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

[spun]

Can't we just gut all the AOL users instead? What was that quote, oh yes, here we go (emphasis mine):

There it is again. Some clueless fool talking about the "Information Superhighway". They don't know didley about the Net. It's nothing like a superhighway. That's a rotten metaphor.

Suppose the metaphor ran in the other direction. Suppose the highways were like the net...

A highway hundreds of lanes wide. Most with pitfalls for potholes. Privately operated bridges and overpasses. No highway patrol. A couple of rent-a-cops on bicycles with broken whistles. 500 member vigilante posses with nuclear weapons. A minimum of 237 on ramps at every intersection.

No signs. Wanna get to Ensenada? Holler out the window at a passing truck to ask directions.

Ad hoc traffic laws. Some lanes would vote to make use by a single-occupant-vehicle a capital offense on Monday through Friday between 7:00 and 9:00. Other lanes would just shoot you without a trial for talking on a car phone.

AOL would be a giant diesel-smoking bus with hundreds of ebola victims on board throwing dead wombats and rotten cabbage at the other cars, most of which have been assembled at home from kits. Some are built around 2.5 horsepower lawn mower engines with a top speed of nine miles an hour. Others burn nitroglycerin and idle at 120.

No license plates. World War II bomber nose art instead. Terrifying paintings of huge teeth or vampire eagles. Bumper mounted machine guns. Flip somebody the finger on this highway and get a white phosphorus grenade up your tailpipe. Flatbed trucks cruise around with anti-aircraft missile batteries to shoot down the traffic helicopter. Little kids on tricycles with squirt guns filled with hydrochloric acid switch lanes without warning.

NO OFFRAMPS. None.

Now that's the way to run an Interstate Highway system.

Author (maybe, it's hard to track down sources on the Net): Jim Wiedman

Re:Fix it

[scoove]

FWIW, however fast wireless broadband gets here, it really will not help anyone escape from Tiered Internet.

It may, actually.

I'm the senior engineer for a 9 county fixed wireless operation. We are MPLS-based in our core, run a minimum of DS3 licensed and unlicensed point-to-point links and feed out into our small communities at a minimum of 24 Mbps. We feed with redundant fiber to diverse carriers. We really have tried to deliver a reliable network on quite a bit of a budget. Our competition is companies like Qwest and Mediacom that usually brings at most bonded T1s (3 Mbps) to a community, does not run MPLS, gets burnt alive by P2P abusers, etc.

We have notified our uplink that we will not tolerate tiered Internet offerings (our SLA prohibits it presently and is locked in for four years). I've been around the BGP peering Internet since 1993, so we were careful to make sure this crap doesn't force us into accepting someone's bastard vision of the Internet.

The bottom line is it comes down to consumers. If you are too stupid to know what you're buying, you're screwing all of us. I had a pain in the ass insurance office (virus of the week kind of nightmare customer) leave for Qwest this week - only noticed it since I hadn't heard his weekly "I'm gonna sue everyone if you don't fix my incompetent LAN" call. I finally told him his ISP is not his LAN integrator and 12 hours of comp time by a CISSP/CISA/CCSP was enough.

But if enough clueless users switch to the Qwests and Mediacoms, buying "9 Mbps download" (on a network fed with 3 Mbps - cluestick!) then the small wireless businesses that are emerging to give you all a better choice will wither and die.

Should that happen in our case, my heart won't break. We diversified two years ago into high-end security engineering for the financial industry which pays a hell of a lot more money than rural broadband. But for those of you that do want a choice:

1. quit voting for losers that screw you time after time. That means BOTH parties. Learn that the big corporations own both parties. Quit falling prey to the bait they offer of blindly blaming one party and being a shill for the other. Go take a look at the immigration votes from both parties. Do you know how many Senators from both sides voted the way they did because some $20 million per year fat cat told them they're tired of paying IT people $60K per year? I've dealt with it first-hand. Most of your large corporate CEOs would prefer us all making less than $30K per year and will outsource or illegally hire to make that happen.

2. quit supporting tired, old fat-cat companies. So what if they advertise 9 Mbps? Will they fight for you when the RIAA is coming for you like I do for our customers? Not a chance. They'll sell you out for a dollar. Ethics? Go read about Qwest's financial statement fraud or insider trading that stole from its shareholders and tell me how they're committed to all of us.

Yea, we may not have our act together all the time. Yea we may not have a 24x7 call center in India that will tell you within 2 minutes of your call to reformat your hard drive as a solution and blow you off.

It's up to you all what Internet you'll have by your decisions.

*scoove*

My letter to my congressman.

[XorNand]

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

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.

Re:My letter to my congressman.

[Anonymous Coward]

Good letter!

Now tell me how you faxed the wikipedia link, and I'll be really impressed.

Tiery eyed

[dotslashdot]

It brings tiers to my eyes.

be fair

[convolvatron]

i'm sure that given this new income, the phone companies will lower
their rates and it will all balance out.

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

Internet Freedom and Nondiscrimination Act

[Stalyn]

Today the House Judiciary Committee approved legislation to "preserve Internet freedom and competition". From the press release

H.R. 5417, the "Internet Freedom and Nondiscrimination Act" will give certainty to entrepreneurs, investors, and others who seek to deliver innovative ideas to market that they may do so without fearing discrimination. Specifically, this bill would amend the Clayton Act to require that network providers: 1) interconnect with the facilities of other network providers on a reasonable and nondiscriminatory basis; 2) operate their network in a reasonable and nondiscriminatory manner such that non-affiliated providers of content,
services and applications have an equal opportunity to reach consumers; and 3) refrain frominterfering with users' ability to choose the lawful content, services and applications they want to use.

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.

Good news!

[vertinox]

The Net Neutrality bill just passed the committee:

http://www.savetheinternet.com/blog/

The broad, nonpartisan movement for Internet freedom notched a major victory today, when a bipartisan majority of the House Judiciary Committee passed the "Internet Freedom and Nondiscrimination Act of 2006 -- a bill that offers meaningful protections for Network Neutrality, "the First Amendment of the Internet."

20 members of the Commitee (6 Republicans and 14 Democrats) voted for the bipartisan Bill, and only 13 against.

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:lame

[cashman73]

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! ;-)

Sound familiar?

[MyNymWasTaken]

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

hansoff.org FYI

[Scud]

I did a whois on the handsoff.org site (the one that dontregulate.org points you to):

http://www.kessels.com/whois/whois.php?InputQuery= handsoff.org&InputServer=--automatic--

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.