Kevin Martin: Antichrist

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The FCC chief throws his weight behind plans for a "tiered" Internet, which means exactly what the telcos want to it to mean at any given moment, but will have the effect of charging more money to somebody, somewhere for more* service.

Remind me why we still have an FCC again? And while you are at it, remember, if it is good for the Bells it is bad for America.

*Not more.

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  1. Um, if ISPs introduce tiered service voluntarily, where’s the complaint?

  2. We still have a FCC because it takes an act of god to kill a federal department. Just remember it was 1994 when the Rural Electrification Admin. was finally killed…no, wait, they just renamed it and made it part of USDA.

  3. I just don’t see the point of this.

    Other than allowing telcos to blackmale popular sites, what is the benefit to consumers by doing all of this? What exactly are the critiques of net neutrality and the concept of all sites being treated as equals, isntead of favorable treatment for the ones willing/able to pay??

    This seems like just more regulation whose only purpose is the ability of the “Big Fish” to keep a strangle hold on the pond.

  4. What is the problem?

    According to TFA, websites and providers who wanted to pay a premium to telcos would be able to get a fatter pipe to customers, while websites and providers who didn’t would continue with the same bandwidth they receive. It sounds to me like a private version of car pool lanes on highways.

  5. ChiTom – bingo! What else do you think regulations are usually used for? I know I don’t have any lobbyists in Washington trying to get…oh, wait, I have these guys in Washington called Congressmen and Senators that are supposed to have my interests in mind, but for some reason, they don’t seem to do a very good job.

  6. Um, if ISPs introduce tiered service voluntarily, where’s the complaint?

  7. What is the problem?

    According to TFA, websites and providers who wanted to pay a premium to telcos would be able to get a fatter pipe to customers, while websites and providers who didn’t would continue with the same bandwidth they receive. It sounds to me like a private version of car pool lanes on highways.

  8. “Because notion that it’s ‘voluntary’ is a lie.”

    So if the FCC doesn’t prohibit providers from offering tiered service, it’s compelling them to offer it?

  9. Weird, I didn’t mean to post that twice.

  10. SR, were you planning on showing up at the shindig on Friday?

  11. Because the only way tiered service could survive is through collusion and probably government enforcement. They make it sound like they’re adding bandwidth for premium customers without affecting others, but that just can’t happen. Bandwidth is really only capped in two places-at the two ends of the connection. One end is the server/provider whom they’re charging; but if Google wants more bandwidth, it buys a bigger pipe. AOL has no control over how much bandwidth Google has on its end. So tiered service would have to mean doing something with the client’s-your-bandwidth. In particular, I don’t think that the way they set up the cap on consumer bandwidth lets them reset it depending on what traffic is coming down at the particular moment; so the tiered service plan would boil down to “if you pay us, we’ll give downloads from you priority over downloads from everyone else.” Which means that I don’t have control over my download priority; downloads from priority customers will always strangle downloads from non-priority customers. I can’t think of any reason to go with a service that acts like that over one that doesn’t, unless there really aren’t options.

    Also, if tiered service is accepted, if I were Google I’d kill service to customers of people who tried to charge me extra, and replace with a page: “We’re sorry, but because of your provider’s policies, we are unable to provide a satisfactory service.” I bet I’d get around it in a heartbeat. And as I understand it, some of the telcos have gone on record saying that their goal is to get a cut of Google ad revenue (sorry, no link, but this came up a few weeks ago at Asymmetrical Information).

  12. What is the problem?

    Everyone is already paying for the bandwidth they receive. Now the backbone providers want a bigger piece of the pie. It’s like a trucking company withholding a delivery until you agree to give them a percentage of profits made from the delivery’s sale.

    Another important point- data carriers have received
    much in the way of government support from free use of public and private land for cable/fiber runs to massive subsidies to enable to them to build a multiple megabit data infrastructure. Of course they never followed through.

  13. I am starting to think that most of what people in government do is sit around and look for the things that they haven’t managed to regulate yet. Once they find something, they get money to study how to regulate it. Then the lobbyists for and against the regulation give money to them. If they wind up not regulating this time, they’ll just start over and get more money.

    And when they finally decide to regulate something, they get money for that. And the lobbyists start paying out to influence how its regulated.

    And they will NEVER stop. Once they have regulated EVERYTHING (probably by next month) they’ll just go back and get money to study how to change regulations on everything.

  14. “SR, were you planning on showing up at the shindig on Friday?”

    As I said in the last thread you asked the question in, “yes”. 😉

  15. “It’s like a trucking company withholding a delivery until you agree to give them a percentage of profits made from the delivery’s sale.”

    As long as the trucking company puts that in its terms of carriage, why is it a problem?

  16. Macklin, it’s simpler than that:

    If it moves, tax it.
    If it keeps moving, regulate it.
    When it stops moving, subsidize it.

  17. digamma – that’s it!

    Pricks.

  18. Ok, I still don’t get it.

    The only real problem I see is that the telcos need to get permission from the FCC to do this in the first place. Otherwise, I’m with SR in seeing that private companies are looking to be able to provide upgraded bandwidth in order to give better performance for those willing to pay.

    I’m willing to admit that I’m either really missing the boat, or else I’m just a big-government/big-corporation apologist, but I’m not sure where my thinking is going wrong.

  19. “As I said in the last thread you asked the question in, “yes”. ;-)”

    Sweet.

    Check your gmail for the nitty-gritty details.

  20. jf, here’s my take. Maybe it will explain why this is such a hot-button issue for people who have been Internet users since the early days of the ‘net.

    Basically, if you host a Web site, you have to pay for upload bandwidth. Usually you pay some sort of network service provider, often one of the big telcos. If you want to access a Web site, you have to pay for Internet access; these days, that usually (again) means one of the big telcos. But in between, the Internet is one flowing stream. If you run a Web site, you have to pay varying rates depending on how much information you’re pumping out into the Internet: you pay to pump out more. But once your traffic gets out there into the larger Internet, it is equal with all other traffic.

    This was always one of the genius aspects of the Net. Essentially, it created a levelling affect for commerce online. Any schmoe could put up a Web site, and it would be on an equal footing with everyone else. It allowed innovative startups to take on giants, and thus forced giants to stay innovative rather than just win markets via brute force. And you could put out any kind of service you wanted — from e-mail to HTTP to modern services like Voice over IP — as long as it used the basic Internet protocol as its foundation.

    The telcos are essentially seeking to stack the deck in favor of those who pay them. While it may seem like “needless regulation” to prevent them from doing this, in fact telcos are only in the stranglehold position they’re in now because of regulatory benefits. For instance, Time Warner cable can’t use its monopoly power to only carry Time Warner-owned channels on its cable systems, because it has a local monopoly thanks to a public franchise. So why should Time Warner cable Internet be allowed to use it in that way?

    Part of the rhetoric that the telcos are deploying goes like this: “We’ve invested in fiber; why should Google get to use our pipes for free?” The question sounds reasonable at first blush, but it really isn’t. Google isn’t useing your pipes for free; I’m paying to use your pipes because I want to access Google. In a perfect world of free competition, I could use some other service if you start throttling Google; but that world doesn’t exist, as there’s usually only two broadband options in any given market, both of which are pushing to open up a two-tiered Internet.

    One final thing: the “carpool lane” analogy isn’t really apt. The throttling of sites that don’t pay up wouldn’t happen on the “highway”; it would happen right before your computer. It’s not as if there’ll be entirely separate fiber lines used for higher-paying customer’s traffic. All the routing will happen at the switching stations just upstream from your computer.

    Josh

  21. Those of you who think this is no big deal are definitely missing something. It’s not necessarily just a case of providing “upgraded bandwidth” so that a web page will load a little quicker. Bandwidth is one part of the equation, *latency* is another part of the equation. Latency is hugely important to interactive data networking applications like Voice Over IP, online gaming, and who knows what other apps that might be invented in the future. Performance guarantees of latency and bandwidth over a network are collectively known as “quality of service” (QoS) and certain types of applications have certain QoS requirements, otherwise they become completely unusable.

    The “HOV lane” analogy is pretty close, but not complete. Imagine a highway with 3 “regular” lanes and one HOV lane. Then imagine this highway terminates in the city center where all four lanes merge into one lane with a traffic cop directing things. The traffic cop allows any cars in the HOV lane that arrive at the merge to pass through, holding up cars in the other 3 lanes until the HOV lane is empty. That would be what an internet with a certain type of “tiered service” would look like.

    The worry is that, in a world where the guys who have a monopoly on provision of last-mile network connectivity are given the power to selectively provide QoS guarantees to those that pay tribute, the next generation of networked applications will not succeed or fail based on how well they innovative to meet consumers demands. The success of a service will be heavily dependent upon whether or not they have enough cash to pay-off the telcos. Many believe that the explosive growth and success of the internet is due to the fact that Verizon will deliver bits from Reason Magazine at the same rate and with the same delay as they will deliver bits from the New York Times.

  22. I live in Sweden so I dont really know anything about the broadband situation in the states,since this issue came up I have been trying to find some articles regarding the whole thing but have so far been unable to find satisfactory articles.
    Why is it that you guys seem to have such a pain in the ass monopoly, were there (like in Sweden) some big initial investment made by the government or has the monopoly just evolved due to the high initial cost of starting a similar venture (laying miles and miles of fiber etc)

  23. So if the FCC doesn’t prohibit providers from offering tiered service, it’s compelling them to offer it?

    I think the fear is that: (i) all reasonably priced packages will become tiered after a time; (ii) that customers will not be able to do anything about that, and (iii) this would be a market failure because customers would not be able to vote with their dollars to get a reasonably priced tierless connection.

    There are basically 3 ways of dealing with this situation taht I will now outline:

    1) the FCC way: use the FCC as sort of a consolidated customer voice to balance the expected business strategy consolidation of the telcos. Pros: customers can get a voice in how services are structured despite the “natural oligopoly” of the telcos. Cons: government greed, government incompetence, government waste, government bribery.

    2) Typical HnR reader way: Maybe the telcos won’t completely force a tiered model on everybody. If they do, then they only did that because it is what the customers really wanted. there is no such thing as market failure.

    3) My Way: Wait and see whether tiered and non-tiered plans can compete in the market over the long run. If they can, great. If they can’t then bring out the antitrust laws and smash the telcos into tiny, unconsolidated bits. 4 Real (no re-do of the Microsoft suit). Make them sorry they fucked with us. Pros: allows competitive market in 1st instance. Cons: C.R.E.A.M.

  24. Thanks for the follow-ups. I’m stil not sure I see the problem (in fact, I remember reading a pretty good rationale for implementing a tiered system, I believe at Wired.com), but I definitely see there are some strong techno-philosophical objections to this plan.

  25. What’s totally messed up is that telcos and cable companies have been granted protected monopolies because they are like common carrier public trust type thingies. For them to now turn around and say “Google and Vonage don’t play fair, we need more protection” is total crap.

    Disintermediation is a bitch eh Ma Bell?

  26. And, in case anyone is still actually reading this, I guess there was something I didn’t make clear in my last post: I only see tiered service coming into being in one of two circumstances. First is that the FCC winds up basically mandating it, which I’m pretty sure we’re all against. The only other way I can see it happening is if one telco has a monopoly on internet access in an area, and therefore can keep consumers from switching. Once again, this situation probably comes from either government subsidies or a government-enforced monopoly, so I’m against.

    I don’t think there’s any rule that forbids telcos from offering tiered service of a sort right now, though I could be wrong; my impression is that they’re lobbying to make this the new standard, so they can be dicks and no one can do anything about it. The Google gambit I described earlier won’t work at all if all providers are required to act that way.

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