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Net Neutrality? Give Me a Break

Neil Schwartzman

As my learned friend John Levine has noted, rightly, any policy that anyone has come up with thus far regarding net neutrality is based upon a Telco model. Now, think about that for a second. A telephone call costs pretty much the same if you whisper or shout. It costs the same if you make a quick phone-call or you yack for hours. These days, even long distance is trivially inexpensive, because the capacity to carry the world's phone-calls is well beyond any foreseeable demand. There is huge headroom.

But with net content, it is different.

If you want to download an Ultra HI DEF version of the new Avatar movie, it is going to come at a cost to someone, somewhere, and that someone is probably you, if not directly, by way of the company delivering it to you, or the company that owns the distribution rights.

The fight between Comcast and Netflix, (and as of today Verizon and Netflix) being divided by 'party lines' is like watching a crowd cheering for one of the two rich guys fighting over who is going to pick up the tab in a Three Star Michelin restaurant, but they actually intend to stick you with the bill.

Comcast foresaw, long ago, that they had a great big infrastructure that was rotting. The world is going (if not already gone) mobile, and a cable to a house is a quaint anachronism that is face-to-face with imminent entropy, and ultimate erosion to irrelevancy. As well, people are turning in droves towards streaming on-demand audio & video, rather than on a set schedule, so their 'cable t.v.' model also has a huge hole in it.

Since, in America, Verizon (see, there’s that name again) has the market for mobile sewn up, and they had no chance at all of competing in that arena, Comcast turned their eyes to the stars. The Hollywood
stars, in fact, and they went out and bought themselves a little content company called N.B.C. Universal (as in ‘pictures, as in ‘motion pictures’).

Fast-forward to 2014 and the announcement that Comcast had made a play for Time-Warner Cable. Now, everyone is focusing on that last word 'cable' which would if the deal goes through, give Comcast a corner on the 'cable/internet' market. You know, the one that is dying. The one into which you don't plug your iPhone very often, and if you do it is to WIFI that will be surpassed by 6G or 7G mobile connectivity (we are currently still deploying 4G at the moment, but for how long?).

What people aren't realizing is the FTC may be able to say no to the merger of the cable infrastructure, but they have no say in the merger of NBC Universal and Warner Brothers and their vast content holdings. I think Comcast is pulling a fast one, pretending to care about TW cable runs, a typical magician's diversion from what is really about to happen.

Remember how some guy once said that 'content is king'? Yeah, well, it still is. The reason, in my opinion that Comcast is giving Netflix a rough ride is that they are a competitor, and will become increasingly ever more so, as Comcast makes the shift from infrastructure to content provider.

There's also the technical angle. I sat with hardcore network engineers about a year ago, some of whom were at Comcast, and they all agreed the technical manner in which Netflix actually delivers content, and was wreaking havoc on their network was best described as 'shitting the bed'.

I mean, it is nice and all that Comcast is forcing Netflix to pay up, so our Netflix bills will go up. Oh wait, no, I forgot, Comcast is evil. I’d rather not pay them more to deal with the technical issues of delivering wildly popular content from Netflix by raising my connectivity bill. I’ll pay netflix instead.

We've come a long way since I joined the 'all text' Internet, and this whole discussion of 'who pays' is akin to the fight I've been having for a long time with reckless emailers we typically refer to as spammers. They offload the costs of their activities on the receiving systems, and ultimately the consumer. I've said this many times, but in 2005 the head of the Canadian Association of Internet providers noted that at that time it was costing every internet user in Canada $5/month for their ISP to deal with spam. That cost has gone up. As has the cost of dealing with content people want, like streaming video. Netflix is doing the best they can, but please, let's realize; they are a front for major media (read content provider) companies.

So calling out Comcast, who is in the content providing (and content delivering) markets pretty solidly, and supporting plucky upstart Netflix in their fight is pretty tunnel-visioned as to the realities of what is now the Internet.

Bottom line: One way, or another, hidden costs or explicit taxes, you are gonna pay.

Go ahead. Tell me I'm wrong, in the comments.

By Neil Schwartzman, Executive Director, The Coalition Against unsolicited Commercial Email - CAUCE. More blog posts from Neil Schwartzman can also be read here.

Related topics: Net Neutrality, Policy & Regulation

 
   

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Comments

Having thought about it … Neil Schwartzman  –  Apr 29, 2014 5:55 PM PDT

I just realized this is is like watching a crowd cheering for one of the two rich guys fighting over who is going to pick up the tab in a Three Star Michelin restaurant, so they can stick you with the bill.

OK, you're wrong. Steven Waechter  –  Apr 30, 2014 2:07 PM PDT

Neil,
Yeah, you're wrong.  You are just wrong.
You want to know why you are wrong?

Here you go.

Columbia University, the New York Times, JC Penney, The Salvation Army, the Catholic Church or maybe Netflix establish a web server. 

They pay their ISP for the bandwidth they want to connect that server to the internet, so we out in the field can use it.  They might be letting us look at it's contents free (Columbia University, Salvation Army, the Catholic Church, JC Penney) or they might charge us for some or all of it (NYT, Netflix). 

They pay their ISP for that connectivity. For us, essentially. So we can get data from them.  When they establish their connectivity they pay their ISP for what they feel they need or maybe what they can afford. It's how the internet works.

I establish an internet connection with an ISP, maybe Comcast.  I pay them for whatever connectivity I feel I need or what I can afford.  I have a 15 MB line, because that's what I could afford.  I'd rather have a 50 MB line but it was too expensive.

So I go to Netflix.  I decide to watch a movie.  Remember, Netflix has already paid their ISP, and I have already paid mine. Assuming Netflix has at least a 15 MB connection I should get most of the 15 MB I am paying Comcast for.  If I find the 15 MB line I have is inadequate I can contact Comcast and pay more if I want.

What is going on here is Comcast wants to interfere with both the deal between Netflix and their ISP, and with the deal between me and Comcast. 

Essentially Comcast wants to delay certain packets (out of sequence, I am sure) to prevent me from getting what I am paying them for, but only if they think they can strong arm Netflix into paying them extortion.

They'd never try this with any of the other internet services I mentioned- except for maybe JC Penney, probably because I don't generally have to pay the Salvation Army or JC Penney for website access.

Why in the world does it make sense for any ISP to establish a toll gate on my internet connection which I am paying them for?  Well, in their minds it's because they think they can extort some money from Netflix.

How long before Comcast blocks all the pictures of sweaters at JC Penney unless JC Penney pays them?  They want me to buy those sweaters, right? Why should I get to see sweaters to buy for free, shouldn't JC Penney pay Comcast for that?  I imagine they will be having meetings at Comcast next week about that since I have brought it up.

I don't want to live in a world where my ISP can block certain things, when I am already paying them for that access. 

How long before Comcast has an exclusive deal with Macys, so I can't see what sweaters are available at JC Penney? Why should Comcast or any other company be able to pick winners and losers, or sell me as a customer to anyone?  I want the internet connection I pay for to be mine.  I want to use it like I want to, not the way someone else wants.

"Macys, the exclusive online sweater supplier for all Comcast customers." I can't wait.

Net Neutrality means I am in control, and no one else is. I don't want my ISP to be selling me off to this company or that.

The internet is the PSTN of the 21st century.  We all need it and much more than we need the old PSTN anymore.  The sooner this kind of nonsense is made just illegal the better. 

These firms should be regulated as public utilities. 

Why? because they are all using easements on the public right of way and on our property to install their infrastructure.  Why should I have to give free easements to companies who are not operating in the public interest, who were given those easements to install their cables and fiber along with that old PSTN. 

Now, they want to both charge us whatever they think they can get us to pay, they also want to charge everyone we contract with, and if they don't pay they will screw it up, just enough that it doesn't really work.  Even though we are paying them for satisfactory service.

That is just wrong.  Out of line.  Should be just illegal.

Well, despite the announcement of your impending Neil Schwartzman  –  Apr 30, 2014 5:42 PM PDT

Well, despite the announcement of your impending suicide,

I don't want to live in a world where my ISP can block certain things, when I am already paying them for that access.

which I think is terribly sad, you seem a nice enough guy despite being a bit prone to hyperbole, the fact remains Comcast isn't blocking access to Netflix, they are merely slowing it down.

For example : I can access a multi-Gb file, say an OS update with little or no problem - if it slows a bit in the download, I never notice. When I 'do streaming' I have a new requirement my ISP never agreed to; i want everything right away.

It is like the development of a human infant. Early on, their needs are met by crying. 'I want to sleep!' says Ms. Infant. 'Bring me a breast!' "Play with me". Soon though, as a crucial step towards growing up, infants become babies, then children, who grow to accept that their needs aren't met, ever again, by crying, or issuing demands (Royalty and the mega-rich are another matter).

So too, the Internet, just past it infancy has learned that 'video on demand' is a tall order. You want that, instead of an operating system update, in other words, all your packets NOW!, well then, you gotta pay. Either you are going to pay your ISP or you are going to pay your Netflix, but you are going to pay for such privilege.

Thanks for your comments.

Neil, Har har har. None of that Steven Waechter  –  Apr 30, 2014 9:31 PM PDT

Neil,
Har har har.

None of that is true at all. That the "streaming" is a tall order, well, that's just unfounded.  That all works, and sure it's not nearly as reassembleable as TCP/IP. But we do have the bandwidth now.  They are charging us for it. We *are* paying.

What the ISPs are doing is intentionally delaying certain packets, you and I both know that is just unnecessary. They do it to screw up your VOIP, your streaming, your video, etc.  They use a deep packet inspection bandwidth management appliance to do this, and I'm sure you know it. NET Enforcer is one. There are others. The first one started with an A, I think, can't remember.

AT&T;used to do this, so if you subscribed to a competing VOIP service like Vonage it would not work properly, but if you were to instead subscribe to their service, those problems would be immediately solved.  AT&T;probably still does it to Netflix, but if you use UVERSE it will work fine.  As you know UVERSE is streaming and believe me, if your UVERSE were screwed with you would complain to them. They don't need that.

I submit I am already paying for straight internet, with adequate bandwidth for the packets to arrive in plenty of time before I need them.  Only by delaying some to screw it up they think they can make more money.  "If you pay us we'll stop screwing you up". 

Hah har har.

How long before they block and pixelate the pictures of sweaters at JCP or Macys?  Now that I have given them the idea, not long.

Dysfunctional market The Famous Brett Watson  –  May 01, 2014 3:16 AM PDT

This isn't a "net neutrality" problem: it's a "dysfunctional market" problem. This is just how large corporations behave when they have an effective monopoly on something: they seek rent. If there were sufficient competition, the competitors would be beating a path to Netflix's door to find cost-effective ways of delivering the service better, so as to attract customers. Why? Because they can sell pricier high-bandwidth plans to Netflix nuts. Instead, they engage in racketeering, using their captive audience of customers as leverage.

I'm not sure which is the path of least resistance: enacting law to recognise the racket as a racket (or abuse of monopoly power, at least), or solve the underlying competition problem. Even if you enact "neutrality" law, you need to enforce it, and monopolists are notoriously capable of dragging out litigation while doing so is a profitable move for them.

Perhaps the best approach is to try to force a choice: make them either accept "common carrier" status, or allow competing infrastructure. The telco incumbents have been lobbying hard to prevent municipal networks, yes? Maybe that's an angle that can be used: they've been trying to have it both ways; force them into an either/or choice. Either alternative is likely an improvement over the status quo.

Sounds like an uphill battle either way. I suspect that Paul Budde's analysis is true enough to warrant pessimism.

Brett, These are indeed monopoly issues. Steven Waechter  –  May 01, 2014 7:20 AM PDT

Brett,
These are indeed monopoly issues. 

As I said in my first article the problem is that the monopoly nature of the problem has not yet been recognized by the law.  "Information services" are unregulated. 

Since these firms do have a monopoly and are using that power to confound both their competitors and their customers that needs to be stopped.  They need to be regulated, forever since they have been using those free easements all these years. You can't unring the bell. 

As long as we're talking about unregulated services here I charge $5,000 a month for the easements these firms have on my property if they want to sell unregulated services through there. Why should I have to let them use it free?  Since we are all unregulated, remember.

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