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.
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.
A couple of weeks ago, I sat down and wrote my first and only letter to a federal rep. Here in Oakland county, Michigan that happens to be Thaddeus McCotter. I decided on a fax because I've read that letters are given greater consideration compared to phone calls and emails, and a fax is better (faster) than the postal service due to postal security concerns. While the letter addresses my concerns from the viewpoint of a VoIP company founder, net neturallity is of major concern to anyone who is starting (or thinking of starting) any Internet-based company.
Congressman McCotter:
I am not politically active and have never contacted a federal representative in my life. However, I am taking the time today to write you because I am very deeply concerned about pending legislation intended to counter recent actions by large telecommunication companies that will hugely detrimental effect on the American citizenry, your constituents, and myself personally.
As things currently stand, big phone companies and cable conglomerates have what is called "common carrier" status. Meaning that they are required to treat all phone calls, Internet traffic, etc. identically. In exchange for keeping their hands off, carriers are given special tax breaks and are normally exempt from being liable for the content they carry (Comcast can't be held criminally liable if someone downloads child porn using a Comcast cable modem, for example). This is how things have been since 1934. However, Congress is moving in the direction to give the big phone and cable companies the power to regulate the 'net as they see fit. They will be able to pick favorites and decide who's traffic they carry--or don't carry at all.
December of last year, I founded Bright Idea VoIP here in Novi, Michigan. We're an Internet-based telephone company that provides voice communication services to small-businesses. I frequently explain it as "Vonage for companies with 5 to 100 employees." This technology is known as "Voice-over-IP" (VoIP) is currently one of the fastest growing segments of the Internet. There are hundreds of companies like mine popping up all over the map. I am not rich by any sense of the word; I am simply a computer geek with a great idea who is trying to earn my piece of the American dream. And it's paying off... The company is growing very quickly. I (and my small, but also growing, group of coworkers) are working hard, but enjoying almost every minute of it. But for us to continue to thrive, or just to survive, we need a level playing field.
If AT&T, Verizon, or another large competitor of ours gains the ability to turn off or slow down areas of the Internet, our service will grind to a halt and I won't be able to do a thing about it. If they start to charge me a special "priority access fee", I'll have to pass that cost onto my subscribers. Suddenly the largest appeal of VoIP is reduced, making it less of a threat to the big telecom companies. The net effect is that I will be out of business within a year. And it's not just me... it's the thousands of other Internet innovators. We'll never know the next Google, eBay, or Amazon.com if the established 800 lb. gorillas get the power to decide who stays and who fails. That's not capitalism and that's not the American way.
With the lifeblood of manufacturing jobs in the metro Detroit area rapidly disappearing, your district desperately needs your help in promoting innovation and job growth in the technology sector. I ask that you please support Massachusetts congressman Ed Markey's "Network Neutrality Act of 2006", and that you see through the well-funded smoke screen of large telecom lobbyists.
I didn't even get a form letter back in return. Since he's up for relelection this
Entrepreneur : (noun), French for "unemployed"
It brings tiers to my eyes.
i'm sure that given this new income, the phone companies will lower
their rates and it will all balance out.
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.
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
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
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.
If I could place a bet on a Tiered Internet, I would because it's going to happen.
The profit potential is too great.
Whatever you thought the Internet is/was, it won't be for long because there are too many players that stand to make way too much money.
-Big ISP's kill the smaller ISP's because they'll pay a "wholesale transit tax." Competition? What competition?
-Companies providing the fiber/cable get to collect more. Someone explain to me how it's possible for there to be any competition in this segment.
-New industry segment is born out of ownership. Effectively creating a new kind of prepaid calling cards.
-Consumer pays only slightly more. The perfect example is the ass-raping Visa/MC gets away with. Consumers see only a little of the cost in some transactions sometimes. Meanwhile, merchants get to pay their bank many, many times over.
Ahh capitalism....
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
Just yet another Government imposed setback. Its things like this that lets the rest of the world simply pass us by.
The article talks about selectively prioritizing data streams, which does seem almost evil on the face of it.
But what if they left the existing infrastructure in place and focused offering on enhanced access to paid sites through selective, local staging and caching (such as leveraging telco-based Yotta Yotta or Akamai implementations)? It seems reasonable to charge for this, it doesn't really impact the rest of the world, and it could enable much faster access.
Ok, it does sound a little bit evil. But certainly far less than deliberately routing non-paying sites through lower bandwidth lines.
If Amazon shows consumers this tiered fee/tax (and the tech support number of the offending ISP), I can't help but think that ISP will soon discover that the fee/tax is unprofitable.
Let the market decide, but ensure that consumers have all the facts and tools to affect the decision.
Two wrongs don't make a right, but three lefts do.
Correct me if I am wrong:
a) Hosting companies pay their uplink for bandwidth and transfer
b) Websites pay hosting companies for bandwidth and transfer
c) ISPs pay their uplink for bandwidth and transfer
d) Surfers pay ISPs for bandwidth and transfer
This is an obvious spite move by Big Telecom. Analog telephony is dead, long live analog telephony. Don't invent services to make up for an obviated technology.
Version 1: What every Slashdotter fears. Our ISPs charge us, the site's ISP charges them, and then our ISP and anyone in between charges the site to not throttle down their connection. This business model is impractical and would probably be found illegal if taken to court.
Version 2: What will probably happen. Any site can pay for what amounts to a "leased line" from their server to our ISP. This would give them guaranteed bandwidth across the entire trip and eliminate potential bottlenecks.
Another idea (would also fit in #2) I've heard mentioned is that service providers can essentially buy more bandwidth for you, but only to use their site. Say you have a 3 Mb connection. ABC wants to stream HDTV to you and would prefer it be over a 6- or 10 Mb connection. They pay your ISP, your ISP conditionally opens up your bandwidth so you can get the stream flawlessly without having to pay for the higher bandwidth full-time.
I'm all for #2, especially the second part. I'd love to be able to pay a small fee to have my bandwidth opened up for a particular service.
120 characters for a sig? That's bloody useless.
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.
So, just how is the internet similar to SnailMail? The only thing I can think of to explain this statement is that this guy is getting a lot of money from some ISP.
Sorry my bullshit sensor overloaded.
The best education consists in immunizing people against systematic attempts at education. - Paul Feyerabend
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.
When you recognize love in another and realize how precious it is, everything else seems so insignificant.
You really think it's a good idea to have big government barging and telling people what they can and can't do on the internet? Wasn't one of the cool things about the internet was that it was supposed to be independent from government regulation and control? That it would allow for experimentation and innovation for both individuals and businesses, and not be told what we can and can't do?
Slashdot: Playing Favorites Since 1997
http://www.savetheinternet.com/blog/
"I am the king of the Romans, and am superior to rules of grammar!"
-Sigismund, Holy Roman Emperor (1368-1437)
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.
..but probably Google will turn evil and offer tiered service, too.
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."
It doesn't hurt to be nice.
Fine...let them create the tiered internet...then sue them the next time you get spammed through their connection.
1 million lawsuits the day after should convince them otherwise.
All you need are lawyers....
the only reservation i have is regarding spam and viruses. should it make you less of a common carrier if you refused to transport malware?
Yeah. I cancelled my cable modem account and went with a hot, new Wi-Fi provider called Default . Don't know who runs it, but there just about everywhere and don't send me a bill! ;-)
That's a fast connection your website has there. It would be a shame if anything were to happen to it.
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.
So Google places a banner on their site that says "We recognize you are coming from AT&T, and you must know that this company is giving you piss poor service in an attempt to blackmail us. If you care about that, call 1-800-CALL-ATT" or something.
How is this going to stop them? AT&T will tell me that "in the interest of giving you the best possible service, we have chosen select providers to guarantee high-speed access directly to our customers. For web search, we have chosen MSN Search, which is provided to you at blazingly-fast internet speeds at no extra charge."
Then do I threaten to cancel my service? I still have no where else to go...
It doesn't hurt to be nice.
I did a whois on the handsoff.org site (the one that dontregulate.org points you to):
= handsoff.org&InputServer=--automatic--
http://www.kessels.com/whois/whois.php?InputQuery
And came up with "The Mecury Group" as the owner:
http://www.mercgroup.com/
From the site:
"Proven practitioners of persuasive arts..."
Not that this should come as any surprise.
I dream in binary.
There are a number of sites online with information on this issue. You can take a look at the save the internet coalition at www.savetheinternet.com. One thing that I strongly suggest people look into is a cooperative effort between moveon.org and of all people, the Christian Coalition. They are teaming up to afford a $70,000 ad in the New York Times. That will really get people talking and see that there couldn't be a more Bipartisan issue out there. 2000 people donating $35 gets the ad. I've already given my money: https://civic.moveon.org/donatec4/save_the_interne t.html
From the article: "On a technical level, creating this so-called Internet fast lane is easy. In the current system, network devices called differentiated service routers prioritize data, assigning more bandwidth to, for example, an Internet telephone call or streaming video than to an e-mail message."
Easy did they say? What planet are they on? Every time a packet crosses a carrier, the priority may or may not be paid equal attention to. I wouldn't think for even a second that AT&T will treat Verizon's prioritized packets with as high a priority as their own customer's prioritized packets.
Even more misunderstood is that the last mile makes much more of a difference than the backbones. If your local ISP doesn't care about the differenciated services settings, all the money Google, Yahoo, and Disney shell out for better streaming video performance won't add up to much. The Disneys of the scene will eventually figure out that they paid for the privilege of slowing everybody down, not speeding themselves up. That should be an interesting fight.
Easy...
"We are all geniuses when we dream"
- E.M. Cioran
I have no objection in ISP charging web sites for being accessed, it's their right to do so, it's their fiber etc. Well theoretically. The *real* issue is that ISPs have a quasi monopoly. In fact it's a fairly natural monopoly, there's no point in companies digging parallel pipes in the ground. The same problem could arise with electricity. The energy providers can't really do evil, but what if the guys who own the cable starting charging the appliance builders to work with electricity. In the end it all comes back to owns the fiber... even if a monopoly controls it, it can't do a lot of damage since a competitor could profit and start placing evil-free fiber. Google anyone?
\u262D = \u5350
"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
Oh, you're not stuck, you're just unable to let go of the onion rings.
Me: Hello, how may I help you?
Member: I'm having a lot of trouble accessing your Web site through my ISP, BigTelecom, Inc. What gives?
Me: Let me check into it.
[later]
BigTelecom: Hello, how may I help you?
Me: Hi, our members who are your customers are experiencing problems contacting our Web site, and the problem seems to occur at the border to your network.
BigTelecom: May I have your customer number, please?
Me: Uh, I'm not your customer, our members are.
BigTelecom: Sir, without a customer number we can't guarantee connectivity to your site. It's only $300 per month. Would you like me to transfer you to our sales department?
Me: Yeah, $300/month times the number of ISPs our members use, which is essentially all of them! Nuts!
If the telecom companies get what they want, that's the exact scenario I'll be dealing with.
It is the optimal way when the two endpoints are an AT&T transit customer and a Level3 transit customer.
No, it really isn't a mystery. Level3 obviously has some sort of connection to AT&T (probably a peering arrangement), and Level3 is advertising to AT&T that they have a route to Google. AT&T customers see this advertisement and simply follow the breadcrumbs home to Google. Level3 isn't some sort of unwitting accomplice here; they are actively telling other networks that Google is reachable through Level3.
I just about coughed up milk through my nose when I read this...
If two of the major tier-1 backbone providers aren't "cluefull", then just who is? I would guess that Level3 has one of the top ten highest-quality backbones in the world, with AT&T perhaps being in the top 5. Accusing them of not understanding how to correctly operate a network is really quite laughable.
Perhaps you should just accept the simplest (and most common) explanation: Google pays Level3 for transit. It makes sense if you think about it, too. Most of the major carriers (AT&T, Sprint, Level3, Qwest, etc...) have a list of very stringent requirements for peers, including a certain ratio of sent to received bits. I doubt that Google has a nice balance of inbound and outbound traffic, as they are primarily a content-provider network. This would make them ineligible for most major peering situations, thus requiring them to buy a lot of transit.