ISPs Race to Create Two-Tiered Internet

An anonymous reader writes "The ISP race toward a two-tiered Internet is picking up speed. This article from Michael Geist points to a wide range of examples involving packet preferencing, content blocking, traffic shaping, and public musings about premium charges for faster content downloads. ISPs are now reducing access to peer-to-peer applications, blocking Skype, and, scariest of all, lobbying Congress to let them do it."

Comments

Re:Vote with your money

[Jeff Mahoney]

A lot of ISPs have caught on to customers talking with their feet and now lock in subscribers.

Circumventing ISP filtering

[CCMCornell]

How do the ISP's block or attenuate traffic speeds for certain services? Do they actually look at the contents of packets or is it simply by port? If by port, can't many applications like p2p's be set to use non-standard ports? For a few years now on Time Warner Cable/Road Runner, I've noticed that sometimes default settings for P2P's yield very slow results and sometimes no connection to the tracker/server and connections to very few peers. I've simply changed those port settings. I guess some applications can't be changed either because of lack of customization in the program or a required standard port.

Re:Two word solution!

[peragrin]

Your idea of two-tier internet and the ISP's are completely different.

Your new two-tiered ISP charges you 1.99 per download from itunes, plus the cost of the music, but if you download from their sponsered service they only charge you for the music.

Think Cell phone bills. The data charges on Cell phones are stupid high. They charge you per byte, plus minutes while online. Try downloading a ringtone sold by sprint on a verizion phone. It doesn't work. Not because the song isn't compatible but because they will put up money road blocks into the way to force you to pay.

I am sorry But I want the internet my way. Not the way some company wants to force me to pay Dollars extra for things they get for literaly pennies.

Yay!!

[JWW]

Yay! They're trying to gain more of our business by limiting what we can do no the intenet and making things suck.

As a "consumer" that exactly what I look for. I wouldn't want the greedy telcos to have to actually price stuff based on a competitive market.

I look forward to a few years from now when Japan and other countries in Asia will have cheap, and abundant bandwith (at least 100Mb/s, probably wireless to boot) and I'll still have a 1.5Mb/s DSL line and be paying MORE for it. Yeah, that'll be great.

If the telco's succeed in this we (US internet users) will be relegated to a second class status on the net.

And that doesn't even take into account the chokehold they'll have on innovation in the IT sector. Then we'll get passed there too.

Don't get me wrong its not a US and them internet, the net is a global endeavor. It just that in the future being from the US I'd like to participate in it and not get blown past because increasing our bandwidth has take a back seat to Telco profits.

rigged election

[mapmaker]

Unfortunately, most people have either one or two choices for broadband internet service - the cable company and if thy're lucky also the phone company. It's hard to vote with your wallet when there's only one candidate running for office.

I think it's fantastic in a way

[rainman_bc]

Just in a way. I'm all for freedom of speech.

I think this plan will backfire on ISP's. They presently do not filter content, so they are held excempt from liability of the content. Plenty of court cases have backed that.

However if they are filtering content, controlling what an end user can and cannot access, then won't the courts hold them accountable for this behaviour?

This will be a splippery slope, one where a few ISPs will get burned from it.

Give in. We're screwed.

[kid-noodle]

Not to be cynical - but we're essentially screwed here.

Nobody else will give a damn. AOL are the most popular ISP in the world, and we all know they suck - doesn't matter. Vote with your wallet, fine. Nobody else will. They'll believe the hype - the megacorps will win, they will be convinced that this means they get a safer, faster internet. They'll be pleased.

Even then, it won't matter - your escape options will vanish, because every major ISP will do exactly the same thing.

We're losing the internet to the Bad Guys, the battle is half over already, and on balance, they're winning it. I have no idea what the solution is - we're under attack from the politicians on both national and international levels, the corporations on a global scale... I don't see us winning this fight. Best we can hope for is a draw.

Re:Two word solution!

[Caspian]

Or, let me put it even more simply: Contrary to what libertarian dreamers like yourself would like to believe, in the absence of controls on the powerful, the powerful get more powerful (and the powerless get more powerless.)

This concept seems so ludicrously obvious, yet you completely don't understand it.

Even as things presently stand, the advances made by "the little guy" (E.g.: The rising influence (for better or worse) of bloggers) are the exception and not the rule. They are like those "human interest" stories you see on the evening news where a firefighter saved a precious cat named Muffins from a raging fire. Awww, how nice. Meanwhile, AIDS is still killing millions in Africa, and people are still being blown up in Iraq.

Loony Libertarian "to make the powerful less powerful, we'll remove all restrictions on them!!111" thought would only make the situation worse. It amazes me to think that there are those who cannot comprehend this.

Since when do you reduce the power of an entity by removing all restrictions on them!?

And please, spare me the lecture about how "with no regulations, barriers to entry in the [X] market would be lowered". It doesn't fucking matter. Little companies could enter the telco market-- they'd just fold inside of a year, since no one can compete with the marketshare and "mindshare" of the established carriers.

I'm starting to think that the entire libertarian/Libertarian movement/party was secretly funded by Fortune 500 companies seeking to grow their influence through eradicating all checks and balances on their nearly-limitless power.

Barriers to entry

[klubar]

You're missing the piece about barriers to entry.

Where the entry cost is low, competition works well (joe's computer shop, asmet's sweatshirt shop, even beverages). Where barriers to entry are very high (telecom, drugs, automobiles) regulation is needed to prevent monopoly powers.

Re:Barriers to entry

[squiggleslash]

Where was google on the map 10 years ago?

I could start a search engine company tomorrow. It's not expensive. The tricky bit is coming up with an original and effective way of searching, but money isn't the object. A search engine company is not an ISP, not a provider of infrastructure.

I'd find starting a telecommunications network, with its own infrastructure, of any useful kind pretty close to impossible. So, unless you're actually Bill Gates et al, would you.

And trust me, I'd love to do that. I'd love to just start a mobile phone company. I mean, I have some great ideas about how mobile phones should work. I can pretty much work out how the things could be funded too so the business makes a profit. But, you know what? It's a little expensive. I need a huge amount of money up front, before I can get it back from the customers.

Creating a website, and writing a program to crawl the Internet is cheap.

Building towers every few miles, and linking them with some form of high-bandwidth telecommunications link, is phenominally expensive. Out of the range of the vast majority of us.

That's mobile phones. Of course, if we're talking land-based telecommunications (copper, fiber optic), then competition actually makes the costs more expensive. Let's suppose I decide I'm going to compete against BellSouth in my city. With my own infrastructure, because, remember, you're proposing total deregulation.

Suppose I get half their old customers. Does this mean:

1. BellSouth's costs just halved, meaning they can charge their existing customers the same amount.

2. BellSouth's costs, for maintaining a network that still covers the same area but with half the number of paying customers, just, for the most part, stayed about the same?

Not difficult to answer that one, and it's actually part of what made early AT&T leaders actually support the notion of monopolies in telecommunications to begin with.

Can you see me actually getting half of BellSouth's customers? I'd have to build out a network that costs as much to maintain as their's does for the same group of potential customers, yet survive on a fraction of that group. I'd have to be nuts to even try.

Here's what happens if you deregulate:

Competition dies completely. Companies work out that it's in their best interests to combine, for two reasons: The first is, as in the infrastructure example above, it's cheaper to build and maintain one network than two. Two companies mean supporting two networks for the same group of potential customers. The second is that control over the market means control over the customer - as long as the product isn't unusable, the customer will pay through the nose and no market will open for exceptionally expensive alternatives that might otherwise eventually come down in price once enough people move to it and compete.

Most of us want regulation. We want the big guys to play fair. We either want competition, or we want services that are reasonably priced, high quality, flexible, and non-discriminatory. What we don't want are monopolies that kill any chance of real competition and force us to use an inferior product. We know that BellSouth doesn't need to come to our doors with guns to put us in a position that we can only use their internet service, it just has to own its own wires, and not make any exceptionally stupid errors.

Re:Two word solution!

[rainman_bc]

Complete deregulation in the telecom field wouldn't lead to "thousands of little companies". It'd lead to one company.

I agree totally. There's a natural tendancy for companies to consolidate, when growth cannot be achieved without consolidation. Economists theorize that in a normal environment, businesses consolidate, raise their prices, and when those prices rise, the incentive for new business to start is better and those businesses will be competitive.

They expand on that theory to point out that when economies of scale are reached, the barrier to entry is too high, and big fish will swallow the little fish because of it.

I'd like to draw attention to Fido and Clearnet in Canada.

At one time we only had two Cell providers in Wester Canada - Telus and Rogers and they hosed us on the rates. It was an oligopoly, where the incentive to keep rates high was better than the incentive to compete. So two new cell providers came to play: Fido and Clearnet. Fido offered amazing rates that were highly competitive - 200 mins for $20/mo. So did Clearnet - unlimited incoming calls for $29/mo. And they did this without a 3 year contract. All of which was unheard of before.

Telus bought clearnet, Rogers bought Fido.

Do you think they bought those cell carriers to compete, or to increase margins?

The barrier to entry for the cell market is very high now. We probably won't see a new cell providor in Canada for a long time now, and rates will stay where they are.

Re:Define the "Internet" and then sue

[Anonymous Coward]

Port 80 sounds like a good choice.

Try port 443. ISPs may send your outgoing port 80 to a transparent proxy, and such a proxy could simply drop traffic it doesn't understand, crippling port tunneling without affecting web surfing. Typical port 443 traffic is already encrypted, so if they block any of it they risk all their users complaining.

You're right in putting the legal solutions ahead of the technical solutions for this one, though. If someone is selling lemons their customers should be talking to a lawyer, not a mechanic.

Re:Two word solution!

[antarctican]

It was de-regulation that caused every hamburger chain to combine into one.

It was de-regulation that caused every big box consumer store to combine into one.

It was de-regulation that caused every candy bar company to combine into one.

Apples and oranges. That argument applies to businesses where entities, offices, etc are separate. Telecommunications is completely different; there is one set of phone lines running through a neighbourhood, there is one set of cable lines running through a neighbourhood.

Do you really think a municipality would allow every company that wants to come along to put up more wires? Do you really think residents would want dozens of different wires running through their streets? Do you really think it would be economically viable for a company to wire up a neighbourhood if they only had one or two customers in an area?

It's an economic factor why there's only one set of telephone and cable wires in a city. And as another poster said, if there was pure deregulation, what would force the owners of those wires to let anyone else use them? They would be the gatekeeper for that telephone network or cable company, they would dictate what goes down those wires and how much you pay, and the consumer would have very little choice.

This is why regulation is needed, because it's not like a burger joint where someone can just put up a new franchise next door - a new player can't simply lay down a new set of wires.

The infrastructure in this case should be a public asset that is there to facilitate commerce and competition, allowing any players to enter, like our public road system. All companies can use the roads in an equal manner.

And that's what a one-tier internet does, allow anyone to enter the game because they have the same access to the market as anyone else. A two-tier would force all the small players on the wider internet out of business because they would have to pay a toll to reach the consumers.

You like real life analogies? It's like each neighbourhood being able to set up a toll on the roads in their area dictating that all red cars need to pay $5 to pass, after those roads were already paid for by taxpayers. I as a consumer already paid for a road to the internet, paying for my DSL or cable, I should be able to pick what colour car I drive down that road, not have that dictated to me.

Re:Two word solution!

[IAmTheDave]

I am sorry But I want the internet my way. Not the way some company wants to force me to pay Dollars extra for things they get for literaly pennies.

This isn't even "my way" - it's quite simply the connection itself. I am paying not for the service, but for the connection to the internet. Currently, the ISP passes my traffic back and forth to my computer/router. Serivces are provided by the connected server that is passing traffic back to my computer.

This is DIRECTLY akin to saying that phone companies want to provide better phone quality if you call another user on their network. Have Verizon and call someone on Cavalier? Well, we can't guarentee a connection, we can't promise you won't be booted off the line for a Verizon->Verizon connection, and we can't help the static unless you get the other party to switch to Verizon.

This, directly, stifles competition, especially at the small business level. It's sickening. And it will become law.

To whomever downmodded the parent

[Caspian]

You can moderate the truth (-1, Flamebait) or (-1, Troll) all you want, but it will still be the truth. I stand behind my words. Not all ideas are equally valid. Libertarianism is idealistic nonsense. It assumes that consumers are all informed, make sensible decisions, and care about quality (or even price, to a point). It assumes that companies won't collude together to fix prices; it assumes competition is perfect and "by the books". It conveniently disregards such concepts as pre-existing mindshare (who'd buy phone service from Joe-Bob's Discount Long Distance if AT&T or Sprint already serves the area, and then some?), FUD, and barrier to entry. It's a pure form of idealistic free-market religionism, cut from the same cloth as the Pollyannas who constantly chirp about how America is "the land of opportunity" and anyone who really works hard and has a can-do attitude can make it rich here.

Just because libertarianism/Libertarianism is currently in vogue on SlashDot doesn't make it a good idea, and just because I'm pointing out similarities between a religious belief in obviously contradictory ideas and an economic belief in obviously contradictory ideas doesn't make me a troll. (Or wrong.)

Re:Two word solution!

[DonChron]

The "market" doesn't exist without laws and regulations - ie. liability law, contract law, etc. Sure, you need buyers and sellers, but the framework in which they operate is defined largely by laws.

To pretend that people can vote with their feet and just embrace alternate ISP's is ludicrous. Businesses can do this - I can buy a T1 from plenty of providers. Consumers generally can't because Congress repealed the unbundling of local loop services. Unbundling was one of the key provisions of the 1996 Telecommunications Act, and this specific regulation successfully promoted competition. Look at the huge growth in small, DSL and dial-up ISP's in the late 1990's. But the re-bundling of local loop and telecom services allows ILEC's who own the (publicly subsidized, monopoly-fueled) phone lines to kick out their competitors. Bye Covad. Bye SpeakEasy.

Since the telecoms killed the regulations *allowing* competition in the baby bells' wiring closets, and all the major telecom providers are merging from a fear of being too small, your small-ISP options are going to evaporate (assuming they're not already gone). That leaves the cable companies, who are rapidly consolidating, and the bigger, post-merger, debt-and-infrastructure-heavy, incumbent telecom providers to choose from. Unfortunately, they all have the same business plan now: milk the infrastructure and perpetuate monopolies and oligopolies, just like the pre-Internet days.

I live in a dense suburb of a major American city. If I want broadband, I can get it from Verizon, Comcast or RCN. Or I can pay a 100% monthly premium for a slower-than-cable SDSL connection from an independant DSL provider. Maybe I'll pay extra because I have some applications which benefit from unfiltered ports, and better upstream bandwidth, but I doubt it. And can I really expect my non-technical friends and family to do the same? For a principle, which almost never gives them any benefits?

Public Interest Research Group has some good analysis of the consumer-unfriendly results of telecom mergers.

http://www.pirg.org/consumer/media/reports.htm

When someone tells you "The Market will determine the optimal solution for consumers," they usually mean "The monopolies created by deregulation will be very profitable and the consumers get what they deserve." If it's a corporate spokesperson, they're buying (and writing) the legislation to re-shape the market. Why do you think these guys try to block all municipal ISP programs? They're allergic to competition. Look at SBC - they've built or bought all the infrastructure they care to build and now it's time to raise the prices and cut service levels. They could never do this with a truly competitive telecom market.

Why wouldn't you try to get your elected representatives to oppose such legislation? What other avenues are left? Start your own telecom business and compete with Verizon or SBC for those lucrative local phone customers? Not likely - the barriers to entry are too high. Sure, there's lots of dark fiber out there, but there's no excess capacity in the last-mile, local-loop side of things.

-Don

PS - What, exactly, is the ideology that takes the SBC chairman's statements about preparing to gouge consumers and turns that into "Consumers win! Everybody wins!"?

Re:Two word solution!

[Comboman]

Telus bought clearnet, Rogers bought Fido. Do you think they bought those cell carriers to compete, or to increase margins?

I don't know about Fido & Rogers, but Telus was a mostly western company and Clearnet mostly eastern. After the merge, they had solid national coverage. It seems more like a fast and cheap way for Telus to expand into eastern Canada rather than getting rid of a rival.

The barrier to entry for the cell market is very high now. We probably won't see a new cell providor in Canada for a long time now, and rates will stay where they are.

Is that why Virgin Mobile just started up this year? With lower rates than everyone else?

The thing that really stops major competition in the cellphone world is not cost-of-entry for new providers, it's things like service-provider locks on phones and non-transferable phone numbers. I doesn't matter how many providers there are if you can't easily switch from one to the other.