FTC abandons net neutrality

This is a real disappointment. The intellectual property developed by the government should not be warped for the benefit of the few. The obvious analogy would be if parts of the Interstate Highway system was controlled so that you would have to stay in the right-hand lane unless you had corporate sponsorship to drive in the fast lane. I am now concerned for the future of the Internet.

>This is a real disappointment. The intellectual property developed
>by the government should not be warped for the benefit of the few.

Well, I'd buy that the technology was ORIGINALLY developed by the
government. But the technology that drives the Internet today? How
many patents does Cisco have that are related to how the Internet
runs today? How many advances in router technology have come from
private companies?

Heck, the ability to even offer tiers of service, packet or traffic
shaping (or whatever it is called), is a private development.

So, I don't think that it is the complete truth to say that the the
Internet is "the intellectual property developed by the government."
I'm not certain exactly how misleading such a claim is, but I think
that it's at least very serious.

> The obvious analogy would be if parts of the Interstate Highway
>system was controlled so that you would have to stay in the
>right-hand lane unless you had corporate sponsorship to drive in the
>fast lane. I am now concerned for the future of the Internet.

Oh, I think that there's a more obvious analogy:
1) All interstate highways were turned over to private management.
2) Those private management companies charge drivers to enter or exit
the system.
3) (And this is the step that matches the loss of net neutrality...)
The private management companies control who gets into fast or slow
lanes based on whatever criteria they choose, mostly like price paid.

More obvious to me. More closely matched to the real situation, just
not as simple.

Beware the simple analogy, as it most likely removes nuance and
history. There is no simple analogy to net neutrality, and the
government gave up control of the Internet long before we started
calling the Internet. And so many consequences flow from that.

--
=Alex Hoffman
Leadership, Policy & Politics
Teachers College, Columbia University

--On 7/30/07 3:00 PM -0700 Alexander Hoffman wrote:

>> The obvious analogy would be if parts of the Interstate Highway
>> system was controlled so that you would have to stay in the
>> right-hand lane unless you had corporate sponsorship to drive in the
>> fast lane. I am now concerned for the future of the Internet.
>
> Oh, I think that there's a more obvious analogy:
> 1) All interstate highways were turned over to private management.
> 2) Those private management companies charge drivers to enter or exit
> the system.
> 3) (And this is the step that matches the loss of net neutrality...)
> The private management companies control who gets into fast or slow
> lanes based on whatever criteria they choose, mostly like price paid.
>
> More obvious to me. More closely matched to the real situation, just
> not as simple.

A better version of the highway analogy for of net neutrality would be:

Drivers are charged to enter the highway at an agreed-upon rate.

Management companies have the ability to limit the traffic flow on the exit
ramps, however, and can demand payment from towns, shopping malls, tourist
attractions, and so forth in exchange for opening up the exit ramp.

As a driver, you can pay the normal rate to drive... but if you find it
difficult or impossible to get off at your destination exit, the only way to
alleviate the problem is to hope that someone else pays to get it opened.

Dave

Dave Scocca wrote:

> A better version of the highway analogy for of net neutrality would be:
>
> Drivers are charged to enter the highway at an agreed-upon rate.
>
> Management companies have the ability to limit the traffic flow on the exit
> ramps, however, and can demand payment from towns, shopping malls, tourist
> attractions, and so forth in exchange for opening up the exit ramp.
>
> As a driver, you can pay the normal rate to drive... but if you find it
> difficult or impossible to get off at your destination exit, the only
> way to
> alleviate the problem is to hope that someone else pays to get it opened.

Ignoring all the nefarious issues, the big cable and phone companies have one overriding issue. If they convert to "everything IP", they want their core services to go through. The phone company wants the ability to limit everything but their voice traffic if needed to make sure voice is clear to everyone who has a handset off hook at any one time. The cable company wants TV to get through "no matter what". Etc. Now if you're buying DSL from AT&T and using Skype for phone service it gets tricky. Does Skype have to negotiate a special path sort of like the ILEC vs LEC issues the FCC deals with now. What if Skype has a "wasteful" service and uses twice the bandwidth as the ILEC's IP phone service. Can the ILEC be allowed to only guarantee Skype 1/2 of what they really want? Can Skype demand "what they need" even if it's a poor design? What if Time Warner Cable is your ISP? Do they get to reserve a certain amount of bandwidth for their internal TV channel distribution which may
 be detrimental to a neighborhood where everyone is watching YouTube? And now you have AT&T offering TV and Time Warner offering phone service and it gets real messy.

Net neutrality is a great concept but the devil is in the details. And with this one there are lots of devils. In many ways this is why the US phone system is such a mess in terms of regulation just now. Every proposed change and many recent changes tend to fix one issue and raise 10 others. I personally think the "easy simple" way out is for the phone companies and cable companies to split out their wires into separate companies but to be honest this would likely create even bigger messes. If we did this it would very likely be that in 10 years we'd only have one wire to most houses as the phone and cable wire companies merge to save costs.

TANSTAAFL
David Ross

I'm hoping Chuck Goolsbee will chime in here with the view from the
service provider angle, but one thing he noted to me a while back
that was instructive is that at least for a number of years, there
hasn't been any net neutrality at the ISP level. All ISPs do some
sort of packet shaping or traffic management, and thus are already
preferring some sorts of traffic over others. The big difference is
that there's no money involved - they're not going to Google and
saying "If you want search results to be returned quickly, pay up."

cheers... -Adam

On Jul 30, 2007, at 6:00 PM, Alexander Hoffman wrote:

>>
> 3) (And this is the step that matches the loss of net neutrality...)
> The private management companies control who gets into fast or slow
> lanes based on whatever criteria they choose, mostly like price paid.
>
> More obvious to me. More closely matched to the real situation, just
> not as simple.
>
> Beware the simple analogy, as it most likely removes nuance and
> history. There is no simple analogy to net neutrality, and the
> government gave up control of the Internet long before we started
> calling the Internet. And so many consequences flow from that.

Broadband connections cost more than dial up, and faster broadband
connections already cost more than slower. And though Google, Yahoo,
eBay, Viacom, etc. might have been howling and spending big PR and
lobbying $$ about how the loss of "net neutrality" would hurt their
ability to deliver services to users, they are already paying
companies like Akamai and Mirror Image to make their services
download even faster.

IMHO, the net neutrality debate is not really about online freedom;
the telecoms vs. the media and web services companies is not anything
resembling Harry Potter vs. Lord Voldemort.

Marilyn

I don't see what net neutrality has to do with access to sites; the
telecoms and cable companies are not being granted permmission to
block traffic. What they can do, if they so choose and the market
will bear it, is charge more for use of the lanes by specialized
vehicles. And when I travel the US highways, I see plenty of weigh
stations for trucks. The government does charge taxes on interstate
truck and rail traffic, and at least here in NY State, hack, truck,
limo, etc. licenses cost more than a regular driver's license. In NY
City, cabs much purchase a medallion and pay an additional annual fee.

If the telecoms and cable companies decided to charge a ransom fee to
prevent web surfers from accessing sites, US anti-trust laws would
surely kick in.

Marilyn

On Jul 31, 2007, at 5:23 PM, Adam C. Engst wrote:
> I'm hoping Chuck Goolsbee will chime in here with the view from the
> service provider angle, but one thing he noted to me a while back
> that was instructive is that at least for a number of years, there
> hasn't been any net neutrality at the ISP level. All ISPs do some
> sort of packet shaping or traffic management, and thus are already
> preferring some sorts of traffic over others. The big difference is
> that there's no money involved - they're not going to Google and
> saying "If you want search results to be returned quickly, pay up."

I think this hits upon the biggest issue with net neutrality: The
cable and phone companies want to bill both the user and the
destination for the same bandwidth.

I pay for my highspeed bandwidth, but the cable and phone companies
also want to charge the destination I use for that same bandwidth. If
the destination doesn't give into this blackmail, they could find
themselves on the slower network. How many people would still flock
to YouTube if it took 10 to 15 minutes to stream a video clip.
Wouldn't you rather use Verizon's own video service which is three
times as fast? Google is extremely vulnerable to this form of
blackmail. How profitable would Google be if AT&T or Verizon decided
to choke off all IP traffic to Google? How many iPods would be sold
if downloading songs from iTunes took 10x as long?

David Weintraub

At 2:23 PM -0700 7/31/07, Adam C. Engst wrote:
>I'm hoping Chuck Goolsbee will chime in here with the view from the
>service provider angle, but one thing he noted to me a while back
>that was instructive is that at least for a number of years, there
>hasn't been any net neutrality at the ISP level. All ISPs do some
>sort of packet shaping or traffic management, and thus are already
>preferring some sorts of traffic over others. The big difference is
>that there's no money involved - they're not going to Google and
>saying "If you want search results to be returned quickly, pay up."

My concern is when the telcos decide to get into the content
provision business they can prefer their packets over anybody elses.
So if I want to buy a tv show from AT&T it will come down the pipe at
full speed, but if I buy it from the Apple store - who didn't pay the
blackmail fee - it comes down in the timespace of a few hours or
days. (Hyperbole inserted to illustrate the point.)

I watch David Isenberg's portrayal and analysis of the situation at
his site and weblog, <http://www.isen.com/blog/>, as he knows what
he's talking about. And I side with his opinion: "Give me the bits
and get out of my way.

On 02/08/2007 2:17 AM, "Marilyn Matty" <mmattynyc.rr.com> spake thus:

> If the telecoms and cable companies decided to charge a ransom fee to
> prevent web surfers from accessing sites, US anti-trust laws would
> surely kick in.

Ahh, but that's the beauty of it. Providers don't *need* to block access to
sites, all they need to do is ensure that their competitors' sites are
significantly slower than their sites and the market will do the rest. Of
course, that assumes that the competitors refuse to pay whatever toll the
provider decides to charge.

Even better, if the provider charges everyone the same rate for the same
service level regardless of whether they're a direct competitor or not, the
competitors can't really claim it's an unfair business practice either.

Basically the providers win whether their competitors pay them or not. Don't
pay, and you make bucketloads of money off your sites. Do pay, and you make
even more bucketloads of money off your competitors.

However, the mitigating factor in all this is that there are currently
multiple providers, who are also competing with each other. I'd say that
you'll end up with bidding wars between telcos for the likes of Google's
business, simply because they can make so much money off the bandwidth used.
Profit always wins in the end.

I'd be more worried about this kind of situation in NZ, where there
(currently) isn't effective telco competition, although that is (very)
gradually changing.

--
Nigel Stanger, Dunedin, NEW ZEALAND.
http://xri.net/=nigel.stanger

On Aug 2, 2007, at 5:43 AM, Nigel Stanger wrote:
> However, the mitigating factor in all this is that there are currently
> multiple providers, who are also competing with each other. I'd say
> that
> you'll end up with bidding wars between telcos for the likes of
> Google's
> business, simply because they can make so much money off the
> bandwidth used.
> Profit always wins in the end.

The problem is that there really isn't a bidding war going on. ATT
and Verizon pretty much have monopoly services in their areas. In
cable, there are more companies, but each one is given a monopoly in
it's area. So, you're pretty much left with either going with the
local phone company or the local cable company -- and that's only if
they both actually offer service in your area. If you live too far
from the exchange office, you can't use the phone company. If you
live in an area with no cable provider, you have no cable company.
Almost 1/3 of the U.S is in a position where they have only a single
high speed Internet provider.

My hopes is that Google puts in a surprise 20 billion dollar bid this
weekend and takes over all the bandwidth up for auction. At that
point, the telcos and cable companies will lobby for the auction to
be invalidated with the final results being a more competitive
distribution of that bandwidth.

David Weintraub

On Aug 2, 2007, at 5:43 AM, dano wrote:

> At 2:23 PM -0700 7/31/07, Adam C. Engst wrote:
>> I'm hoping Chuck Goolsbee will chime in here with the view from the
>> service provider angle, but one thing he noted to me a while back
>> that was instructive is that at least for a number of years, there
>> hasn't been any net neutrality at the ISP level. All ISPs do some
>> sort of packet shaping or traffic management, and thus are already
>> preferring some sorts of traffic over others. The big difference is
>> that there's no money involved - they're not going to Google and
>> saying "If you want search results to be returned quickly, pay up."
>
> My concern is when the telcos decide to get into the content
> provision business

The telcos are already distributing content in a number of markets,
and are very aggressively lobbying in many areas in the US to deliver
services that compete with cable and satellite broadcasting
companies. Here's just one example:

http://www22.verizon.com/Residential/Entertainment/

> they can prefer their packets over anybody elses.
> So if I want to buy a tv show from AT&T it will come down the pipe at
> full speed, but if I buy it from the Apple store - who didn't pay the
> blackmail fee - it comes down in the timespace of a few hours or
> days. (Hyperbole inserted to illustrate the point.)

Delivering high bandwidth content requires an increase in the
capacity of the pipes that carry the messages; this will cost the
telcos, cable companies, and whatever else materializes in the future
a lot of money.

High bandwidth connections, like the cable service I'm using now,
used to cost prohibitively more than dial up connections; a the time,
consumer households and small businesses could rarely justify the
price. But demand for services quickly led to rapid price declines;
now in most US cities and suburbs, the differences in pricing are
barely negligible; some municipalities offer wireless access for free.

Free market pricing has been working well here, I think. And
distributors of content have ways of allocating cost to maximize
sales. Broadcast media is a good example; there's a lot of high
quality stuff available for free that is advertising supported;
there's a lot of other great stuff available at premium cost. And now
there are enhanced services like DVR, VOIP, Xbox Live, etc.

>
> I watch David Isenberg's portrayal and analysis of the situation at
> his site and weblog, <http://www.isen.com/blog/>, as he knows what
> he's talking about. And I side with his opinion: "Give me the bits
> and get out of my way.

Personally, I think that net neutrality would in reality get in the
way, probably ultimately causing more harm than good. Unless
companies have a financial incentive to innovate, the development of
new technologies, products and services would at best slow to a crawl.

Google, eBay, and other companies not only build huge server farms,
they also pay for services like Akamai, etc. to make sure their
content is delivered more quickly than via conventional paths.

Marilyn

On Aug 2, 2007, at 5:43 AM, Nigel Stanger wrote:

> On 02/08/2007 2:17 AM, "Marilyn Matty" <mmattynyc.rr.com> spake thus:
>
>> If the telecoms and cable companies decided to charge a ransom fee to
>> prevent web surfers from accessing sites, US anti-trust laws would
>> surely kick in.
>
> Ahh, but that's the beauty of it. Providers don't *need* to block
> access to
> sites, all they need to do is ensure that their competitors' sites are
> significantly slower than their sites and the market will do the
> rest. Of
> course, that assumes that the competitors refuse to pay whatever
> toll the
> provider decides to charge.

I sure do wish I had bought stock years ago in Akamai (especially),
Mirror Image, Cache Fly, Limelight or any of the other wildly
successful acceleration technology companies the big guys depend on.
And Google didn't spend well over $1.5 billion USD for YouTube about
a year ago without assuming it would be able to deliver high
bandwidth content quickly and efficiently to a extremely large
audiences.

>
> Even better, if the provider charges everyone the same rate for the
> same
> service level regardless of whether they're a direct competitor or
> not, the
> competitors can't really claim it's an unfair business practice
> either.

This is what exists in the current "neutral" net; however, the
companies that pay for acceleration services, build big server farms,
etc. move their packets through more quickly.

>
> Basically the providers win whether their competitors pay them or
> not. Don't
> pay, and you make bucketloads of money off your sites. Do pay, and
> you make
> even more bucketloads of money off your competitors.

If the providers can't make money, they won't expand their services.
And while I love YouTube and look at videos they deliver a few times
a day, and as far as I'm concerned, Google is THE search engine,
these and other services (like Gmail, Google Calendars, etc.), do eat
up a lot of bandwidth. And with the demand for video, music, online
gaming, web 2.0 and "live" services growing exponentially, the
service providers will need to constantly invest in expanding the
delivery pipes.

>
> However, the mitigating factor in all this is that there are currently
> multiple providers, who are also competing with each other. I'd say
> that
> you'll end up with bidding wars between telcos for the likes of
> Google's
> business, simply because they can make so much money off the
> bandwidth used.
> Profit always wins in the end.

It's been about a year since I stopped getting junk snail mail and
newspaper blows from telcos charging about $14.99 a month for entry
level DSL service (meaning not the fastest, but significantly faster
than dial up and cheaper than higher bandwidth). Just about 7-8 years
ago, a small company I worked for paid well over $200 a month for
slower DSL.

>
> I'd be more worried about this kind of situation in NZ, where there
> (currently) isn't effective telco competition, although that is (very)
> gradually changing.

The battle among the service providers is ferocious here in the US,
esp. as the cable companies now offer phone services, and the phone
companies are offering TV services. And though free internet phone
services like Skype still have their limitations, options and ease of
use are growing - there's an article in today's NY Times reviewing
the most popular ones:

http://www.nytimes.com/2007/08/02/technology/circuits/02pogue.html?
_r=1&ref=technology&oref=slogin

Marilyn

On 8/2/07 12:33 PM, "Marilyn Matty" <mmattynyc.rr.com> wrote:

>> I watch David Isenberg's portrayal and analysis of the situation at
>> his site and weblog, <http://www.isen.com/blog/>, as he knows what
>> he's talking about. And I side with his opinion: "Give me the bits
>> and get out of my way.
>
> Personally, I think that net neutrality would in reality get in the
> way, probably ultimately causing more harm than good. Unless
> companies have a financial incentive to innovate, the development of
> new technologies, products and services would at best slow to a crawl.

I think if the people signed up with "get infinite bandwidth and data
transfer for a nickel a year" services actually a) constantly used the
bandwidth they were promised and b) saw the actual bill for it, they'd get a
real harsh lesson in just how much fantasy is involved in ISP marketing.

--
John C. Welch Writer/Analyst
Bynkii.com Mac and other opinions
jwelchbynkii.com

Marilyn Matty wrote:
> On Aug 2, 2007, at 5:43 AM, dano wrote:
> At 2:23 PM -0700 7/31/07, Adam C. Engst wrote:
>>> I'm hoping Chuck Goolsbee will chime in here with the view from the
>>> service provider angle,...
>> My concern is when the telcos decide to get into the content
>> provision business
> The telcos are already distributing content in a number of markets,
> and are very aggressively lobbying in many areas in the US to deliver
> services that compete with cable and satellite broadcasting
> companies. Here's just one example:.....

You are building a good overview of the situation, so let me throw my
10c into the fountain of knowledge...

There are mainstream views on life and many complementary or alternative
views. Civilised nations, including some famous parts of the US, enjoy
the variety available. As that enriches our health and culture, but not
necessarily our bank accounts, there are some mean spirited
organisations that would leap at any chance to push these alternatives
well into the background of any bandwidth; letting them virtually disappear.

It may be time for the alternative and complementary organisations to
organise themselves to keep their place in the bandwidth available. The
chimps pecking away at random will almost certainly fade into the
background noise, progressively.

George

>At 2:23 PM -0700 7/31/07, Adam C. Engst wrote:
>>I'm hoping Chuck Goolsbee will chime in here with the view from the
>>service provider angle, but one thing he noted to me a while back
>>that was instructive is that at least for a number of years, there
>>hasn't been any net neutrality at the ISP level. All ISPs do some
>>sort of packet shaping or traffic management, and thus are already
>>preferring some sorts of traffic over others. The big difference is
>>that there's no money involved

Sorry, been busy over here building a new datacenter I didn't hear my
name called out until now.

Honestly, there isn't much to add to that. Network neutrality at the
moment is really just a illusion and hasn't existed in reality for a
long, long time. I can see the point of view of the
megacableteclos... their entire revenue model to date has been
charging for stuff going across "their wires"... and the now with
content being available from networks other than theirs, they are
angry that they don't get "their cut."

So, like the dinosaurs in the record industry they're willing to
punish their own customers in fruitless pursuit of a buck. If the
megacabletelcos get too uppity and charge too much, the Internet, in
the industry parlance will just "route around the damage" ... meaning
that the only people who will really lose are the customers of the
megacabletelcos.

You see the content providers do their best to deliver packets over
the LEAST expensive route, and if the incumbent carriers start making
it painfully expensive to go through them, then they'll find other
ways. Settlement free peering is one way, and content networks and
"eyeball" networks make ideal peering partners. So long as the
megacabletelcos don't have ALL the eyeballs it shouldn't be a big
issue... except of course to the customers of the megacabletelcos.

The odd thing is, that the content networks have all the stuff that
the users really want to see. The megacabletelcos have some content,
but not the "good stuff". Any move to alter that playing field will
only hurt the customers of the big players. The megacabletelcos are
just too slow moving to stay ahead of the game anyway.

Legislation won't change any of this. Neither will it change
financial reality. The idea that somehow Congress has any control
over the Internet or how it works is laughable. There is no
"Internet" really... just a collection of autonomous networks, all
linked together. Those individual entities can operate their OWN
network however they please. The *only* folks they need to respond to
are their customers and their shareholders.

Having the US Congress try to impose control on the Internet and how
it works will be about as successful as one of the "Five Year Plans"
in the old USSR.

Regards,

Chuck Goolsbee

David's comments reminded me of something...

>The problem is that there really isn't a bidding war going on. ATT
>and Verizon pretty much have monopoly services in their areas. In
>cable, there are more companies, but each one is given a monopoly in
>it's area. So, you're pretty much left with either going with the
>local phone company or the local cable company -- and that's only if
>they both actually offer service in your area. If you live too far
>from the exchange office, you can't use the phone company. If you
>live in an area with no cable provider, you have no cable company.
>Almost 1/3 of the U.S is in a position where they have only a single
>high speed Internet provider.

(The following applies to most US states- I can't address the situation
in other countries)

While it is true the local cable provider and local telephone company
(or power company) may be described as a monopoly or sole provider
of those services for any particular area there is a key difference. These
services are regulated by states and local municipalities. This arrangement
is beneficial for the companies, the municipalities and, yes, the consumer.
The company has efficiencies that make it possible to keep costs down
for itself and its customers. Providing electricity and telephone at
reasonable rates is in the public interest. Recognizing the social and
economic value of these service, states and municipalities license/authorize
utilities which allows access to public streets, sidewalks, alleyways, etc.
In return the utilities typically need to submit rates and rate increases to
state and local municipal regulatory commissions. groups or councils. If you
have a problem with landline telephone or electricity rates, your recourse is
those regulatory groups.

At present society doesn't think that broadband access is critical enough
to promote the same way as telephone or electricity as it did with the
creation of the Rural Electric Administration (REA) in 1935. This New Deal
and anti-Depression measure made it possible to get electricity to areas
outside urban areas to customers who couldn't afford to pay power companies
for the construction of the power infrastructure. Broadband has been treated
differently by municipalities. As with David's example, I had no
recourse when
the telephone company told me they could not provide DSL to my previous
home and I had to settle for the cable provider for broadband service.
Not perfect
"free market" conditions as my connection was no incentive for the telco
to untangle its local mess of physical wiring. On the other hand, the cable
company has to answer to the city for its access to municipal alleyways
and streets.
Rates have been kept "reasonable" but I expect that an attempt by the cable
company to maximize profits would bring scrutiny by the city government.

- Hank