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Net Neutrality, Schlocky Salesmen vs Monopolist Plumbers
Andy Kessler has written a short tongue-in-cheek summary of the net neutrality debate over on the Weekly Standard. Kessler identifies the two sides as the 'schlocky ad salesmen' (Google, Yahoo!, etc) and the 'monopolist plumbers' (Verizon, AT&T, etc) and when you add the politicians to the mix it creates a pretty untenable situation. From the article: "But the answer is not regulations imposing net neutrality. You can already smell the mandates and the loopholes once Congress gets involved. Think special, high-speed priority for campaign commercials or educational videos about global warming. Or roadblocks--like requiring emergency 911 service--to try to kill off free Internet telephone services such as Skype. And who knows what else? Network neutrality won't be the laissez-faire sandbox its supporters think, but more like used kitty litter. We all know that regulations beget more lobbyists. I'd rather let the market sort these things out."
Google may have stumbled across a very expensive but robust solution.
The "internet" didn't get big until the 1990's because that's how long it took for just modems to get out from under Ma Bell's monopoly thumb. There's very many articles here on /. about how the telcos tried to sabotage regular 56k dial up... like we never get that because they won't clean up the lines! Every Net Neutrality argument misses this point. It's like now that stuff is faster we forgot what life was like when we "rented" phones, and paid $$$ per minute charges. What's even more disheartening is that there's a good share of Reps and Senators that were in Congress when we Made THAT rule... and when we broke up Ma Bell... and they STILL don't get it!!!
RTFA here. http://www.weeklystandard.com/Content/Public/Artic les/000/000/012/348yjwfo.asp
The summary does injustice.
The author is neither pro nor anit-net neutrality. The next paragraph following the quote in the summary starts with "But what market?"
Kessler acknowledges that the Teleco's are aging giants and that something needs to be done. At the same time he does not think that NEt Neutrality and regulation are the right answer.
He does bring up an interesting tactic of using the Kelo ruling on eminent domain to sieze teleco wires and hand them to new players who want to expand and innovate.
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My parents have a choice of internet providers. They can choose the Cable company... or they can get dial-up access. That's it. About one out of every five people in the U.S. do not have any real choices. Saying "the free market should work out this problem" is fine in theory, but in practice, it fails miserably because we do not have, have never had, and likely never will have a free market in information services. The barriers to entry are too high for the relatively small ROI.
You can tell that most of the people giving these opinions have never lived anywhere in the South, where over half the population lives in rural areas, and where broadband availability is spotty, at best. An awful lot of hard-working Americans depend on the government to protect them from abusive monopolies like the telcos. That's what net neutrality is really about---ensuring that users have the freedom to choose where on the internet they go without getting inferior service because their ISP is playing extortion games. The ISPs have already said that they hope to do this. This isn't hypothetical. This is in the planning stages.
Back in the early days of telephone, the government did something really smart. It passed laws that said that the phone services had to make phone service available to any customer no matter how far out in the weeds they lived. It wasn't always pretty---indeed, it often included using parts of fences, etc. as sections of the connection---but everyone had equal access to the technology. Government intervention could do the same for data services, but the big boys don't want that. They want to be able to charge companies for preferential access to their customers while simultaneously locking their customers into their service by limiting competition in the marketplace, through distance limitations (only servicing the customers they can cover at a minimal expense), through not providing DSL service on all of their COs or cable modem service in all their served cities, and through trying to block CLECs from being able to provide data services on their lines. In short, they want to have their cake and eat it, too.
The way I see it is this: the telcos and cable companies should have a choice:
Make the law such that the company can choose which to do. Then, the free market might stand a chance of working this out....
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Verizon has installed all the equiptment necessary to provide DSL service in my town - this is according to both the local techs and online account access.
They refuse to offer the service to anyone because they are trying to blackmail the PUC into doing what they want.
Their actions do not make any sense.
Can the market really sort this out? In a word ... YES.
The problem is that RARELY is the market allowed to anymore. People fear Monopolies. Me? I Look at them not as problems, but oppotunities in disguise. Linux would NOT be where it is today, if it weren't for M$ Monopoly. Linux, IMHO, is a direct result of the Market routing around a break in the system.
Some systems, it just takes longer to route around the problem, but it eventually will.
Take Oil (Petroleum) for example. A hundred years ago, a naturally occuring monopoly occured in the marketplace and Standard Oil controlled a M$ type share of the Oil and Gasoline market. Along came do-gooders creating laws that broke up the company into itty-bitty pieces. Today, we are OIL dependant, and have no alternatives (to speak of).
Let us say, for the sake of arguement that nothing was done 100 years ago and Standard Oil was left untouched. Today, we would probably have 1) more mass transit 2) cities and highways designed for effiency alternative transportation etc 3) alternative fuels 4) no wars over oil (Iraq/Iran???) and the pety dictators world wide.
The unintended consequences for breaking up Standard Oil are completely unknown, but I am 100% sure that the world would have routed around the problem by now. But for political expediency and short term gains, we chose otherwise, and are living with the consequences.
Necessity is the mother of invention. We don't "need" another fuel source, so none has been invented. Relating this back to M$ and Linux, WE needed an alternative to M$ and Linux was the route around the problem (over simplified version).
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I don't think ISP's will degrade or restrict access to web sites (stop your typing about port 25 and craigslist now). I do think what they will do is offer private or exclusive bandwidth to their partners. For no extra charge to the end user I expect them to cordon off a portion of their fiber bandwidth to be used exclusively by their partner.
Let's say you have a fiber connection and a 15mbps plan. I think the ISP would give you a value added extra 5mbps for dedicated for use by a third party, let's say MSN.
So in your house you have your son using up bandwidth playing counterstrike, your daughter chatting away on skype while downloading a Warner movie using Bittorrent and your significant other watching a streaming video on how to boil water from YouTube.
You want to check your stocks so you go to google, google has to share that 15mbps connection with the other apps and is slow, so you switch over to MSN and find it blazingly fast in comparison. So you start to use MSN more and more and google less and less. Is that because MSN is doing a better job then google? No it is because the ISP has partnered with MSN. Over time this will limit your choices and you will find that you only use you ISP's partner services.
Has your ISP violated the tenets of Net Neutrality? They are not blocking your or slowing down access to sites.
Google: Maybe you do now...
Google lights up all that dark fiber they are rumored to have been buying over the last few years to build GoogleNet.
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The phone companies are always afraid that the cable companies have a major expansion just around the corner, or that someone will come along with a wireless solution, and put them out of business. This is entirely possible now, since VoIP has been taking off. Just as the phone companies are now examining the possibility for television over the phone lines, the cable companies are examining the potential for phone calls over their television lines :)
Basically, the phone company (the real DSL vendor, no matter who you think you're buying it from) is scared shitless that they will become irrelevant. They're pricing their services as low as possible in an attempt to get customers now under the assumption that if they already have two of three services from their telco (vox and 'net) that they won't switch over and get all three from the cable company. I think that this is an idiotic assumption because it's worth a small amount of hassle now to have just one bill for all major teleinformation services.
The cable companies are only too willing to play along because they have more money than the phone companies (or at least, that has traditionally been true, not sure about the latest incarnation of the death star) and if they can put the phone company out of business then they will win this round by default and they can start focussing on the impending invasion of wireless.
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SEC. 3. DECEPTIVE PRACTICES IN PROVIDING INTERNET ACCESS.
(1) Definitions.- As used in this Section:
(A) Internet.- The term "Internet" means the worldwide, publicly accessible system of interconnected computer networks that transmit data by packet switching using the standard Internet Protocol (IP), some characteristics of which include: i) Transmissions between users who hold globally unique addresses, and which transmissions are broken down into smaller segments referred to as "packets" comprised of a small portion of information useful to the users at each transmission's endpoints, and a small set of prefixed data describing the source and destination of each transmission and how the packet is to be treated; ii) routers that transmit these packets to various other routers on a best efforts basis, changing routers freely as a means of managing network flow; and iii) said routers transmit packets independently of each other and independently of the particular application in use, in accordance with globally defined protocol requirements and recommendations.
(B) Internet access.- The term "Internet access" means a service that enables users to transmit and receive transmissions of data using the Internet protocol in a manner that is agnostic to the nature, source or destination of the transmission of any packet. Such IP transmissions may include information, text, sounds, images and other content such as messaging and electronic mail.
(2) Any person engaged in interstate commerce that charges a fee for the provision of Internet access must in fact provide access to the Internet in accord with the above definition, regardless whether additional proprietary content, information or other services are also provided as part of a package of services offered to consumers.
(3) Network providers that offer special features based on analyzing and identifying particular applications being conveyed by packet transmissions must not describe these services as "Internet" services. Any representation as to the speed or "bandwidth" of the Internet access shall be limited to the speed or bandwidth allocated to Internet access.
(4) Unfair or Deceptive Act or Practice- A violation of paragraphs 2 or 3 shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)). The Federal Trade Commission shall enforce this Act in the same manner, by the same means, and with the same jurisdiction as though all applicable terms and provisions of the Federal Trade Commission Act were incorporated into and made a part of this Act.
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