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?

[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?

[xs650]

So the last ones standing are AT&T and SBC. And they will merge very soon,

It already happened on November 21st of this year.

http://www.schwabpt.com/downloads/support/T_SBC_21 Nov05v3.pdf

"Important Information about the new AT&T Inc. The AT&T Corp. ("AT&T") and SBC Communications Inc. ("SBC") merger completed effective November 21, 2005. The newly formed company is known as AT&T Inc. Initially AT&T shares will be exchanged for SBC shares under the 'SBC' ticker symbol. On December 1st, 2005, the newly formed company will take back the symbol 'T'"

Re:Time for another breakup?

[kgruscho]

BS,
if you live in New York maybe, but living in central illinois, if I want landline phone service I have one choice SBC, if I want broadband I have one choice, InsightBB.

SBC to offer DSL but left the market because it was small.

The only telco service where I have had any choice is Cell phones. Most of the telcos have regional monopolies. Not national, but still pretty hard to deal with as a consumer.

Re:Time for another breakup?

[Anonymous Coward]

The DOJ's budget was $23.4 billion dollars last year, as opposed to $21 billion in 2000. By the DOJ's AntiTrust division's own reports, its budget has gone up, even with respect to inflation: DOJ Budget Trend Data, Antitrust Division.

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?

[RevMike]

I don't deny everything you say, but the landscape today is very different than it was in 1984. Pre-breakup there was no other game in town. Now even if Ma' Bell is reassembled there are several alternatives.

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.

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.

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.

Fourth, new technologies like WiMax will provide additional communications options.

In 1984, Ma' Bell was a monopoly because not only did they completely control a particular service, but there was feasible substitute service available. Twenty-one years later there are several substitutes available and so the monopoly won't have near the market influence it once had. The attempts to reestablish Ma' Bell should be interpretted as a set of uncompetative companies merging in order to hopefully achieve economies of scale and become competative - not an attempt to reestablish an old monopoly.

Re:Time for another breakup?

[Captain Splendid]

Thnaks for the correction, but it still strikes me that we get the worst of both: Either it's a hyper-succesful company that basically exists due to slave, or quasi-slave labour; or a mildly succesful comapany that would be nothing but memories if it weren't for large chunks of taxpayer money.

Everybody loses except a few thousand majority shareholders, executives and politicians, yet these are the systems that are held up as paragons to emulate.

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?

[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?"

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?

Re:Wait...

[bcattwoo]

Will anyone actually go for this?

You must be new to the real world where enough lobbying and campaign contributions can buy just about anything.

what will happen to /.

[tehwebguy]

not like anyone reading this doesn't know already, but this would be the worst thing ever to happen to the internet. if you think they would stop by offering crap connections for competitors, you're blind. things like /. would be low priorities since they love to expose what big bells are doing to screw us.

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.

Dumb Network

[Kelson]

Hmm, maybe we need to send these telcos over to World of Ends and remind them that the end-to-end or "dumb" nature of the Internet (in the sense that all the logic is handled at each end, not in the middle) is a big part of what's made it successful.

Not that that's ever stopped anyone from killing the goose that lays the golden eggs, of course...

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?

[Anonymous Coward]

If companies want to try to create supernets for their customers to better access each other, I say allow them to.

It isn't about them trying to create a supernet, it's about them breaking the current 'Net and inserting them selves between the end points. then they can prioritize traffic based on who coughs up the most money to them. No $$ = no access.

This isn't a suppliment to what has become, in essence, a Utility.

Unfortunately, with the current Administration's track record on pro-corporation, pro-Internet regulation, this proposal should look mighty juicy indeed. This will give them two things they always wanted. An easy wat to regulate/control the Internet, and more $$ for their friends.

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?

[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?

[LaminatorX]

If the Telcos did business more or less privately like any normal business, you'd have a good point. However, that is far from the case.

The Telcos have been the beneficiaries of large grants of land siezed or given to them by the government. The government taxes their customers and then hands that money to the Telcos to pay for capital improvements in less profitable geogephic markets. The Telcos benefit from government regulation that places enourmous barriers to entry for competitors attempting to enter their markets.

So yeah, the are subject to congressional oversight. If they don't like that they should'nt have gone to Congress in the first place for all the freebies and just conducted business in an open market.

It really hacks me off when whiney corps try to have it both ways.

Re:Why ask Congress?

[pthisis]

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.

Absolutely untrue. The original telegraph companies had government-backed eminent domain powers. Further, they often relied on railroad landed (acquired through eminent domain). There were constant battles between the two; see, for instance, Western Union Tel Co v. Pennsylvania R Co, 195 U.S. 594 (1904), available at: http://caselaw.lp.findlaw.com/scripts/getcase.pl?c ourt=us&vol=195&invol=594

The Pennsylvania statute (mentioned in that ruling) granting eminent domain to the telegraph company was absolutely typical, and telegraph companies in the US relied on such mandates. Normally such power was granted to a single company, giving it a monopoly in the state or region.

Common Carrier Status

[notNeilCasey]

Wouldn't this automatically end their common carrier status, if they're filtering blocking traffic from certain sources to certain destinations? Or is that something they hope the law they're lobbying for to address? The Telecommunications Cake Eating and Having Antiterrorism and Freedom Act of 2006!

This leads directly to fraud (hear me out)

[kimvette]

This means that common carriers will be essentially committing fraud.

If for example, I get a T1 from Verizon (I would never buy from them directly, we're going with an alternate provider, but hear me out) and AT&T has a dispute with Verizon. Were this thing to pass, data transfers between my T-1 and a customer's T1 (who happens to be an AT&T provider) would be downgraded. This means that my customer is not getting the full 1.54mbps bandwidth their SLA guarantees, and by effect neither would I. This is {potentially} interference with interstate commerce and is also discriminatory in deciding whose traffic goes where, not to mention breach of contract (violating the SLA).

Implementing this kind of policy should immediately result in the provider's losing common carrier status, as by advertising one thing and then providing a different service, they are carrying out a bait-and-switch on the customer - in short, fraud.

Re:This leads directly to fraud (hear me out)

[moosesocks]

Cell phone carriers do exactly what you're describing above in the form of in-network calling.

Heck, I'm switching to Verizon's mobile service because it doesn't make any sense to pay Cingular when virtually all of my contacts are on verizon, and would be free to call if I were a verizon customer.

It's probably racketeering, and definitely immoral, but it's a damn effective business strategy.

Re:This leads directly to fraud (hear me out)

[Urusai]

It's only fraud if Congress hasn't been paid enough.

Re:This leads directly to fraud (hear me out)

[chill]

This means that my customer is not getting the full 1.54mbps bandwidth their SLA guarantees, and by effect neither would I. This is {potentially} interference with interstate commerce and is also discriminatory in deciding whose traffic goes where, not to mention breach of contract (violating the SLA).

Wrong.

You'll get the full T1 from your termination point to theirs. That is ALL the SLA covers. You are not guaranteed any type on link to other networks at all. Never ever. Telcos don't guarantee service on their competitors networks.

What most people dont' realize is that the common carriers DO THIS ALREADY. The connection equipment of choice is ATM, and that supports QoS. Leased circuits were configured with QoS depending on what was paid for by the customer. As a field engineer at Lucent, it was explicitly explained to us "see that level there, marked 'no guarantee, best effort'? That is all the Internet traffic -- lowest priority there is."

However, all this is done at the network level and not the transport level. Major carriers routinely ran their own circuits high priority. Anyone else who paid for one, also got high priority circuits. Everone else got 'best effort' links. Links where they didn't control both endpoints, like to a competitor thru a peering agreement, were 'best effort'.

The fuss is not that the carriers are doing this, it is that they want to do this further up the stack. They want to become more than carriers and get into the realm of "content providers". Thus, not just provide the wires, but the stuff on the wires as well. This is where they run afoul of the existing laws.

In essence, they want to do QoS at the TCP level. Personally, I think that is fine by me as long as it is TARRIFED like services are now. If SBC wants to do it for SBC produced content, they have to charge that division the same as if it was a Google, Yahoo or NBC service. The "premium" costs the same no matter WHO you are.

I'd love to have end-to-end QoS available, even if at a premium.

  -Charles

What a mess

[VaderPi]

This has the potential to turn the Internet into a huge mess, especially as the telecoms continue to consolidate. I hope that Congress is not going to implement this. At least we have Google, Amazon, Ebay and Microsoft sticking up for us, because we all know that their interests are much more pure.

This will never happen

[borgheron]

For one thing, it would require a radical change in how the internet currently works. TCP/IP was designed around the whole idea of having no central routing (note, I didn't say naming) authority. This is one of the features which make it resilient to damage, since the network can adapt to nodes which suddenly might go dark.

This, after all, was the whole purpose of it, since ARPANET was intended to be resilient to enemy attack if parts of it were taken out.

Re:This will never happen

[ivoras]

Yes, TCP/IP is built to be reliable and decentralized, but the lower-level protocols used by big telcos, like ATM, can discriminate just fine.

Re:This will never happen

[Bishop]

it would require a radical change in how the internet currently works

No it wouldn't. It is a common myth. TCP/IP was desgined to allow for dumb routers so that it is resiliant to damage. But TCP/IP does not enforce this feature. There is nothing to prevent smart routers from prioritising packets or simply dropping packets into the void. There is nothing preventing AT&T from closeing their massive network and disconnecting it from the Internet. The rest of the Internet will continue to function as designed, but that is little comfort to whose people who are left with an inferior network at a higher price.

Don't worry!

[Darth Maul]

"AT&T Inc. and BellSouth Corp. are lobbying Capitol Hill..." ...But our politicians are elected to best represent the needs of their constituents (and we all voted, right?), so everything will work out just fine in the best interest of the individual citizen.

Whew. That was a close one.

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.

Isn't this what the cable companies already have?

[RockClimbingFool]

Not to play devils advocate here, but isn't this the setup all cable companies currently have?

They have their own private internet for video services and a separate internet for normal IP traffic flow.

This allows them to send massive amounts of video with fairly reliable QOS.

That's it!

[temojen]

I'm making my own internet!

I've got a spare linksys and two pringles cans; who's with me?