Sunday, March 04, 2007

Net Neutrality III

In case you're not a tech-head, you may not have gotten caught up in the (mostly online) debate about Net Neutrality. You can read my old posts as an explanation of what it is, who's for and against it, and what you can do about it. You might want to educate yourself on it because it's gaining recognition as an important issue. In truth, it's not really a conservative vs. liberal issue so much as it is a individual vs. corporation issue. The only problem is that the conservatives are allied with the big telecoms, which is why they've been making a fuss by blocking any Net Neutrality legislation thus far. This article in the Washington Post provides a good summary thus far. Here's why people are for Net Neutrality:

Net neutrality is a principle that bars Internet providers, primarily phone and cable companies, from charging higher rates to Web-based firms in return for giving their content priority treatment on the pathways to consumers. Without such restrictions, proponents say, a user might find it time-consuming, or even impossible, to call up a favorite site that carriers have relegated to slower lanes for economic or even philosophical reasons.

Here's why people are against it:

Net neutrality restrictions "could prevent broadband providers from offering enhanced levels of service for specialized applications such a telemedicine, or to offer their own branded or co-branded products or services," said Christopher Wolf, co-chairman of Hands Off the Internet, a group sponsored by phone and cable companies . Such arrangements, he said at a recent Federal Trade Commission workshop, "will help pay for the build-out of the next generation of Internet pipes."

And in rebuttal:

Moreover, Wolf said, his industry's critics cannot cite an example in which any U.S. user has been blocked.

But some groups that rely heavily on their Web sites to share information, raise money or promote causes say they fear it's only a matter of time. They cite, for example, a 2005 comment by William L. Smith, then chief technology officer for BellSouth, which has merged with AT&T, that Internet service providers should be able to charge a firm such as Yahoo for the opportunity to have its search site load faster than Google's site.

Now, whatever hifalutin language is used on either side of this debate, it comes down to this: bandwidth providers want to be able to charge data providers for different levels of service and individual bandwidth users don't want that. That's as plain as I can say it with no judgments involved as to who is more right. But proponents of either argument aren't leaving it that simply, so there is definitely a need to clarify. Here's an articulate argument against Net Neutrality (until, at least, it becomes an obvious necessity).

Network neutrality is supposed to promote continuing Internet innovation by restricting the ability of network owners to give certain traffic priority based on the content or application being carried or on the sender's willingness to pay. The problem is that these restrictions would prohibit practices that could increase the value of the Internet for customers.

Traffic management is a prime example. When traffic surges beyond the ability of the network to carry it, something is going to be delayed. When choosing what gets delayed, it makes sense to allow a network to favor traffic from, say, a patient's heart monitor over traffic delivering a music download. It also makes sense to allow network operators to restrict traffic that is downright harmful, such as viruses, worms and spam.

Kind of a red herring though. Legislation can make what whatever provisions it needs to ensure that medical or emergency traffic is assured of speedy delivery. This includes things like remote surgery or VOIP calls to 911. Not only that, but as far as the technical side of things, data "surges" can be accomodated by laying more fiber down. That's what you pay your ISP for. That's what they're supposed to be spending some of that revenue on. Furthermore, that's not what people at AT&T are talking about. Don't believe in corporate goodwill; they want to charge web content providers for the privilege of faster access to their websites. And there's nothing stopping them from regulating the flow of viruses, worms, and spam why aren't they doing it?

Pricing raises similar issues. To date, Internet pricing has been relatively simple. Based on experience in similar markets, we expect that, if left alone, pricing and service models will probably evolve. For example, new services with guaranteed delivery quality might emerge to support applications such as medical monitoring that require higher levels of reliability than the current Internet can guarantee. Suppliers could be expected to charge higher prices for these premium services.

Blocking premium pricing in the name of neutrality might have the unintended effect of blocking the premium services from which customers would benefit. No one would propose that the U.S. Postal Service be prohibited from offering Express Mail because a "fast lane" mail service is "undemocratic." Yet some current proposals would do exactly this for Internet services.

Let's say you're an at-home patient who needs 24 hour medical monitoring. You pay the hospital or whoever it is to do the monitoring and you pay the ISP for access to the internet. Now the argument is that your monitoring service should be able to pay the ISP for guaranteed data transmission without fail. That would be a premium service, and in such cases reliability is absolutely paramount. But that doesn't mean it should be adopted as a model for the entire internet. As a matter of fact, I think it would be safer to adopt Net Neutrality with the provision that such medical services must receive first priority. Before you argue that it's impossible to distinguish what kind of information is being trasmitted (that is, the ISP couldn't tell the difference between a heartrate monitor and hardcore porn), remember that it is possible to differentiate between where the data goes. Any domain registered with the ISP with legitimate credentials would get a free pass. So even if the user laying in bed used the same connection to look at porn at the same time as his heart was being monitored, the ISP could give priority to one or the other.

This also brings up an important issue: most data bottlenecks happen in the vicinity of the end-point; that is, the receiver. When you're using your computer at home and notice a slow-down at about 5 or 6PM, that's because everybody in your neighborhood with your ISP got home and logged on. Your connection to Amazon or Yahoo or whoever is irrelevant because their webservers aren't being overloaded. That's whether you pay for 56K dialup or whether you pay for 15Mbps Verizon Fios. Net Neutrality won't affect that one way or the other, and whether Yahoo pays to load faster than Google or not, both will still be slower for you (unless you're rich of course and pay for a T1 of your own or something, which is what you can already do).

As far as the concerns the individual user, you'll never experience a change for the better. They can't give more bandwidth to those who pay, they can only slow down those who don't. As more and more users get online and more and more traffic is shuffled around the existing internet, you might see service degrade overall. That's why if bandwidth is an issue, the ISPs need to get in gear and roll out more fiber instead of increasing prices for a smaller and smaller piece of the pie. The answer to that is not to let the ISPs slow non-premium paying sites down, it's to increase the bandwidth overall. And finally, if so many users are visiting a website that it's slowing down, the ISP can't do anything about that anyway. That's an issue with the website, in that they need to buy more servers and buy more bandwidth (not faster). But you rarely find websites to be like that. Some instances are when tickets go on sale (at, for example), or over the holidays when Amazon was having special offers and you had to log on at a certain time. Otherwise, it happens during a Denial of Service attack. All of this has nothing to do with your ISP, and that's why the idea of them offering "Premium Service" has no meaning to you or me and seems like merely a way of extorting more money from web content providers and giving us trouble by slowing down sites that can't pay for it.

The analogy of the Postal Service does not stand. The Post office moves all mail at the same speed, except for the stuff you pay extra for. They move that faster. The ISPs can't offer to move any data faster, as it all moves at the same speed (relative to your websites, ISP servers, and you). You can't pay for any data to get to you any faster. It's not even possible because of the technical limitations (like how your email gets turned into a bunch of different data packets and takes innumerable paths through a bunch of different servers along the route; who are you going to pay?). The Post office doesn't slow all mail down so that you can buy a premium service which gets to you at the same speed all mail used to; it actually does speed it up. It's not the same thing at all.

We're not saying that all discrimination is good or that the market always gets it right. Some forms of discrimination can be harmful, especially when service providers have market power. For example, if a local telephone company that is a monopoly provider of both broadband access and plain old telephone service for a community blocks its broadband subscribers from using an Internet phone service offered by a rival company, this discrimination can harm both competition and consumers.

Does this mean we believe that we should place all our trust in the market and the current providers? No. But it does mean we should wait until there is a problem before rushing to enact solutions.

What does the market ever get right except making money for those who own resources? How many times do I have to point out the example of the Robber Barons for what an unregulated market does? Why wait for problems to arise and then solve them after they've already caused trouble? Look, the Ford Pinto had problems that Ford knew about when they designed it. But because there weren't any laws that would harm Ford or keep them from building it, they went ahead and did it. When the public and the government know that a problem probably will arise because of some action a corporation is taking, it's better to stop it before it begins, not after!

Here are my own thoughts on this issue. Let's say you want to go online and look at to shop for books. First, Amazon establishes itself online. It buys its servers and pays an ISP for access. The default speed is the speed of electrons through copper wire or the speed of light through fiber optic lines. This speed is, of course, impeded by the hosts en route between the provider and end user. The ISP lays out the copper wire or fiber and charges for people to use it by the amount of data they move. You pay an ISP to get online for basically the same thing, except more data comes into your computer than leaves it. At the level of the individual, you basically pay for the speed level instead of the data amount because you actually use so little data. That means that no matter how fast data flows out onto the Internet, you can only get it as fast as you can get it and you're paying for the privilege. So there's Amazon, ISP1 (the ISP Amazon uses), ISP2 (the ISP you use), and you. Now Amazon is paying umpteen-million a month for using somebody's lines. Let's say you're paying about $50 a month for broadband.

Now what ISP1 is proposing is that for an extra fee, they'll let Amazon keep the same speed as before and they won't let them be slowed down, whereas for that doesn't pay for the premium, it will be serviced at a slower rate. Now if both rates are above your 15Mbps connection (if you have such), it doesn't matter to you. But it's not likely that both will be above that speed, and if the ISP feels it necessary, it may actually service that website at a slower speed, like 3Mbps. So no matter what bandwidth you pay for, you'll only be getting what the other ISP feels like giving. Or maybe they won't limit it overall, but at peak times, your connection to will be slowed down whereas your connection to will remain nice and perky. You may not care, but what if you do? Envision this also; whatever surcharge they add on for premium service to Amazon will be rolled into your purchases from because they're not going to eat the costs. Part of the price of an item is already their operating costs, because they're not shy about charging you for them. Let's say there's another site you shop from,, which is pretty much exactly like but it doesn't pay for premium speed. When you buy from Amazon, items may be a little more expensive, but you can browse faster. When you buy from Bookstore, items are the same old price but it's hella slow. And in both cases you're paying for their costs, but in the case of Amazon you're paying extra so that you can get the same old site speed and service. What good is that to you? It sounds like crap to me.

Ok, if ISPs want to charge more for laying more cable or fiber for a guaranteed service which is separate from their services in general, that's fine with me. But it's not fine with me if the speed I pay for is irrelevant when it comes to internet services. It's not fair, but what am I going to do, quit using the internet? Is that like how we're supposed to control market prices of food by not eating when food prices are high? You may think that's a hyperbolic comparison, but is it so much when you're the one on the heart monitor?


Daniel said...

I agree that net neutrality is a prime issue for many internet services. But the issue seems to focus around services that both companies and home consumers use such as cable and dsl. However, I do believe that net neutrality can be compromised by featuring an exclusive business-only internet service.

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john said...

Interesting article. I agree with you 100 percent. The issue about the 2 companies and home consumers that use DSL and Cable. you shouldnt quit using the interne, hopefully they will realize it and the price will go down.