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| June 22, 2006

Nick Gillespie explains why "net neutrality" is a nice way of saying "extensive and hamstringing government regulation."

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|6.22.06 @ 12:29PM|

I share the instinct to limit government regulation of the net, but let's at least recognize that the infrastructure used to deliver the content is owned by a few companies because they were part of a regulated regime of monopolies. The market isn't the way it is today because of free markets, so it seems to me, simply making them free now is simplistic and dangerous. Besides, comparing the internet to TV disregards the bottom up nature of the internet. I'm not willing to give that up (OK, admittedly some speculation here) in an ode to free markets that have taken shape under very un-free circumstances. Let's not just give Cuffy Meeks the farm! Some libertarians still admire people who create brilliant things, not just companies that exploit other people's accomplishments until they are no longer profitable.

Dave W.|6.22.06 @ 12:38PM|

THe gr8 thing is that if consumers of the Internet ever are denied meaningful choice, it will be easier to make sure we don't come back here and pull up this article and ask wha'HAPpen.

At least maybe Reason can afford a new server now.

KipEsquire|6.22.06 @ 12:40PM|

I incorporate everything Lamar said by reference, except for misspelling "Meigs."

It's quite simple really: Net neutrality would make Internet access like the cell phone industry: he who uses more pays more, and the party called is, quite properly, irrelevant. Prices perpetually plummet and technology spirals ever upward.

Anti-neutrality would make Internet access like cable television: everybody pays, often for what they don't want, innovation is stagnant, service is lousy and competition is non-existent.

Gillespie's use of the term "fundamentally ass-backwards" is, well, fundamentally ass-backwards.

The idea that libertarians and pro-capitalists would have more confidence in the arguments and predictions of government-sanctioned monopolies like Verizon, AT&T and Comcast over entrepreneurial firms like Microsoft, Yahoo! and eBay is utterly mind-boggling.

|6.22.06 @ 12:50PM|

This isn't such a cut and dry issue. In many cases, the free-market prevails, and government regulation is a bad thing. However, this is only the case when real competition exists. I don't trust the telecom companies any more than I do the government, and with good reason.

Companies like Verizon and COX do everything they can to screw the customer because they can. They have the infrastructure, and there is no real competition in most areas. The free market only succeeds when competition exists, and it doesn't with telecom companies.

Jennifer|6.22.06 @ 12:51PM|

Net neutrality would make Internet access like the cell phone industry: he who uses more pays more, and the party called is, quite properly, irrelevant. Prices perpetually plummet and technology spirals ever upward.

If it were just a matter of paying for how much bandwidth you use, fine. But as I understand it, this isn't about charging for bandwidth, but an extra charge to make sure people who want to reach you can do so. I'm fine with eBay paying more for their website than Reason, for example, on the grounds that eBay gets a lot more hits than this site; but that's different from someone like AOL telling eBay and Reason "you'd better pay us extra money if you want to make sure our users can visit your sites when they wish."

I read one columnist who described it something like this: Jim's Pizza has to pay extra money to the phone company to make sure people who call Jim's can get through right away; otherwise, people who call Jim's Pizza will be have to wait awhile for their call to get through, and in the meantime they'll get ads talking about how great Pizza Hut is (since Pizza Hut shelled out the extra cash)."

|6.22.06 @ 1:13PM|

Allowing builders of Internet infrastructure to recoup their investment by charging the Googles and Amazons for use of their network would balance the incentives for innovation more closely.

If this is the best argument that can be made for non-neutrality, that's pretty sad. The Googles and Amazons *already* pay for their use of the network either directly (by paying their provider), or indirectly (by the their provider including a margin for peering to other providers networks). Equivalently, the consumer also pays for their use of the pipe.

I'm no fan at all of excessive regulation, and I don't believe that regulation is necessary in this instance, at least not at this time, and as someone who works for a carrier, I think that there are advantages that can be gained in tiered networks for some applications. But to complain that the various customers aren't paying their way is disingenuous.

|6.22.06 @ 1:15PM|

They have the infrastructure, and there is no real competition in most areas.

And when Verizon tries to add bandwidth on their existing right-of-way to provide services like IPTV, COX marches to the local government and says "Hey, you granted us a monoply, now enforce it or it's a breach of contract."

|6.22.06 @ 1:40PM|

I've been following this debate with great interest because I of course oppose regulation in general (and even in specific), but I find the arguments against 'net neutrality' a little weak. I live in the Detroit area (not exactly an obscure backwater of the US) and whatever the WaPo says, we don't have any kind of competition on broadband. We can choose Comcast cable modem or we can choose AT&T DSL. That's it. (We could use satellite, as long as it doesn't snow :-)... in Michigan...) Comcast has no incentive to innovate, compete, provide useful services.... For the fifty bucks a month we give them for broadband service I (not counting the additional fifty bucks for TV, minimum level access) I'm not happy about having to deal with slow service to the websites not paying them rent.

fyodor|6.22.06 @ 1:41PM|

that's different from someone like AOL telling eBay and Reason "you'd better pay us extra money if you want to make sure our users can visit your sites when they wish."

I have no problem with that because there are viable alternatives to AOL. If AOL tells anyone that, the anyone can go elsewhere. Thus, AOL is not likely to do that, not unless that's just the most efficient way to make money across the industry. In which case I'm still okay with it because the most efficient way to make money is the most efficient way to serve the customer, as long as there's competition.

OTOH, but it seems there are folks here saying that the owners of the infrastructure of the internet (as opposed to ISP's) do not operate in a competitive environment. I can see how that would make things different, although I'm not sure if government regulation is the answer for the same reason that two wrongs don't make a right.

|6.22.06 @ 1:52PM|

ISP's already have tiered service costs...AT&T has three flavors of DSL connections based on access speed...why shouldn't the ISP's be able to tailor the costs to provide bandwidth options? It's more choices, not less. More transparency to the real costs of delivering content, not less.

Besides, it's just one component of the service model...so Microsoft chooses to invest it's dollars in speedy delivery instead of R&D? Let the market value that choice.

Jim's Pizza has to pay extra money to the phone company to make sure people who call Jim's can get through right away; otherwise, people who call Jim's Pizza will be have to wait awhile for their call to get through, and in the meantime they'll get ads talking about how great Pizza Hut is (since Pizza Hut shelled out the extra cash)

and as to the Craig's list analogy of Jim's pizza to Pizza hut...

Jim's Pizza has to pay extra money to the phone company to make sure people who call Jim's can get through right away; otherwise, people who call Jim's Pizza will be have to wait awhile for their call to get through, and in the meantime they'll get ads talking about how great Pizza Hut is (since Pizza Hut shelled out the extra cash)."


That's the stupidest analogy yet...all us sheep are going to suddenly go for Pizza Hut's slimy pie crappy delivery and corporate name, just because we didn't want to wait 30 seconds for what we really had in mind or because advertising has us under mind control? BS.

Jennifer|6.22.06 @ 1:54PM|

I have no problem with that because there are viable alternatives to AOL. If AOL tells anyone that, the anyone can go elsewhere.

No, no, you're missing the point: it's not "Reason does its site through AOL and should have to pay AOL extra," it's "other people using AOL can't reach Reason unless Reason pays AOL extra."

Just out of curiosity, Fyodor, what would your opinion be if the phone company operated the same way? In other words, a business wasn't just charged for the number of lines it had and the number of calls it took, but had to pay an extra extortion fee to all other phone companies to ensure that customers of those companies who tried to call said business could actually get through?

Jennifer|6.22.06 @ 1:57PM|

That's the stupidest analogy yet...all us sheep are going to suddenly go for Pizza Hut's slimy pie crappy delivery and corporate name, just because we didn't want to wait 30 seconds for what we really had in mind or because advertising has us under mind control? BS.

Where did I say all the stupid sheep were going to go to Pizza Hut? I merely talked about the fact that suddenly, getting through to Jim's will be a LOT harder than getting through to Pizza Hut unless Jim's coughs up extortion money over and above what it is already paying for its phone lines.

|6.22.06 @ 1:58PM|

Allowing builders of Internet infrastructure to recoup their investment by charging the Googles and Amazons for use of their network would balance the incentives for innovation more closely.

Builders of Internet infrastructure? If I'm not mistaken, the builders of Internet infrastructure be us. The construction of the infrastructure has been heavily subsidized by taxes (see yesterday's discussion of the Universal Service Fund for one example of taxes we've paid to fund communications infrastructure).

Don't substitute corporate control of my surfing habits for government control of my surfing habits and call it progress, Nick.

|6.22.06 @ 2:11PM|

Where did I say all the stupid sheep were going to go to Pizza Hut?

Sorry Jennifer...I wasn;t really commenting on what you said...I was commenting on the analogy that the guy from Craig's list used on NPR this morning...my point was that having to wade thru a 30 second commercial for PH is hardly an incovenience worthy of regulation...OR a threat to Jim's pizza.

Tom|6.22.06 @ 2:16PM|

Proponents of net neutrality argue that the telecom and cable companies who effectively control access to the Internet should be forced to make sure that all traffic be delivered at the same rate of speed.

No, the argument is that the companies which effectively control access to the Internet should give the same priority to all providers of a given kind of data. Prioritizing VOIP over email is smart; extorting Vonage is unacceptable.

If ISPs are allowed to charge some bandwidth users more than others, goes this line of thinking...

The users of an ISP's bandwidth are its customers, who are already charged according to usage. Nobody's challenging the propriety of an ISP charging its customers more for higher throughput or lower latency.

Forget for the moment that ISPs haven't kicked in tiered service yet, so there's no real telling what form(s) it might take.

We can make reasonable predictions based on public statements by company executives.

(as The Washington Post has reported, more than 60 percent of U.S. ZIP codes are served by four or more high-speed providers, a figure that will only continue to increase)

This figure is misleading to the point of mendacity. It comes from FCC data which:
define a "broadband" connection as 200 kilobits per second in one direction,
disregard latency entirely,
count an entire zip code as served if the service reaches a single customer,
and ignore any restrictions on customer eligibility.

At the very least, you'll bitch and moan to your provider, which is known to have some beneficial effects, even with near-monopolists. Remember what happened to the biggest ISP of them all, AOL, during its rise to dominance a decade or more ago? Originally a closed system, it had to allow its users to email with non-AOL customers, then it had to allow its customers full access to the Internet, then it had to go to flat-rate pricing, then it had to woo subscribers with ever-increasing free hours, giveaways, and the like.

AOL never had more than 50% market share; it's had to do all these things because of effective competition. The local phone providers never really got into dialup, so there was a level playing field.

Isn't there every reason to believe that cable companies and telecoms would similarly use whatever revenues they generate via tiered services to develop the next big thing in terms of networked communications?

Not if the past is any guide.

And isn't there also reason to believe that some of the cable companies and telecoms might not go the tiered-service route...?

The three major telephone companies want a tiered Internet, which leaves Cincinnati Bell, maybe. There are a lot more cable companies, but rarely does more than one serve a given location. The top three cable ISPs (all of which support the tiered model) account for one third of all Internet users. Cable and DSL each have nearly half of the broadband market, so it would be reasonable to assume that two thirds of current broadband users would not have a neutral option.

Jennifer|6.22.06 @ 2:18PM|

my point was that having to wade thru a 30 second commercial for PH is hardly an incovenience worthy of regulation...OR a threat to Jim's pizza.

I'll ask you the same thing I asked Fyodor: what would your opinion be if the phone comapny worked the same way? You already pay for all your phone lines and the number of calls you make and receive, but now you have to pay other phone companies to ensure that their customers will be able to get through to you?

|6.22.06 @ 2:20PM|

To add to Jennifer's comment - What AT&T and others want to do is not just offered tiered bandwidth - which is already done. AT&T wants to offered tiered service based on the application between the client machines. What AT&T said was not that Google should have to pay more because they need a large pipe - they should pay more because they offer video and chat and possibly VoIP services.

I wouldn't know how to codify net-neutrality but you can bet it wouldn't take much for AT&T or any cable provider to bury Skype. Or for the **AA unions to get AT&T to restrict Bittorent. What kind of innovation is that?

|6.22.06 @ 2:23PM|

Nick quotes the Washington Post as being against government intervention here. Any time the Post is against government activism, it's a "slam dunk," to coin a phrase.

Jennifer|6.22.06 @ 2:24PM|

So I live in Connecticut. I pay for my phone line, and if I started making or receiving a very large number of calls I'd pay more if I had to. No complaint there. What I'm saying is that I should not have to pay money to California phone companies to make sure Californians who try to call me can get through, and then pay Oregon comapnies to ensure I get messages from Oregon, and pay Kansas Bell to ensure people from Kansas can call me when they wish. . . .

fyodor|6.22.06 @ 2:44PM|

Just out of curiosity, Fyodor, what would your opinion be if the phone company operated the same way?

Again, if there's competition such that one can go to another phone company, then I don't think that it's something that requires government regulation. If the phone company is a protected monopoly and one cannot choose another one, then it's a very different matter, and I'm not sure what to think. That third parties who want to make use of the customer's service are being affected, not just the customer himself, doesn't change it in my mind. If a friend picks me up in a cheap, uncomfortable car, should the comfort of cars be regulated because I'm being affected by friend's choice?

Jennifer|6.22.06 @ 2:50PM|

Again, if there's competition such that one can go to another phone company, then I don't think that it's something that requires government regulation.

But the one being hurt by this is NOT the one who can merely "go to another company." If AOL tolds its customers "YOU must pay us extra money to visit eBay and Reason," I wouldn't call for regulation. But no--it is eBay and Reason who are told to pony up the extra cash.

|6.22.06 @ 2:56PM|

I'll ask you the same thing I asked Fyodor: what would your opinion be if the phone comapny worked the same way?

I'd use my VOIP phone...or my cell phone...or my internet connection...or mail...or my car...

the point is that the Internet is just one form of communication...it's got competition from all other forms of communication. Regulating a tiny part of the communication spectrum...in the name of fairness...seems rather narrow minded...and presumes a regulators can predict how several hundred million experiments in communication might make sense of it all.

Of course I don;t for a minute think the unregulated Internet will be the bad and scary place that net neutrality advocates are hyping to support their statist agenda.

Jennifer|6.22.06 @ 3:09PM|

Regulating a tiny part of the communication spectrum

The regulation of which you speak is merely telling companies they can't extort money from Website owners who want their Websites to remain accessible to customers of different Internet access providers.

Jennifer|6.22.06 @ 3:12PM|

I'd use my VOIP phone...or my cell phone...or my internet connection...or mail...or my car...

Just to clarify: this isn't a case where you could switch to another provider, because it isn't YOUR provider extorting you, but the others. It's not that you can't call out; it's that people calling in to you can't reach you unless you've already shelled out money to their providers.

Jennifer|6.22.06 @ 3:37PM|

SOrry for what might be a triple posting if nobody else posts first, but--Fyodor, Gaijin, and all of you guys who say "go to another provider"--let me give you a concrete example. I get my Internet from Comcast. Two days ago I just started a little blog of my own. Of course, hardly anybody knows about it, but let's say people who DO know about it can't get to it, because their providers are AOL, SBC, their local phone dial-up, and so forth, and said providers say I have to pay them money if I want people to be able to get to my blog.

So what can I do? Do I switch to another provider? Well, if I switch to SBC I suppose THEIR customers can get to my site, but I still can't get readers from AOL and phone dial-ups, and now I can't get Comcast viewers either. What free-market solution do I have, or do I just shell out money to all the major Internet providers to ensure people can get to my blog if they so choose?

(Yes, I know I am leaving myself open to about 3,496 smarmy comments about how nobody would want to read it anyway. But I'm hoping y'all at least include some serious answers in with the smarmy ones.)

fyodor|6.22.06 @ 4:19PM|

let's say people who DO know about it can't get to it, because their providers are AOL, SBC, their local phone dial-up, and so forth, and said providers say I have to pay them money if I want people to be able to get to my blog.

So what can I do? Do I switch to another provider?

No, THEY go to a different provider (the people who want to read your blog). They do so because you refuse to pay their providers and they can't read your blog because of that. Just like my friend who picks me up in a crappy car might want to get a better car because I think his car sucks. I'm sure there's better examples. But it all comes down to choice and competition. As long as we all get to choose whom we contract with for services. It's true that you can't choose your readers' service providers, but they can, and you can choose whether to pay those providers the money they're asking you for or not.

fyodor|6.22.06 @ 4:19PM|

let's say people who DO know about it can't get to it, because their providers are AOL, SBC, their local phone dial-up, and so forth, and said providers say I have to pay them money if I want people to be able to get to my blog.

So what can I do? Do I switch to another provider?

No, THEY go to a different provider (the people who want to read your blog). They do so because you refuse to pay their providers and they can't read your blog because of that. Just like my friend who picks me up in a crappy car might want to get a better car because I think his car sucks. I'm sure there's better examples. But it all comes down to choice and competition. As long as we all get to choose whom we contract with for services. It's true that you can't choose your readers' service providers, but they can, and you can choose whether to pay those providers the money they're asking you for or not.

fyodor|6.22.06 @ 4:27PM|

You already pay for all your phone lines and the number of calls you make and receive, but now you have to pay other phone companies to ensure that their customers will be able to get through to you?

Those customers of the other phone companies which want to charge YOU so THEY can get through to YOU might want to change phone companies or else lose the privelege of being YOUR friend!

|6.22.06 @ 4:28PM|

No, THEY go to a different provider (the people who want to read your blog)

Ahh what a wonderful solution. So anyone who wants to say use google or eBay or read Jen's blog should just go to another provider if they refuse to pay extortion??
Wouldn't most people just go other sites that arent blocked?
What if they only have a choice between two providers that both block these sites?

What happens when providers start blocking things after you have signed a service contract?

Do they telcos have to provide a list of blocked sites so you can make a decision as to whether you want to use them?

It seems to me that this type of scenario allows telcos to skew and manipulate the market quite a bit instead of allowing free market.

You would prefer an unregulated environtment where major players can obviously skew the market as they deem, instead of a minor regualtion that will ensure a free market? Talk about not being able to see the forest.

Jennifer|6.22.06 @ 4:29PM|

No, THEY go to a different provider (the people who want to read your blog). They do so because you refuse to pay their providers and they can't read your blog because of that

Ah, so they get one Internet provider for when they want to read me, and another for when they want to read Reason, a third for when they want Internet banking, and a fourth if they want to go on eBay.

That, of course, doesn't count the people who might enjoy my blog but have no idea it exists because on their IP they can't get it.

If this tiered-Internet thing had been in place from the beginning, the Internet as we know it probably wouldn't exist today. The beauty of it is that everybody has the same chance to go online and get noticed--an artist can become well known because of the beauty of his art, not because of his huge marketing budget. A writer can become famous because of his writing, despite having only enough money to pay for his Internet connection.

Now the Internet will be just like TV and commercial radio--it doesn't matter how good your stuff is if you don't have enough money to break into the market.

|6.22.06 @ 4:31PM|

Jennifer first your fears have not come to fruition second if they do then you will choose the best service for the best price that the most people can access...all of which puts pressure on internet providers to meet your needs...why on earth you want to randomly aboandon your libertarian principles of giving capitalism the benifit of doubt simply becouse it has the word internet in it is beyond me.

Anyway put my name on your list. Fyodor and others are dead right and you should start listening to them.

Jennifer|6.22.06 @ 4:37PM|

The thing is, Fyodor, usually when you argue "free market uber alles" it's because YOU, personally, have the power. Worker-protection laws aren't needed because YOU can go to another job. Anti-discrimination laws aren't needed because YOU can go somewhere that doesn't discriminate.

But this is not a situation where YOU are the one with the power to change things; this is where YOU just have to sit on your butt and hope others make the changes for you.

|6.22.06 @ 4:39PM|

first your fears have not come to fruition

Only because it wasn't allowed up until a recent FCC ruling


Can we stop with the "there hasn't been a problem yet" BS -- there only hasnt been a problem because they weren't allowed to do what they want to do.

So I guess its more valid to say "There hasn't been any lack of innovation with the regulation in place for the last 10 years -- so why remove it?"

It's a safeguard against the doomsday scenarios. Why should it be removed???

The onus should be on the ones pushing for the end of this smart regulation to show what innovation has been stifled, and how this regulation has hindered the growth of the internet -- cuz if you can't do that then you have no leg to stand on, despite your "free market" rhetoric.

Jennifer|6.22.06 @ 4:49PM|

The onus should be on the ones pushing for the end of this smart regulation to show what innovation has been stifled, and how this regulation has hindered the growth of the internet

That's a very good point, Tom.

Fyodor, Josh, Gaijin--why is it harmful that right now, no matter who your provider is, you can access any Website anywhere in the world that has enough server capacity? How would the Internet be improved if from now on you could NOT reacha lot of sites you can currently get to?

Jennifer|6.22.06 @ 4:57PM|

Nick Gillespie--

What is your company's plan? If this thing goes through, is Reason planning to pay all the Internet providers to ensure access, or are y'all just going to watch your readership decline? Have you guys worked out some sort of cost-benefit formula, like "We won't pay unless we lose X percent of our readers first?" Or can you not do that until you know just how much you'll be charged?

fyodor|6.22.06 @ 5:02PM|

Wouldn't most people just go other sites that arent blocked?

Maybe, maybe not. That's what the market would determine.

What if they only have a choice between two providers that both block these sites?

If there's limits to entering the market created by government, then it's different, as I've already said.

If it's a free market, then the two companies have incentive to compete for people who don't want others forced to pay for their business or attention.

If the two companies both decide to do business a certain way, then it's likely the most efficient way to do it.

Ah, so they get one Internet provider for when they want to read me, and another for when they want to read Reason, a third for when they want Internet banking, and a fourth if they want to go on eBay.

You're assuming things will work out in a certain way. Maybe it would work out that way, maybe not. However it would work out, if it's the result of people freely making decisions, it's the most fair and efficient way.

But this is not a situation where YOU are the one with the power to change things; this is where YOU just have to sit on your butt and hope others make the changes for you.

Well, as I've tried to explain, it's just a matter of what "YOU" you're talking about in what circumstances. You certainly do have the choice whether or not to pay money to companies asking for it for whatever reason, and you have the choice whether or not to contract with companies known for charging the people you want to do business with through their services for the privilege of doing so (this issue sure lends itself to run-on sentences!!).

What happens when providers start blocking things after you have signed a service contract?

Then they risk losing future customers.

Look, I don't deny that companies do whatever they can to squeeze money out of people and will be unethical given a quarter of a chance. And I don't deny they often succeed in fooling people into bad decisions. But as long as people have the choice between competing companies in a market with no legal barriers to entry, then the power of big business to screw people is limited by people's desire to get what they want. A struggle ensues between the two, and voila, CAPITALISM! It ain't utopia, I know, but it's the best we got from the available alternatives.

|6.22.06 @ 5:02PM|

Also note that tiered pricing is likely targeted at emerging, very high bandwidth applications like audio/video on demand, voice over IP, and things of that nature. General web content is not likely to be impacted greatly.

Carrick

Jennifer|6.22.06 @ 5:06PM|

Fyodor, what harm is being caused by the fact that right now you have equal access to all sites that aren't subsciption-only or password-protected, and how would the Internet be improved if you woke up tomorrow to discover that you could no longer access a lot of the sites you can acdess today?

|6.22.06 @ 5:09PM|

Forget for the moment that ISPs haven't kicked in tiered service yet, so there's no real telling what form(s) it might take.

That never seems to stop you from speculating on what it would take to enforce an abortion ban.

Remember what happened to the biggest ISP of them all, AOL, during its rise to dominance a decade or more ago?

AOL was not a state-protected monopoly. Anyone with a bank of modems and a server could compete with them. Compare that to the barriers to entry a would-be broadband competitor faces. With satellite and wireless broadband iffy propositions in most of the country now, expect the average consumer to have two choices for broadband for the foreseeable future.

John Mueller notes, even monopolists have reasons to court a captive market. If they do so, he explains, they're "more likely to be able to slide price boosts past a wary public�that is, such moves are less likely to inspire angered customers to use less of the product and/or to engender embittered protest to governmental agencies."

Ha ha ha ha ha ha ha!
Nick, have you ever tried to get your cable to pick up a new channel? Do you want to do that every time you want to go to a new website?

As The Washington Post�whose parent corporation is both an ISP and a content provider�put it in a June 12 editorial that tracks closely to Sanchez's earlier Reason Online argument:

If anything that makes them more likely to skew towards the anti-neutrality side, since the content provider half will get a sweetheart deal with the ISP half.

|6.22.06 @ 5:09PM|

these companies are in a position to charge for "tiered service"�to charge content and application providers money if those providers want to make sure their Web pages and info streams get to surfers first and faster than content from providers who don't pony up

No one is talking about blocking content from sites that don't pay up. Only providing higher QoS for those that do.

Carrick

fyodor|6.22.06 @ 5:09PM|

Fyodor, Josh, Gaijin--why is it harmful that right now, no matter who your provider is, you can access any Website anywhere in the world that has enough server capacity? How would the Internet be improved if from now on you could NOT reacha lot of sites you can currently get to?

I wouldn't claim to know! I assume the competition this might open up might allow for more choices and services.

That said, I'm officially undecided on this issue because I don't understand it entirely. Especially in regards to factors brought up earlier in the thread about limited competition due to infrastructure ownership owing to past government meddling.

Plus, network neutrality may possibly be better for me personally. Though that doesn't mean it's necessarily the most fair and equitable thing for everyone. Which of course creates a conflict for me.

|6.22.06 @ 5:10PM|

I realize Nick has to do the libertarian thing here, but voting against net neutrality is one of those things that may make you feel more ideologically pure but will make your average, everyday life suck totally. Internet now: good. Internet under a handful of companies who control the speed: bad. Say you want about government control, but at least the people (thats you and me) can have some say over it when things get really bad. When it comes to monopolies (or what would be in effect oligarchies) we would have virtually none.
Look how the mighty market has made going to the movies suck more (I just got back from Nacho Libre). There were EIGHT previews and THREE ads before the film, all very stupid. According to Nick's magic market in the sky theory movie theaters that do this universally detested practice would lose out to those heroic Randian movie entrepeneurs who do not engage in such crap. But, oh, wait, there has only been more and more of said crap for years. Where is the magic market? Answer: markets are good, usually preferable, but not perfect. In this case there are only a few major theater companies, they have gobbled up the market using their economies of scale, and they can screw us as much as they want to (news flash: they make all those DVD's and VHS tapes with their own ever growing crappy commercials, so so much for the mighty Randian entrepeneur beating the monopoly with new technology).

Jennifer|6.22.06 @ 5:14PM|

No one is talking about blocking content from sites that don't pay up. Only providing higher QoS for those that do.

Yeah, we're not going to block your site--it just might take an hour to log on to it. But that won't be a problem for you, will it?

Jennifer|6.22.06 @ 5:18PM|

I assume the competition this might open up might allow for more choices and services.

Like what? You already have the choice to visit any site in the world--what choices ar eyou lacking? What services? That was as vague as an explanation of how gays will threaten traditional marriage.

|6.22.06 @ 5:19PM|

Yeah, we're not going to block your site--it just might take an hour to log on to it. But that won't be a problem for you, will it?

The bandwidth to download a single page from reason or any other magazine is trivial compared to the requirements for the coming services to download movies via iTunes or any other business model that will let you get last night's sitcom on your portable viewer.

And yes, you will be forced to choose between internet service providers if one supports iTunes and a different one support their competitor.

Or if you live in the rural midwest like I do, you may not get to use your preferred movie supplier. Which is no different than my very limited choice in getting cable/satellite TV now.

Carrick

Jennifer|6.22.06 @ 5:25PM|

The bandwidth to download a single page from reason or any other magazine is trivial compared to the requirements for the coming services to download movies via iTunes or any other business model that will let you get last night's sitcom on your portable viewer.

But I've already said there's no problem with charging extra for using extra bandwidth; that, however, is not the case here. It's not a matter of "you use ten times the bandwidth I do so you should pay ten times more"; but "you and I use the exact same amount of bandwidth but since I pay protection money and you don't, my site is instantly accessible but yours is hard to reach. My site loads instantly but yours takes a quarter of an hour."

|6.22.06 @ 5:32PM|

Let's try this a different way.

Mr. Jobs pays some ISP in California (or India who knows) a lot of money to connect iTunes to the Internet.

ACME Cable Co. in Gothom has to add capacity because some of Gothom's citizens download tunes from Mr. Jobs. Today, ACME Cable company can only charge Gothom's citizens (everyone pays a little or high bandwidth users pay alot) for the added capacity.

But it might be a better business model to charge Mr. Jobs a buttload of money then give cable access for free to all Gothom's citizens. Today, that business model is prohibited.

Carrick

|6.22.06 @ 5:35PM|

Jennifer,

What's the source of that Jim's Pizza analogy? I think it misses the point and suggests that multi-tiered pricing will be more restrictive than than it really will be.

I think this is a lot more along the lines of the difference between IPv4 and IPv6 Internet Protocols. (read up their wikipedia articles: http://en.wikipedia.org/wiki/IPv6 http://en.wikipedia.org/wiki/IPv4)

This IPv6 might even be a candidate technology improvement (for ChicagoTom) that the internet at-large, today, CANNOT adopt because the installed user base is wide and decentralized; a few backbone ISPs might be able to arrange a parallel IPv6 network; or Japan + Korea as discussed in the wiki.

I understand that there are existing IPv6 networks that can "fake out" the overall widespread, underlying IPv4 network by wrapping their v6 packets in v4 layers for transport ("tunnelling"). So the technology is not blocked per se, but it has a not-purely-efficient workaround. If ISPs wanted to offer pure IPv6 networks for their own cell phones or other devices (the point of IPv6), then yes, if you wanted to access an IPv6 service, you would need pay for a level of service from an ISP that has an IPv6 network. In that sense, the first providers of IPv6 would likely be large corporations, and your blog (for example, Jennifer) will not be available to the IPv4 network if your blog was hosted on the IPv6 network -- though people on the IPv6 network would still be able to access pages on IPv4.

So, IPv4 is not likely to ever go away, but certain classes of devices or interactions make a whole lot more sense on a new network standard that will require investment in network infrastructure. Currently, corporations don't have an incentive to go first; Korea and Japan are doing it for leadership in technology.

My sense is that tiered services will be similar: what we currently have and can support(small file browsing, email) will be just about fully unaffected. However, if you have an application that makes sense to use a lot of bandwidth (especially low-latency bandwidth) like VOIP or streaming video on demand, you may be delighted paying for Concorde speeds through a parallel expensive network (which coincidentally would get these big piles of packets out of the slow coach-class network).

Network neutrality means every application has to fit to shoehorn itself into what will become the network equivalent of Aeroflot: the Soviet airline.

|6.22.06 @ 5:38PM|

Today, that business model is prohibited.

As it should be...ACME isn't providing Mr. Jobs any services, so why should they be able to charge him anything?

ACME is providing their subscribers a service by connecting them to the internet, and that is the only person that ACME should be able to charge. If ACME wants to charge more for higher bandwidth users -- by all means...but why should they be able to extort one dime from Mr. Jobs? What are they providing him?

|6.22.06 @ 5:39PM|

Addendum

Either way, people who buy tunes are going to pay for the new capacity. The question is who sends the bill -- so who looks like the bad guy.

Carrick

fyodor|6.22.06 @ 5:48PM|

Like what? You already have the choice to visit any site in the world--what choices ar eyou lacking? What services? That was as vague as an explanation of how gays will threaten traditional marriage.

Well, DUH it's vague, after all, you quoted what I said immediately after saying, "I don't know"!!!

But there's a big difference between my vagueness and the vagueness of someone who wants to restrict marriage. My vagueness is inevitable. Other than Timothy Leary predicting the internet (ha-ha), NO ONE knows what technological advances the future holds! That's the nature of the beast! I think there's been some talk of faster connections for people who have large video material to send, enabling people to watch TV shows over the internet. Which may not benefit me much, but that doesn't mean I should restrict other people's ability to get it.

When people come up with vague explanations for why they want to RESTRICT people, I think that's very different from someone admitting that they don't know what choices and services may result from NOT restricting the freedom to contract.

|6.22.06 @ 5:50PM|

If the regulation is so hamstringing, then why has the internet developed into the monster we know today under it?

|6.22.06 @ 6:07PM|

Hit and Run will take hours to load if this happens. No need to read all those criticisms of the government. Here is Fox and CNN for your news and commentary folks. No more reading about the excesses of the drug war, unless you wait 4 hours.

|6.22.06 @ 6:20PM|

"If I'm not mistaken, the builders of Internet infrastructure be us"

Exactly! We also paid in the late 90's for network upgrades to alow multi mega"byte" connections. The exact type of upgrades the the ISP's, telco's are crying about providing now. They're nothing but utilities operating on the dole.

|6.22.06 @ 6:36PM|

Today, that business model is prohibited.

As it should be...

Wrong answer, please try again.

The state should not prohibit business models, the free market should validate (or invalidate) them.

ACME isn't providing Mr. Jobs any services,

Wrong again. Today, ACME Cable CO has no contractual relationship to Mr. Jobs. But ACME is carrying payloads for Mr. Job's customers.

so why should they be able to charge him anything?

Why should they be prohibited from trying?

The pipe has two ends. The companies that provide access to the pipe should be able to "try" to charge the user at either end of the pipe if they want -- whatever the market for access to the pipe will bear.

My guess is that tiered pricing will fail unless it is accompanied by the introduction of newer, faster pipes and that there is a valid business reason for the "source" of the payload to pay for priority delivery.

Carrick

|6.22.06 @ 6:44PM|

Why should they be prohibited from trying?

Because trying to acquire payment from someone you aren't providing a service is called extortion.

Job's data (in your example) only affects the ISP so long as the ISPs customer request it. SO again...why exactly should any ISP be allowed to try and get money from anyone other than the person who they have sold services to / contracted with?

the free market should validate

This is not a free market situation, as has been explained upthread. These teleco's are oligopolies. Save your free market solutions when there is real competition and the infrastructure wasn't paid for by tax dollars.

|6.22.06 @ 7:16PM|

Save your free market solutions when there is real competition and the infrastructure wasn't paid for by tax dollars.

That's exactly what this is about. New infrastructure to support very high bandwidth delivery of proprietary content. The consumer will pay for this future infrastructure one way or the other, not taxpayers.

These teleco's are oligopolies.

So are the content providers.

These two Goliath's are arguing over who will bear the risk with putting up this new infrastructure. The telco's nearly bankrupted themselves laying fibre the first time. I doubt they want to do it again. Nor do I expect the content providers want to volunteer to carry the risk for them.

By the way, the vast majority of the channels that carry the internet today were laid down by the telcos using their own money, not the taxpayers.

The taxpayers, via DARPA, merely paid to develop the protocols.

Carrick

fyodor|6.22.06 @ 7:32PM|

Because trying to acquire payment from someone you aren't providing a service is called extortion.

Holy tautology!!

ex�tor�tion n.
1.The act or an instance of extorting.
2.Illegal use of one's official position or powers to obtain property, funds, or patronage.
3.An excessive or exorbitant charge.
4.Something extorted

extort

v 1: obtain through intimidation 2: obtain by coercion or intimidation

|6.22.06 @ 7:36PM|

The pipe has two ends. The companies that provide access to the pipe should be able to "try" to charge the user at either end of the pipe if they want -- whatever the market for access to the pipe will bear.

Using your example of ACME and iTunes, ACME doesn't own *either* end of the pipe. Most likely, they contract a circuit from a carrier / provider. And in most cases, the carrier also doesn't own both ends of the pipe. Where the network traffic goes from a line owned by one carrier to a line owned by another, the receiving carrier can charge an access fee of sorts (usually this is simplified into peering agreements).

The cost to ACME is entirely related to the bandwidth used by their circuit. What ACME pays to its provider will include, explicitly or implicitly, the cost of peering with other providers. If ACME's bandwidth charges increase due to customer usage, then ACME's only recourse in recouping those costs is to pass those costs onto the customer (either in terms of increase usage fees or limits on usage, etc.). Even in the case of a tiered circuit, ACME would still be paying their bandwidth charges, only those charges would include whatever additional costs that tiering would accrue to the carrier.

ACME has *no* recourse to the content provider under any scenario.

However, to clear up some apparent misunderstandings about tiering and class (quality) of service on a network (for the sake of simplicity, I've purposely omitted things like bandwidth shaping and other packet control mechanisms that are largely orthogonal to tiering), class of service *does not* speed up or slow down packets, in and of itself. The packets will always arrive at pretty much the same rate as always. What class of service provides is a priority method for passing the packets onto the next router. Higher priority packets are sent out with dispatch, lower ones are sent out in a queue kind of process, with low (or no) priority packets being sent out on a 'best effort' basis. Worst case scenario is a 'best effort' packet will drop and have to be resent by the sending server, this happens all the time, even on an untiered network (and by the way, a good portion of the routing hardware on the net currently supports the class of service flag).

If the bandwidth of the pipe serving the tiered class of service network is sufficient to send every packet through as it gets them, regardless of priority, it will do so. As long as there is available pipe, the packet will be sent. Throttling or packet dropping will only occur when the bandwidth requested of the pipe exceeds the bandwidth of the pipe.

If tiering for content does become common practice, it will nearly certainly be expressed in a premium charge (probably to the customer and/or provider) for particular classes of traffic (voip, video, etc.), and the bulk of the internet will continue on (and behave) largely like it does now.

|6.22.06 @ 7:47PM|

Using your example of ACME and iTunes, ACME doesn't own *either* end of the pipe. Most likely, they contract a circuit from a carrier / provider. And in most cases, the carrier also doesn't own both ends of the pipe.

You are right, it was a weak example. The carrier in the middle wants to examine the payload and charge a premium to provide priority service for certain types of payloads. This premium gets passed on to either the seller of the payload or the buyer of the payload. If the seller pays the premium it will likely pass it on to the buyer through the purchase price of the payload.

the bulk of the internet will continue on (and behave) largely like it does now.

Agreed, this is not the end of the world.

|6.22.06 @ 8:02PM|

This is nuts. Google and the other major content providers pay through the nose for access. It's access to Google and the like that has people like us pay for broadband access. The ISPs want to double dip. Without the content providers, there's nothing for us to come for.

Without net neutrality, EVERY SINGLE ISP will be able to pressure and extort Google for money. Separate agreements for Sprint, Time Warner, Comcast, Verizon, AT&T, Cablevision... on and on. It's a horror.

|6.22.06 @ 8:21PM|

Jennifer writes: ". I'm fine with eBay paying more for their website than Reason, for example, on the grounds that eBay gets a lot more hits than this site"

But eBay already pays vastly more than Reason does, just for the internet bandwidth they use.

|6.22.06 @ 8:28PM|

But this is not a situation where YOU are the one with the power to change things; this is where YOU just have to sit on your butt and hope others make the changes for you.

you must live in bizaaro world becosue in my world I have at least three broad band providers (at both resisdances which makes a total of 6) can get internet by cell or satalight and if all that doesn't work i have about a million different options for dial up...oh yeah and if you actually read nick's article you would find that 60% of the countries zip codes have at least 4 different broad band providers and that number is expanding...and if i am unlucky enough to not have those 4 choices then i can always move!!!

perhaps you should leave the bizaaro world jenifer becouse it is obvious that you don't have the choice to access the internet you want...but wait if you didn't then how on bizzaro earth am i comunicating with you right now???!?!

If the regulation is so hamstringing, then why has the internet developed into the monster we know today under it?

that is just it joe...the internet could have become teired at any time and individual providers have atempted to slow down compitition but everytime they did they got nailed by thier costomers and loss buissness.

Why do we need regulation when it is so apperant that the market already regulates it?

|6.22.06 @ 9:21PM|

Forcing large, popular websites to underwrite small, unpopular websites through uniform pricing...

SNORT! Uniform pricing? Where, my friend? Go to any ISP or Web hosting service on the planet. Check their prices. They charge differently for different levels of use. Businesses get charged more than home/personal users. Gamers and static IP users get charged more than Granny who just wants to get on once in a while to check her mail and download pictures of the grandsprogs.

Ah, so they get one Internet provider for when they want to read me, and another for when they want to read Reason, a third for when they want Internet banking, and a fourth if they want to go on eBay.

And if they live in Corn Beetle Gulch, Iowa, they can take $170-per-month service on a single provider, and like it.

Fyodor, just how many ISPs do you think are available to most Americans? I live in the heart of the Silicon Forest, and have exactly one broadband provider available to me: Comcast, which I refuse to use. If I want Verizon, I move 30 miles north. If I want Earthlink or Qwest, I move 20 miles west.

I'd believe all this telco wheedling about the "free market" if it really were a free market, and if consumers really did have choices. However, telcos are the first ones to run crying to the government for subsidies and gimmes that stack their deck against small start-up ISPs and local broadband solutions. They get tax funds and property tax breaks to build new equipment. They prevent consumers from choosing better service by chaining them with long-term service contracts. Telcos are right up there with Amtrak in their raw nerve bandying about the term "free market" with straight faces. Free market, my ass.

The telco's nearly bankrupted themselves laying fibre the first time.

ROFL! Carrick! You're killing me here! WE paid for the fibre. It was subsidized. The part that wasn't, we paid for with our telephone access fees and per-line charges. Oh, those poor telcos! Wasting away to billions of dollars of their former selves, having to do what every other business in the country does: pay for its own shit with the profits from money it's been charging customers. The telcos can also make improvements to their for-profit businesses by doing what my friends did when they wanted to open a specialty store: it's called "going to the bank and taking out a loan."

Corporations have a long history of whining that if they have to provide what consumers actually want, they'll *snif* go belly-up. It's all lobbyist bullshit, and I'm disappointed that Nick Gillespie, for one, would swallow it. Auto makers sniveled about putting seat belts in cars. Miracle of miracles, seat belts didn't put them out of business. They whined about making smaller cars that got better gas mileage. Whaddya know, that didn't drive them under, either. AT&T whined in the early '80s that ending their monopoly would destroy them. What a surprise; they survived. Cellular carriers bitched that allowing customers to take their numbers with them from one carrier to another would harm them. Lo and behold, they're still here, except for AT&T Wireless, which made a fine meal for Cingular precisely because they refused to improve their service and give customers what they wanted.

Really, has an industry ever been right about this? Has any of this doomsday wailing ever come to pass? Is there one industry that's ever tanked because they changed their business model to provide products or services that consumers want, when they want it, and at the prices they're willing to pay for it? Seriously, give me one example.

|6.22.06 @ 9:31PM|

Why are these the only two choices? How about this:

1) The content provider pays for the bandwidth it uses. This is currently the case.

2) The content receiver pays for the bandwidth it uses. This is not currently the case. Suppose subscribers A and B currently pay $50 per month for their internet service. Say subscriber A uses the internet for moderate surfing and e-mailing, using little bandwidth. Subscriber B downloads many GB worth of porn and other media. Both currently pay the same, but B uses much more bandwith. Maybe A should be paying $10 per month and B should be paying $90 per month. (Actual numbers would vary depending upon monthly usage.)

Forget the double dipping. Just charge all users for the bandwidth they use. We pay for electric power by the kilowatt, long distance calls by the minute (and according to distance), and gasoline by the gallon. Why should bandwidth be treated any differently?

|6.22.06 @ 9:50PM|

"Forget the double dipping. Just charge all users for the bandwidth they use. We pay for electric power by the kilowatt, long distance calls by the minute (and according to distance), and gasoline by the gallon. Why should bandwidth be treated any differently?"

But they do charge for bandwidth, by offering different speeds at different prices. Verizon in Massachusetts offers DSL at several speeds, and in some places you can get fiber, which is much faster. The speed effectively limits the maximum amount you can transfer in a given amount of time, ie, bandwidth.

Also, cable TV isn't priced according to how much you use it. If you never turn your TV on, you still pay the same monthly rate. Price differentiation is by the number of channels you buy. If you don't watch TV 24x7, you're just not making the most of your cable fee.

And most cell phone users don't get a refund if they use fewer minutes than they paid for in their calling plan.

A person who buys 3 megabit DSL and only gives it light use is like a person who buys 900 minutes a month but only uses 45.

|6.22.06 @ 10:01PM|

carrick writes: "The carrier in the middle wants to examine the payload and charge a premium to provide priority service for certain types of payloads. This premium gets passed on to either the seller of the payload or the buyer of the payload. If the seller pays the premium it will likely pass it on to the buyer through the purchase price of the payload."

The thing is, the "premium" is going to be charged for an alleged service that won't benefit most users, because the major bottleneck will be the local phone or cable lines, which probably won't be upgraded.

The phone companies may upgrade the hardware running their fastest pipes, but that won't help you if your DSL line is noisy, so why should the end user pay for these mythical benefits?

This is why I think the phone and cable companies plan on keeping the *same* lines, letting surcharge-bearing content pass through at today's regular speeds, and throttling down everything else to be even slower than it is today.

Jennifer|6.22.06 @ 10:26PM|

Jennifer writes: ". I'm fine with eBay paying more for their website than Reason, for example, on the grounds that eBay gets a lot more hits than this site"

But eBay already pays vastly more than Reason does, just for the internet bandwidth they use.

Agreed--it was sloppy writing on my part. What I meant to say was "on the grounds that eBay uses more bandwidth."

And just to reiterate: I have no problems with charging for amount of bandwidth used. My complaint is with charging for bandwidth and then charging extra to make sure others can access your site.

|6.22.06 @ 10:27PM|

Okay, bandwidth was the wrong term to use. How about charging per kB (or MB, etc.) sent and received?

Tom|6.22.06 @ 11:04PM|

you must live in bizaaro world becosue in my world I have at least three broad band providers (at both resisdances which makes a total of 6) can get internet by cell or satalight and if all that doesn't work i have about a million different options for dial up...oh yeah and if you actually read nick's article you would find that 60% of the countries zip codes have at least 4 different broad band providers and that number is expanding...and if i am unlucky enough to not have those 4 choices then i can always move!!!

I direct you to my comments upthread and over here, where you last tried this argument.

|6.22.06 @ 11:38PM|

The Real Bill writes: "Okay, bandwidth was the wrong term to use. How about charging per kB (or MB, etc.) sent and received?"

Imagine, for a moment, if they'd started doing that ten years ago.

What are the odds that the PHONE COMPANY would have adjusted the rates downward as typical bandwidth usage rose due to new applications? Approximately zero, I think.

How many of today's high-bandwidth applications would never have gotten started, had users been charged per kB?

If this kind of pricing had been set up in the day of 56k dialup, DSL bandwidth would have represented a king's ransom if priced on a per-byte basis. An upgrade to DSL speed would represent a huge increase in your bill, automatically.

There never would have been any demand for DSL or cable, because the price would have been seen as exorbitant.

|6.22.06 @ 11:48PM|

carrick writes: "Wrong again. Today, ACME Cable CO has no contractual relationship to Mr. Jobs. But ACME is carrying payloads for Mr. Job's customers."

No, ACME is carrying payloads for ACME's customers.

If ACME declines to deliver the payloads their customers want, then those become ex-customers.

If you are carrying internet traffic, it makes no sense at all to demand extra payment for traffic that goes beyond your network. That's not the internet, that's called an *intranet*. But chances are really slim that ACME's customers will be happy only connecting to other sites that are customers of ACME. They didn't sign up for ACMENet.

Even AOL has pretty much given up on that.

|6.23.06 @ 2:55AM|

If this kind of pricing had been set up in the day of 56k dialup, DSL bandwidth would have represented a king's ransom if priced on a per-byte basis. An upgrade to DSL speed would represent a huge increase in your bill, automatically.

You're kidding right? That's why computers cost millions of dollars each, right? They are thousands of times faster than they were originally! But this is not the only problem with your argument. I don't download much more with DSL than I did with dial-up; I just do it much more quickly. I like DSL for the speed, not massive downloading of videos and other content. If someone wants to clog up the internet streaming YouTube all day, they should pay for it. Why should they be subsidized by broadband users that just surf a little?

|6.23.06 @ 11:11AM|

"You're kidding right? That's why computers cost millions of dollars each, right? They are thousands of times faster than they were originally!"

Yes, but they aren't a product of the telecom monopolies, are they?

The phone and cable companies have been enjoying the same hardware price/performance improvements, but they've hardly passed the savings on to you, have they?

"But this is not the only problem with your argument. I don't download much more with DSL than I did with dial-up; I just do it much more quickly. I like DSL for the speed, not massive downloading of videos and other content. If someone wants to clog up the internet streaming YouTube all day, they should pay for it. Why should they be subsidized by broadband users that just surf a little?"

That may be the case for you, but it's not typical.

|6.23.06 @ 11:45AM|

The phone and cable companies have been enjoying the same hardware price/performance improvements, but they've hardly passed the savings on to you, have they?

actually in portland OR there has been a price and fuction war going on for the past 3 years...comcast has cut its per month price by 30% in that time and tripled its bandwidth.

|6.23.06 @ 12:34PM|

A lot of this discussion is going right over my head, but it seems that a rather easy solution is to reclassify ISPs as common carriers.

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