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Major ISPs Threaten To Throttle Innovation and Slow Network Upgrades
An anonymous reader writes "In a letter released on Tuesday and addressed to the FCC chairman, a group of the U.S.'s top ISPs have warned that if the FCC re-classifies the internet as telecommunications, then innovation would slow or halt and network upgrades would be unaffordable. 'Under Title II, new service offerings, options, and features would be delayed or altogether foregone. Consumers would face less choice, and a less adaptive and responsive Internet. An era of differentiation, innovation, and experimentation would be replaced with a series of 'Government may I?' requests from American entrepreneurs.' They add, 'even the potential threat of Title II had an investment-chilling effect by erasing approximately 10% of some ISPs' market cap.' Ars Technica highlights earlier doomsday predictions by AT&T. The FCC is scheduled to vote May 15 on the chairman's recent proposal encompassing this reclassification option that the ISPs vehemently oppose."
Reader Bob9113 adds that a protest is planned for the same day by those who oppose the FCC's plans.
Sounds like a serious threat. Better cave.
They weren't going to upgrade anything to begin with. Their strategy has so far been imposing limits and charging more. ISPs were never planning to innovate or upgrade.
where the new sheriff holds a gun to his own head and threatens to pull the trigger in order to get everyone to back off. I think it will work this time too as the FCC et al do their usual backing off party trick.
Consumers would face less choice,
How would that even be possible? We only have 4 main providers in the U.S. Are these folks saying that if they were reclassified they would start merging with one another?
One can only hope they go through with this threat because the government would be able to step in and regulate them as a monopoly, forcing them apart like they did with AT&T and for a few years we'd once again have multiple ISPs to choose from.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
Careful there, son. If they don't get what they want, customers will have less choice than the one monopoly provider charging several times what international customers in equivalent markets pay that some of those customers can choose from at present.
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
that want to make money charging for higher speed access about how preventing them from doing so will be harmful to "consumers".
A brain is a terrible thing to waste... Mind? That's debatable.
I have exactly one choice in my area, and many places in the US are the same. Many more only have two choices, with few having more than that. It's difficult to imagine having less choice than this.
And upgrades? I don't know what they did with all that money they received, but they certainly never upgraded a thing.
These comments are my own and do not necessarily reflect the views or opinions of my employer or colleagues...
If these companies can not handle regulation, then others will step in.
While people often talk about 'free markets' and 'regulations' like they are opposites, they really are not on the same scale. If a company can not adjust to regulation, then it probably can not adjust to shifts in market demand, supply chain changes, or price fluctuations.
If these big ISPs can not adapt, then they will die.
How could consumers possibly face "less choice" than they do now?! I moved about three months ago and my ONLY choice for wired internet (and cable, for that matter) is Comcast. For two and a half of those months, I had no service and was fighting with Comcast. It sure would have been nice if there WERE another choice. It's also not like I'm living in the middle of nowhere - this is in the DC Metro! This is not a rare thing, at all. Where I moved from I at least had two choices (AT&T and a local Cable / internet company), but that's still not much choice.
Regulation can only help at this point, because it will give consumers a leg to stand on when dealing with these people. I suggest anyone who thinks we DON'T need regulation should try dealing with Comcast customer support for a month, then get back to me.
How about all those telephone companies that were forced to give service to every American and look how they all went bankrupt, oh wait, no they didn't. ISPs like to say that it will stop expansion, but in reality the government will force them to instead of waiting for Google to announce they're coming to a new city and force the network improvements.
Internet STARTED OUT as a "common carrier" service, which is how we were able to buy DSL service from a CLEC instead of the ILEC. Common carrier status was done away with about the time Verizon took a billion dollars from the taxpayer and started rolling out Fios.
I used to buy DSL from a CLEC in Philadelphia that rode on top of Verizon's copper. When Fios rolled out, I remember discussing with the CLEC that they would not be able to serve me because Fios was not considered a common carrier, and Verizon did not have to sell capacity on its lines at a cut rate to competitive carriers.
That CLEC exited consumer broadband shortly thereafter.
Reclassifying modern broadband as a common carrier is absolutely going to create more competition and more choice for consumers. Yes, it will mean a tiny bit less profit for the majors, because they will have to sell capacity to CLECs again at a discount, but whatever.
Honestly, and I'm hardly ever one to talk about nationalization, but the taxpayer has paid for almost all of the Internet infrastructure that has been laid out since about 2004. It should belong to them and be used for their benefit. If Verizon et al want to be considered media providers and not common carriers, then let them pay the taxpayer for access to the network that the taxpayers paid for. Yes, I know, socialism. So what? A lot of what we do is socialized, because it's better for everyone that way.
Maybe it is time for internet to be treated more like electricity as a "REGULATED UTILITY". That statement should scare the daylights out of ISPs. Sorry but you can only make a 20% profit and yes we will audit the daylights out of you and by the way, you owning media companies is a conflict of interest and you must sell them all off.
The problem is the same one as the RIAA, MPAA, and Coal. All three have the Democrats in their back pockets because of the mostly liberal "artists" or in the case of coal the unions and they have the Republicans in the other pocket because of corporations and stock prices or in the case of coal you can throw in jobs in Republican areas.
What is funny is that nobody likes the cable companies but they politically get their way.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
For quite some time now, according to data from the NCTA:
http://www.vox.com/2014/5/12/5...
"To those who are overly cautious, everything is impossible. "
even the potential threat of Title II had an investment-chilling effect by erasing approximately 10% of some ISPs' market cap
Translation: Our investors know we stand to profit greatly from being able to control the flow of internet traffic in accordance with our company's best interest.
What innovations have the major ISPs come up with lately?
Price gouging? Copying services developed by other people?
Sorry, but these clowns have been charging more for less for a long time, and failing to invest in their own infrastructure. They don't innovate. They sit on their piles of money and make promises they'll never keep about how awesome their internet is, and then fight to ensure their local monopolies are protected.
When they say this will stifle innovation, it sure can't be anything they're doing.
Lost at C:>. Found at C.
Maybe it's time for antitrust regulation to be used against ISPs that have used predatory business practices to eliminate competition from smaller ISPs in their regions in order to maintain monopolies over the areas they service?
They provide a single service, an internet connection, continually reclassifying this depending on if it is Copper, Cable, Broadband, DSL, Fios ... etc is a red herring they provide an internet connection and nothing else ...
They are already a common carrier, they just don't want the service they provide to be classified as this as it would introduce the possibility of competition into the market ...
Puteulanus fenestra mortis
The only innovation they are doing is coming up with better ways to count their money.
Well, they have a point. I mean, they are pretty innovative. Just 10 years ago, I had exactly two options for home broadband. Today, with all that amazing innovation and competition, I have exactly one option for home broadband.
SJW's don't eliminate discrimination. They just expropriate it for themselves.
They are attempting to monetize individual streams from a service we already pay too much for.
What really yanks my chain is that they built the internet with our money.
We gave them subsidies, tax breaks, and rights for physical placement.
Now they have the nerve to extort the right to further monetize the net.
Remember when conectivity came with benefits?
Most all "service providers" had a community area and good support.
They maintained news servers.
They provided shell access.
As more got on board the unwashed ignored these vital beginnings these services dropped off the menu.
As yet more came along providers used this as an excuse to raise fees.
Then came cellular technology which the providers connected to this network we helped them build.
And more subsidies and tax breaks were given = more of our money was used to build the thing the providers would then charge us more to use.
Given this path and the wreckless way we are governed I predict we will soon have Obama-Net.
All citizens will be legally obligated to purchase service from a provider.
Providers will monetize certain streams as they see fit to further exploit their position.
More of our money will be given to the providers so they can build out the network to effectively reach all.
The providers will fail that measure as they failed to provide DSL or fiber beyond the urban boundaries.
The providers will use the money we gave them for a wired network to build out the cellular network.
Then charge us 10x fees to connect since cellular is unregulated + cheaper infrastructure for them to provide and maintain.
Oh! Wait! This has all already happened (except Obama-Net)(but it's coming)
Rick B.
If that is the case then we will invalidate all those local laws you have somehow gotten enacted to stop competition in local areas.
you know the ones that say it is illegal for the local government to give Comcast competition?
The ones that strangle startups at birth keeping your defacto monopoly.
How about a bit or 'real world' economics to sharpen your game then?
See how you like that then?
I'd rather be riding my '63 Triumph T120.
This threat is exhibit #1 that the ISPs have gotten too large, and need to be regulated.
US ISPs have steadfastly refused to provide adequate service outside major metropolitan areas for decades.
Threatening not to do something they already don't do strikes me as a pretty damned weak threat.
Chill out bro, they already are PRISM compliant.
They are absolutely right, to an extent. Now hold on, hold on. What they of course carefully avoid mentioning is their sweetheart local monopoly deals. I don't think we need more government to solve the problem caused by government in the first place. If they want to shelter under the rubric of the advantages of a free market, let them have a free market and we'll see who innovates and competes. While they are profiting off government provided monopoly they can go pound sand.
This posting is provided 'AS IS' without warranty of any kind, implied or otherwise.
Remember MCI? Yes, tell us all about how much less competition we'll have when you're forced to compete on service instead of in disservice. Blow it out your interconnect. We've already been down this road. ISP definition of "competition" is how much more they can over charge for shit than their competitors without actually delivering service. Thus the throttling unless the endpoints pay even more for the shit they already paid for.
ISPs are quadruple dipping: The website pays for access, the end user pays for access, OK, but then they charge extra for non-NATted IPs (hello, IPv6 exists) and unblocked ports ("business" class), and now they want to sell the websites "faster" access to the customers when we both already paid for that speed of access to each other, AND they want to put caps on the number of bits downloaded -- Hint: That's not how it works. They have to have the hardware to handle peak load, it doesn't matter if I suck in tons of gigs during off-peak time, caps are not about congestion, they're just yet another way to monetize. Not to mention "bursting" plans where they allow the first n-bytes of a download to come in fast, then throttle the shit out of it. "Up To X MB/s, (minimum 0 BAUD, yes Zero)", WTF. Damn, that's more that quadruple, but I lost count of how many dippings that is.
Visit OpenCongress and locate your congress critters via zipcode. Politely call each of them and say, "I want the FCC to classify broadband Internet services providers as common carriers", and have them repeat it (a real person will answer, and they'll have written down your words). I also mention that it should be considered illegal anti-competitive business practices for municipalities to granted ISPs monopolies, and that breaking up said monopolies will allow new competition to flourish. You can leave a comment on Issue #14-28 via the FCC Comment Filing System. Contact the FCC by Email: openinternet@fcc.gov, or call the FCC comissioners (but remember they're not beholden to voters). The most effective thing to do is write a letter to the editor mentioning your congressman's name and the net neutrality issue and send it to your local news outlet, that really gets their goat -- they care about the newspaper for some odd reason, maybe because old folks read it? Here's a petition, but these don't do shit, really it's just the illusion of shit-doing.
P.S. Here's a vid explaining the net neutrality issue. Here's another more sarcastic and long winded vid on the subject. and here's a video from an actual honest ISP. (NSFW, for brutally honest language).
Protip: Use a download accelerator to open multiple connections to the same file and trick the ISP into allowing you a faster speed. When the D/L starts getting throttled (hover to view the speed graph), pause it then unpause it and the speed goes back up (new connections = new "bursting" counter).
Regulating profits does nothing to ensure an open internet. Its a separate issue, and should be kept separate. If you limit profits, you may also be limiting the chance of competition forming.
The FCC should focus on ensuring fair standards for access and content delivery, and set rules accordingly. Let local governments deal with monopolistic entities if the wish, as every situation is different.
There is no competition now! That's the whole problem. My choices are slow but steady DSL, fast but unreliable cable, or slow AND unreliable dish network. The cable companies and the phone companies have zilch incentive to upgrade their lines to better support their Internet-only customers, since their primary phone and television customers are happy and don't realize what awful Internet service we're getting compared to all the other developed countries on the planet. If I want better service where I live, I have to pay several thousand dollars to the cable folks to run business class fiber to my house, for which I'll pay several hundred dollars a month... and the service will STILL cut out every hour, based on what I saw of the business service when I did third party tech support in town. The DSL company won't even consider giving us the business class package since we're not in a commercially developed area.
Occasionally living proof of the Ballmer peak.
Just separate each companies' hardware from its services and make two companies, the hardware side being a Title II Common Carrier. Then, anyone, including the former companies' services division can now buy wholesale access and sell their services.
The infrastructure is expensive and it isn't feasible for more than one or two companies to install lines to every home. Have one utility company install the lines and sell to the services companies. It should have been done years ago.
-SaNo
Oh, I think 99% of everyone would agree that it is way past time, but where are you going to find a Federal DA willing to indict, who wouldn't also be immediately fired? Well, in reality, in today's day and age, he'd be framed for child porn or proved to be an islamo-mole and buried in gitmo.
"Unheard of means only it's undreamed of yet,
Impossible means not yet done." ~~ Julia Ecklar
I’m going to open a big can of worms here, and I’ll admit up front that I haven’t fully thought it through. This more of a US-centric stream-of-consciousness kind of mind-dump.
I’ve lately come to hate the US telco industry with the angry passion of a thousand fiery suns. They enjoy a monopoly or near-monopoly in most areas of the United States. They also have a legal responsibility to maximize value to their shareholders. In the absence of competition, maximizing service and quality to their customers runs counter to maximizing that shareholder value. Our natural instinct is to shout the mantra of “increase competition!”, but even in the areas where there is competition, we see very little competitive behavior.
Why is that? Collusion? Well...maybe it’s because the Comcast CEO doesn’t have to pick up the phone and discretely call the AT&T CEO to find out what he’ll do if Comcast decides to lower rates and provide better service. He already knows it will start a price and service war that while benefiting the consumer, will hurt corporate profits. Nobody at this echelon wants to race to the bottom. All the big players have to do is find a happy medium of market share and slowly increase profits. The barriers to entry to be competitive/disruptive are enormous. It takes a Google to do it. Even if you could do it, you’d be forced to join the club and be a part of the same problem for the same reason the incumbant companies do.
But telecom isn’t the only industry that operates in this manner, even when competitors are present. The average prices in automobiles, new homes, health care, etc. have all outpaced increases in wage at a rate of roughly 2-to-1 over the last 45 years. The increases should be in line with wage increases to guarantee sustainability. These are competitive markets, so why the disparity? The reasons are many and varied. There are some easily justified increases like safety, R&D, and environmental concerns; but there are also offsets like increases in efficiency, automation, logistics and transport, overseas labor, etc. More often than not, these companies report quarterly and annual profits that measure in the billions and frankly defy belief. Which brings me to that can of worms.
There was a time when companies were reluctant to sell stock. They were literally selling a piece of their company to the public, and only did it because they needed the capital to bring new products and technologies to market. People bought stocks because they believed in that company, product, or technology; and handed over their money to help bring it to market and maybe make a little money in the process. Now, stocks are strictly investment vehicles for the buyer, and the seller often uses the capital to force stagnation instead of innovation. Look at Facebook. They are a titan in the tech industry, lighting cigars with $100 bills. Why the IPO? What new major advances in social media did the IPO make possible that they couldn’t make happen themselves? Likely none. But what it did do is allow Facebook to make some acquisitions. They are staying on top by removing the competition not rising to meet it.
Maximize shareholder value. That phrase is used to justify: higher prices, lower service, lower quality parts, environmental damage, damage to the long-term future of our nation, and general unethical corporate behavior (skimming, fleecing, shell corporations, tax loophole exploits). I’m not opposed to making money as a shareholder. But that money isn’t made out of thin air, and it doesn’t come from the seller. It comes from the American public. We pay that. When you get your dividend check or sell your stocks for a fat profit, that money came from me, from your neighbors, from your family and friends, from anyone that ever bought a product or service from that company. You paid for it too.
Similar to the underlying storyline in the movie The Matrix, I’m of the ever-increasing opinion tha
I'm sorry, but your opinion seems to be wrong.
You mean like the innovative way Verizon got New Jersey to fork over a boatload of cash for broadband access that Verizon never rolled out....
They're not supposed to, not when you take a former cable and wireless lobbyist and put him in charge.
He's not there to have a backbone and "do the right thing" for us, he's there to ensure the cable companies get everything they want, all in the name of corporate profits.
And your senators and members of congress, they've probably also been bought off by the same companies to ensure they get what they want.
America stopped being a democracy (or a republic) long ago, and is entirely under the control of corporations. Sadly, some people view this as a good thing.
I simply don't believe the FCC has the desire (or the ability) to do anything which isn't entirely in the interests of the cable companies.
And, as I said elsewhere, for the cable companies to say this would stifle innovation is a crock -- because there isn't a damned thing the big ISPs have innovated in years.
Lost at C:>. Found at C.
Here are some pricing examples for Romania, a backwards country somewhere in Eastern Europe.
I pay about $25/month for 40 mbits on a so-called "bussiness" connection - at this price of course "bussiness" means no SLA, but it does mean unmetered traffic and the freedom to run any service i want on that wire.
I also pay about $30/month for 200 mbits on fiber, plus IPTV plus a voice line (not sure of the conditions on voice, I don't really use it). This is a home connection, but it's also unmetered. I think I can't do SMTP through it, but no other restrictions.
This is what happens when you have a little real competition. Everyone has access to at least two out of cable and DSL. Which are no longer cable and DSL, but fiber.
You're going to give me the age old argument that the US is much larger and more spread out, but we have residential suburbs as well, and they get... guess... ethernet and/or fiber :)
I apologize for the lack of a signature.
PRISM compliant as in custom ASICs mandatory to be stamped on all new logic boards (motherboards, routers, etc)?! That's next. They will be silent sentinels listening in on the bus. Speed and performance will be sacrificed for homeland security.
What? You actually think the heroes in office know anything about what they regulate?! Man, you haven't a fucking clue what those monkeys in office do.
How did we get from ISP's being regulated like utilities to government mandating what gets printed in circuits? Does the FCC mandate how electrical transformers are built?
"What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)
I don't mean the ISPs, I mean the rest of us. Wheeler is a cable lobbyist; I suspect the court striking down the Open Internet Order was exactly the excuse to scuttle the net neutrality that all his buddies hate so much. Besides: the court has been very clear on this matter. The only way the FCC could force net neutrality would be by declaring ISPs common carriers. The Republican Party -- and Wheeler himself -- is adamantly opposed to such an action, and so it will not happen.
This smacks very much of the Obama administration responding to all the illegal wiretapping the NSA and FBI et al were doing not by arresting the perpetrators, but by writing the laws to give them authority to go right on doing it.
That's a nice Internet you got there. Would be a shame if anything happened to it.
If he explores all forms and substances Straight homeward to their symbol-essences; He shall not die.
Don't forget the provisions -- that the telcos heavily lobbied for -- in the last major telecommunications act that made it legal for them to lock out all those smaller ISPs.
IMNSHO, the anti-trust actions should have started the day the first Baby Bell was being purchased to begin the reconstitution of Ma Bell. It's time to break up AT&T again.
And kudos to whoever it was who suggested that they (and the cable companies) need to divest themselves of any content creation companies they now own. Owning the pipe and the content seems like creation of a vertical monopoly to me. I don't need or want the ISP's "content". I'm struggling to think of any content that AT&T could provide to me that I would find valuable. In fact, I really don't want to deal with an internet service provider but, rather, an internet connection provider. That's what I have now through one of the companies that's managed to survive on the crumbs left over after AT&T started pricing access to their copper to the point that it killed off the little guys. It works fine although its tough to describe my connection as "broadband".
CUR ALLOC 20195.....5804M
The water pipe to my house doesnt need to be replaced because it was sized properly from day one. The only people with properly sized internet connections in the US are the ones with fiber to the house.
Good-bye
it sure seems as if the only time there is "competition" is when google threatens to put fiber in a city, anything else the cant be bothered
have you seen my sig? there are many others like it but none that are the same
I wasn't aware that data caps are considered "innovation".
The real Sig captains the Northwestern. This one captains
Funny how regulation of ISPs doesn't affect their profit margin too much for the rest of the planet...
"Wait. Something's happening. It's opening up! My God, it's full of apricots!"
Actually, merely with the replacement of my key lightbulbs with warm LED's (the G7's at 3000k are indistinguishable from incandescent by the way) (the 3000k is the key - not the brand), my electricity usage and bills dropped enormously.
Meantime, when I replace my AC unit, it will drop more.
And my TV draws a fraction of the previous TV.
My electricity usage has consistently dropped since i moved into the house 15 years ago. In some months- my bills are lower than they were when I moved in despite price increases. During the summer, they are about the same- a little higher (10%) last august. I think I found the cause for that- a repair man broke one of the ducts so I was air conditioning the attic instead of one of the rooms.
I agree internet bandwidth consumption is growing and will continue to grow. However--
1) Whenever google enters an area, the ISP's have shown a pattern of being able to rapidly upgrade service while holding or even (!!!!) lowering their prices.
2) Many other countries have had better service at lower prices for close to a decade now.
---
To be fair, my $110 internet service from comcast has gone from 3mbps to 25mbps (and sometimes even higher- perhaps they are caching large files locally) as it increased from $70. But I suspect if google came around, I could get much more bandwidth for $70.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Bingo. "Mr. CEO, we'll push to have you removed if you waste your profits building out your infrastructure to be more modern. What you have now if making us huge profits. Mess with that at your own risk."
Someone needs to revisit this BS argument that -- as I currently understand it, came out of a controversial opinion in a state court proceeding that manage to make its way into business textbooks -- the only goal of a business it to make a profit for the shareholders. It's an important goal (or the company won't be around very long) but it shouldn't be the only goal. Making a quality product? Doing something for the community where you're based? Not polluting? It's all very nice if those things happen but don't you even think about spending one red cent of our profits on those activities. Heck, at one time, corporations had their charters revoked (the corporate death penalty) if their activities failed to provide for the public good. Remember the public? In theory, they're the ones who allow these legal fictions to even exist.
CUR ALLOC 20195.....5804M
"When buying and selling are controlled by legislation, the first things to be bought and sold are legislators."
-P.J. O'Rourke
A better solution would be to run the last mile as a public utility. You pay the city to maintain a single fiber to the premises, and then all the various ISPs could hook in at defined network access points.
So your local connectivity would be within the utility, but anything beyond that would be routed through your chosen ISP...sort of like picking different long-distance providers for a phone subscription.