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Killing Net Neutrality Could Be Good For You
Hugh Pickens DOT Com writes "Berin Szoka and Brent Skorup write that everyone assumes that cable companies have all the market power, and so of course a bigger cable company means disaster. But content owners may be the real heavyweights here: It was Netflix that withheld high-quality streaming from Time Warner Cable customers last year, not vice versa and it was ESPN that first proposed to subsidize its mobile viewers' data usage last year. 'We need to move away from the fear-mongering and exaggerations about threats to the Internet as well as simplistic assumptions about how Internet traffic moves. The real problems online are far more complex and less scary. And it's not about net neutrality, but about net capacity.' The debate is really about who pays for — and who profits from — the increasingly elaborate infrastructure required to make the Internet do something it was never designed to do in the first place: stream high-speed video. 'While many were quick to assume that broadband providers were throttling Netflix traffic, the explanation could be far simpler: The company simply lacked the capacity to handle the "Super HD" video quality it began offering last year.' A two-sided market means broadband providers would have an incentive to help because they would receive revenue from two major sources: content providers (through sponsorship or ads), and consumers (through subscription fees). 'Unfortunately, this kind of market innovation is viewed as controversial or even harmful to consumers by some policy and Internet advocates. But these concerns are premature, unfounded, and arise mostly from status quo bias: Carriers and providers haven't priced like this before, so of course change will create some kind of harm,' conclude Szoka and Skorup. 'Bottom line: The FCC should stop trying to ban prioritization outright and focus only on actual abuses of market power.'"
bullshit!
"No, you shouldn't worry about prioritization, in fact it can help startups."
What? Wasn't that what everyone was worried about to begin with? That those with all the purse strings would be able to lock out these very startups you're claiming will benefit the most from this setup?
Of course, Comcast owns NBC and Universal Studios.
"A two-sided market means broadband providers would have an incentive to help because they would receive revenue from two major sources: content providers (through sponsorship or ads), and consumers (through subscription fees)."
Thus it would be a disincentive to carry any data where they could not do any double billing for the bandwidth revenue. Is Berin Szoka an industry shill?
everyone assumes that cable companies have all the market power, and so of course a bigger cable company means disaster. But content owners may be the real heavyweights here
So big content providers (the "real heavyweights") can lean on ISPs to exclude access to small content providers (or at least to get better access than small content providers). That's what network neautrality is intended to stop.
When ISPs where Mom and Pops shops doing things for the neighborhood, they got some special protection and the FCC kept their hands off.
Now ISPs are huge companies and SHOULD be considered common carriers. If they start inspecting packets to see where they come from, to assign priority, they will lose the shield of common carrier. They will be expected to know more about the contents of the packets that get sent. So that Bin Laden or kiddie pron video will be on THEIR network. Do you want them to know more about the contents of what you put on the web?
Things like polluted air and water, sugary drinks, strychnine, high crime rate, police state, etc. could also be good for you. Except that they are not.
The internet is a dumb system of pipes with the intelligence at the edges, specifically so we can do things with it that non-techies don't think we can do.
Streaming video is easier than downloading large programs, as you only need to ship a certain amount per second, rather than ship it all and only be able to use it when the last byte has arrived. For real-time broadcast, which causes massive numbers of synchronized transfers, you can use multicast directely, as well as to "prime" a content delivery network node close to your particular edge.
davecb@spamcop.net
That is where the real danger lies: stacks: the joint ownership of or collusion between content providers and transport providers. If the interests of a specific content provider overlaps with those of a specific transport provider, there is an opportunity to screw the customers and competing content providers. Net neutrality aims to prevent such practices, and rightly so. You don't want to be locked out of DuckDuckGo (or even Bing) because Google have paid off your ISP.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
It appears to me like thay are paid shills of the Telecommunications Industry hiding behind "non-profit" "think tanks"
Berin Szoka used to work for the PFF: (from Wikipedia)
The Progress & Freedom Foundation (PFF) was an American market-oriented think tank based in Washington, D.C. that studied the digital revolution and its implications for public policy. Its mission was to educate policymakers, opinion leaders and the public about issues associated with technological change, based on a philosophy of limited government, free markets and individual sovereignty.[1]
PFF was funded in part by the digital media and communication industry.[2]
Brent Skorup works for the Mercatus Center: (From Wikipedia)
Washington Post columnist Al Kamen has described Mercatus as a "staunchly anti-regulatory center funded largely by Koch Industries Inc."[3] Rob Stein, the Democratic strategist, has called it "ground zero for deregulation policy in Washington.”[2] The Wall Street Journal has called the Mercatus Center "the most important think tank you've never heard of."[2]
The Mercatus Center was founded by Rich Fink as the Center for the Study of Market Processes at Rutgers University. After the Koch family provided more than thirty million dollars[2] to George Mason University, the Center moved to George Mason in the mid-1980s before assuming its current name in 1999.[2] The Mercatus Center is a 501(c)3 non-profit and does not receive support from George Mason University or any federal, state or local government, but rather is entirely funded through donations, including some from companies like Koch Industries[3] and ExxonMobil,[4] individual donors and foundations. As of 2011, the Center shows that 58% of its funding comes from foundations, 40% from individuals, and 2% from businesses.[1]
In the early 2000s, the federal government gave tax breaks to the then-leading communications giants to install an open high-speed data infrastructure throughout the country. The amount of taxes they didn't collect averaged $2,000 per household. Shortly after that, the companies began sales and mergers. TechDirt.com published an article detailing this scam as recently as 2013.
It's a perfect time for being wasted.
A perfect time to watch the stars.
- Burden Brothers, "Beautiful Night"
No, The Free Market will solve all that. Unless Government interferes.
He's not talking about a "two-sided market", he's talking about an industry that is trying to double bill. The end user pays for the delivery infrastructure, and if they need to build more capacity, it should come out of the huge profits these companies are realizing. *That's* how Economics 101 works. Saying "I'd really hate something bad to happen to your bits on the way to your customer...maybe you should pay me a little something to make sure that doesn't happen" and then claiming "I need the money because bandwidth" is simply extortion. Utter bullshit, every word of it.
It's warm and feels good to let it flow.
But after a while you realize that in the end you will stink and be dirty.
Don't do it!
Just saying it like it are.
But content owners may be the real heavyweights here: It was Netflix that withheld high-quality streaming from Time Warner Cable customers last year, not vice versa
Netflix except for a few shows it funded, is mostly a distributor. Also if you read up on what really happened, Netflix found itself with steep interconnect fees due to the actions of Comcast. So it built their own network that the ISP could join. However, any ISP that joined and did what Comcast did would find itself under scrutiny by the FCC. Time Warner wants to spin it as Netflix "withholding access" when really it is Netflix protecting itself.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Someone who uses 10GB a month should pay ten times as much as someone who uses 1GB a month
While I agree with you in principle, your pricing structure is way off. There is a physical infrastructure that must be maintained regardless of whether you're using 1GB/mo or 1TB/mo. Your proposal would require breaking out a separate network access fee, which would be the overwhelming bulk of the cost for someone only using 1GB/mo.
The argument that the poor carriers are being bombarded by all this data (when our endpoint bandwidth is much less than other places in the world) is completely absurd. It's not because the internet wasn't "designed" for video, it's because competition hasn't spurred more development by the carriers. They've been living on capital rents.
This piece is naive in the extreme: it assumes implicitly that the only players are major content providers, carriers, and "consumers", and never speakers, telecoms, and citizens.
> The only thing they designed it for in the beginning was simple http.
In the beginning, when the internet was designed, http wouldn't be invented for another 15 years. Http has only been around for half as long as the internet has.
I run a very small WISP. We have around 200 residential customers. Most other alternate ISP (not Comcast or CenturyLink) will not sell residential Internet. Why? Less money, more bandwidth. Streaming video uses up to 100 times more bandwidth that typical web surfing does. Comcast gets Level3 (Netflix's bandwidth provider) to pay them extra to deliver there video streams to there customers. We are so small, how are we supoosed to get Level3/Netflix to compensate us without getting laughed out of the room?
The situation is bad enough that we are considering discontinueing our sales of residential Internet.
At least if Comcast was not allowed to charge Level3 for the delivery of there streaming data (Shouldn't Comcast customer my fees cover this?), net neutrality, they would have to pass that expense on to the customer. If there rates went up so could ours. Level playing field.
I have been in the telecom industry for for many years. The issue that most people don't understand is that the infrastructure is "shared" amongst all subscribers and somebody has to pay for it.
One of the common questions I always got from Telco operators is "how many subscribers can your mobile system handle"? My snide answer is "100 billion"....as long as nobody makes any calls. The question they should be asking is "how many simultaneous calls can your system handle?". Then the answer becomes 100,000 peak busy hour calls. The Telco customer should know what their *expected calls per hour per subscriber* are and then they can calculate the number subscribers they can handle.
The "expected calls per hour per subscriber" (or expected bandwidth per subscriber in this case) changes the calculation significantly. Netflix and other content providers have been a game changer in recent years because they have drastically changed that number. The ISPs know they can't provide every subscriber peak bandwidth at the same time. When subscribers used their "promised bandwidth" in 2 second bursts to quickly load a WWW page, the ISPs had no problem providing it. But now that subscribers are demanding their "promised bandwidth" in 2 hour "bursts", the playing field changes dramatically. ISPs, of course, can engineer for that load, but then "somebody" needs to pay for it. That "somebody" is either the subscriber in the form of higher ISP subscription rates, or the content providers in the form of "throttling fees" which they will undoubtedly pass on to their customers or advertisers.
Net neutrality simply shifts who is paying for the cost of all that equipment for our access. One way the end user will end up paying for it directly, and the other way the end user pays for it indirectly through higher content fees, or goods and services that are more expensive due to higher advertising fees. In the end we all have to pay for it.
I tend to fall on the side of Net Neutrality (and consequently would be willing to pay the ISP more for access), because otherwise the big players (Netflix, Google, etc.) will become more entrenched as they are able to pay the throttling fees while some upstart with a great service can't afford it.
That is where the real danger lies: stacks: the joint ownership of or collusion between content providers and transport providers.
Agreed. It's also not a new problem. Back in the 1940's there was a problem with movie studios owning theater chains, which of course only showed, or at least gave preference to, that studio's movies. Of course back then antitrust law was actually enforced (United States v. Paramount Pictures, Inc.), which allowed for real competition. Nowadays corporate rent seeking is called the free market. While we're at it, war is peace, freedom is slavery, and ignorance is strength.
This isn't news--this is an opinion piece, and it's a bad opinion piece at that. The bulk of it is not only wrong but eye-wateringly wrong and factually incorrect.
Whether or not ESPN wanted to monetize their viewers or not has nothing to do with Net Neutrality or a lack thereof. ESPN is an over-the-top provider in this case just like dozens or other companies. This argument is just thrown in to confuse people and pretend that there is precedent for the argument the morons are trying to make.
That quote deserves special contempt because it's not only bullshit but is also a shamefully ignorant statement to make. Not only was the Internet designed to route traffic without passing judgement, IPv6 (the protocol broadband would be moving to if they weren't so busy punting around) handles all sorts of data in special ways to facilitate these sorts of things. Furthermore, multicast, bitches. It was designed for doing things like streaming video something like twenty years ago.
As to this stuff about a "two-sided market"... it's simply a load of nonsense. Broadband providers don't need a special incentive to "help". What they need is actual competition so they'll stop goofing off, actually invest in upgrades like any healthy technology company should, and stop paying people to write shillery like this. The fact that they're already being paid by their customers at rates higher than almost everywhere else in the world, for notably slower connections should be a big red flag that they're negligent in this obligation.
We're not "assuming" broadband providers are throttling Netflix--we can prove it, because unlike paid shills, we can actually analyze and diagnose networking issues. Fifteen minutes of Googling will readily turn up multiple reports (from both skilled individuals and capable technical organiztions) demonstrating that the broadband ISPs are throttling the traffic.
If you want abuses of power, this article is one. It's nothing but a pack of lies designed to muddy the waters. Are we going to start seeing reposts of the stupid shit FOX News says now?
Someone who uses 10GB a month should pay ten times as much as someone who uses 1GB a month and they should be able to use 100GB if they can afford it.
I'm a cost accountant professionally and your analysis of the economics here is complete nonsense. You are assuming that delivering 10GB/month costs 10X as much as delivering 1GB/month. In reality it doesn't work like that. There are two types of costs, fixed and variable. Fixed costs are things like electricity and salaries and rent that you have to pay every month regardless of how many customers you have or products you produce. Variable costs are things like raw materials or data interchange fees that scale with each unit of product delivered. For companies like Comcast, fixed costs hugely outweigh variable costs, meaning that it costs them only fractionally more to deliver 10GB than it does 1GB. The equipment used is the same, the salaries of their employees are the same, their electricity costs are the same, etc. The cost to serve a customer is generally not affected greatly by the amount of data they use in most cases once the infrastructure is in place to serve them.
What these companies are doing is in many cases creating artificial scarcity and engaging in price discrimination to maximize revenues while minimizing costs. Investing in infrastructure (a large fixed cost) is expensive so companies don't want to do it if they don't have to. Furthermore they know that some people are willing to pay $100 per month while others only $30 so they are using the fact that there is a minor difference in variable cost for data delivery to extract more money out of those who are willing to pay more for faster/more data. Companies like Comcast don't like companies like Netflix because Netflix customers start demanding more out of their existing infrastructure which screws up their cost models and forces them to invest in infrastructure (big fixed costs) soon than they intended.
If you want to charge differential pricing based on usage, then you need to have a flat access fee based off the actual (fixed) cost of providing the service (plus some profit for the ISP) and then you charge a per-byte usage fee for the variable cost of delivering the data. The variable cost in this instance should be a relatively small amount compared to the flat access fee. Right now by paying a flat fee, users who use less data subsidize those who use more.
User bobstreo posted the best analysis yet of this so called "news" - reproduced below. Berin Szoka and Brent Skorup are almost defiantly industry shills:
It appears to me like thay are paid shills of the Telecommunications Industry hiding behind "non-profit" "think tanks"
Berin Szoka used to work for the PFF: (from Wikipedia)
The Progress & Freedom Foundation (PFF) was an American market-oriented think tank based in Washington, D.C. that studied the digital revolution and its implications for public policy. Its mission was to educate policymakers, opinion leaders and the public about issues associated with technological change, based on a philosophy of limited government, free markets and individual sovereignty.[1]
PFF was funded in part by the digital media and communication industry.[2]
Brent Skorup works for the Mercatus Center: (From Wikipedia)
Washington Post columnist Al Kamen has described Mercatus as a "staunchly anti-regulatory center funded largely by Koch Industries Inc."[3] Rob Stein, the Democratic strategist, has called it "ground zero for deregulation policy in Washington.”[2] The Wall Street Journal has called the Mercatus Center "the most important think tank you've never heard of."[2]
The Mercatus Center was founded by Rich Fink as the Center for the Study of Market Processes at Rutgers University. After the Koch family provided more than thirty million dollars[2] to George Mason University, the Center moved to George Mason in the mid-1980s before assuming its current name in 1999.[2] The Mercatus Center is a 501(c)3 non-profit and does not receive support from George Mason University or any federal, state or local government, but rather is entirely funded through donations, including some from companies like Koch Industries[3] and ExxonMobil,[4] individual donors and foundations. As of 2011, the Center shows that 58% of its funding comes from foundations, 40% from individuals, and 2% from businesses.[1]