'm totally fine, in other words, with Amazon's ISP charging them more for increased up- and download. I'm all over that. They do it already (well, you know what I mean). I'm fine with Verizon charging me at different rates for my use through my Verizon account. I'm not fine with being charged by someone with whom I'm not in privity for their own maintenance needs.
I came into this late but am somewhat shocked at what I am reading. It sounds like people want a state-owned internet, rather than the one we have that was built with private equity and private innovation.
The networks that deliver the internet to our homes and works are in almost all cases private infrastructure built with private funding. There are exceptions to this (namely municipalities that have paid to build city owned networks for economic development reasons). As a private asset the owners of those networks should be free to charge what they want for access to their infrastructure.. that is what capitalim depends on to work.
The Googles and Vonage's of the world do not own the pipes, they are relient on the pipes and they can and should be charged for access to those pipes just as I am charged to get access to those pipes on my home and work computer.
If their volume is higher than my volume they should be charged more. If they want to increase their access speed they should be charged more (or find another company to use).
If they want they can build their own infrastrucure to get access to my house.
Just because Google and Vonage's business model is flawed, and dependent on free access to an infrastructe they did not build does not mean we should change the laws, they should change their business plans.
On the road analogy the internet is not the car you drive it is the road you drive on. In this case a company (say Comcast) built a private highway with their own privataly raised capital. Google is the trucking company that hauls goods on that road, Google can most definetly be charged a toll by Comcast to drive on that private road.
Neutrality legislation adds bad laws on top of bad laws, and does not promote competition. It is a salve for the perceived lack of competition.
It encourages competition in online services. The telcos and cable companies are opposed because they wish to extend and protect their monopoly by excluding competition and forcing people to use their services.
Just because Google and Vonage's business model is flawed, and dependent on free access to an infrastructe they did not build does not mean we should change the laws, they should change their business plans.
Just what do you think Vonage and Google spend on connectivity every month? I'll give you a hint... it isn't zero. Not even close.
that the content provider currently pay nothing, but they are trying to avoid paying their share of the upgrade costs by using net neutrality as a shield. Take a look at this article regarding the American Consumer Institute 's opposition to net neutrality legislation,
Institute Slams Net Neutrality Legislation
WASHINGTON--Saying that proposed changes to the telecom bill currently working its way through the U.S. Senate will hurt consumers, the American Consumer Institute has announced that it's pressing senators to leave any regulatory provisions out of their legislation.
The public policy group, which studies a wide range of consumer issues, presented an economic study by Dr. Larry Darby, a former chief economist for the FCC, that said that current proposals for regulating payment for the Internet would make consumers pay the whole cost of upgrading and operating the Internet, while the companies that benefit the most, such as Google and Microsoft, would be given what is essentially a free ride.
From your article:
"For a set of beneficiaries in a multisided market to say that only consumers should pay for it flies in the face of reality of the rest of how the economy actually price services," Darby said."
This does not describe the reality of the situation at all.
- Content providers pay for their bandwidth. They can only use the bandwidth they buy. If they want more bandwidth, they pay for it.
- Consumers pay for their bandwidth. They can only use the bandwidth they buy. If they want more bandwidth, they pay for it.
What's the problem? The problem is the telcos don't want to lose their POTS customers to Vonage. And the cable companies don't want to lose HBO subscribers to video on demand. They have a solution for that. Cut off access to it or throttle until it's unusable.
to what net neutrality advocates are arguing, not the current landscape. Remember, Darby is representing an organization dedicated to promoting the best interests of consumers and he was formerly the chief economist for the FCC. I'm sure he understands how the internet pricing structure works.
As I mentioned before there is a general confusion as to what exactly net neutrality is, but according the the ACI study,
"The proposal, dubbed net neutrality, would make it illegal for broadband companies to shift any portion of payments to high-tech businesses that use and would benefit from new broadband investments."
http://www.theamericanconsumer.org/release1.htm
Thus, if net neutrality legislation passed, ISPs couldn't seek compensation from content providers for their billions invested in infrastructure upgrades.
This is all BS. This "shifting payments to high-tech businesses" is extortion. These aren't their customers. They have no business demanding payments from them. It would be more accurate to call these protection payments. If you give us enough money, we make sure nothing happens to your user's data. In the case of VoIP and VoD they'll just demand high enough payments that they'll be sure no one will pay them. Then you'll have no choice but to go with your monopoly service provider for voice and video. That is their goal.
Thanks JG, here's the real problem: Congress should not decide what the right business model is.
Of course Google et al are paying for service right now, but that does not entitle them to the same service moving forward. I have nothing against Google and nothing against a neutral net, so long as the market makes the call. All this second-guessing about the "right" way to charge...how do we know? Free markets allow us to try every granular possiblity.
Let 'em fight it out. Of course they can try to abuse their customers. Every industry has that freedom. The free market is the best corrective, not rule-making.
And, they are not monopolies. Here's a breakdown of market share. If we pass onerous neutrality legislation, we basically lock the incumbents in place, much like public utilities.
The VOIP and VOD companies can just build their own infrastructure? Vertical integration is a very common practice, perhaps google could use some of their billions of dollars in market capitalization and buy and/or build their own pipe?
We have an internet for what purpose? Every content provider just has to run wires all the way out to every user! That sounds like a great new direction for the internet.
...should net-neutrality pass.
http://www.pbs.org/cringely/pulpit/pulpit20051117.html
http://www.pbs.org/cringely/pulpit/pulpit20051124.html
I'm not sure which is worse.
It is exactly what Time Warner did when they merged with AOL.
But, who is to say wires will matter in the next 10 years? 10 years ago the internet was barely even alive. Innovation changes markets. Right now we have satellites, WI-FI, WI-MAX and dozens of other delivery methods coming on-line all of which could change the marketplace that people seem so eager to lock into stone.
"The proposal, dubbed net neutrality, would make it illegal for broadband companies to shift any portion of payments to high-tech businesses that use and would benefit from new broadband investments."
Web publishers already pay for bandwidth used. It can be a substantial cost. You pay both for the total bandwidth used in a month, and a surcharge if you want to be able to burst through more traffic at peak periods. You don't just pay $20 a month and serve as many pages as you want. Unless you design your site to minimize bandwidth usage (e.g., no or small images, no videos, etc.) it is pretty easy to get over $10,000 per month even with a medium traffic site (say, 10 million page views monthly).
What the opponenets of net neutrality want is not just to charge for access, but to put a surcharge on if you actually want your content delivered as quickly as the preferred vendors.
On the toll road analogy, it's like paying to get on a tollroad, and then noticing a superfast express lane that, as a practical matter, is offered only to those who are sending 10,000 vehicles a week down that same highway.
"The VOIP and VOD companies can just build their own infrastructure?"
That's one of the core points - they can't. Most cities aren't going to invoke state powered takings to allow someone to put a line across your yard, or dig up all the city streets to lay new fiber, for any wannabe telco or cable company that comes along.
Then there is the massive level of investment needed if you can get governmental support. Cost to build out a cable or telco network of any kind nationwide would be tens of billions of dollars.
These are called barriers to entry. If you took any economics in school, you might remember that such barriers to entry distort market forces.
It feels good to say leave it to the market, but if you are not a raging ideologue, you need to look at whether there is or can be a functioning market.
Reading all the insane pro-regulation comments here, it looks like Red State has been taken over by the Kosola Krowd.
What's going on here, fellow conservatives, have you guys been duped by Google, Microsoft, Yahoo, Amazon, and the Hollywood Establishment?
The regulations proposed by the Kosola Krowd make legitimate services illegal and do little or nothing to protect free speech on the Internet, not that it needs protecting.
And what's most interesting, their supporters are the very same people who produced the propaganda film Outfoxed: Bob McChesney, Jeff Chester, Moveon.org and the liberal consumer groups.
You guys are nuts to support their agenda, they're coming for our guns next.
Wake up.
But I'd have to say, I have no problem with a company ruling an open marketplace by virtue of the vast majority of customers choosing to use them for whatever reason. That applies to Microsoft, Apple (iPod), Google, Adobe, whoever.
I have a real problem doing business with a company where I have no choice in the matter, and then having them use that power to force me to buy more products and services from them.
You guys are nuts to support their agenda, they're coming for our guns next.
Who knew that the telcos and cable companies were working to protect my 2nd Amendment rights? That would almost make it worth being forced to buy all my services from them.
"Remember, Darby is representing an organization dedicated to promoting the best interests of consumers and he was formerly the chief economist for the FCC."
Well, if he worked for the government, he must know best, I suppose the argument goes. Forgive me if I don't view government service that way. That's doubly true for the FCC, where a mix of true believers in various ideologies and folks on revolving door loans from various interest groups have distorted fact based analysis pretty badly in recent years.
And does anyone here know what the American Consumer Institute is? Did they exist before net neutrality? Are they a bona fide consumer oriented organization? Who funds them? Are we sure that they are not some astroturf group pretending to advance neutral viewpoints but really just serving as an extension of the K Street lobbying shops? It seems just a little pat to me when you refer to this organization as an "organization dedicated to promoting the best interest of consumers." I don't take it at face value when Ralph Nader or Common Cause make that claim, and I don't take it at face value when you make that claim on Darby's behalf.
By a member of the Penn State IT department:
The Importance of Net Neutrality.
Our experience working with advanced networks has taught us that the Internet works best if the user - not the network owner or operator - determines what information is transmitted over the network. Users should be able to decide how much bandwidth to buy from the network operators - a little or a lot. Once the user has paid for his or her bandwidth, the user should be able to go to any web page, use any lawful application, equipment or service, and send any lawful content.
Allowing the network owner to block or degrade content, equipment or applications fundamentally alters the Internet experience. Indeed, allowing a gatekeeper to monitor, screen, manipulate traffic would ruin the Internet as we know it. Instead of the open, free-wheeling, forum for discourse and commerce that we enjoy today, the Internet would become the private playground of a few network owners - which face little competition and thus have significant market power -- whose incentive will be to steer users to the products and services that they own.
The debate over net neutrality is sometimes distorted by those who oppose legislation. They maintain that everyone has a different definition of net neutrality, or that this is a solution in search of a problem. While these pithy phrases might be easy to toss around in casual conversation, they are dead wrong. This issue is not nearly as complicated as the opponents would have you believe. Let me state a few points very clearly.
First, now that the FCC has eliminated the net neutrality requirements for broadband providers, network owners can block traffic at will. A cable or phone company could block access to a Senator's web site or an on-line journal simply because they disagree with the viewpoint being expressed. The network owner could block or degrade a competitor's VOIP offering, simply because it competes with the telco's own VOIP service. There is absolutely no legal requirement to maintain an open network today. At a minimum, Congress must act to prohibit blocking or intentional degradation of Internet traffic.
Second, there is one central principle that underlies the entire net neutrality debate - nondiscrimination. Network owners should not be able to give preference to their own services over those of their competitors. Network operators should truly be "neutral"; their job should be to carry traffic on a nondiscriminatory basis. To be sure, there are lots of ways of writing this principle into statutory law, but the variety of language does not mean that there are a variety of meanings to net neutrality. All the advocates of net neutrality with which EDUCAUSE and Internet2 are aligned share this common goal of ensuring an open, nondiscriminatory, neutral Internet.
Third, the telephone and cable companies maintain that legislating on net neutrality would prevent them from managing their networks, but this is a misconception. Network management is not a barrier to net neutrality. As network managers ourselves, we understand the need to be concerned with security attacks, spam, and overall congestion - but these should not be used as excuses to discriminate. In short, network management and net neutrality are not in conflict, they are perfectly consistent. In fact, telephone companies today engage in network management of their narrowband networks under a net neutrality regime without difficulty.
Fourth, giving preferential treatment to certain Internet traffic (as the telephone and cable companies desire) is not only unfair, it inherently degrades the quality of service provided to others. If a network operator starts to give preference to packets from one source (that perhaps pays the operator for preference), what happens to all of the other, ordinary packets? We know that when an ambulance or fire truck comes down a congested highway, everybody else has to pull over and stop. For emergencies, and for public safety, that is accepted, but what if UPS trucks had the same preference? Giving a preference to the packets of some will degrade the transport for everyone else.
Fifth, allowing the network operators to charge users to deliver traffic on the Internet will inherently inhibit non-profit organizations from using the Internet for social good. If economic toll booths are allowed for content and applications to access the Internet, then soon only the richest content providers will be able to make their material available. What happens to the small college or university, the little guy, the start-up, the entrepreneur? If charging content providers to carry their bits to local customers had existed ten years ago, we would never have seen universities using the Internet for distance learning and telemedicine applications that are widely available today. Universities and colleges simply could not compete with the large on-line merchants for priority access to the network.
Just to cite some examples, MIT is pioneering a move to put all of its course content - written materials, multi-media, videos of lectures and more - onto the Internet for free distribution to the world. It is an experiment, but a bold one that could have transformative impact upon those who might never be able to see the inside of a college classroom. Stanford University is making the audio from class lectures available on the Web. The Library of Congress is working on projects to make rare materials available over the Internet. Should MIT or Stanford or the Library of Congress now have to pay Verizon and AT&T, Comcast and Cox, and all of the other local network providers to allow Americans access to this material? Other nations are not putting up toll booths, why should we?
as they continue to spout doomsday scenarios about the ISPs blocking content if net neutrality legislation doesn't pass they are refusing to run ads opposing net neutrality on their site.
I realize there is a difference between a website and the internet, but this seems to be a bit hypocritical.
Has everyone forgotten that Al Gore intends His Internet for governmental data research exchange? Yes it's BECOME a business, but it's only a hardware service business. It shouldn't be in the demoting-nonprofitable-content business, but neither should the laws to invoke "neutrality" be longer than a single typed page.
There are literally millions of miles of dark fiber already buried in those city streets ready to be bought, or leased. If anything there is an overubandunce of unused fiber in this country, not too little.
Or again I give you Wi-Max or any of a variety of ways to get around whatever barriers you may see.
And how much do you think Comcast or Verizon or Sprint or Qwest spent to build what they have today?
I just peaked at the markets and Google's current market capitalization is $121.22 billion. That is 45% greater than Comcast's market cap of $67 Billion and 22% greater than Verizon's market cap of $96 billion.
I don't think expense should limit their entry too much.
This overly-long essay is a load of crap that spins the issues. The regulations prohibit Quality of Service for a fee, and that's a vital part of the new streaming media and voice applications we want to deploy in the Internet.
This is a debate over engineering and regulation, not over free speech and religion.
If you come across a nice essay, pull out the best paragraph or two and post a link.
Don't spam.
"What's going on here, fellow conservatives, have you guys been duped by Google, Microsoft, Yahoo, Amazon, and the Hollywood Establishment?"
Setting aside Barbra Streisand, I think you will find the major studios all in favor of killing net neutrality in its cradle. It's Time Warner, after all, that wants to be able to charge a premim if a competing content provider wants to send content down their cable company subsidiary pipes.
And it's Bill Clinton's press secretary leading the PR charge against net neutrality - not exactly a conservative icon there.
Personally, I found that a helpful post that was no longer than it needed to be to say what it said. You may disagree, and I respect your right to do so, but that doesn't make it spam.
Show me one paragraph in that pompous essay that actually relates to the pending legislation.
Astroturf is a term for a fake grass roots or public interest group that really is just synthetically constructed front for a political or financial interest group in a public debate.
I'm not saying this group is, because I don't know. I just don't know who they are, so I'm wondering.
There is no such thing as net neutrality in past or present Internet regulation; it's a myth.
Hollywood's business community hasn't taken a stand on Internet regulation, but Alyssa Milano. Arianna Huffinton, and Moby sure have.
To the actual freakin' bill in question? There has been so much misrepresentation on this issue in all these summaries and blog postings, who knows what the thing actually says any more.
but what if regular service gives you access only to VOIP from your broadband provider and blocks or degrades other VOIP solutions,
I would say that the company doing this is begging to have competion introduced into the area.(not as easy as this currently, I know)
Now I know I live in a populated area, but the second cox implements something asanine like this I'll switch to qwest, or something else.
I don't think the solution to years of over-regulating the telecoms is to introduce more regulation.
My post isn't much longer than the others on this thread.
I fear the day when telcos start deciding what is and is not "offensive" or "appropriate" for their "diverse users". Perhaps comcast deems it safer to reduce the bandwidth to sites that attack affirmative action, or sites that support a question a popular celebrity or politician (perhaps a politician that voted "their way" recently). All of us politicos should fear a world without net-neutrality. The direction of the internet will no longer be decided by content providers, but by the networks that carry that content. I suppose that is the outcome of an unregulated internet. Perhaps that is the right "conservative" stance to take, but it leaves the internet as we know it, in shambles.
I am a network architect. I have avoided this subject because I feel I would have a difficult time explaining to the average person what it is really about. This is about allowing certain data streams to have priority through your network for a fee, as you state.
If I am AT&T and CBS wants to stream college basketball playoffs to people and they want their traffic to get higher priority in my network, they would pay me money and I would set a bit on their packets that treats their traffic a little differently. That's it. In other words, someone watching their stream might be a little less likely to see the video stream freeze and restart ... they would get a bette viewing experiance than if the packets were sent with the default priority. And there isn't even a guarantee of THAT happening. If my network has ample capacity, it isn't even going to matter since it is going to be able to handle all traffic and won't need to care about the QOS bits.
Basically what happens is a network might have several paths. One path might be very good but very expensive. Another path might be very cheap but not as good. If someone is paying me money, I might put their traffic on the expensive link.
Or, if I have a path that is congested and traffic is queueing up in the router, I might drop a packet from a "routine" traffic stream before I drop a packet from a "premium" or high-priority traffic stream.
In fact, the entire thing will probably be completely transparent to the user. This is really an engineering issue that someone has attempted to spin into a political issue. Overall, allowing networks to prioritize traffic for a fee will probably result in BETTER performance for the end users. I as a network operator might be more likely to buy an expensive, high-performance link if I can sell access to that link at a higher fee.
As I understand it, this is not about CUSTOMERS paying more, it is about CONTENT PROVIDERS paying more to use higher cost infrastructure of transport providers.
The only problem I have with it is a technical one. It could encourage providers to allow congestion so they could charge extra fees to allow providers to "cut through" the congestion. But overall, I believe it will result in providers purchasing better connectivity and passing the costs to the CONTENT PROVIDER rather than to the CUSTOMER.
In other words, if you want all traffic to be the same, you are saying you want all costs associated with network upgrades to be passed to the consumer. If you allow content providers to pay a premium for better access, they end up paying for network upgrades in the form of these access fees.
Good question. In the case of Japan and Korea, their population densisites are 10x ours, so the ROI on building networks is (back-of-the-envelope) 10x higher. Very different economics. Also, they were driven by a consumer killer-app in gaming.
France also claims to have a broadband miracle, where users pay something like $20/mo for 25 Mb/s. And they do, but this is because it is sitting on top of the very expensive France Telecom infrastructure. If you factor in things like real estate and pensions, they are paying a lot for the privilege. It's a metaphor for their greater problems, actually...
So who is funding Hands Off The Internet? I noticed a reference to a Mercury Group in the WHOIS. Is this the Mercury Group that provides PR services or someone else? Are they providing, perchance, PR services for Williams, one of the major owners of legacy fiber optic networks? Just wondering.
The entire net neutrality argument is bogged down in so much misinformation that productive discourse on the subject has become nearly impossible.
Proponents of net neutrality want the government to require that ISPs guarantee equal service to all data packets. Aside from the inevitable regulatory clusterflock that this will entail, the simple fact of the matter is that not all packets are created equal.
Opponents of net neutrality -- largely cable companies and telcos -- want the government to enable them to disfavor traffic across their networks, not because they want to charge more for iTunes and YouTube and BitTorrent, but because they're desperately afraid of the competitive challenge represented by the Vonages and Skypes of the world. Aside from the inevitable regulatory clusterflock that this will entail, the simple fact of the matter is that they're asking government to protect them from competition from VoIP.
No one is on the side of angels, here.
S.2686, Senate bill (prior to today's Commerce committee markup)
http://thomas.loc.gov/cgi-bin/thomas
House passed COPE Act, HR5252
http://thomas.loc.gov/cgi-bin/query/D?c109:4:./temp/~c109kat3uY::
"Hollywood's business community hasn't taken a stand on Internet regulation"
Well, I'm not so sure that's true. The cable companies certainly have, and the big studios and the big cable companies overlap overwhelmingly.
And, with all due respect, none of the names you cite are exactly A list celebrities. Does anyone know where Tom Cruise and Britney Spears stand on this? I feel unenlightened without their contributions to the debate.
We used to have such a thing, it was called Ma Bell (ATT)a governement allowed monopoly. Not a govnmt RUN but a single entity whose sole purpose would be to manage, update, build new fiber etc. A maintenance type company. ATT was given a monopoly to build the original system so they would all work together and would cover the entire US, and were guaranteed a certain amount of profit to accomplish upgrades etc, but they also provided a service ie phone, you had no choice of content or service provider.
NO content would be allowed to be provided by the access provider. We would pay this company an access fee and we could get the speed of service we wanted to pay for.
Whomever won the right to be the "Maintenance" type company could also be offered a certain amount of profit to upgrade etc. Having access is to important to allow control by both an access and service provider. That is why I suggested the utility type concept. Ma Bell used to be guaranteed a certain return due to it being designated an important issue to be provided almost like a utility. Yes, I know its semi utopian but we are not a true democracy or pure capitalist either.
Then we could get phone from Verizon, ATT, Bell South OR any NEW company coming along, vonage, skype etc. We could get a couple of shows from Time Warner, a couple from Cox and some from Comcast....OR DIRECTLY from the CBS or NBC or Viacom or movies directly. But the ACCESS provider could not mess with ANYTHING we wanted over our fiber. Let them compete over their SERVICE or their other PRODUCT. Not solely bacause they OWNED to road to my house and had me as a captive audience. I will never have cable competition, I will have competition from another TYPE of provider but will never see the ability to get competition from 2-3 or 4 cable companies due to the cost of EACH one having to pull cable. I wouldnt want a Ford Hiway and a GM hiway running to my home.
"Right now we have satellites, WI-FI, WI-MAX and dozens of other delivery methods coming on-line all of which could change the marketplace that people seem so eager to lock into stone."
What do satellites or wi-fi conceivably have to do with the network issues at stake here? Is this just the old let the telco monopolies charge what they want because technology will save us all argument?
as it is the fact that it is a direct cut and paste of a whole article. Besides the possible copyright infringement, if it is someone else's words you should grab a pertinent paragraph or so and provide a link.
The issue isn't with passing on costs to the consumer. My issue would be this. Using your analogy of AT&T, say another company wanted to stream their political documentary about successes in Iraq at a higher bandwidth. Say, AT&T decides that this video is "offensive" or "not in line with company policy" and says no. Could the company with the documentary sue to get AT&T to give them better access? AT&T own the bandwidth and the fiber, and they can do as they please, right?
This is the problem. AT&T gets to decide what information is easy to access, and what information is more difficult/impossible to access. This is all well and good, as long as you trust AT&T. If you don't I guess you could switch ISPs, but chances are, they have a state sponsored monopoly on broadband like Comcast does here in Baltimore.
Were traditionally state monopolies, and everything in Europe is run through much more of a socialist filter before it goes live. I wouldn't look to Europe for guidance, because their basic approach starts from a bad premise of pervasive governmental control.
In terms of price, you can get combined phone with national long distance and high bandwidth DSL in Europe for about 25 euros a month, which is about $33.
This does nothing to forbid tiered service. It does not ban offering QoS service.
I think the days of buying cheap dark fiber are long gone. There's a lot of stuff you could have bought cheap in 2001 or 2002 that's not available cheap today.
I don't get where Wimax fits in here, other than as a supposed miracle new techology that can be used to justify the telcos and cable cos doing whatever they want. Maybe you can explain it to me.
it has actually already happened. several smaller ISPs in small markets have degraded voip service to the point of unusability while selling their own service, and it was only the intervention by the FCC that stopped this. recent rule changes will now preclude the fcc from doing so.
i'll dig up the links...
It wouldn't be done "per item".

It is the status quo. How can you trust the guys who keep telling you your phone service will get better and cheaper if we just let them have more of a monopoly on service?
Net neutrality means EVERYONE gets to use the internet at the same speed, for the same price. And there is nobody deciding what content should/should not move through the ether. It just so happens that NOW, since those protections have been eroded by LACK OF LEGISLATION, it has to be re-legislated.
Do you REALLY trust the phone company any more than the government? Come on.