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."

Comments

Money

[Anonymous Coward]

Whoever spends the most money on lobbying will win.

Re:Doesn't Really Matter...

[Anonymous Coward]

Here is the Complete article, not a summary...as linked to above: http://www.weeklystandard.com/Content/Public/Artic les/000/000/012/348yjwfo.asp

I think...

[alfs boner]

...The problem (from the telco's point of view) is that Google is paying only one company for the bandwidth it uses. Wouldn't it be nice if they could all get a share by threatening to throttle Google's traffic on their networks? Not only that, you can squeeze out any small-time competition from the market by threatening to take away a big chunk of Google's users if they sign with a smaller company for bandwidth. Only why stop at Google, you could do it to anyone! Heck, maybe even political parties? (So, probably not but the telcos would love to do it anyways, I'm sure.)

Re:I think...

[Cleon]

"Heck, maybe even political parties?"

I think you hit something significant there, at least for me. You can talk about the financial aspects of Net Neutrality all up and down the information superhighway (remember that lovely phrase? Now think of a toll booth). In the end, however, we're talking about giving private companies control over the transmission of a giant steaming shitload of information.

So an organization with the sufficient funds could bribe pay someone, say, AT&T, to throttle content to sites they'd like shut down. So let's think beyond political parties...Suppose the Church of Scientology took it into their head to try and slow/stop traffic to, say, Xenu.net. Just a thought--I mean, I'm sure the Church wouldn't do anything so heavyhanded. After all, they've been so upstanding in the past and value open debate. Or suppose conservative organizations decided that adult-oriented content should be as inaccessible as possible. Maybe Microsoft reversing their position and decides that people don't really need to be able to access Slashdot.org, Firefox.org, or even Google.com.

The more I look at the issue, the more I'm concerned that this could open the floodgate of a free-for-all where you don't have a voice unless you've got a bunch of money to be able to pay for it.

Re:I think...

[rossifer]

The problem (from the telco's point of view) is that Google is paying only one company for the bandwidth it uses.

But the fees they pay go towards the provider's upstream bandwidth costs, so Google's fees get split with the upstream provider before you can measure profit. You and I pay into the same sort of a heirarchy, with everyone trying to obtain universal connectivity with everyone else.

What the telcos want is to obtain control over content. But the success of the internet is based on a lack of control over content. Anyone can publish, so (almost) everyone does publish. This results in enormous quantities of useless crap, but also more useful information than has ever been available to the public.

The telcos can get what they say they want already by selling dedicated channels beside the DSL channel. If you want DSL pay-per-view, there's not much preventing them from selling you a channel of that. You'll need some new gear to see your new TV feed, but people are used to that sort of abuse.

But when I agree to lease a 1.5Mbit DSL line, I intend to lease a 1.5Mbit link to the whole internet. If they stop selling me that, I take my business elsewhere. The huge problem arises if there's nowhere else to go.

Regards,
Ross

Re:I think...

[Mr. Slippery]

No forced neutrality, no forced billing - just get the FSCK out of the way and let things progress via market forces like they have been for the last 15 years now.

The reason we have had network neutrality is not because of "market forces" but because of regulation that made telephone lines "common carriers".

The question before us is whether cable, fiber-optic, etcetera networks should be regulated in the same way, or whether the common carrier requirements should be droppped from telephone (DSL) lines.

Market forces can't do dick when there's no competition; few consumer have meaningful choice between several broadband providers.

Re:I think...

[illumin8]

This isn't so much about google as it is about TV. The value of most internet traffic ($40/month for a 3 mbps unique connection) is nearly an order of magnitude below the value of TV ($60/mo for shared access to stream equivalent to ~27 mbps)

You're absolutely right.

And, you bring up an interesting point.

The cable and telcos have been arguing that without the ability to charge Google/Yahoo/MSN for access, they won't be able to deliver the next generation of HDTV on demand video streaming services. This is a bullshit argument , and here's why:

I used to work at a cable ISP and I learned that a cable modem segment only occupies one 6 mhz. band, or a single analog cable channel, and contains 27 megabits of broadcast ability a second. Basically there are ~80 or so analog channels available (forgot how many). This means that the cable company only takes a single analog channel on their network to deliver broadband Internet to an entire neighborhood or small town. They also deliver digital cable by compressing about 3 or 4 channels down to another 6 mhz. analog channel. That's why the big push to get people off of analog cable... each one of those channels is worth about half a T3 worth of digital bandwidth from the central office to the customers.

So, if the cable company is already streaming Hidef and standard def movies to me on a different channel than my 10 megabit cable modem service (I have OptimumOnline, YMMV), and watching an "on-demand" movie on my TV doesn't interfere with my BitTorrent download in the next room, then why even bring up this idea that Google and MSN and Yahoo somehow interfere with that. It's a Straw Man Argument...

They want the uneducated Congress-Critters to think that if Google video or YouTube takes up too much bandwidth... "the gosh 'dern TV might stop werking!!! Oh NOES!!!!!11!1!1One!1!!1"

The truth is, the cable companies (and telcos) have tons of bandwidth; way more than they could ever use at the last mile. This argument that internet, which only occupies a single ~27 mpbs channel, can possibly interfere with any of the 80+ other ~27mbps data streams is laughable at best.

I hope this sheds some light on the situation. I started to put 2 and 2 together on my own...

Dark Fiber

[(1 -sqrt(5))*(2**-1)]

From TFA:

Horse-drawn trolleys ruled cities, too, but had to be destroyed to make way for progress. How do we rip the telco's trolley tracks out and enable something modern and real competition?

With Google buying up dark fiber, how relevant would net-neutrality's demise be (for Google, at least)?

Google may have stumbled across a very expensive but robust solution.

Will the market really sort itself out?

[gbulmash]

Can the market really sort things out?

Long ago, in a humor column on religion, I wrote: "Humanity, by nature, is an ambivalent animal, given to fits of inertia, and we're more than likely to sit on our noncommittal behinds unless there's a bogeyman to chase us out of our chairs." I was talking about how certain religions use the concept of the Devil to scare us toward God, but it applies to a lot of things.

I'm not so sure that the market will work things out due to a few factors:

• Consumer ambivalence - If your ISP starts slowing down X, Y, and Z sites, how bad will it have to get before you, as a consumer, go to the trouble of switching ISPs?
  
  
• Changing E-mail - While a lot of us have free e-mail accounts through Yahoo, Hotmail, or Google, how many people have just the e-mail address they got from their ISP? People who do not have established freemail accounts that they use as their primary address have an incentive to stay where they are, because if they leave, they lose the address everyone knows to contact them at.
  
  
• Changing ISPs can be a bear just on a technical level - I used to have 6 megabit DSL through speakeasy. When I made some job changes, I decided to downgrade to 3 megabit DSL from Verizon so I could save $700 bucks a year. Problem was that there seemed to be no way for me to cancel the Speakeasy DSL line and have Verizon pick up service on the same day or even the next. Best estimate I could get would be 3 days or more without broadband service as Speakeasy/Covad released the switch and Verizon assumed it. I'd gone with DSL because my house was built without cable running into the room I used as a home office and I didn't want to drill through walls. Finally, I went with 8 megabit cable, coming into another room, then shunted into the office through a Broadband over Power Line (BPL) bridge. With some tweaks in cabling and placement of the bridge units, I was able to get about the same speed I had with the 6 megabit DSL. But it was an adventure in frustration.
  
  
• Lock-in Contracts - The broadband providers have taken a page from the cell phone companies. They're offering free installation and equipment, but to get that, you have to sign up for a 1 or 2 year contract with early termination penalties. So if you have ISP X and you have 6-8 months left on your contract, how slow will your favorite sites have to get before you're willing to pay the early termination fee?
  
  

With all those factors working against switching broadband providers, will the market really work itself out? Things will have to get pretty bad to force the average consumer to vote with their wallets and go to the ISPs that deliver the services they really want. There may be some ripples felt in terms of new entrants to the market, but most of those will be people moving into new homes or new apartments. When it comes to the people in existing residences where broadband is available (excluding people in rural markets who are still waiting for broadband to become available), if they don't have broadband yet, are they really among the technically savvy people who will know enough or care enough to shop wisely?

Re:Will the market really sort itself out?

[gbulmash]

If Google were not available from my ISP for even 24 hours, I would go to a *lot* of trouble to find another ISP.

But what if your ISP offered you Microsoft's new gonzo search engine at full speed? And while it wasn't as good as Google, it was 90% as good?

Remember, that under the best of circumstances, you'd be looking at a couple of days to switch over to a new ISP. If Google slowed to a crawl, would you wait those days until you had a new ISP to do your search on Google? Would your brand loyalty to Google be so complete that you'd do without searching while you waited?

Maybe, maybe not. I think many people would try the alternate search their ISP was pushing. And if they got the results they wanted, the urge to switch might be diminished. They might take a "wait and see" attitude and try a few more searches on Microsoft before committing to switching. And if all those searches got them the results they needed, then it would become a matter of principle to switch, not a matter of utility.

Look at the way our country is today. Look at the people. Give me a ballpark estimate of the percentage of people who fall into one or the other of the following two groups. Group 1: People who get mad about something and do something about it! Group 2: People who get mad about something and merely bitch about it, but never get up the gumption to really do something.

Group 2 is huge and Group 1 is a minority. While you may be in Group 1, you've probably got lots of elbow room at the meetings. And because Group 2 is willing to settle for "almost as good" because it's easier than doing something about it, the market is not as efficient a regulator as some would have us believe.

- G

Direct Link to article

[cinnamoninja]

Ick -- Slashdot is linking a blog post with the first two paragraphs of the real article. Go here instead:

http://www.weeklystandard.com/Content/Public/Artic les/000/000/012/348yjwfo.asp

we only have the internet because of forced neutr.

[mabhatter654]

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!!!

Indeed

[Anonymous Coward]

The Great God The Free Market will solve all ills. We must only have faith. If we regulate, we will be cast down in the eyes of our God The Free Market, and he will be much displeased, and cast us down for defying His will. Since it is impossible that a piece of legislation designed to solve a problem could ever actually solve the problem it is intended to solve, we must simply continue to pray that The Free Market shall turn His eyes kindly upon us, and accept His just decision when it comes.

Re:Finally, some sense

[dgatwood]

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:

• Provide equal access to content from all providers without preference, or
• Open their lines to CLECs (INCLUDING remote terminals) at a reasonable cost AND provide universal service to anyone without regards to distance.

Make the law such that the company can choose which to do. Then, the free market might stand a chance of working this out....

I wrote Joseph Lieberman (CT)

[C_Kode]

I just got a responce today:

June 20, 2006

Mr. XXXXXXXXXXX
XXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXX

Dear Mr. XXXXXXX:

Thank you for contacting me with regard to the issue of net neutrality. It was good to hear from you.

The principle of net neutrality suggests that data from all Internet content providers should be treated equally, regardless of provider or content. In recent months, broadband service providers, including cable, telephone companies, and wireless providers, have expressed a desire to charge Internet content and application providers, such as Google, eBay, Amazon, and Vonage, for delivering content to Internet consumers.

Net neutrality is one of many issues that have been the subject of hearings held by the Senate Committee on Commerce, Science, and Transportation as it prepares to advance telecommunications reform legislation. Commerce Committee Chairman Ted Stevens (R-AK) has scheduled a meeting for June 22, 2006, where details of his proposed legislation will be debated among members of the Committee. Furthermore, you may be interested to know that Senator Ron Wyden (D-OR) introduced legislation, the Internet Nondiscrimination Act of 2006 (S. 2360), aimed at codifying the concept of net neutrality. According to Senator Wyden, S. 2360 would prohibit network operators from charging Internet content and application providers for faster delivery to consumers or from favoring certain content. Senators Olympia Snowe (R-ME) and Byron Dorgan (D-ND) have introduced similar legislation, the Internet Freedom Preservation Act (S. 2917). Both of these bills are pending consideration by the Commerce Committee. To keep track of future actions on this legislation, you can go to the "Bill Tracking" service at http://lieberman.senate.gov/issues/resources.

I strongly support efforts to promote broadband deployment, but we must remain vigilant to ensure that congressional efforts to promote deployment by reforming telecommunications law maintain the openness of the Internet that has fueled economic growth and has reinforced our nation's commitment to free speech. Please be assured that I will keep your views in mind should legislation affecting net neutrality come before the full Senate for debate. I also want to review the materials and testimony from the Committee hearings and actions. My official Senate web site is designed to be an on-line office that provides access to constituent services, connecticut-specific information, and an abundance of information about what I am working on in the Senate on behalf of Connecticut and the nation. I am also pleased to let you know that I have launched an email news update service through my web site. You can sign up for that service by visiting http://lieberman.senate.gov/ and clicking on the "Subscribe Email News Updates" button at the bottom of the home page. I hope these are informative and useful.

Thank you again for letting me know your views and concerns. Please contact me if you have any additional questions or comments about our work in Congress.

Sincerely,

Joseph I. Lieberman
UNITED STATES SENATOR

How Access Tiering will come to be

[tlabetti]

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.

The Telcos didn't even pay for the build out...

[z-kungfu]

and they made promises of fibre to the home. Read all about it at http://www.newnetworks.com/scandals.htm Get it straight it's another something for nothing deal for big business...

Just a littie summary...

This book documents the largest fraud case in American history The case is simple: Do you have a 45 Mbps, bi-directional service to your home, paying around $40? Do you have 500+ channels and can choose any competitive service? You paid an estimated $2000 for this product even though you did not receive it and it may never be available. Do you want your money back and the companies held accountable? Background: Starting in the early 1990's, the Clinton-Gore Administration had aggressive plans to create the "National Infrastructure Initiative" to rewire ALL of America with fiber optic wiring, replacing the 100 year old copper wire. The Bell companies -- SBC, Verizon, BellSouth and Qwest, claimed that they would step up to the plate and rewire homes, schools, libraries, government agencies, businesses and hospitals, etc. if they received financial incentives. The Commitment: * By 2006, 86 million households should have already been wired with a fiber (and coax), wire, capable of at least 45 Mbps in both directions, and could handle 500+ channels. * Universal Broadband: This wiring was to be done in rich and poor neighborhoods, in rural, urban and suburban areas equally. * Open to ALL Competition: These networks were to be open to ALL competitors, not a closed-in network or deployed only where the phone company desired. * Each State: By 2006, 75% of the state of New Jersey was to be wired, Pennsylvania was to have 50% of households by 2004, California to have 5 million households by 2000, Texas claimed all schools, libraries, hospitals....Virtually every state had commitments. * Massive Financial Incentives: In exchange for building these networks, the Bell companies ALL received changes in state laws that gave these them excessive profits, tax savings, and other perks to be used in building these networks. * This was not DSL, which travels over the old copper wiring and did not require new regulations. * This is not Verizon's FIOS or SBC's Lightspeed fiber optics, which are slower, can't handle 500 channels, are not open to competition, and are not being deployed equitably. * This was NOT fiber somewhere in the network ether, but directly to homes. The Harms and Outcome * Costs to Customers -- We estimate that $206 billion dollars in excess profits and tax deductions were collected -- over $2000 per household. (This is the low estimate.) * Cost to the Country -- About $5 trillion dollars to the economy. America lost a decade of technological innovation and economic growth, about $500 billion annually. * Cost to the Country -- America is now 16th in the world in broadband. While Korea and Japan have 40-100 Mbps at cheap prices, America is still at kilobyte speeds. * The New Digital Divide -- The phone companies current plans are to pick and choose where and when they want to deploy fiber services, if at all. * Competitor Close Out -- SBC, BellSouth and Verizon now claim that they can control who uses the networks and at what price, impacting everything from VOIP and municipality roll outs to new services from Ebay and Google. The Truth: This is a Fraud Case * Fraud: There is a dark secret -- the networks couldn't be built at the time the commitments were made and are still not available. If someone pays thousands of dollars for a service and doesn't get it, isn't that fraud? * Collusion and Cover-up: TELE-TV and Americast, the Bell companies' fiber optic front groups, spent about $1 billion and were designed to make America believe these deployments were real in order to pass the Telecom Act of 1996 and enter long distance. How did every major phone company in America not know that these fiber-based services couldn't be built and were able to defraud over 40 states? * The mergers killed fiber optic deployments in over 26 states and harmed competition.