The Cost of a Tiered Internet

An anonymous reader wrote in to mention a Popular Science article about the money issues involved in a tiered internet. From the article: "With a tiered Internet, such routing technology could be used preferentially to deliver either the telecoms' own services or those of companies who had paid the requisite fees. What does this mean for the rest of us? A stealth Web tax, for one thing. 'Google and Amazon and Yahoo are not going to slice those payments out of their profit margins and eat them,' says Ben Scott, policy director for Free Press, a nonprofit group that monitors media-related legislation. 'They're going to pass them on to the consumer. So I'll end up paying twice. I'm going to pay my $29.99 a month for access, and then I'm going to pay higher prices for consumer goods all across the economy because these Internet companies will charge more for online advertising.'" Update: 05/26 16:54 GMT by Z : The article is hosted on CNN, but is original material from Popular Science. Post updated to reflect this.

Comments

Fix it

[linvir]

Stop ISPs from creating a conflict of interests by banning them from going into the content market at all. It'd kind of gut AOL, but you've got to learn take the bad with the good :p

Obviously, the situation already exists, so a simple ban wouldn't be enough. But in Microsoft's antitrust case, they considered splitting them up to fix just such an issue. The ISPs in the US have similar monopolies, right? So cut them up. AOL Internet and AOL Portal, or something.

No way we should pay twice for them to profit twice though. Screw that.

Re:Fix it

[linvir]

I've given it some extra thought, and I reckon it'd be a false sense of security anyway. Swiss bank accounts and under the table deals make that kind of legislation moot.

I'm still up for gutting AOL though.

Re:Fix it

[Anonymous Coward]

Having an informed choice is meaningless if you only have one choice. At the moment, I have one and only one option for high speed at home. That's Charter. Do I like them? Not really. I'd had them in the past, and they are overly expensive and reliability isn't what I'd like. However, since there is no DSL availability at my house (it stops about 1 mile away from me), and no other cable companies have high-speed access at my house, I'm stuck with either them or a slow connection. Well, not counting paying insanely to run a dedicated line directly to my house or to have a satellite connection with good download when the weather decides to play nice, and always slow uploads.

Anyway, just being informed doesn't help those who have limited options. And something like this would even further limit consumer options.

Re:My letter to my congressman.

[Daniel_Staal]

Lack of reply is not lack of response. Watch how he votes before deciding how you vote.

Poor Analogy

[Nos.]

FTA: "Christopher Yoo, a professor at Vanderbilt University Law School, argues that consumers should be willing to pay for faster delivery of content on the Internet, just as many FedEx customers willingly shell out extra for overnight delivery. "A regulatory approach that allows companies to pursue a strategy like FedEx's makes sense," he says.

He's looking at it incorrectly though. Absolutely I should, as a consumer of a service be able to choose different levels of service, for example, dial up, "light" high speed, or torrent-downloading-freak high speed. However, using his Fed-Ex example, since when does the shipper AND the receiver pay for the service.

Re:Poor Analogy

[xenocide2]

It's even more retarded than you present it. Currently, companies like Google and Yahoo and Archive.org pay for every byte they send. Yes, there's the issue of who is charged, reciever or sender, and Tiered Internet changes this some. But currently, if you use more packets, you pay more money. Net neutrality isn't about paying more for sending or recieving more. It's about selling "priority routing." Your average bandwidth likely remains the same, but worst case latency could be much improved. Say you're a large company with a good income stream from selling VoIP products. What the ISPs want to sell you is the right for your packets to be served before everyone else's. If you're the only person in line, it's a great advantage, your packets will all have low latency, and packet loss would be minimal. You would be able to corner the market quickly, either by paying the ISPs for the exclusive right for priority, or simply by being among the few who choose to pay for the privledge. This division of packets among customers (customers who've already paid per byte) is what has been labelled a Tiered Internet.

Nobody knows how the ISPs plan to implement this Tiered Internet from a business perspective. Some people fear ISPs like the Bells will use this to crush the threat VoIP represents to their phone networks. Some people think that it could be used as a competitive advantage for ISPs to enter content markets by giving themselves higest priority reguardless of bids on the table. Some people worry that priority creates a false scarcity and bidding war that leaves the larger players well served and squeezes out the traditionally vital role small new players have had in Internet applications; the consumer ISPs represent such a huge and critical market that companies can't risk losing them, and everyone ends up paying for privledges. Others have said that optimizing the Internet for one particular role (streaming media) deoptimizes it for all others.

Ideally, a Tiered Internet allows us to segregate data transfers that don't require some level of QoS (downloading patches, web traffic, other non-realtime data) from applications that do benefit from it (streaming movies, VoIP, other real-time contrained things). I personally worry that the consumer internet market is not diverse enough to allow a free market to compete for the most optimal solution, nor the average consumer capable of pinpointing the troubles they may find on subtle changes to the network that the ISPs have planned but not advertised.

Accountability for traffic

[RingDev]

Simple, if they don't want to be a common carrier, hold them accountable for anything that is transmitted.

Either be a common carrier, or be charged with a felony every time a kiddy porn image passes through their network. Hold them accountable for criminal digital acts including hacking, DOS attacks, defacement, etc...

Either they are a common carrier, or they aren't. None of this cake having and eating.

-Rick

Re:Accountability for traffic

[atarione]

Well.... you should be making money getting people to sign up for Internet access from your pipes (paying various amounts for given service speed levels).

I mean fucking BILLIONS of dollars have been made by people making business deals on the phone.... are you saying the phone company is somehow entitled to a percentage of real estate deals made on the telephone???

I call bullshite on you, and you have ignored the main point of his argument... the service providers have been shielded from prosecution for illegal content crossing their (your) networks by their status as common carriers.

if ISP's are going to adopt this new model and decided what content gets to whom, and at what speed, well then sir they (ISP's) are no longer "common carriers" and could and fucking well should be criminally liable for illegal content crossing their networks.

If ISP can't make money by providing the pipe to the customers, then they are not very smart.... And honestly since all the broadband providers touted all the "streaming" ..blah blah heavy load traffic to sell their product w/out actually having the infrastructure is their fucking problem... and they shouldn't be allowed to destroy the very basic foundation the internet was built upon to cover up their mistaken business model.

Not exactly...

[RexRhino]

Creating a tiered internet does not mean that users pay twice... It means that users pay more to the online content provider instead of paying more to their internet service provider. The economics of the article are not exactly correct.

Now, don't get me wrong, tiered internet is still bad, because it squeezes out smaller content providers who can't pay for extra bandwidth. But opposition to a tiered internet isn't about paying less, it is about making sure that Internet isn't like cable TV or radio, or other mediums where a handful of companies or the government control the whole thing. I, as a consumer, want to get the web site that I want, and I want to get it fast, and I don't care if that web site is google or something very obscure.

2 sides to every story, this is no exception

[fl!ptop]

i have been keeping very close track of this story for the past 2 months now. both sides of the argument have valid points.

for example, consider the telecommunications companies' point of view. currently, they sell more access to bandwidth than they have available. which is fine for regular, burst-type internet use.

now, with internet tv, video-on-demand, and movie downloads looming on the horizon, their argument is, "the current infrastructure can't handle everyone watching streaming video or downloading movies at the same time. if your house is on fire, and all your neighbors are downloading the last episode of '24', your VoIP phone call to 911 may not go through."

so their goal is to get the gov't to allow them to run their part of the internet as a private network. where they can partition off portions of their bandwidth that's dedicated to VoIP phone calls and such, while allowing a (perhaps smaller) portion of the pipe to be available for video downloads and such.

but the potention for abuse is there. what's to stop comcast from throttling a customer's bandwidth if they're using vonage so it basically becomes unusable, then forcing that customer to use comcast's VoIP service instead?

then you have the argument of the google's, microsoft's, amazon's, etc. they know that they'll be charged money to guarantee fast delivery of their services on infrastructure of those companies they're not partnered with. for example, if comcast and yahoo partner up, comcast can guarantee yahoo's search page comes up right away, but google's might take a few seconds longer. that would be a disaster for anyone who doesn't pay the 'comcast tax' and relies on their ads being served up.

one thing the telecom companies forget is that, although they've invested billions into this country's infrastructure, joe taxpayer has had a hand in that investment too. look at your phone bill. see those taxes? universal service charge - what's that for? it's to encourage better connectivity to schools, libraries and rural areas. it's collected and distributed back to the telecoms to invest in infrastructure.

the root problem is the current infrastructure won't be able to handle all the new tv/video/movie services that are about to strike. so instead of investing in more bandwidth to handle the load in the manner we currently enjoy (net neutrality), the telecoms want to use the 'tiered' structure instead.

i'm with tim berners-lee on this - provide either service or content, but not both.

Re:I don't think the idea is viable

[SydShamino]

So google.com has a internet connections coming in from AT&T, and AT&T says "You have to pay us extra because you are google". What's google going to do? They're going to call around and find someone else to provide the service.

You have the idea completely wrong. Here is the scenario as stated:
1. Google does not use AT&T for its ISP.
2. AT&T calls Google and says "We have 100,000 customers. Pay us $0.01 a packet or we will deliberately slow down or lose packets sent from you to our customers."
3. Google says "..."

This has nothing to do with service providers charging more to their own customers (who happen to be content providers). It has to do with service providers charging independent content providers a sort of "mob tax" to make sure nothing "happens" to their data on its route.

Sure if AT&T does this, AT&T's customers can move to Time Warner. Then what if Time Warner does it, too? Those are the only high-speed internet options I have. And even if there was a third-party ISP (i.e. Earthlink), they probably rent their lines from AT&T or Time Warner, and they would have the same restriction.

The only option I see is this one:
3. Google says "O Rly. Well then, we're going to take our nationwide dark fiber and roll out a low-cost high-speed nationwide ISP. When you've lost 20,000 customers, come back and apologize and we won't take your other 80,000." ..but probably Google will turn evil and offer tiered service, too.

Re:Two versions of "teired internet"

[mugnyte]

How can you say your 2.2 is a workable solution? Imagine: User upgrades from 3Mbit to 6Mbit, full time, anytime. User doesn't have to worry if content at "schmoe.nowhere" is in the same game as "www.abc.com", or any other closely tied affiliate of ISP.

  The ISP cannot throttle what they've already sold. This is the Big Lie of bandwidth. It's dynamic on the demand side. However, scaling back based on any criteria suddenly places the carrier into a serious category: judge.

• What are the public checks to ensure ISP doesn't throttle based on source? content?
• If they do throttle, what are the rules? How are they communicated? enforced?
• What are the true values for continuous bandwidth? can i demand content all day at full without worry? What did I pay for?
• How does the market remain free for smaller ISPs? If they are throttled above them, but their competition is not, why? Who is going to police this behavior, and pay for such policing?

Overall, it's a safe bet that the money is going to the ISPs. This is a power play, IMHO. "You like internet? great, today internet is slower, unless you visit my friends' sites, or pay me". Bullshit!

If this goes through, perhaps the only recourse is homegrown networks, with fat links to other homegrowns. Suddenly, the backbone is replaced with a newborn wireless system - which will take a long time to match anything around today. However, the possibility is growing.

Sound familiar?

[MyNymWasTaken]

That's a fast connection your website has there. It would be a shame if anything were to happen to it.

Christopher Yoo nailed it in the article

[Todd Knarr]

Christopher Yoo got it, and his point is what's wrong with the telecomm's ideas. He's right, consumers should be able to pay for better delivery, just like when I order something shipped FedEx I can pay for regular delivery or I can pay more for overnight delivery depending on what I want. But that's not what the telecomms propose. That'd be like the telecomms saying "Consumer, you're using a lot of bandwidth. If you want to download streaming video you're going to have to pay for a higher-capacity link.". What the telecomms propose, though, is to not have the consumer pay for what they want but to have whoever the consumer's asking for stuff from pay. It's like my ordering something and paying for overnight shipping, and FedEx saying to the shipper "Right then. The customer's paid for standard shipping, but unless you pay us for overnight delivery we'll shove your package in the back and deliver it whenever we feel like it. Which may be never. Oh, and the extra just gets you standard delivery, real overnight will be yet more on top of that.". Of course the telecomms don't want to phrase it that way, because people understand FedEx and the extortion attempt's blatantly obvious.

Re:Two versions of "teired internet"

[DragonWriter]

Er, #1 and #2 are two different ways of wording the exact same thing.

The "amounts to a 'leased line'" connection in #2 is the result of the charges in #1. In either case, you get a comparatively degraded connection unless your content provider has paid a negotiated surcharge to the pipes between their service provider and you to guarantee premium access, and you can guarantee that if they are providing a service that your ISP wants to provide (or anyone else in between!), those fees are not going to be reasonable.

Re:This is nothing but a money grab.

[NerveGas]

"How is Google "freeloading"? Paying $millions in ISP fees every year is now called "freeloading"?"

I don't think that Google pays much - if anything - in "ISP fees". They don't go out to some ISP and buy a bunch of OC-whatevers. They buy their own fiber, and have non-transit peering arrangements with all of the major ISPs, and many of the smaller ones as well. Because of that, they're able to hand off packets to the destination network without having to pay an upstream "default gateway" ISP.

Now, I'm sure that moving all those packets costs them a pretty penny, but calling them "ISP fees" doesn't quite fit.

steve