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Who Pays for Rebuilding the Internet?
pcause writes "The Internet (physical as opposed to technical) was really not designed for applications that want to use maximum bandwidth all of the time, such as P2P and streaming video. Here in the US we've seen Comcast try to balance the demands of P2P traffic with other traffic and its backbone capacity. In the UK, a flame war has broken out between the BBC and ISPs about the same issue. So the question is who pays? Should the content owners who make the profits pay for the extra infrastructure, or should the consumer pay?"
The interesting question is not who pays, but how can we all collectively pay less for better performance? The problem is that the billing model for the internet is broken. ISPs need to start billing for usage, that much is obvious. But in addition, I think it would be really interesting if they billed based on a function of their actual cost for delivering every individual packet. I.e. if it stays in their network it's really cheap, if it goes through a peer then it's still pretty cheap, and if it goes to a transit provider then it gets expensive. the upstream ISP could in turn bill based on their cost to deliver it. Routers could pass along this metadata about the cost, accumulating it along each hop.
Obviously this has tremendous implications in terms of the additional work that routers would need to do to account for traffic, and how the costs are communicated to the customer. However, I think the end result would be something quite incredible, because what would happen is it would drive the development of smarter P2P protocols that keep traffic nearby, and widespread deployment of caches for static content and such. Right now there is very little incentive to do these things.
The end result, once everything has had a chance to adapt, would be a phenomenally efficient internet, with reduced costs and better performance all around. ISPs wouldn't give a hoot about this new class of "smart" P2P because the bulk of the traffic would stay among their local subscribers, the bandwidth to whom is free. Massive loads would be disappear from peering centers and long distance links. The cost of bandwidth would plummet.
I think all of this is feasible, and it's worth doing.
A better question would be, "why is the market broken?"
Well, here is the catch. Who ever spends the money should gain control of the resulting infrastructure. If the BBC/British government pays to upgrade the lines you can expect a great big (politely worded) fuck you to the telecoms if they try to set any demands.
If the telecoms pay for the infrastructure, they get to say what happens to it. Within whatever terms they negotiate for the use of public land to build on. And if they continue the false advertising of their services, they can expect that at some point a class action lawsuit will be made and will break them.
This is essentially the same argument raised by those who are truly anti net neutrality -- not just "don't let the government interfere", but "why, yes, I do think Google should pay Comcast's bills."
Look, it's simple: Google pays Google's bandwidth bill. I pay mine. Both of them go towards building the infrastructure. If it's not enough, raise taxes to pay for it, I don't care.
What you do not get to do is raise the bar for the next Google, and continue to let ISPs deceptively advertise "unlimited" Internet access. Yes, technically, the advertising is truthful, but it is intentionally misleading, and we are all paying the price for it.
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they both pay (consumer and content owner). They even pay according to the bandwidth they're provided, in most cases. Exactly who does the writer think is getting free service?
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Should the content owners, who make the profits pay for the extra infrastructure or should the consumer pay?
The consumer will pay. PERIOD. Even if the content owners pay, the costs STILL get passed down to the consumer.
Chas - The one, the only.
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FTP has been around since the 70's and http since the 90's and they want to take MAXIMUM BANDWIDTH.
The question presumes that if the content owners pay, the consumers won't have to pay.
This is wrong. If the content owners are forced to pay, then the consumers will have to pay for the bandwidth when they pay for the content.
Here is the correct question: Should consumers pay for bandwidth when they pay for bandwidth? Or should consumers pay for bandwidth when they pay for content?
When phrased correctly, the answer becomes obvious. Consumers should pay for bandwidth when they pay for bandwidth. Any other answer has negative consequences, both to the economy and to the current nature of the Internet.
If you had super powers, would you use them for good, or for awesome?
>>There's a ton of spare bandwidth at night.
I don't know where you get this from. As an engineer for an ISP, our low point is only from approx 2-4 am. Bittorrent and other P2P clients left running all night still consume constant traffic in both directions.
I thought we paid already, and the ISPs just didn't reinvest into rebuilding their network.
The last I checked most of these ISPs either had monopolies granted to them, and/or had existing infrastructure handed to them by Governments.
Some even had billions of _public_ money handed to them by Governments to build their _future_ networks.
So now they want us to pay again?
This is like the power and water companies asking us to pay extra just because they went "Oops, oh yeah forgot about this reinvesting into infrastructure for the future thing".
Compare how much ISPs charge and how much power and water companies charge, and what you get for it. While small ISPs have to pay per bit (like water and power companies which have to pay per unit of gas/coal/water), AFAIK large ISPs have cushier arrangements with each other, since the incremental costs of sending bits isn't high once the network capacity is paid for - if nobody uses the bandwidth, the ISP still has to pay about the same for the network.
If the content providers pay, but cannot (or do not) pass those costs along to the consumers, then their business model will not be viable. They will be paying more than they are making, and eventually will starve to death.
Obviously, this isn't going to happen.
If the content providers pay, and can still squeeze a profit out of the deal, they will *still* pass the cost along to consumers, for two obvious reasons: 1) they want to maximize their own profit margins, 2) they will get sued by their own shareholders if they don't try.
The cost will be passed on to consumers one way or another...perhaps in the form of a direct infrastructure tax, perhaps in the form of tax incentives/subsidies specifically for ISPs, perhaps in the form of higher cost service to the consumers, most likely as a combination of all three (and maybe other common means of paying that I haven't thought of).
Remember...the workers generate wealth while the organizers skim off the top. There is no more universal principle.
You're in business selling a service that's so popular you cannot meet all the demand that exists for it.
And you're asking how you're going to pay for building out to be able to provide more?
(1) Raise your prices. Use the extra revenue to pay for buildout. Sell more service. Profit.
(2) Get investment. Use it for buildout. Sell more service. Return profit to investors.
I understand that the peering agreements make things more complicated, but the basic issue is that people on the ends of the network have demands for the services, and it really seems like there's fairly transparent economic solutions to that problem without trying to do anything particularly complicated like having ISPs shake down content providers who don't have points of origin on their networks.
In short: bill the people you provide service to. Don't try billing the people you don't provide service to.
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Here, I'll pay for it. Whom do I make the check out to?
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Okay, I live in a somewhat crazy country (New Zealand) in which we have this deal where both parties pay an ISP for Internet services. The consumer of the product (e.g. people who view videos) pays their ISP for internet traffic (something like $b + $x per hour + $y per gigabyte, billed or prepaid at some interval, where b, x, y may be zero). The providers of the product (e.g. people who host videos on their server) are themselves consumers of Internet services, so also pay their ISP for internet traffic. It seems to generally be the case that each party pays for both upstream and downstream traffic.
The idea of this approach seems to be that the money given to the ISP goes towards paying other higher-level providers for traffic, and upgrading the network where/when necessary. If the ISP doesn't think they have enough money to support traffic, they should either bump up consumer prices, or alter their accounting system. Both consumers and providers of products are already paying the ISP for the traffic and infrastructure maintenance.
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What is your basis for claiming that the internet is clogged and choked up? With few exceptions, the internet is working just fine, thank you very much. Moving to a consumption-based billing model is nothing more than an excuse for the telecommunications providers to extract more money and perform fewer upgrades. The notion that ISPs are buckling under the weight of P2P and YouTube is even more retarded when you consider that P2P protocols by their nature prefer to use fast, local peers and companies like Google use backhaul networks to deliver content to local peering points.
The current model is elegant in that the exchanges between ISPs are essentially free. If Comcast/AT&T/Time Warner/etc are suddenly able to charge me in KB/s or have a tariff for each Email/IM sent like the wireless carriers do, someday they'll wake up and say "Hey, let's charge Verizon for accessing our customers!" Then the whole system breaks down, and you time travel back to 1989 when you had Prodigy (the IBM/Sears version), Compuserve and GEnie.
I work in an organization that maintains a carrier-grade private network that connects about 25,000 locations. But since even carrier-grade equipment has a relatively short lifespan, routine infrastructure refreshes give us next-generation technology, automatically, whether we need it or not. In 2004, it would have cost millions for ISPs to implement metro Gigabit networks to connect customer nodes... but today, equipment swap-outs will essentially give them that capability for next to nothing. In 2012/2013 when today's new equipment is obsolete, 10G ethernet will be the norm.
When your local transportation department discovers that traffic patterns have changed, they don't start billing you for your time on the highways. They figure out what the problem is, re-engineer traffic signaling or change maintenance schedules to widen/pave/etc roads. ISPs need to do the same.
Conformity is the jailer of freedom and enemy of growth. -JFK
Put a tax on spam emails, and popup advertising? Then use that tax to pay for the new Internet.
Also charge the spyware and adware companies fees for infecting a majority of the Internet and affecting bandwidth, and use those fees to pay for the new Internet.
My plan is to get the money from companies and people that abuse the Internet via taxes or fees and use that to build the new faster Internet.
Maybe it will cut down on spam, adware, spyware, and popup ads? Just a thought.
Remember, Slashdot does not have a -1 disagree moderation, and no, troll, flamebait, and overrated are not substitutes.
The ISP world has changed significantly from "many years ago". P2P, streaming media and Itunes-like services mean folks leave their systems on and pull content 24/7. As stated, 2-4 is the only low point (and we are not a small, more a medium-sized ISP). Margins for small-medium sized ISPs are pretty thin. You're not going to have "loads" of spare bandwidth if you expect to maintain any profit at all. I live in a state where the majority of locations are served via satellite. It's not cheap to rent time on a sat btw.
You can only use my tax money if I get to own it. Let one company own the last mile, and sell it to providers. No provider can own last mile, and no last mile company can provide access. It works for electricity in Houston...
Lets face it, only Earth people get to use the internet so it won't be getting bogged down anytime soon. It's when aliens start tapping into it that we're screwed.
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Who gets the contract to do the fiber? How much should be paid to do this contract? Should everyone get it or only dense populations? How dense do the populations have to be? How do we pay for it, do we inflate the currency through debt or do we increase tax?
Who gets the maintenance contracts? How much do we pay for the maintenance contracts? How much maintenance should be spent on all fiber or should only dense populations get it? How dense do the populations have to be? How do we pay for it, do we inflate the currency through debt or do we increase tax?
Who gets to use the fiber? How much do we charge companies to use this fiber? How do we ensure its being used for the right purposes and companies aren't bidding for contacts and locking in those customers? Who is responsible for faults in the network? How are costs allocated?
The market is fine, the solution is to deregulate so companies are forced to compete, as opposed to the more segregated systems that we are used to now a days.
I don't recall anyone ever saying "To have a free market, it must be provided by public Government services", a free market can never have any Government regulation or intervention, else it is not a free market.
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For the obligatory car analogy... If you bought a car using a 48 month loan (I've never financed a car, but I assume that may be a typical duration nowadays), by the time the loan is paid off, the value of the car is substantially reduced (perhaps down to your down payment depending on how many miles it was driven) and you paid both the principle and the interest over the primary useful life of the car.
Of course, ongoing maintenance (labor of repair and administration as well as cost of replacement parts) and operational costs such as power, cooling, insurance, also must be recovered. For example, it really does cost more to run 2N routers than to run N routers.
Why is there an "insightful" mod and why isn't it "-1"? If I wanted insight, I wouldn't be reading
It has been obvious since dialup-to-BBS days that bandwidth demands were only going to go up, and go up fast. Every new, faster modem was snapped up immediately, until the bandwidth of voice lines was saturated. And those of you with longer memories may recall the RBOCs/ILECs bitching along the lines of, "Oh noes! Our trunks and switches, they are overloaded! We can haz data tax?" Proposals to surcharge data traffic were floated, which were all greeted with hearty, derisive laughter.
Fast-forward not-at-all-many-years to the broadband age, and the RBOCs/ILECs are saying, "Oh noes! Our switches and routers, they are overloaded. We can haz content tax?" The only real difference between then and now is that now the cable television providers are joining in the chorus. This, however, does not make the argument any more valid.
Now, whether or not heavy users of the network should be surcharged, and how much they should be surcharged -- while a subject worthy of some discussion -- is nevertheless completely swamped by the Actual Point. Here is the Actual Point:
YOU SHOULD HAVE BEEN BUILDING OUT YOUR NETWORK IN THE FIRST DAMNED PLACE!
Really, after watching dialup explode in popularity, after watching broadband explode in popularity, after watching other nations build out their digital infrastructure to some amazing levels... There is no fscking excuse for any RBOC/ILEC to be whining about overloaded networks!
You had plenty of warning, you had more than plenty of money, you even got $200 billion in handouts from the Fed... I mean, what the fsck have you been up to the last fifteen years?
The floor of your monthly fee structure should be covering not only maintenance, but also aggressive buildout. If they aren't, then you've deliberately kept your head in the sand this whole time (and you suck at math).
Tweak everyone's base rates, build out the network to the required capacities like you should have been doing, and stop trying to propogate this self-serving pathetic meme that some network users are more equal than others.
Schwab
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ISP A-20Gb per month for $40 and $1.50 per Gb for everything over, or ISP B at 35Gb for $40 with $1 per Gb over. And NEITHER bothers to give you any kind of way to tell how much you've used! Why? Because they know that by NOT giving you an easy way to tell that you will either overestimate badly which means you don't get what you paid for, or you underestimate badly and you connection will go up by a ton.
Me I'd much rather pay for a slower unlimited line than deal with this crap. But thanks to the lack of competition I don't get a choice in the matter. So enjoy having to throttle your downloads to 10k to keep enough overhang for videos and surfing. Trust me it is REAL fun. IMHO this is just another excuse for the big telecos to sit on the butts and enjoy their huge profits rather than doing what a sensible company would do which is reinvest some of it into upgrades to their business. But don't worry, I'm sure you'll all get a taste of it REAL soon. But this is my 02c my exp,YMMV
ACs don't waste your time replying, your posts are never seen by me.
The problem is, companies like Time Warner/Road Runner, Charter, Comcast, and the DSL providers make so much profit off their networks that massive upgrades get paid off in an extremely short period of time.
...
Knowing the costs involved the local Road Runner division, coupled with the number of accounts they hold, the proper analogy would be something like this:
Tell the customer it will take 48 months to recoupe the cost of this upgrade, regardless of the fact that it'll be paid off by half our subscribers next month, leaving the other half for pure profit.
2N routers does cost more than N routers, this is true. The problem is that they could manage 100N routers and fill them up with bandwidth and STILL make a fair profit.
You're completely ignorant if you think the cable/dsl providers aren't making a fortune. Even putting new fibre in the ground gets paid off when the first year in most cases, and once its there its just a matter of lighting it with the right bandwidth, think about the half million dollar router that gets implemented. If its only spread across 50k customers, thats $10/customer to pay it off. Thats less than 25% of a monthly bill in most areas. The UBR routers don't serve that many people of course, but they also don't cost half a million.
We ARE (the cable/dsl customers) already paying for the upgrades! We've been paying far more for service than we should have been for years. We've paid for the upgrades. The BBC pays for the bandwidth that is required to keep from filling up their own pipes. Our ISPs are not paying for the bandwidth required to serve their network, hence their pipes are full.
This is the way the Internet works. I pay for my pipe to the cloud. BBC, Yahoo, Google/YouTube, Microsoft, Apple, all of them, pay for their pipe to the cloud. I get my fair share of their pipe. If they want me to have more speed, they pay to make their pipe bigger, and assuming mine isn't overloaded, I get more. The Internet has always been a 'pay for your own pipe' type of network, the service providers would rather it be 'the other guy pays for the privledge of using the pipes I'm already charging my customers for' which is ridiculous to say the least. If the various countries of the world don't step up and enact network neutrality laws, I fear the Internet we know and love will not exist in the long term.
The problem is the cable and DSL providers have over sold their crappy bandwidth and don't want to pay for more. It has nothing to do with not having the money to pay for more, they are making an absolute fortune every month. If someone else wants to start another broadband provider in the area other than the massive initial investment that someone has to lay out, which wouldn't be a problem if the new provider could charge the same price as the monopilistic provider already in the area, the local monopoly can just drop their price. Go from $40 to $10, still turn a profit, although much smaller, and you've just made it a lot more difficult for the new guy to get funding. To the point that the funding won't want to risk it. Monopoly upheld, customers still get screwed.
The worst part is that my tax dollars funded half this crappy network which doesn't meet any of the things they said the funding would get me when begged congress gave them the money in the first place. Very frustrating
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