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Net Neutrality Debate Crosses the Atlantic
smallfries writes "The network neutrality debate has raged on in the States for some time now. Now broadband providers in the UK have banded together to threaten the BBC, who plans to provide programming over 'their' networks. The BBC is being asked to cough up to pay for bandwidth charges, otherwise traffic shaping will be used to limit access to the iPlayer. 'As more consumers access and post video content on the internet - using sites such as YouTube - the ability of ISPs to cope with the amount of data being sent across their networks is coming under increasing strain, even without TV broadcasters moving on to the web. Analysts believe that ISPs will be forced to place stringent caps on consumers' internet use and raise prices to curb usage. Attempts have been made by players in the industry to form a united front against the BBC by asking the Internet Service Providers' Association to lead the campaign on the iPlayer issue. However, to date, no single voice for the industry has emerged. I thought that the monthly fee we pay already was to cover access ... but maybe it only covers the final mile and they need to be paid twice to cover the rest of the journey."
The article doesn't go into much detail, but from what I've read the deal goes something like this.
BBC to ISP/IPP == Hi I have an idea for a website/web based product let's hash out the details.
ISP == oh yeah, great send that money right over here. We're the internet we can do anything.
ISP/IPP actually looks over the details... wait.. we'll be needing more money if you want that service we just agreed to.
That's not right, if a company cannot keep it's part of the bargain they should not have made the deal in the first place.
This reminds me of an ISP I dealt with a few years ago when DSL was just gaining popularity. My predecessor made a deal that we would get free unlimited bandwidth for the school I worked at, in exchange for free classes for some of their employees. After I took over we went from about 3GB a month to close to 25GB. The ISP called and wanted to renegotiate. I said no, unlimited is what the contract says, unlimited is what I'm getting. You may be able to limit the speed at which I download, but you can't limit the amount of time I'm hitting that at 100%.
They did so, and I started removing their employees from the classes. Sometimes in the middle of the class.
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Fortunately it seems unlikely they'll be able to make this stick. Nowadays, at last, there's some degree of choice of broadband providers for most people in the UK. In fact, usually more choices for ISP than there are television companies. So who needs who most ? If my ISP won't do BBC, it's not likely I'll be dropping the BBC for some other station. I'll be dropping the ISP.
Here's a better analogy. A certain toll road is a convenient way to transport goods between points A and B. UPS carries goods for hundreds of clients, but Amazon.com has recently increased their shipment of product through UPS in a way that leads UPS to send many more trucks across the toll road.
The toll road's owner, in an effort to remain price-competitive with other routes, has been neglecting upgrading toll road capacity in favor of keeping prices low. Now, because their roads are choked with UPS trucks, and because raising toll amounts will lead to loss of traffic to other routes, the toll road owner demands that Amazon.com directly subsidize their shipment traffic across the toll road.
There are a few possible solutions. First, Amazon.com could pay the subsidies. Second, Amazon.com could ensure their traffic doesn't cross that toll road. (E.g. air freight.) Third, the toll road could take out a loan or two to build up its capacity, and pay off the loan by raising rates.
The first option would mean the BBC would pay subsidies to individual broadband providers. The second option would require the BBC to find another way to push their content to potential customers. (I.e. move into video on cell phones and the like.) The third option would mean raising rates charged to customers, at least until the loan is paid off.
In a way, this is the result competition working too well. Broadband providers are so desperate to avoid raising prices for their end consumer, they're trying to find other ways to subsidize their costs. Obviously, in many cases, there isn't much current competition. (Let's see...I can choose between DSL and cable, both of whom have monopolies for their respective site access physical layer.) However, they're probably trying to prevent the ISP market from opening up to offer a new kind of competition. (Oops...I forgot I could also choose to connect my computer to the Internet via a phone...)
If new avenues of competition open up, then their lack of investment in infrastructure will be their downfall. Going back to the toll road analogy, someone would see the opportunity to make money in an alternate transportation system, and our jammed toll road will have to deal with another avenue of competition.
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Exactly what companies do you think are going to start massively laying wire? The phone companies (the what, two that are left)? Already have. Maybe cable companies? Already have. The... ummm... newspaper industry? Cereal manufacturers? Who do you think is going to jump in the ring and change the world?
The government has nothing to do with the high barrier to entry to the telecommunications market. In fact, aside from the bureaucracy of having to get the permission of basically every local government you want to lay wire for, I don't believe that there ARE any laws restricting competition. It is simply ungodly expensive to lay wire and purchase all the devices necessary to connect those wires, and it's economically inefficient to run two or three or 15 pieces of wire to the same places when only one gets used at a time.
That these new entrants would have no interest in serving rural customers if not forced to is certainly something to consider. So is whether or not these people all scrambling to run wire in your scenario would bother to connect with each other and under what terms. Ultimately these are issues that will require government intervention.
You should acquaint yourself with the term Natural Monopoly and its implications. These issues are complicated, particularly if you go back in history to the time when things were just starting out. There really isn't an answer that is both simple and good. It may be that there is no good answer at all.
The BBC have looked into multicast; but a few ISPs disable it but, interestingly, the key issue are home routers - most home routers filter multicast by default and most home users don't understand how to enable it.
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