Net Neutrality: Always Count on Major Media and Pundits to Slant the Story
I was going to blog about “infrared” BBQing this morning, but just got fed up with the whole “Net Neutrality” debate, and so here goes. BBQ post tomorrow. A couple of weeks back I read an article that for the first time I’ve seen or heard, addresses all the issues—not just the slant the left (predominantly) wants you to have.
I set it aside, for then, listening for if I would ever see or hear the thing fully addressed. I’ll begin by saying that this is one rare instance where I’m actually undecided—setting aside my contention that all such matters ought be worked out by markets unencumbered by State regulations whatsoever. Since that ain’t happenin’ any time soon, here’s why I’m undecided given the landscape as it is.
- The Net Neutrality folks with their “all data is created equal” stance are essentially arguing for socialization of the costs of running the Internet. The person who does nothing but stream video pays the same as the person who only reads books or other predominantly textual material online. On the other hand, data costs will probably come down over time and things will probably sort; and if data costs are low enough to people, then it becomes an exercise in arguing over some people subsidizing others to the tune of a few bucks in real terms. Bigger fish.
- On the other, other hand, the bigger issue to me is subsidizing in time and aggravation, waiting 20 second more for a text page to load because all data is equal, steaming video packets competing with exponentially fewer text data packets. And, as is typically the case with socialist schemes, it’s ok that everyone is miserable (FTA takes 20 seconds more to load, Parks & Recreation skips when Ron Swanson fans watch it over Netflix) so long as everyone is equally miserable.
- Establishing other tiers of service, as has been proposed, will allow for companies and their customers to simply: pay more because they use more. You should be familiar with this concept. If not, check out the meters on your house for electricity, gas, and water—or at the gas pump when you fill ‘er up. This is already happening in wireless. Where it used to be I paid per minute for phone calls and had “unlimited” data, it’s now reverse. Phone calls are flat rate, unlimited in the US, but I pay for data. Because I rarely go over one gig on my phone—because I pay attention to WiFi—my wireless bill has actually gone down.
- I very seriously doubt that selling Netflix, Facebook, Hulu, or the companies that deal in streaming video ads a higher tier of service is going to compromise other publishers, their readers and customers…and it’s highly possible that technically “differentiating” these packets from the general Internet will speed things up for everyone. After all, even today, if you are finding that things seem to be slower and slower, it’s likely because these vastly different data demands are undifferentiated.
- On the other rest of the hands I have—and I’ve not chewed on this—it may be possible that this move is in anticipation to virtually all video being served via the Internet instead of traditional cable or satellite. Seen your cable or satellite bill lately? On the other hand, you now have Netflix, Hulu Plus, Amazon Prime, video rentals in iTunes, etc., and by-and-large, unless you have specific desires (like live sports) you can only get from the dinosaur companies, you can get by far cheaper on just an Internet connection and these new services. Gonna take a bite out of cable and satellite revenue for sure. Gotta make it up somewhere. On even one more other hand, I sense that a big shakeup is coming on how all of these contacts and services work in total and it’s difficult to even imagine. For a clue, observe how the recording industry has radically changed since Napster originally disrupted the whole thing, and now with Pandora, Spotify, Apple, and all the others.
So, here’s two points of view, so at least you can consider all the facts and not just the ones the ignorant and socialist want you to consider; because, after all, everything has to be a war all the time, all corporations are always evil all of the time, and all government is good and benevolent all the time.
Last Week Tonight with John Oliver. Now, this is funny as hell, but alas, you’re getting only the Big Bad Corporations angle.
A very nicely done article by Karl Denninger of Market Ticker: The Net Neutrality Debacle: A Submission To The FCC. Mr. Denninger is a former internet service provider from back in the early, dial-up days in the Chicago area. He may not raise every single issue, but it’s a sure sight better than anything I’ve seen elsewhere. There’s lots of excellent bits to excerpt, but I had to pick one.
Let’s take the Internet “neutrality” position out of cyber-space and into the physical world. We’ll assume that I develop a really innovative movie theater that immerses the viewer in some new way in the film they are seeing. We’ll also assume that this theater only works financially if I can manage to get 10,000 people into it for each showing; the cost of building and operating it is large enough that unless I can amortize those costs over that many people I will lose money and eventually go bankrupt.
Whose responsibility should it be to construct the roads, infrastructure and parking lots so as to be able to fill that theater every two hours during the business day, efficiently directing traffic into and out of the complex so that I can attempt to make a profit? Should that cost fall on the persons who watch the movies (whether directly via fees on their use of the infrastructure or indirectly via my ticket prices, with the city assessing me for the necessary improvements) or should I be able to force everyone in the Chicago area to pay those expenses, whether they want to watch movies in my theater or not, by convincing the City Government to increase property and gasoline taxes?
This is the essence of the problem we face today with the Internet.
I encourage you to read the whole thing and share it around if you think people ought to be considering all of the relevant arguments, not just one. Also feel free to link to other resources in comments that attempt to deal with the matter more objectively.
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I can’t agree with your here, Richard.
As I understand it, Net Neutrality has to do with the priority of speed and accuracy in delivering packets. You and I still have to pay for a connexion, and we still have to pay for the infrastructure to provide service to our customers, and how much data we want to serve to them will probably affect how much we pay for that infrastructure. This happens either directly through per-byte charges (like I pay with my little Rackspace server) or indirectly through per-machine and per-big-fancy-pipe charges (mostly installation and equipment fees). That takes care of ensuring that Netflix spends a lot more than I do on providing data to our customers.
Once that’s all done, Netflix’s packets should not reach their customers any more quickly nor any more slowly nor any more accurately nor any less accurately than mine.
Imagine if the only cars that could go over 20 MPH were Lamborghinis. That’s a better analogy than who pays for all the roads. Netflix pays for better roads to connect from the highway to their house. We share the cost of the highway. What anti-NN threatens is Netflix being able to install a device in MY CAR when I drive on the PUBLIC HIGHWAY that caps my speed at 20 MPH. No.
“I can’t agree with your here, Richard.”
Please read the post more carefully, where I said I’m UNDECIDED. I have not stated a position to be agreed or disagreed with.
…Beyond that, JB, you are using public roads as an analogy where there is no dispute or ambiguity that they are owned by the state.
It’s not as clear that the internet—a vast collection of mostly privately owned machines connected together by wires, fiberoptics, various wireless protocols, satellite transmissions—is a “public good” in the sense that roadways are.
And I’m not the only one who thinks it’s not as cut & dried as you…
http://trends.ifla.org/expert-meeting-summary/is-internet-access-a-human-right-is-the-internet-a-public-good
…one reason I’m undecided, rather than just-so concluding it’s another simple case of “BUT WHO WILL BUILD THE ROADZ!?” 🙂
Fair enough. I disagree with the notion that pundits are distorting the issue.
I get you, and I’m not arguing “who will build the roadz”. I’m arguing against anyone’s right to pay to make their car more quickly AND my car go more slowly.
Look at it another way, JB.
As it stands now, the Deux Chevaux and Lamborghini have the same speed limit.
But not on the German Autobahn, they don’t.
“…to make their car more quickly AND my car go more slowly.”
JB, I find that to be an incomplete analysis. As Richard mentioned, if you accept the current structure of excessive regulation (welcome to America, right?) in cyberspace as a given, then it makes more sense to keep NN than not.
The MORE IDEAL situation, however, would be to lack all these stupid regulatory roadblocks–which are justified with typical statist propaganda including phrases like “public good”–so that we don’t even need to have this debate to begin with, because NN would not exist.
Think of the gay marriage issue. Giving gays marriage/civil union recognition with equal treatment for taxes, divorce, etc is better than discriminating against them. But the better solution would be to get government completely divorced (tee hee) from the issue of marriage altogether. None of the state’s business. Neither is the internet (as used today), nor the speeds associated with it.
…And to further muddy the waters, JB, let’s take your roads, undisputed public good that your taxes and gas taxes contribute to the infrastructure.
All sorts of differing conditions depending on what you’re driving, whether towing, how many people in the vehicle, what time of day it is and even now, the increasing use of pay lanes in urban congested areas.
More mud: how about the increasing use of remotely performed medical procedures. Sure you want your surgeon’s packets to have the exact same priority as Ron Swanson’s?
Your “surgeon’s packets” argument is seductive, but you know that that surgeon’s packets will be completely and totally dominated by useless crap, anyway. 🙂 Moreover, companies like Netflix will pay to ensure that their useless crap will dominate the surgeon’s packets even more.
BTW, if anyone ever tries to perform actual surgery over the internet, people will die instantly. The internet, by its nature, only *mostly* works, and it’s designed to only mostly work. That we depend on it for as much a we do is a huge mistake, even before CNN can pay to slow my packets down.
JB
I’m not up on current tech used for remote medical, including paramedic and surgery. But the Internet is there.
Keep in mind that the architecture was worked out when there were only text packets, not image, and now, video/multimedia. We’re talking the equivalent of bacteria and Queen Marys’ on the same road, with an artificial rule that the whole of the snail gets to its destination in bits just as surely as does the QM.
I believe vid packets are distinguishable. So, how about we say OK, for every 10 non-premium packets, 15 vid packets go through.
Plus, it’s easy to catalog and analyze service levels so, once you find that the non-commuter lanes and the non-toll lanes are slowed to much, you put in another lane or two (add servers, routers, another pipe).
This is all an engineering problem that’s being made into a social problem where no problem exists. Everyone on all sides has a serious interest in the fastest page loads and streaming as possible.
I think it’s really silly that people assume cable companies and other providers want to give some people even lousier service. I see it as ideas and proposals to work with what exists to better differentiate priorities.
BTW, can you think of any instances where some companies have (and paid for) a higher priority for water services, sewer, gas, electric? How about roads? Ever seen a private ambulance with lights and sirens?
My question is why we’ve always taken those sorts of priorities for granted, but we can’t for the Internet.
JB
http://en.wikipedia.org/wiki/Remote_surgery
Interestingly, it already exists, but uses a more of a peer-to-peer version of the Internet, analogous I suppose a peer-to-peer dedicated ISDN on the phone network (how all those radio talk show hosts got to be in home studios).
But again, it’s all just prioritizing on dollars, or in the case of medical, lives at stake. It seems to be painted by pundits as a way for companies to give worse service for more money or higher profits and I simply don’t see the average trend in society going that way. Quite the opposite.
It ventures way too far into TL:DR territory, but the boys over at the NoAgenda podcast have been all over this for a couple of years now – even ran interview with Comcast CEO where he conceded the ultimate goal is to find a way to meter the internet (as per electricity, water, etc); the trick is to find out to implement this on a public that want to pay the same bill every month.
Short summary at http://www.pcmag.com/article2/0,2817,2458307,00.asp
MordWa
Yes, I would fully believe that and agree also.
Why not?
Use more, pay more, duh.
….this is a result of video.
In text, the difference between a 1 page and 1,000 page document is trivial.
Video, especially HD now, is light years different. In fact, I have been so amazingly impressed at the level of service already provided.
I don’t see much to be on the fence about, but that’s me. The government should have no place in this debate/dilemma. If Netflix is consuming too much of the infrastructure capacity, the free market will regulate it. And it will do so efficiently. The market will develop new costing plans to facilitate this shift in usage.
Netflix is only the current flavor of the day. The future will bring others that stress the system in other ways. Which model would be more fluid and efficient, Net Neutrality (FCC regulations and lead-footed movement) or the Free Market?
Leroy
Strange as it may sound, I think the end result is going to be somewhat equivalent, and that’s why I’m “undecided” on the practical level.
It’s going to be regulated. That much is sure.
It’s the land of the free.
fcc.gov/comments
“fly my pretties, fly, fly! ”
Richard, thanks for that John Oliver bit 🙂
It just seems to me, the trouble is neither ‘the evil corporations’ nor the arguments framed around corporations, it’s the analogies to highways, packets/cars, pay-per-use etc.
None of the analogies fit.
For example, for an actual highway, you get competing bids from companies to maintain the road and so they get to charge (differentiated) tolls. The bidding system is often corrupt, yes, but in the case of cable service providers, there’s not even that modicum of competitiveness, they’ve overtly, visibly, carved up their territories.
The free market can’t regulate anything if there’s no free market.
So all the debates around possible free markets regulating themselves are moot.
It looks to me more like this: in some twisted dystopia, the prisoners get to vote on whether or not each guard can individually decide which prisoner is allowed what plate (and without knowing how big can be the differences, porterhouse steak vs. gruel w.bugs floating, so that effectively some have access to nothing?). Versus everyone being allowed an adequate plate – and then, it’s the same 300 year-old debate 🙂
Plus ça change…..
Though, it would be interesting to look at it from ‘natural rights’ perspective? I haven’t, have you tried? If one accepts inalienable rights of life and liberty, what rights derive from them in the technological age? In the past, some were obviously derived, because without them there could be no life or liberty, for example, the right to self-defense.
Prices create neutrality don’t they? For example: I could coax the legislators into forcing you to give a sermon for Jesus or you could just name your price and we could pay you to do it. The first is theft, the second is not. We still get our sermon either way.
BTW Richard, what would you charge for a 45 min sermon on a bright Sunday morning?
While I read Karl Denninger’s blog every day, I never lose sight of the fact that he is a statist. Karl advocates blindly the logical fallacy of limited government and complains incessantly about how dissatisfied he is that other folks don’t “do their part” to end corruption. Bottom line is that Karl cheer-leads for his brand of statism, which he finds undeliverable by any and every political collective ego. Yet Karl returns every day to partake and advocate for the mixed economy model (socialism not capitalism) and pontificates his vision of an acceptable initiation of force against individuals. Karl knows no equal in his pursuit of truth by numbers, revealing with great clarity the money trail(s) where freedom is destroyed by corruption and stamps his feet whining that “other folks” continue to maintain status quo corruption, all the while cheerleading about some vision he’s had at the poison well of mixed economy model (socialism). It’s a lot like watching a one-legged man hold a one man ass kicking contest. Pure futility.
1) There is no right way to do something wrong.
2) Freedom can not coexist with government.
3) Technology, especially the internet will remain first priority target by government to destroy freedom.
4) No valid philosophy can’t be practiced to the nth degree.
5) Pragmatism (aversion to principle) will not yield victory, in contrast it is defeat.
6) If something looks like shit, and it smells like shit, don’t eat it because it’s shit.
7) The mixed economy model (socialism) is shit.
8) If you are practicing socialism you deserve to suffer.
Woodchuck Pirate
aka Raymond J Raupers Jr USA
http://www.woodchuckpirate.com
Most of this is conjecture. I’d like to get more information, but since this is a reply to a post about the internet on a food related blog … why not …
I think the issue is the regulation difference between the internet backbone and the connection to the customer (via an ISP). The peering agreements and the fiber for the internet backbone are largely unregulated (or at least thats my understanding), but most of the ISPs are heavily regulated since the data travels over traditional lines (cable, phone). Both industries (cable, phone) enjoy a public utility (natural monopoloy) status where only one company is allowed to exist in a market (I’m not sure the John Oliver video did this part justice – [ http://www.wired.com/2013/07/we-need-to-stop-focusing-on-just-cable-companies-and-blame-local-government-for-dismal-broadband-competition/ ]). If you look carefully, cable companies (Comcast, Cox, Timewarner, etc.) provide phone over IP, and phone companies (AT&T, Verizon) provide TV over IP. It would seem they are getting around these public utility rules by providing competing services over IP, which is not considered to be the same service for regulation purposes. I’ve not seen anyone discuss whether VoIP and IP-TV get around these regulations (purely a conjecture, albeit a good one).
I think companies like Netflix are upset because (based on various sources which I am too lazy to find again), they have worked out agreements with the backbone providers to get the data as-close to the end-customer as possible. The goal is to provide the cable/phone companies with the least amount of routing to do; it would seem that its in the best interest of Netflix to do it this way (likely cheapest & highest throughput). The cable companies can either: (1) figure out how to efficiently route the Netflix data to the customer and charge a flat rate (which is what the customer wants) , or (2) charge different rates for different usages. Its impossible to know if (1) is possible, since the cable/phone companies enjoy vast amounts of regulation that prevents most competition (its a duopoly at best for internet in most areas, as per John’s video, phone + cable). This means Netflix customers are at the mercy of what the ISPs want to charge for that service. Net neutrality seems to be centered around this issue – various government related agencies have created a situation for themselves to fix. I’m reminded of a mises.org article, “Is Further Intervention a Cure for Prior Intervention?”. A competitive ISP market would force the ISPs to keep their customers interests a top prioririty, which would effectively solve the net neutrality issue. Government getting involved will not help with competition, the bigger companies are simply going to leverage the government power to their advantage (just as they’ve always done).
The real fun begins when more people start requesting pure IP-data lines, and continue to ignore phone/cable altogether. Do the cable and phone companies need to exist anymore? Why not go through a company like Google Fiber, or similar, to get unregulated IP data? I think the cable/phone companies need regulation to stay in business (without massive changes to their organizations). Too lazy to cite a source here (it was probably CNN), but I definitely saw someone propose that the internet be considered a public utility. This would be the most effective way of keeping the status-quo, and its almost certainly what the FCC is eventually going to propose: “The problem is the free-market, it produces monopolies on ISPs. Let us regulate the internet like we do other public utility monopolies”.
Reactive regulation ends up with unintended consequences.
Net Neutrality is a power struggle between incumbents and the up and coming players who are fighting for the same money. And, it’s absolutely nothing new. There are plenty of historical lessons that can be applied to understand the potential outcomes of this “new” fight.
Telecom has been subject to reactive regulation for many decades, with the Carterphone being perhaps the first strong act of regulation since the Telecom Act of 1934 itself.
While I agree that the government should not step in to regulate “Net Neutrality” issues, it’s for a much simpler reason. There’s very little they can do to make the situation better at this juncture. The networks are privately owned and there is meaningful competition in many places. (The kind that means you can purchase a mostly equivalent product from more than one supplier.)
The first problem is that the Internet moves at the speed of technology that is now primarily driven by the private companies that produce it. In other words, the government role in helping to dismantle the AT&T monster that it helped create is different than the role it could possibly take today. There is no stagnant monster to destroy. This means that regulators, unless they are very smart and move very quickly (yeah, right) are not going to be able to keep up with the unintended consequences. This also means that advances in technology define what is practical and affordable for companies to deploy, not bureaucrats. Bureaucrats can force the companies to take less profit. That’s all they are really doing.
The argument for Network Neutrality is based on how the “natural monopoly” of putting expensive infrastructure in the ground or on poles leads to monopoly business practices. Networks that are not municipally or co-op funded are typically very restrictive in the types of products they sell (lest the user use the product to compete with the provider!). This is one way phone companies differentiated their low and high cost services, even when they utilized the same physical infrastructure. Prioritizing a provider’s own services (or their financial friends) is basically the same behavior.
We can just look at the Telecom Act of 1996 as the most recent, relevant history to the new “Network Neutrality” debate. Here, the government literally forced the descendants of AT&T to open the deepest parts of their networks, at “Total Elemental Long-Run Incremental Costs” rates (decided by the telecoms and their associated state PUCs). TELRIC rates were claimed to represent actual costs to deploy and maintain telecom services, averaged across users, plus a 15% profit markup. But the process was held entirely in private, and the basis for TELRIC rates kept private as well.
The Telecom Act allowed any registered CLEC (a rather easy designation to obtain in many states) to use the phone company’s own infrastructure and compete The main hurdle after 1996? Understanding HOW to use this infrastructure (which many did poorly, at best). The majority of CLECs provided competition only in the high-profit segment of business telecom clients, gutting some of the most profitable services offered by telecoms. The FCC dreamed they would build fiber to stay in business and compete in the future. This is clearly documented. Some companies actually built fiber, either to support their other networks (coax copper hybrid fiber, cellular) or as a primary venture. But they didn’t typically do it by being a CLEC.
The act had failed. The majority of CLECs gamed the system for short-term profit and never made any long-term investments. They simply took the low hanging fruit and did nothing except lower prices to end users (perhaps on occasion provided a better product) The telecoms had the option to buy CLEC products in their CLEC contract, but frankly I’ve never heard of telecoms using this clause.
First, before crying “socialist”, the 1996 act was based on some interesting foundations. The dichotomy of “capitalist/socialist” is patently false in the case of AT&T. This is an ideological oversimplification, each of which primarily serves the desires of opposing camps, and not much else.
A set of oversimplifications which are useful to understand the context here:
1. The AT&T-derived telcos were far from “private” (in many aspects)
2. Their infrastructure was largely paid for many, many, many times over by the public
3. These companies had an immense cultural stagnation which prevented them from doing…anything that had not already been done for the 40 years leading up to the act
4. Almost everyone was totally fed up with them
5. CLECs were widely viewed as necessary competition to fix the telecom stagnation; to provide access to create new, economy-building choices
There was one good effect – the 1996 act was the single most important government action which made the Internet accelerate to what it is today, by quickly making Internet access widely available existing over telecom infrastructure.
It opened up direct, private access to telecom phone switching, telecom fiber and telecom copper. This access was priced by the telecoms and their state PUCs (which are “regulatory” agencies that are heavily influenced by their largest regulated telecom entities; and for good reason!) as a requirement of the telecom act.
It accelerated Internet deployment through dial-up, T1, T3 and other telecom technologies by lowering interconnection and service costs and lowered phone service costs.
Part of the 1996 act required a review of its provisions. The 2003 TRO and 2004 TRRO removed private access to telecom fiber under CLEC rules. So 8 years later, it went to being the “copper/switching” access method, no more fiber! In 1996, fiber was the primary medium for backbone and high capacity links. CLEC access for competition was unnecessary according to the FCC, there was enough existing competition from cable companies and wireless carriers. (The telecoms argued this was the case and the FCC agreed. Requiring TELRIC access to dark fiber was really bad for them.)
Unlike underground copper which was long paid for (and heavily overpriced, mismanaged), telecom fiber was being actively deployed with a long-term payout (decades in many cases). Equally important to realize, the telecoms said the same thing the cable companies are saying now in the Neutrality debate. They said “if you force us, we’ll just stop deploying it.” The FCC stopped trying to force them!
This is all good, but what does it have to do with Network Neutrality? It’s the same type of fight. But the landscape has changed a lot. There is no more reason for the Telecom Act or something like it to apply to new companies; they are still recouping their investments and many of them are truly private companies to begin with, which makes public appropriation of their pricing or resources much more akin to socialism and communism.
The engineering of the internet relies heavily on “oversubscription” at ALL levels. There isn’t a provider on earth who has enough IP network capacity to run all of their IP-capable ports at 100% traffic all the time. Everyone connects between equipment with trunk ports that have limitations. A government attempt to regulate this behavior is not going to be easy, simple or practical.
The worst oversubscription happens at the “last mile” where the physical (or wireless) infrastructure that reaches customers exposes the most stringent limitations. (Even Google’s fiber network has limitations, despite the potential to reach 1Gbps (or 10Gbps) to each home.) There are a variety of reasons for this but in the end the limitations are physical and resource-based. Companies do a good job arbitrating these limitations based on customer demand, profit requirements, and technology available. Or rather, they do it better than government regulators are likely able to.
Any large internet provider that serves end users is almost always immensely profitable (unless it’s very poorly run.) The larger you get, the lower your costs per customer are, and the more profit you make. This is even true for the merger of Comcast and Time Warner.
Google Fiber is real competition and this type of project is the #1 way to force the incumbents to do better. And it has, in every city that Google wheels and deals with municipalities, the incumbent cable and telecom providers instantly de-stagnate and begin to offer modern products that are competitive. There is NO WAY THE GOVERNMENT COULD DO THIS ON THEIR OWN. It takes a HUGE AMOUNT OF MONEY to force the incumbents to re-think their own strategies and how they spend their profit.
I could ramble on and this could turn into an essay 10x larger and still not completely explain the landscape. At some point the network neutrality legislation bleeds over to regulating interconnection between internet providers (“Peering”) and further regulation of all things internet.
This wired article misses the point:
http://www.wired.com/2013/07/we-need-to-stop-focusing-on-just-cable-companies-and-blame-local-government-for-dismal-broadband-competition/
The issue is not that municipalities are dumb, stupid and greedy. They probably can be and are in various cases, but that’s not the issue.
If someone with the mind share and money of Google can force them to change their views, perhaps someone with less resources but a equally ambitious plan can do it. Now that Google’s strategy appears to be viable, other companies are attempting to do the same thing.
Tiny companies are now buying their own fiber splicing gear, their own bucket trucks, and putting fiber up on poles. They don’t need municipal help. They don’t suffer from municipal interference. They just are. The real hurdles for them are the high cost of equipment, splicing, and training to navigate the landscape of property easements, pole right-of-ways, fiber splicing, the legal and technical issues that surround them.
I’ve dealt with these issues and so have my competitors. They aren’t insurmountable, they aren’t even that hard in many areas. To build fiber in a large city is entirely different, but the city is ALREADY BUILT UP and the construction work alone is very expensive. If you can deal with that issue, it’s a much larger and more expensive one than simply getting access to poles or right-of-ways. That is VERY FUCKING EASY compared to paying for digging hundreds of miles in New York City.
The fight between Netflix and Comcast is really a fight between long-haul providers who can easily pump VERY LARGE amounts of bandwidth into “eyeball” end-user networks (Cogent, Level 3, HE, etc.) and the end-user facing networks (Comcast, others). The long-haul networks have huge capacity and can very easily light up more. The end-user facing networks have limitations based on their level of investment in physical infrastructure. Sure they can light up more ports with L3, Cogent, or even direct ports with Netflix, but in the end, they really need to pay for and deploy more infrastructure across EVERY PART OF THEIR NETWORK to provide more bandwidth to the end users.
Should the government be forcing them to do this?
At some point, if they don’t do it themselves, that could happen.
But so far, everything is working quite smoothly, despite the fact that this hasn’t happened.
Before Netflix bought direct IP ports from Comcast, Netflix was sending their huge volumes of traffic over Cogent and L3 (and other) networks to Comcast. Comcast was letting those network ports run at 100% traffic volume (VERY shitty service to everybody) at peak times because they didn’t feel it was their responsibility to do anything to fix the problem. Or that’s what they said. What really happened was that Comcast doesn’t want to give any random company access to fully utilize their network for any application whatsoever. That’s what the Netflix fight is about. It’s not about munis. It’s not about right-of-ways. It’s about WHO CAN FULLY UTILIZE the capacity of the Comcast internet network. Streaming video is very demanding. Comcast argues, and I don’t disagree, that they bear a much higher cost in facilitating this video distribution than Netflix does. It’s absolutely correct. And Comcast already makes money distributing video, WHY would they want to allow a competitor (who does it virtually for FREE) to fully utilize their network and compete with them. (Wait, that sounds just like the CLECs and Telecom Act of 1996!!! SAME FIGHT)
Chris
Thanks for your great contributions here. Lots to chew on.
Chris, I’m not in the telecom business so I’m hoping you can respond to some of my questions here.
How are the local municpalities not relevant? If cable + phone companies have exclusive rights in a given area, that seems relevant. Its my understanding in many jurdisctions only a single cable provider can exist. I can vouch for one such jurisdiction in the DC area that Comcast purchased the rights to in the early 2000s. Isn’t that relevant to the discussion, or did I misunderstand what was going on with the local municapilities? Isn’t it the same for phone too? How come when I want electricity I have to go to “my local provider”? I don’t even have an option. The natural monopoly seems like an illusion to me [ http://mises.org/daily/5266/ ]. Is that article factual incorrect? There is political slant to Tom DiLorenzo’s writing, but is his historical analysis wrong?
I don’t disagree that a company like Comcast should have issues trying to charge flat rates – charging higher volume customers makes sense. However, “natural monopoly” seems like bullshit. If we label the internet as a “public utility” and allow for natural monopoly data connections, the internet will likely be no better than television. A one-way medium where diarrhea is thrown at increasing velocity and volume.
I own a farm in town of Chemung, Chemung County, NY. After observing the bucket trucks and wire being strung up and down county highway, I stopped by the town of Chemung municipal building and inquired about the work in progress. Nobody revealed any knowledge of the work despite it being conducted less than 3 miles away on main street Chemung. I researched the project and returned to the county clerk office and provided them with a printout of info found at this link:
http://www.the-leader.com/x1179527061/-12-2-milllion-broadband-project-unveiled-Corning-Inc-to-split-cost-with-counties?zc_p=0
My farm is 3 miles north of the Chemung municipal building and the Time Warner broadband cable ends almost exactly at the municipal building. I’ve had several conversations with Time Warner reps regarding any plans to expand service area and received definitive answer “no”. Despite this particular project now more than 3 years old, no utility of it is available north of the municipal building.
The entire net neutrality debate is based upon fallacy of city sustainability. I don’t have a dog in the fight. However I will definitely get the bill through higher property taxes, as the oligarchy continues to enjoy the mindless loyalty of city livestock with no clue what’s around the next corner.
Is this infrastructure crucial to marketing the U.S.S.A. for purchase to the Chinese who are now purchasing the city of Detroit? The folks living in US cities today are being systematically eliminated. Good riddance. The economic stimulus propaganda machine is dead in the water here in upstate NY, as even the government workers aren’t even briefed on the projects at hand. They are no more economically viable than the weasels on entitlements. What relevance do municipalities have? None. The best case scenario a US citizen can have is not to have a dog in the fight. All else is a delusion of grandeur. The business model being debated is unsustainable.
Woodchuck Pirate
aka Raymond J Raupers Jr USA
http://www.woodchuckpirate.com
A lot more of our modern society depends on city sustainability than just internet access.
The municipalities have relevance in that they can make it easier and cheaper for companies to use city resources and/or to set city rules so they may deploy their product quickly and efficiently.
The link you posted sounds like the local government literally installing fiber and handing over access to companies whose business is to sell network access, video services, telephony, etc. I would expect a project like this to be relatively small in scope. With the amount of money described, it’s probably being underbuilt and overpaid for a rural area. If so, this is exactly why a municipality should not be involved in such a project. Unless they can do it cost-effectively, it’s just another fucking handout.
In any event, the project hopefully includes some service mandates for the participating provider. You should call up the bureaucrats and tell them what their project isn’t doing for you and why you think it should. Hold a town hall meeting. Get people to talk. If you don’t, this could be just another handout ripe for abuse. Or it could be planned to serve areas aside from you own. Or both 🙂
The federal courts struck down exclusive franchises, I think 25 or 30 years ago. One cable company no longer gets an exclusive franchise to serve an area. They get a franchise, with some terms for the taxes they pay within the city limits, and terms for their access to right-of-ways and other items in the city limits that the cities have any governance over.
Municipalities are relevant, in small ways. But they are not capable, in my estimation, of creating the ultimate incentive or disincentive to build out network and telecom services in a given area.
That mises article is really odd. The author blames the government for not charging more for “use of scarce urban resources.” Isn’t that precisely what a city franchise does?
Natural monopoly is the reality. In practical terms it means that a company has less incentive to make a long term investment in an area because someone else already does something similar in the same area. They won’t get as many customers, so their payback is too small or over too long a time. Once you are up against a competitor in the monthly subscription business, your growth slows down. When you have to spend huge amounts of money and effort to do what your competitor can already do with a small amount of effort, your strategy has to change.
I’ve been through this over and over for years. Meaningful competition changes the landscape in a BIG way. Suffice to say, I just bought three towers that my formerly largest competitor owned. They spent roughly 10x what they needed to and now they are closing their wireless division.
Now if a municipality builds fiber and then competes with their local providers, that changes things significantly. It also changes things significantly for those providers if the muni builds fiber and then hands it over to them. It makes sense for a muni to build fiber in a high-cost area and then sell access to multiple providers in that area which couldn’t afford to do it by themselves. But ultimately the providers should re-pay the cost, not stick the general public with the entire bill.
Chris:
Can’t tell you how much I appreciate your knowledgeable, from-in-the-trenches perspectives and contributions.
As I suspected, it’s a bit more complex than one hears in the news, and as much as I tried to expand the view, looks like I barely scratched the surface.
Chris:
OK, I get Comcast’s argument in principle, and especially, any objection they should be forced to do this—provide services to an entity disrupting their business model.
OTOH, this is kinda what the Internet IS so, one aspect of NN is that (of course) since your core business is delivering video (TEEVEE), you’re disrupting our business and we have to support it (this, to me, is reminiscent of the whole music wars beginning with Napster). Tech eventually makes competitors of provider-client relationships—a wonderful thing ideologically, in my view.
OTOOH, Comcast gets about $60 per month per me for the data pipe, plus the ~$150 to cable TEEVEE service because, well, 49ers football.
Netflix get $8, and I understand clearly that’s subsidized by Comcast.
Seems like they all ought to jest get together in a back room and collude.
At some point the immensely profitable Comcasts of the world are going to be judged as too greedy (they are) and some kind of regulation will take away some of their power to keep competitors off their networks. There are two logical extremes:
1. The current situation is close to this first one, where there is zero regulation and hugely profitable entities can do whatever they want to protect their own products and profits. This is not entirely bad, or good, it just is. The levels of profit turn this into an ideological argument and little else.
2. The other extreme is that the government forces the service providers and the underground/overhead wired infrastructures to be essentially separate companies, with the service providers (cable, internet) forced to deal on an equal basis with the wired providers. This is the end-game of the 1996 Telecom Act, which the companies never let happen.
Neither of these situations perfectly benefits the actual users, consumers of these products. The first allows pricing to stay high and stagnation to take over (only so many google fibers are out there.) The second forces some kind of weird resource-allocation scheme, and guess who calls the shots? Not the people who are going to do any kind of innovation, who have any kind of forward-looking future ideas.
I don’t think it’s healthy for everyone to be shoveling huge amounts of profit into the AT&Ts or the Comcasts. But I also don’t think we want bureaucrats deciding how your service will work. Luckily there are always other companies angling for new ways to provide profitable services and this middle ground of market competition actually works (sometimes.) I don’t think there is any easy answer.
Chris, what about wireless (last mile service) as a disrupting influence?
With my iPhone 5, where I get a good LTE connection at my house, if my Comcast goes down, I can WiFi into my phone and the robustness is pretty comparable. Only problem is data costs, now, so it’s only useful as a backup or traveling where WiFi isn’t available.
Wireless is great to fill in but it can never usurp the capacity from coax and fiber. All communications mediums rely on representing discrete bits over an analog carrier, including wireless, fiber and coax. Shannon’s theorem has yet to be disproven. It is a mathematically proven theorem (anyone who has come out with a technology that appears to usurp Shannon’s theorem has always been a sort of investment scam or ponzi scheme). It essentially says that when you increase the data rate, your error rate increases until there is no gain from increasing the speed anymore. You can only move so many bits per Hz of spectrum (and that amount decreases when the spectrum already has noise.)
The wireless medium presents ONE frequency spectrum, for ALL users who can hear the signal (who are within range, lacking obstructions, so on). Coax cable provides its own separate, private “lane” for those frequencies, for EACH cable “node”. A very simplistic view says that a cable data company with 10,000 nodes has 10,000x the capacity of a wireless data provider! Fiber provides many, many “lanes” because lightwaves can be multiplexed, thousands of times, on a single fiber cable. If fiber is in good physical condition, it can carry HUGE volumes of data with a VERY low error rate.
Wireless technology is great to fill in where it isn’t economical to run fiber and/or coax. But the physical nature of the medium can’t compete with fiber to the home (or business) for high volume data. Satellite TV providers and wireless internet providers are limited to very small amounts of spectrum when compared to cable and fiber providers. They must take a much more conservative approach to their spectrum use since they are guaranteed so little of it.
There are many grand plans to use wireless spectrum in tiny pockets, re-using the same spectrum over and over for different signals in adjacent areas. In practice these take many years of development time and the theory may not meet the physical reality (may not be possible to deploy) in some areas at all. CDMA technology (basis for 4G LTE and earlier systems) promised to allow really easy spectrum re-use. Unlike TDMA systems, which have a problem with adjacent frequency interference, CDMA was supposed to give carriers ultimate flexibility. But in reality, you just run up against a different wall. As it turns out, CDMA’s adjacent codes interfere with each other just like adjacent frequencies in TDMA.
WISP operators are using cheap gear like Cambium ePMP and Ubiquiti AirMax. These are ultra-cheap TDMA-like systems based on home WiFi chipsets. They suffer from huge inefficiencies (in spectrum usage) and are rather wasteful of the 5GHz, 2.4GHz, 3.65GHz and 900MHz bands that WISP operators monopolize. None of the available technologies come close to fiber in terms of service quality and speed. But they are getting better which is why I say they are great to fill in.
Qualcomm is working on an unlicensed 5GHz LTE implementation for WISP operators. It’s probably going to be a huge flop since 5GHz is already saturated with interference (LTE is not likely to work well against interference in my estimation)
By the early 90s, it was very commonly understood in the telecom and related industries that fiber was the ideal medium for high volume data and high quality voice as well.
Fiber to the home, when done right, can be done more and more cheaply than ever before. But nobody thinks to lay down conduit and install fiber on new developments (when the trenches are dug up and pipes are laid.) Instead new developers just ask the cable company to come in and they almost always install copper coax because it’s cheaper. It’s not much cheaper, but it’s cheaper and easier to work with. It’s immediate gratification.
Chris Cappuccio
All cogently and accurately described, clearly from a player who is “still there and doing that”.
A monopoly can Regulatorily be de-Monoplised, but the resulting Federal Oligopolists easily resume Monopolistic practices at State & Muni level.
Point- to-point cannot become broadcast unless the transmission medium is satellite using some parts of the electromagnetic spectrum rather that copper, fiber or coax.
There is NO competition in the last mile without riding on radio/micro satellite “broadcast”.
Léon
Last mile competition varies from area to area. Some areas have multiple cable providers that will build to your home (this is rare but it has happened).
Many areas have the option of both cable and satellite.
Many areas have the option of both cable and DSL.
Many business areas have multiple fiber providers, both the cable company and a CLEC or another type of competitive provider.
The problem for you the consumer is that there is usually only one really good provider in an area.
The closer you get to higher population density areas, the more options you typically have.
Many radio WISP and cellular/LTE providers cover areas with services that may not be as well known as the incumbent cable and telecom providers.
Point-to-point cannot become broadcast? I don’t quite understand your point. Many microwave systems use wide antennas and are considered “Point-to-multipoint”.
The “infrastructure” of the internet isn’t public property. It’s privately owned, and as such, it’s owners should have complete control over how it’s used. This isn’t at all a freedom of speech/information issue – it’s a property rights issue. Just because you have the right to freedom of speech doesn’t mean that you have the right to a podium, or blow horn, or (if you’re a consumer of speech) a newspaper subscription. When an ISP discriminates against this website or that website, it might be bad business, but it’s not at all a rights violation. No one has right right to use that ISP’s infrastructure except in a way that it freely agrees to. To have the government dictate the terms of an agreement is nothing except plain old fascism. “Net neutrality” is wrong. Period.
MeThinks,
There are always lies about the money trail but the money trail never lies.
Woodchuck Pirate
aka Raymond J Raupers Jr USA
http://www.woodchuckpirate.com
This is an ideological argument. And it isn’t always true. Many of these private companies have taken cheats and shortcuts, relying on public goodwill in a variety of ways. To find one that built a large infrastructure completely on its own accord is hard. As a generalization, the cable companies are usually the closest.
Much of the long-haul fiber around the US and undersea was NEVER paid for. It was built on public and/or investment money, and then the operators bankrupted. This happened over, and over, and over during the past 20 years. These companies took money, didn’t deliver, the investors got nothing back, and the infrastructure went to someone else for virtually no money.
Some of the smartest operators used their existing resources in very intelligent ways; Level 3 used special railroad cars to plow underneath their railroads and place cable. But did they earn all of their profit by themselves? They are essentially an arm of the defense department. They are from a truly private entity.
Two wrongs make a right, Cappuccio? Eventually the buck has to stop with “ideology” (you say that as if it’s a bad word).
Oh, and by the way, when you talk about “public money.” Where do you think the “public” go that money? My guess is from some big, bad corporation (eg: an ISP).
MeThinks:
I don’t think Chris disputes that ideology is a worthy debate, but just as I was for 20 years, he’s in business and whether you own one or work for one, and no matter what it is, you are dealing with the State.
So, we could have endless ideological debates over, for instance, how to get piped running water to urban and suburban residences, short of a “water company” being granted a monopoly to run pipe to NPE, and the consumer has only the choice to dig a well, if he can get a permit for it—which I doubt he could unless under zoning that provides for such permitting.
So, while I’m an anarchist and love the underlying ideology, it does not mean I’m completely unwilling to engage in how better to run a State coercion scheme, because it’s the lay of the land.
Richard,
I’m NOT an anarchist. I realize that most of these issues can’t be untangled cleanly and neatly. That respecting the principle of private property, in most cases, because we’ve been so unprincipled for so long, means everyone getting a little bit of mud on their faces. Discussing that, however, is not an “endless ideological debate.” That’s just… untangling it all (while everyone is on the same page about achieving ideological purity, and what that looks like).
But, for the record, I don’t think that the state has to grant monopoly rights to any utility in an urban or suburban area. I don’t think that economics works that way, and so – even with a state – anarchists would be happy that no one’s “right to seek happiness” would be violated, as well as most people’s fear that it would be chaos. But that’s a wider debate for another day…
I’m not sure wrong or right is so easy and simple to determine. How did the public get their money? I get MY money running a big bad ISP.
When I say public money, i’m referring to money funneled through the government, via taxes and fees, to some public or private project.
Richard, I’d be interested in your views on government education policy. Personally I feel I would have been better off without it. I am naturally motivated to learn and considered myself much brighter than most of my teachers.
Well, in spite of the fact my wife is an elementary school teacher (over 30 years now, and she had 15 years in when I met her), I do not think any level of State has anything worth doing.
Plus, we have the Internet now, which makes the ridiculous cost of college obsolete for most things.
On the other hand, public education is evolving and for the sake of the kids, given other State “alternatives,” that’s good. For instance, my wife was tapped to save a school, actually the first one she taught at for about her first 15+ years, and went to shit when her and a bunch of others went to a new school in the district.
It’s called PBL, Project Based Learning. They don’t do all the traditional subjects. Rather, they decide on projects to accomplish over weeks, sometimes months, and to accomplish the project…you guessed it, readin’, writing’ and ‘rithmatics are going to be involved (plus a lot of Googling).
http://www.edutopia.org/project-based-learning
Most recently, they took on a beautification project for a long dividing wall between the school and a neighboring apartment complex, and the strip of dirt alongside. Beatrice facilitated the kids writing up a crowd funding deal (they raised about $2,500), did the design, comissioned things like having a “tagger” do a long mural on the fence, got volunteers, donated and purchased plants, benches, everything that goes into it.
Tell you what, the kids can’t wait to get to school. They are so fucking proud of themselves. And the before and after pics show it.
I’ll be blogging about it someday soon.
Despite the now common knowledge of the saturated corruption encompassing the PC hardware industry and internet service provider industry, who were paid to be complicit with the fascist agenda of the NSA, the herd still prefers to aversion to principle as entrance fee for negotiating the terms of their slavery.
Here’s a glimpse of the true agenda, and of course it’s fixated on urban “target customers”. It contains a real General Dynamics advertisement.
http://youtu.be/VwKWJLC6BwU
You can consider all the government intervention recipes you wish, but in the end it’s your own arse that’s a boilin’. Bon appetit!
Woodchuck Pirate
aka Raymond J Raupers Jr USA
http://www.woodchuckpirate.com
I have no illusions about it, WP, and given my productivity, have had amounts stolen from me personally and via business activity to an extent I wonder where I could be.
But I’m headed out of this place, out of the US, way down in freedom rankings worldwide, now. I want to see most of the 3rd world figure it out and leapfrog the first, and I want to see 1st world folks in soup lines lamenting their various entitlements but I digress.
The Internet, in particular, affords any individual to make a living from any beach.
America is obsolete. Good riddance.
Richard,
I understand you have expressed sentiment toward an escape. Have you plans to continue your blog after you have relocated? What underlying premises regarding an economic collapse (reset) in the US are necessary to ensure your success in timing your escape? In my opinion the best case scenario in delaying the reset is 10 years, and that will require an ultimate (unnecessary) expenditure of Keynesian counterfeiting of the currency. Surely the riots, martial law, genocide will commence before then in major cities. It’s hard to imagine the internet will arise enlightened by all this debated legislation, as if the embodiment of Messiah to serve anyone with faith enough in it to adapt and survive. No tool is uniquely suitable for survival in the absence of natural resources necessary to satisfy Maslow’s hierarchy of needs. Where does the faith in the propaganda polishing this turd of despotic construction called internet come from, except the rank and file oligarchy and corporate pawns humping their leg?
Yes, the US is finished, but this dysfunction is global. Civilization is finished. It isn’t rational to count on the internet for sustainability anywhere. Counterfeiting the currency is as deliberate a means of genocide as fire, tooth and claw. Will this US net neutrality dog and pony show capture the cash flow attention of anyone once the hungry masses turn and bite? If Con-gress has any interest in the masses regarding net-neutrality it’s primary fixation is anything but economic growth. It’s E-S-P-I-O-N-A-G-E against the citizens. Growth is not possible without a global economic reset. Internet? What internet exists in a global economic reset?
Anyone concerned with success in timing an escape would be wise to study the paradigm expressed here:
http://www.zerohedge.com/news/2014-06-07/explaining-nycs-record-homelessness-one-disastrous-chart
The answer is not found in finding the right way to do something wrong. Time has come today.
Anarcho-Capitalism or else.
Woodchuck Pirate
aka Raymond J Raupers Jr USA
Woodchuck
The Internet is out of the bag worldwide. The best hope now, is that the international States get together and severely restrict it from a 2-decade hands off approach it has enjoyed. Tens of millions would die in WWIII.
Cocooned Americans have no idea what the Internet has brought to hundreds of millions worldwide, who no longer give a shit about the old-world fantasy of “Coming to America.” Most could now give a fuck about America beyond selling trinkets to its comatose, putting them on a higher moral plane that 99% of Americans.
Understand me: I want to see America fail. Badly. I want it to be understood that there were zero good intentions, even at the outset. You do not form a country based on slave labor and get away with it. Hell, even Euro countries are cleaner on that score than US. The US basically killed 700K of its own citizens and went on proclaiming it was the Land of the Free. Fuck America. Bad idea, no redemption.
That said, I disagree with you. I think civilization is bright and on the upswing. Most of the world’s population have yet to experience the ability to produce and be remunerated, with profit, beyond smal circles.
The Internet provides that.
Count on the parasites, more numerous now than every in earth’s history to understand that the Internet has far crossed point of no return. Either it persists and they keep on finding ways to regulate it and get their take, or shut it down and their heads roll.
They are smart enough to understand this. But, the very best they can do is manage the problem. The internet teaches people, over time, that they need less and less of what the Nomeclatura offer.
So, tragically, we might be at an end of where we could enjoy a Head of State beheading; because the only good Head of State is a dead head of state. 🙂
Richard,
Thanks for the straight talk. You have more insight than I do per my ignorance maintained by isolation to the US. I’m more inclined to retreat off the grid (within the US) and cling to my homesteading. I sincerely hope your perception of a sustainable internet during and after WWIII is possible. I’m removing my unnecessary internet elements as the fascism grows here in the US.
Ever since Gov Cuomo commenced formal attack on the 2nd amendment here in NY, I’ve retrenched, ceased and shelved all the previous plans I had of building music venue, and musician utilities such as cloud storage and website utilities. I’ve withdrawn and closed all tax deferred accounts, ordered out all cash from banks, sold off securities etc. Today I’m closing my ebay and paypal account. That takes me to baseline sustainability with one credit card, zero balance. Once I head off the grid (36 acres in AZ) I’ll likely close my website, and discontinue internet account which costs me approximately $1,000 per year altogether. All this retrenchment is resultant of fascism rising in the US. I can only imagine what the net sum total of all retrenchment in the US must be. It can only get worse as the Obama administration forces the endgame into the present moment.
I have difficulty imagining it is any better in any other country, but then I can only respond limited by my ignorance at present. The following link suggests I will be lucky to retrench fully before time runs out here in the US.
http://www.zerohedge.com/news/2014-06-09/across-america-police-departments-are-quietly-preparing-war
Woodchuck Pirate
aka Raymond J Raupers Jr USA
http://www.woodchuckpirate.com
Hey Wood.
Perhaps all that is what you want. I used to go to sea months at a time and I joked that the first day at sea was the best, because you get away from all the people trying to help you.
At this point we’re clearly where you’re doing what you want, I’m doing what I want, and readers might get bored.
More than private property, I hate to be boring. Is that allowed…like in the A-C deal these days?
Unequivocally.
Woodchuck Pirate
aka Raymond J Raupers Jr USA
http://www.woodchuckpirate.com
As a sports fan, I can say that the net is becoming a friendlier place for us too. With the exception of the NFL all major U.S. sports stream their games. I pay $25/month for baseball. It’s not perfect–national and local games are blacked out–but I’m a Yankees fan in Virginia and can see the majority of the games. Even better is hockey. A Dutch site called Hockeystreams.com charges $110/year (not a season, a year) and I can see EVERYTHING–most importantly the Stanley Cup playoffs, which except for the finals are broadcast exclusively on cable. As for the NFL, it’s the only league that still broadcasts primarily on non-cable TV (cable games tend to suck anyway). Foreign sites are looking at Hockeystreams’ success and realizing that there is a huge market in the U.S. who would love to be able to watch all the games in their favorite sport and are willing to pay for it. It’s coming–it’s just a question of time.
Excellent, Patricia.
As the 49ers are mostly what I care about (SF Giants BB if in playoffs–which looks fucking good now), it’s gratifying to know that this is surely coming. Given how much they can make from endorsements and whatever else, I’m sure they know they’re already leaving huge sums on the table by not being International, and the only way to do that is the Internet.
Only a matter of time.
Richard,
I think your argument about “subsidizing aggravation” and socialization of the internet misses the point. The point is as simple as this: if I am being charged by my ISP $xx.xx/month to access up to however many gigabytes a month (and all the ISPs do have some sort of GB limit) at a speed UP TO a given mbps rate. If I’m being charged a certain amount, then my reception of content should be ubiquitously slow or ubiquitously fast as dictated by the backhaul through which the information is traveling, not the point of origin and whether or not that company has yet paid a bribe to my ISP to deliver the content as f*cking promised. Anything less than this arrangement is fundamentally stealing from the consumer by (A) throttling the speed of content that I want to access and have ALREADY paid to receive and (B) extracting an additional sum of money from the content generators that is ultimately passed along to the end-consumer in the form of higher subscription costs (e.g., it’s not a coincidence that Netflix has raised its monthly rate after having agreed to pay Comcast, Verizon, etc. extra to deliver content at previously normal speeds).
That’s where I think your article falls short: the end game of every ISP in this debacle is to increase the costs of the content generators so that it becomes cost prohibitive for you or me to cut the cord and ditch cable all together. Their goal isn’t to deliberately destroy what makes the internet such a great vehicle of disruption (i.e., level paying field), but they’re more than willing to incur that cost if it ups their revenue stream at the expense of the consumer and general welfare. Cable companies, like most other utilities, are natural monopolies, there’s just no escaping the economies of scale needed to successfully employ these models. But natural monopolies MUST be suitably regulated to prevent the abuse of their position; the erosion of net neutrality thus represents not a move from “socialized” cost of internet, but a move toward an inherently anti-free-market system where monopsonistic practices are ultimately passed onto the end consumer.
As someone who works for a contractor for cable companies, trust me: this is not about improving service for the consumer, it’s about a declining industry trying to ratchet up revenue.