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

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.