Telcos Propose 2-Tier Internet

cshirky writes "Boston.com is reporting that 'AT&T Inc. and BellSouth Corp. are lobbying Capitol Hill for the right to create a two-tiered Internet, where the telecom carriers' own Internet services would be transmitted faster and more efficiently than those of their competitors.' The telcos basic fear, of course, is that the end to end design of the net (PDF version) will erode the telcos ability to use service charges to generate revenue for delivering video and voice; the proposed solution is to break end-to-end in order to protect pricing leverage over the users." We reported on this at the beginning of the month, when it was just speculation. Not any more.

Comments

Time for another breakup?

[Scoth]

I admit to being a bit too young to remember the original, but maybe it's time for another breakup similar to the original Bell? Seems the current ones have gotten a bit too monopolistic, IMHO...

Re:Time for another breakup?

[dada21]

No single company has the money to invest or support a seperate Internet over the long run. There are too many ISPs and backbone providers competing in the open market.

Telcos can try to create their own Internet, but how long would it last if users can't get to sites they've commonly accesses? Google and Slashdot and other popular sites can refuse to pay the telco premium charges, and the users will bail.

They should have tried this a decade ago. Too little, too late.

Re:Time for another breakup?

[Catbeller]

I'm more than old enough, so here's how it was, in brief: AT&T fought the monopoly battle in court for almost ten years, lost in '84, then was broken up into multiple geographical companies, AT&T for long distance only, and Bell Labs became Lucent Technologies.

During the last twenty years, they've individually frozen out as much competition as they could, in a forward-guard holding action. And the last two decades have seen the installation of a lot of judges whose philosophies are decidedly pro-business with a jaundiced eye for monopoly regulation, as well as a large number of legislators and at least two Presidents, even three as Clinton wasn't exactly a flaming socialist, turning a blind eye and a curious lack of oversight as the Baby Bells merged together again.

Right now, the Justice Department has found itself stripped of monies to enforce antitrust law for the last five years. No money for investigations, no investigators. It's like repealing antitrust legislation without the messy bother of repealing the laws. (Ditto environmental laws, pollution, meat inspection, etc. ad nauseum).

So the last ones standing are AT&T and SBC. And they will merge very soon, so here we are again, with one monopoly dictating terms. And even if somehow a new set of enforcers come in after the next election, they will find a hostile Congress and court system slowing them down. Even in ideal circumstances, as we found with the original AT&T breakup and the Microsoft conviction, it takes ten years to get to the point of enforcing antitrust laws under a judge's supervision, and a lot can happen in ten years. A new Republican president can be elected, and the case dies. New technology can obsolete AT&T entirely in ten years -- if they let it happen (look at Philadephia and Pennsylvania trying to install municipal WiFi).

Every decade, the corporate powers grow stronger, more integrated with the government and the courts. The ability to enforce antitrust laws is decreasing hyperbolically with each era.

Re:Time for another breakup?

[Anonymous Coward]

So I used to work for one of their equipment suppliers. I believe these companies are Evil (TM) but there is SOMETHING good about what they would like. They DO have the ability to control quality of service, end to end, and to use things like multicasting effectively. What this means to you and I is good quality media and let's say a very, very impressive Quake arena for all players and it could conceivably not be that expensive because they control the distribution equipment. It won't be cheap, but it COULD be, in a happier world, I digress.

Unfortunately, because they are Evil(TM), this is going to be lost in the noise of a "two tier internet", in which one tier isn't really the internet, and will be designed to dwarf the one that is. Further, they are once again in the position of putting THEIR equipment in YOUR house and leave you with no alternatives. Have you ever wondered about why Sci-Atlanta is working with Cisco? Why MS is so hell bent on IPTV (and why they show up at SuperCom?) I can give you any number of STB companies working with telco equipment makers, big and small. I used to build some of them and ultimately quit because I was being compelled to architect them such that they would take choice away from the consumer. They are designed to control your home network, forcing you to license or upgrade (depending on the model) your network if you want to add equipment. Got an XBox? That'll be $4.95. Want an inbound port? That's extra. They are designed to control your household 802.11, bluetooth (and others) and license connections to you, and set up your firewall for you, even if you don't want that. They don't HAVE to do it that way, although they will argue it's the only way to ensure devices don't compete, but it's part of the greed grab.

In the end, they probably have something that consumers might want to buy in one form or another, but they're going to try to shove down the monolithic 0wn1ng version by using the government as their weapon. We should resist this, even if they make it sound very attractive. The end goal should be the same: the bell's are bandwidth providers, nothing more. We should let them differentiate the types of bandwidth they offer, force them to compete to keep prices low, and forcibly separate them from the services layer. No video, internet or anything else from the bells. Just keep the wires working and let us purchase the types of bandwidth we want.

Re:Time for another breakup?

[Captain Splendid]

You know, that's a comforting thought, but to the Telcos, it's just going to be another batch of obstacle they can whine about to Congress. The conversation might go something like this:

Telcos: "Waahhh, this is turning out to be too expensive! Please make the taxpayers pay for it instead of us!"
Congress: "Sure thing! Don't forget us during election time!"

On a related note, anybody wanna take a crack at defending capitalism anymore?

Re:Time for another breakup?

[Anonymous Coward]

Since what you described was an example of socialism and not capitalism, the burden is on you to take a crack at defending socialism.

The key phrase, you used was: "Please make the taxpayers pay for it instead of us!". The fact that it's a company saying it does not make it any less socialistic.

Re:Time for another breakup?

[dada21]

On a related note, anybody wanna take a crack at defending capitalism anymore?

I will.

Capitalism is providing no regulation or public funding for a market. Mercantilism is providing corporate welfare for favored company. Lincoln fought a war to protect his mercantilist dreams. Congress today runs the mercantilist ship, with the Executive branch profiting from the warfare state. You have Congress doling out corporate welfare with the Executive's warfare manipulations.

Don't confuse a free market with a regulated one. Capitalism is merely the process of billions of consumers and producers making unique trades that create common values that can change on a whim, but the entire process still runs. Mercantilism is stealing from the majority to support a minority that the majority didn't want to support at the price they were asking.

Re:Time for another breakup?

[Skreems]

Except the GP is pointing out the fact that what we try to pretend is a capitalist system is in reality a buddy-oriented socialist state. If we would just come out and ADMIT that we want to be socialist, then we could concentrate on making sure that the money propping up corporations is distributed to benefit the citizens at large, not the corporations and the corrupt politicians. In which case, there is no possible way we would consider paying corporations to take choice away from the citizens in the manner this article describes.

Re:Time for another breakup?

[kindbud]

I see. So, just like the communist utopias, unadulterated capitalism, too, is a pipe dream, dosconnected from reality, and will never be realized.

Re:Time for another breakup?

[advocate_one]

First, cell phones are wide spread, and the companies that control them aren't entirely under the thumb of Ma' Bell. Verizon and Cingular are closely related to Regional Bell operating companies, T-Mobile and Sprint are not. They'll limit any power that resurgent Ma' Bell could exercise.

Only if they own their own cable... if their voice/data traffic has to travel via any wire owned by "Ma'Bell", as you put it, then they can be choked out by price rises and/or low prioritisation.

Second, the cable tv industry is making strong moves into telephony. The VoIP bundles offered by the cable companies provide the second line of defense against Ma' Bell.

ditto the above, plus VOIP is being subjected to legislation designed to require costly measures to achieve compliance. Note, when the 911 system was originally set up, the landline companies were subsidised heavily to get the infrastructure in place, this time, the VOIP companies are not getting any money or relief on the date to achieve compliance...

Third, municpal broadband would only become a stronger alternative in the face of a reassembled Ma' Bell. Municipal broadband, coupled with Skype, Vonage, or a dozen others will offer a third line of defense against Ma' Bell.

Municipal broadband with VOIP will also be heavily legislated such that it becomes very expensive to achieve compliance... that crap earlier on about all access points having to be encrypted and firewalled is expressly designed to make it very expensive to set up. And WiMax is going to run into a wall of legislation designed to make it expensive to achieve compliance as well.

I've been watching the big telephone companies setting their ducks up in a row... shoes are starting to drop and the real results will soon be seen as the fledgling IP based upstarts will not be able to grow into healthy businesses.

Re:Time for another breakup?

[Darby]

He used it twice. He meant it. And it is an incredibly accurate term to use with respect to the Bush administration's manipulation of policy and perception. Under the diseased system of government of today, we who question and seek accountability are the enemy.

I hate Bush as much as any decent human being, but you really need to expand the blame to include pretty much the entire post World War 2 US foreign policy.
Ike laid it out pretty clearly

"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the militaryindustrial complex. The potential for the disastrous rise of misplaced power exists and will persist."

The problems with the weapons industry have long been clear. What you're seeing here is other industries trying to expand their membership in the club.
Socialized costs and privatized profits are a very real problem, no matter the industry.

Does this fall...

[Spytap]

Does this fall under the heading of "If we ask permission, it's not illegal anymore?"

oh yeah

[Anonymous Coward]

Good thing the american government^W^Wicann is in control of the internet so we are protected from things like this at the root level

Common Carrier?

[mwsmith824]

Wouldn't this go against the common carrier provisions? Wouldn't this sort of filtering and degrading things that they choose open them up to liability in other areas like P2P sharing that happens on their networks?

Wait...

[Malacon]

So they want to break the internet to make more money for themselves?

Will anyone actually go for this?

Seriously, what ever happened to running a business on the merits of its product, not on cash generated by hidden surcharges?

formalizing something that already exists

[Anonymous Coward]

Don't telcos do this already by customizing their BGP routing so that their own traffic takes the fast routes and external traffic that they carry takes the slow routes? At least by allowing multiple tiers of service they will be able to better accomodate QOS concerns by allowing external traffic to take the fast route if the owner of the traffic wants to pay for it.

Why ask Congress?

[dada21]

It confuses me as to why Congress should have any say in companies creating additional networks. Interstate commerce clause? What a joke.

If companies want to try to create supernets for their customers to better access each other, I say allow them to. I can not imagine any supernet subverting the Internet in any way. If an ISP decides to slow down traffic to non-ISP destinations, you're going to see user backlash. I've changed ISPs over the years due to bad routing (or repeatedly failed routing) and I know some of my non-techie friends have done the same.

These supernets would just be a second backbone connecting their network together, correct? I think this is a great idea, especially for corporations that can not afford their own backbone connections for remote offices. If my companies could connect quickly through a secondary network at no additional cost (or lower cost), I'd jump on it immediately.

I just can't understand why Congress has any say in what companies do with their own property. They're already providing for the "public need" and they should be free to supplement the "public need" for what other users are demanding/needing.

Re:Why ask Congress?

[Red Flayer]

"If my companies could connect quickly through a secondary network at no additional cost (or lower cost), I'd jump on it immediately."

You can bet it would cost more -- whether in terms of actual operating expenses for your company, or in terms of less valuable service provided to your company.

Re:Why ask Congress?

[Nom du Keyboard]

I just can't understand why Congress has any say in what companies do with their own property.

Allow me to elucidate.

It's because they are a Monopoly. It's because you, the customer, doesn't have any other reasonable choice if you don't want to go with them. It's because in return for being allowed to be a monopoly that they have to play by different rules than the open market. You take your choice of monopoly or open market, but once you make it quit yer complaining about the rules you initially agreed to follow!

Clear now?

Re:Why ask Congress?

[dada21]

It's because they are a Monopoly. It's because you, the customer, doesn't have any other reasonable choice if you don't want to go with them. It's because in return for being allowed to be a monopoly that they have to play by different rules than the open market. You take your choice of monopoly or open market, but once you make it quit yer complaining about the rules you initially agreed to follow!

Government is the only monopoly in this picture. They rent their monopoly powers to others, though.

How are the telcos a monopoly? I have a cable modem, my friend across the country has one. A little free VoIP software and we've forgotten about the telco. If they want to overregulate my DSL connection, I can go back to using a dial-up ISP seperate from them (and take advantage of the unlimited $20 package).

The freedoms the Internet reinforces are causing people to rethink the costs that used to be commonplace. Dialing your aunt long distance more than once a year was unheard of, now we can chat with her all day long for barely pennies. Sending an instant e-mail through FidoNet sometimes took 3 days for a reply, now it takes moments. Any company who thinks they can back-up the common actions of billions of users is in for a big surprise.

Re:Why ask Congress?

[supabeast!]

"I have a cable modem, my friend across the country has one. A little free VoIP software and we've forgotten about the telco."

The telco is still there. Comcast doesn't have its own huge backbone running connections out to all of its own users around the USA, it uses the backbones provided by the big telco monopolies to do that. So if they decide to create special high-priority networks accessible only at a premium charge, and degrade the quality of the existing networks to make VOIP unusable, you'll have to pay extra for a premium Comcast account that can send data over the premium networks.

Unfortunately its next to impossible for anyone else to move in an build new networks that can challenge the big telcos, because years of overregulation kept everyone else out of the business for so long. So if the telcos manage to pull this one off, everyone who wants low-latency access will be paying extra to the big telcos unless a huge number of people pool their resources to build new backbones, which would most likely require government involvement that will make such actions illegal under the anti-municipal internet laws that the telcos will doublessly get pushed through at the federal level at the same time they get Congress to allow them to build the premium backbones.

Re:Why ask Congress?

[dada21]

Because the wires wouldn't have gotten run without eminent domain.

Prove this. The original telegraphy and radiotelegraphy was created without government funding or mandate. The railroads that were built with private dollars and private aquisition of land were quickly regulated in order to control the procedures (and incorporate taxes), but the telegraphy lines were privately funded and controlled.

We believe we need government to help with communications because we've always had them around. I see many of the pushes for better and faster communications happening outside of government regulation and control. Sure (D)ARPA created the Internet, but it was private businesses that took it lightyears ahead. Government comes around with standards, but the protocols that continue to build on old protocols are invented by competitive companies.

Government regulations hold us back. I lived in a town when I grew up that didn't mandate Ma Bell (we had a tiny local phone company called Centel) and my local phone company had no problem providing me with dry pairs between my house and my friends' houses. We had our own very basic phone system going back then, secondary to the telephone company. Centel was even trying to allow other companies to run their own phone lines (this is back in 1986-1989 or so), so that they could do the same in Ameritech's market. Who prevented this? Local governments.

Alright, but not on wires running across my property. How's that for "better access?"

Microwave direct connections make this concern invalid.

You'd need new routing protocols (to distinguish between normal and "special" packets) and possibly a whole new DNS server structure (to tell which URL is in whose network). It has the potential to break IPv4 (at least) entirely.

I'm sure Amazon and Slashdot would gladly jump on this network and lose all their users. I'm sure users that get on this network that can't connect to Amazon and Slashdot would just roll over and live with it. Anyone who attempts to break IPv4 would find themselves in a very lonely micronetwork.

Again: if the telcos can't force people to sell easements, there is no network, or at least none without obnoxiously high pricing (in order to all the prices asked for by the milllions of property owners nationwide).

Easements that are now unnecessary. Sure, over the past 100 years maybe you can argue you needed eminent domain, but I believe it could have been performed much faster without it. It would have been much more expensive, but this would have pushed inventors to find cheaper solutions through radiotelegraphy. Eminent domain hasn't solved any problems, all it does is force the public to pay for things that the free market would still find solutions to. Oh, and it helps pay off the cronies, too.

Seriously, in your little anarcho-capitalist wet dream, I'm charging per packet to not put my shovel through the wire.

And there would be 5 other wires ready to back it up. Or a microwave direct connect. Or a radiotelegraphy unidirectional signal. Or a satellite signal. There is no stopping the flow of information at a single point, not with the Internet. Back in the BBS days, you could have blown up my house. Today that would only stop one person, not billions.

Telcoms

[PetriBORG]

Just another example of greed? This is directly comparable to them being allowed to degrade voice service from another phone company. Its ridiculous for voice its ridiculous for the internet. See what happens when you stop considering them to be common-carriers where everyone is on a level playing field? It will lead to no good, thats for sure.

Re:what will happen to /.

[qkslvrwolf]

Capatialism only works when there is competition, and the only way for there to be competition is to mandate competition. Monopolies are not a part of a working capatalistic economy...they're what happens when the system breaks. However, monopolies are what the corporations want because they don't care about anything except shortt term personal gains. The rest of us need to worry about long term social gains.

Re:what will happen to /.

[rumcho]

I don't think this is the way to cheap internet. Look at South Korea - they have one of the cheapest and fastest internet connections in the whole world. The result was achieved with creating fierce competition among providers, not rigging the internet the way the bells want.

Re:6 Bullet points? How about 14?

[Jtheletter]

Wow. That was actually what I was hoping to get as a response, what I didn't count on was how perfectly America now fits that mold. I suspected such, but reality is worse apparently. Thanks for the great response. I can't rep this since I've posted, but I'll give you a point elsewhere. ;)