ISPs Race to Create Two-Tiered Internet 612
An anonymous reader writes "The ISP race toward a two-tiered Internet is picking up speed. This
article from Michael Geist
points to a wide range of examples involving packet preferencing,
content blocking, traffic shaping, and public musings about premium
charges for faster content downloads. ISPs are now reducing
access to peer-to-peer applications, blocking Skype, and, scariest of
all, lobbying Congress to let them do it."
Two word solution! (Score:4, Insightful)
Real deregulation has nothing to do with Congress making laws, changing laws or getting rid of a few old regulations that actually don't affect communications. True deregulation means getting rid of ALL laws that affect communication, including ones that were set up over a hundred years ago that we still have to follow.
In my opinion, the interstate commerce "clause" in the Constitution was not intended to control communications, set up an FCC, or regulate costs or services. It was intended to prevent taxation and tariffs (exactly the problem we have today!) I'll grudgingly accept the argument for the regulation up to maybe 1995, but after that, we saw an unregulated quantity of computers magically connect without major subsidies (I'll grant you that ARPA was originally tax paid, but how big did it get during the government years?). The fact that so many people got online without excessive regulations aimed at driving the Internet leads me to believe that the best form of our beloved Internet IS anarchy (not chaos).
Congress shall make no law
My speech is free to go where I sent it. For Congress to say that 2 or 5 or 10 big companies know better than thousands of little ones is typical nannyism. Who knows best? The People. We choose ISps that meet our needs. The system works. Some ISPs go under. Some combine into one ISP. Some fall apart into seperate smaller ISPs. This is how the free market works. We're going to see more free WiFi ISPs (my small town has 3!). We're going to see faster cell phone bandwidth (my EDGE network gets 150kbps downloads). We're going to see less reliance on the phone companies and the cable companies. This isn't happening because of regulation.
As to the two-tiered Internet, I'm all in support of the system if it isn't regulated. Without regulations, the ISPs must compete with one another. This means that the two-tier system could actually be of benefit to the end users. I have customers with offices all over the country who have to maintain expensive T1 lines. With a two-tier system that gives customers on the same network preferential treatment, I think we'll see lowered costs for corporate WANs, meaning lower prices for consumers of those corporations' products. Every dollar saved is some money passed on to the consumer.
Yet these two tiered systems can, overnight, become a mess if Congress decides to set rules and restrictions and requirements. Instead of promoting more bandwidth between same-network customers, regulations will push less bandwidth for different-network customers. If the little guy is pushed out (as regulations tend to do), the big guys won't have any reason to stay competitive. It isn't AOL versus MSN versus Comcast versus SBC that lowers prices and raises bandwidth. It is the thousands of smaller ISPs that are like mosquitos, constantly biting the big elephants and causing them to make changes to their service. For years I used Speakeasy and converted dozens of my customers. I still prefer Speakeasy, but they've been cut off in my market -- by SBC and Comcast that lobbied my local government and state government. REGULATION killed off Speakeasy in my area -- deregulation gave me years of amazing performance and price.
Don't believe the hype -- anarchy in communications has led us to a smaller world and a brighter future. Regulations have led us to 90 years of excise taxes on our phone bills that won't go away, even if the reason for the taxes is antiquated or ancient. Yes, we're still paying taxes on our phone bill that were set up in 1898 and for World War I costs. [findarticles.com] And you continue to support those leeches by voting for them?
I wonder how long Europe will take to do the same (Score:1, Insightful)
Let me guess... (Score:4, Insightful)
Two Tier Highways (Score:3, Insightful)
Re:Vote with your money (Score:5, Insightful)
Re:Two word solution! (Score:5, Insightful)
Your new two-tiered ISP charges you 1.99 per download from itunes, plus the cost of the music, but if you download from their sponsered service they only charge you for the music.
Think Cell phone bills. The data charges on Cell phones are stupid high. They charge you per byte, plus minutes while online. Try downloading a ringtone sold by sprint on a verizion phone. It doesn't work. Not because the song isn't compatible but because they will put up money road blocks into the way to force you to pay.
I am sorry But I want the internet my way. Not the way some company wants to force me to pay Dollars extra for things they get for literaly pennies.
Yay!! (Score:5, Insightful)
As a "consumer" that exactly what I look for. I wouldn't want the greedy telcos to have to actually price stuff based on a competitive market.
I look forward to a few years from now when Japan and other countries in Asia will have cheap, and abundant bandwith (at least 100Mb/s, probably wireless to boot) and I'll still have a 1.5Mb/s DSL line and be paying MORE for it. Yeah, that'll be great.
If the telco's succeed in this we (US internet users) will be relegated to a second class status on the net.
And that doesn't even take into account the chokehold they'll have on innovation in the IT sector. Then we'll get passed there too.
Don't get me wrong its not a US and them internet, the net is a global endeavor. It just that in the future being from the US I'd like to participate in it and not get blown past because increasing our bandwidth has take a back seat to Telco profits.
sad truth (Score:3, Insightful)
Comment removed (Score:5, Insightful)
rigged election (Score:5, Insightful)
Re:Two word solution! (Score:5, Insightful)
You're wrong about that and you know it. Most saved dollars in fact do NOT pass onto the consumer! At best, they pass onto the shareholders or are reinvested into business, but more likely they are used for golden handshakes and exorbitant executive salaries and benefits (such as special loans, stocks and other such things).
Give in. We're screwed. (Score:5, Insightful)
Nobody else will give a damn. AOL are the most popular ISP in the world, and we all know they suck - doesn't matter. Vote with your wallet, fine. Nobody else will. They'll believe the hype - the megacorps will win, they will be convinced that this means they get a safer, faster internet. They'll be pleased.
Even then, it won't matter - your escape options will vanish, because every major ISP will do exactly the same thing.
We're losing the internet to the Bad Guys, the battle is half over already, and on balance, they're winning it. I have no idea what the solution is - we're under attack from the politicians on both national and international levels, the corporations on a global scale... I don't see us winning this fight. Best we can hope for is a draw.
Re:doesn't happen in europe (Score:1, Insightful)
Three weeks ago, every American pinhead was in here screaming
"Why would the rest of the world not want the US to be the sole master of the Internet, we are the bastion of freedom, and would never restrict Internet freedom, unlike those lefties in Canada and Europe"
This is exactly why. The US WAS the bastion of freedom. You have become nothing more than a new facist state. Your policies, and beliefs are way out of line with the rest of the world, and no one looks to the US system as a model of anything, except rampant corruption.
Is it time to edit some old quote?
Information wants to be free, except in America, where it wants to be $52.75 a month.
Good ol days (Score:3, Insightful)
Just like any other great thing that comes along in history, bureaucracy is getting its hands on it and making it a mess.
Re:Go time (Score:3, Insightful)
Yes, because Al Gore has so much power these days. The original lawmakers creating the Internet, Al Gore being one of them, had a vision of the Internet created for the military expanding to academic purposes. Somewhere along the line it was controled by corporations and now corporations want to expand thier power and the current adminstration is taking the the bribes (lobby money) and giving corporations full control.
Define the "Internet" and then sue (Score:5, Insightful)
Back when AOL and Compuserve were BBSs (networks unto themselves with minimal/no connection to other services) their customers demanded access to Internet E-mail and got it; eventually bundled in as opposed to for extra charge.
The ISPs will have to realize that there are ways to circumvent their blockages and all it takes is one person to come up with it and the whole world knows.
How about "port knocking" as a data transport? I hesitate to list some of the other methods our group of gurus has discussed over the past few years, but you can be assured that there are lots, and the black hats have been using them for some time now.
How about someone providing a service that tunnels other traffic via an unblocked port? Unencrypted there would be not much extra overhead - encrypted it would be proof against almost any blocking since the tunnel service provider can use any port they want and the ISP can't block them all or what's the use of calling it a network. Port 80 sounds like a good choice.
And if the ISP blocks the service's address block, how about something that does a shared-bandwidth service such as bittorrent does now?
Pretty soon the ISPs will get it through their thick skulls that blocking ports isn't the way - providing lower latency for similar service (to that provided by someone farther away by net) or making partnerships (franchises, etc.) with the data/service/application providers is really the only way to differentiate.
Using the routers is easy - but it will not prevail.
Comment removed (Score:5, Insightful)
Barriers to entry (Score:5, Insightful)
Where the entry cost is low, competition works well (joe's computer shop, asmet's sweatshirt shop, even beverages). Where barriers to entry are very high (telecom, drugs, automobiles) regulation is needed to prevent monopoly powers.
Re:Two word solution! (Score:5, Insightful)
I agree totally. There's a natural tendancy for companies to consolidate, when growth cannot be achieved without consolidation. Economists theorize that in a normal environment, businesses consolidate, raise their prices, and when those prices rise, the incentive for new business to start is better and those businesses will be competitive.
They expand on that theory to point out that when economies of scale are reached, the barrier to entry is too high, and big fish will swallow the little fish because of it.
I'd like to draw attention to Fido and Clearnet in Canada.
At one time we only had two Cell providers in Wester Canada - Telus and Rogers and they hosed us on the rates. It was an oligopoly, where the incentive to keep rates high was better than the incentive to compete. So two new cell providers came to play: Fido and Clearnet. Fido offered amazing rates that were highly competitive - 200 mins for $20/mo. So did Clearnet - unlimited incoming calls for $29/mo. And they did this without a 3 year contract. All of which was unheard of before.
Telus bought clearnet, Rogers bought Fido.
Do you think they bought those cell carriers to compete, or to increase margins?
The barrier to entry for the cell market is very high now. We probably won't see a new cell providor in Canada for a long time now, and rates will stay where they are.
Re:Go time (Score:3, Insightful)
It's funny how one moment people are screaming because regulations are going to limit what they are allowed to do online, and the next they're screaming because some law is going to remove the regulation that's preventing somebody else to do whatever they want online.
ISPs should be allowed to have however many tiers they want. You're free to choose whatever internet provider you'd like, aren't you? If the market doesn't like the multi-tiered model, they'll buy from other providers. The quote you have at the end of your post spells it out pretty well. It's the best argument for why very little bad can come from any legislation that de-regulates ISPs.
Re:Two word solution! (Score:3, Insightful)
In a free market, competitive companies that realize cost savings pass on these savings as increased profits. When the trend of increased profits stays stable, competition always causes companies to try to low ball their competitors -- decreasing prices to consumers.
Competition allows a guy with a better idea to bring it to the market, upsetting the big players. I see it all the time in the businesses I am in (skateboard retail, paintball retail, engineering IT consultant, contract outsourcing) -- some kid with a good idea and low overhead comes into the market to undersell the big boys. Sometimes the kid profits and succeeds, sometimes the kid runs out of cash and fails. Whatever the case, the prices drop to compete -- and if the kid goes out of business, a few months later someone else replaces him with the same idea or a better one.
Competition does not create megacorporations -- Congressional regulations and SEC mandates create megacorporations.
Re:Two word solution! (Score:5, Insightful)
Re:Barriers to entry (Score:4, Insightful)
If you have a high cost to enter a market, and you have people with good ideas, money is available from risk taking investors. My friend sells Love Sacs -- they're big "bean bag" chairs that sell for $300-$600 at malls. The kid who started this company is now a multi-multi-millionaire, and he started in his garage. Now he has millions to spend on other ideas (to make himself even richer) and he'll invest in technology or medicine or who knows what. Look at the billionaire who invented the Segway and tell me that transportation is a hard market to buy into. He did it, and there are numerous billionaires out there pushing for outer space and underwater, but can't do much without getting rid of government regulations.
Your attitude is based on the belief that big companies are bad. They are only bad if they're given the ability to use force, and only government can grant that ability.
Mod parent up (Score:5, Insightful)
In a way, I hope it does go to hell in a handbasket. Then maybe something will happen.
Re:Two word solution! (Score:2, Insightful)
It was de-regulation that caused every hamburger chain to combine into one.
It was de-regulation that caused every big box consumer store to combine into one.
It was de-regulation that caused every candy bar company to combine into one.
It was de-regulation that caused every shoe company to combine into one."
You are a fucking idiot. And I understate my opinion greatly.
If it were possible for McDonalds to monopolize the source of hamburger -- they would.
Walmart is well on the way to squeezing others out of their market.
The big ISPs ALREADY OWN THE PHYSICAL MEDIUM that is the internet backbone. Without regulation, they WILL lock out competitors.
Re:Two word solution! (Score:5, Insightful)
Blockbuster's rental of DVDs and CDs and videos caused a huge increase in the amount of DVD players and VCRs sold. This brought jobs to retail employees. Ma and pa video rental stores eventually bounced back in my area and now we are back to having 3 or 4 for every Blockbuster, especially in porn and import rentals.
How again did either of these two companies cause pain in the market? They made some things more efficient, and created new markets to support. Sounds good to me.
Re:I think it's fantastic in a way (Score:5, Insightful)
Yes, you're referring to common carrier status. As long as the legislature is bought and paid for, I'm sure this loophole will be closed before long where they can filter and divert packets that threaten their revenue but wash their hands of responsibility for copyright infringement and kiddie pr0n.
As it stands now, common carrier says that they either let data ride on their network without discrimination or they become accountable for everything that comes across it.
Re:hmmm... why lobby congress? (Score:5, Insightful)
No. There's no such thing as a "free" (as in "freedom") market.
Big companies lobby congress (and the President) because it *isn't* a free market. There are two ways of controlling a market: either be the biggest and baddest and have real teeth (like Microsoft, or the old Ma Bell) so that others in the industry *have* to do what you say or face your wrath; or get congress to give you teeth.
That's what the MPAA/RIAA/BSA/etc have done with bills such as the DMCA, and are attempting to do with the new Analog Hole bill. That's what "service providers" are trying to do with this lobbying effort.
Once they have this advantage over the rest of the telecom industry, they will use this advantage to keep their superior market position. Simple as that.
Considering the development of the internet was funded in a big way by our US tax dollars, the thought of corporations moving in and fucking us over out of greed kinda gets my dander up a bit.
Not only that, but in many areas, there *is* no choice for broadband. What happens when you have Cox on one side, and SBC on the other, and that's your only choice? When two companies will fuck you over equally, and they "own" the infrastructure (partially paid for by tax dollars), what choice do you really have? What kind of "free" market is that?
"Free market" is a myth for naive slogan-spouting arm-chair economists. I was taught the whole "free market" ideal back in high school, right along with the concepts of how our government works.
Both turned out to be lies.
But, no, I'm not cynical.
It's a free market right? (Score:4, Insightful)
What would happen if the ISP silently blocked P2P, server, VoIP, and gaming ports of their entire user base?
A few people would cancel their accounts. No more than 10%. Really no one else would know that something is up. Its a free market, and people are voting with their money. But they don't even know they're voting and dutifully write their checks each month. More importantly, ISPs see this as compliance. Which opens the way for more restrictive rules..
Hell, I wouldn't be surprised if the US made like the Aussies and had draconian bandwidth restrictions. With..I dunno..say $300 per gigabyte over 2GB down per month? It'd sure make them a lot of money in saved bandwidth..think of how many more subscribers they could jam into the saved bandwidth..after all, its not about the customers or providing a good service. Its about extorting money out of people, through laws, regulations, shady service, passing the buck, whatever it takes.
Re:Two word solution! (Score:4, Insightful)
There is plenty of regulation in the PC world, it just happens to come courtesy of Microsoft, who also skim billions off the top.
In the automotive world, we have heavy regulations -- steel tariffs, union requirements and other government mandates. Car prices have risen, faster than inflation.
Car prices haven't risen fast enough--they still aren't anywhere near accounting for the cost they impose on society.
In the medicine world, we have excessive regulations, and prices have climbed beyond inflation.
Actually, the regulated and public medical providers are the most efficient ones in the system; it's the private insurance companies that are driving up costs further and further, not because of regulation, but because of a lack of regulation.
Tell me again how regulations help and anarchy hurts?
You didn't think your haphazard collection of poorly chosen examples constituted an argument supporting your position, did you?
Whether government regulation helps or hurts depends on the goals one wants to achieve, the market, and the details of the regulations. The details are fairly well understood economically, although doing the right thing is often politically difficult. One regulation that is generally a good idea is antitrust regulation: markets are rarely well-served by a single dominant company.
SSH / Port 22 (Score:2, Insightful)
All I'm going to say is.... (Score:5, Insightful)
America is getting what it deserves in so many ways right now it's not even funny. When you reward behavior like this, you get MORE behavior like this. We are responsible for it because we allow it to happen.
My suggestion would be....get away from the telco ISP and be happy with real quality of service.
Re:Two word solution! (Score:2, Insightful)
Re:I think it's fantastic in a way (Score:2, Insightful)
Re:Two word solution! (Score:5, Insightful)
It was de-regulation that caused every big box consumer store to combine into one.
It was de-regulation that caused every candy bar company to combine into one.
Apples and oranges. That argument applies to businesses where entities, offices, etc are separate. Telecommunications is completely different; there is one set of phone lines running through a neighbourhood, there is one set of cable lines running through a neighbourhood.
Do you really think a municipality would allow every company that wants to come along to put up more wires? Do you really think residents would want dozens of different wires running through their streets? Do you really think it would be economically viable for a company to wire up a neighbourhood if they only had one or two customers in an area?
It's an economic factor why there's only one set of telephone and cable wires in a city. And as another poster said, if there was pure deregulation, what would force the owners of those wires to let anyone else use them? They would be the gatekeeper for that telephone network or cable company, they would dictate what goes down those wires and how much you pay, and the consumer would have very little choice.
This is why regulation is needed, because it's not like a burger joint where someone can just put up a new franchise next door - a new player can't simply lay down a new set of wires.
The infrastructure in this case should be a public asset that is there to facilitate commerce and competition, allowing any players to enter, like our public road system. All companies can use the roads in an equal manner.
And that's what a one-tier internet does, allow anyone to enter the game because they have the same access to the market as anyone else. A two-tier would force all the small players on the wider internet out of business because they would have to pay a toll to reach the consumers.
You like real life analogies? It's like each neighbourhood being able to set up a toll on the roads in their area dictating that all red cars need to pay $5 to pass, after those roads were already paid for by taxpayers. I as a consumer already paid for a road to the internet, paying for my DSL or cable, I should be able to pick what colour car I drive down that road, not have that dictated to me.
Re:Two word solution! (Score:5, Insightful)
This isn't even "my way" - it's quite simply the connection itself. I am paying not for the service, but for the connection to the internet. Currently, the ISP passes my traffic back and forth to my computer/router. Serivces are provided by the connected server that is passing traffic back to my computer.
This is DIRECTLY akin to saying that phone companies want to provide better phone quality if you call another user on their network. Have Verizon and call someone on Cavalier? Well, we can't guarentee a connection, we can't promise you won't be booted off the line for a Verizon->Verizon connection, and we can't help the static unless you get the other party to switch to Verizon.
This, directly, stifles competition, especially at the small business level. It's sickening. And it will become law.
Comment removed (Score:5, Insightful)
Is This The End of the Internet!?! (Score:4, Insightful)
The cable companies got it right. They have a box in your home with big-time controls and identification features. It's critical they know who you are to make paying for content easy. They've made that model work and work extremely well. How many
No one with any power to substantially influence government values your anonymity. I don't know about the rest of the world, but in America, we tend to abhor a kind of neutral freedom where all participants have similar access. It smells too much like "Socialism" which we've been trained to believe fails.
The people that value a free internet will be sequestered to their own little freedom-loving ghetto while the rest pay. (and pay and pay some more) It was fun while it lasted. In the future, I'll be one of those in the freedom-loving ghetto.
Re:Two word solution! (Score:4, Insightful)
I'm starting a wireless ISP in my trailer park in March
You wouldn't be living in a trailer park if you were so capable. Just a small observation. I realize it's partially an ad-hominem attack, but you cite your own experience as starting a wireless ISP in a trailer park as an example of how easy it is to get into any business. I find it ironic that you live in a trailer park and are debunking economic theories that propogate far beyond your own business experiences, which incidnetally demonstrate you have failed, not succeeded if
Truth is, you can't just go and start a leasing company without startup capital. Sometimes the barrier to entry is so high it's almost impossible for a business to start and be competitive.
Re:Circumventing ISP filtering (Score:5, Insightful)
It's not so much that they will select specific things to block, but rather they'll select specific things to be given preferred access.
In the router world, this is referred to as ToS (Type of Service) or QoS (Quality of Service). They are slightly different, but for the purpose of this conversation let's just say there is a single byte in every IP header that can be used to differentiate different kinds of traffic.
Routers also have the ability to have multiple outbound queues on a single hardware interface. You can configure a priority queue such that its packets are sent before any packets in the non-priority queue.
Given all this, the ISP can reduce the bandwidth of their backbone (or avoid increasing it as demand grows) and their pay-for-content services will work just fine but anyone else's services will suck.
The ISP can then go after other companies that are trying to sell content to their users. If Apple wishes to have priority access to the ISP's customers, they must pay a fee to have an ACL set up which flags their traffic as priority. Ditto for anyone selling a real-time stock market feed, video-on-demand, etc.
The ISP can then also target you as a customer. If you want to be able to receive any of this priority content, you'll have to pay an additional monthly fee to do so.
Personally, I don't like the idea of being charged differently based on who I'm talking to. It's like the post office or Fedex charging you more for a letter you're sending to your attorney because they know that must be important, but less for your letter to your mother. It's like when a truck enters a toll highway, they look inside to see what is being moved. If it's just a moving van full of personal belongings, the fee is low. But if it's a load of consumer electronics headed for sale they'll charge a higher fee.
I'd rather see this be done based on the level of service you're requesting. If you want low jitter, low latency access to the network, it costs more per Mbit than it does for high jitter, high latency access. Whether you have a voice call to your grandmother or your attorney, it shouldn't matter. Whether you're viewing a movie from the ISP's server of HBO's server, it shouldn't matter.
Unfortunately, the ISPs want to go the way of the cellular providers, to maximize their profits by charging you additional fees for anything they can get away with.
No More Common Carrier (Score:4, Insightful)
Write your senators and representatives! (Score:3, Insightful)
Disconnecting them: skype and ebay (Score:4, Insightful)
Alan
This is inevitable in the US economy (Score:3, Insightful)
Comment removed (Score:5, Insightful)
Re:No More Common Carrier (Score:5, Insightful)
Bull on that. (Score:4, Insightful)
Honestly, that's ridiculous. If that's what you believe, than
Practically everything that's ever been done has been out of some sort of profit motive or another. I won't say 'everything,' because certainly there have been some things done from various altruistic motives, but they pale in comparison to things that were done for profit. And that's profit both on a personal and corporate/institutional/national level. In fact a lot of people who do "charitable" work are doing it for personal profit of some sort. You can argue whether that's their chief motivation or not, but it's undeniably quite strong.
Just because I'm aiming to make a profit off of you, doesn't mean that it's a bad thing. In fact the basis of a truly 'free' economy in the sense that free-marketers talk of it, is that every interaction is a win-win. That is, for you and me to do business together, BOTH of us have to be getting some sort of profit out of it. Does that always happen in our real world? Probably not; but it happens a lot more often than you'd realize.
The owner of the pizza parlor down the street from me is quite wealthy. He doesn't stay in the business he's in because he really enjoys enriching other people's lives by serving them pizza, he does it because he's good at it and makes more money running a pizza shop than he would in an alternative career at this point in his life, given his education. His business, on paper, is ripping off its customers. After all, it sells what is probably less than a dollar of raw ingredients (probably the cardboard box is the most expensive thing) and a few cents worth of gas for the oven, and a few dollars for overhead of the store and employee wages, for $10. And I happily pay it, because I'd rather pay him to do this, even if he's making money hand over fist, than do it myself. It's a win-win transaction.
Just because you're in the business of making money for yourself doesn't mean that you're harming anyone else. As long as the transaction is not coerced in any way, everyone ought to be able to go about their profit-motivated ways and be fine. It's not a perfect system, but it's a damn sight better than anything else I've heard offered up as an alternative.
Re:Two word solution! (Score:5, Insightful)
To pretend that people can vote with their feet and just embrace alternate ISP's is ludicrous. Businesses can do this - I can buy a T1 from plenty of providers. Consumers generally can't because Congress repealed the unbundling of local loop services. Unbundling was one of the key provisions of the 1996 Telecommunications Act, and this specific regulation successfully promoted competition. Look at the huge growth in small, DSL and dial-up ISP's in the late 1990's. But the re-bundling of local loop and telecom services allows ILEC's who own the (publicly subsidized, monopoly-fueled) phone lines to kick out their competitors. Bye Covad. Bye SpeakEasy.
Since the telecoms killed the regulations *allowing* competition in the baby bells' wiring closets, and all the major telecom providers are merging from a fear of being too small, your small-ISP options are going to evaporate (assuming they're not already gone). That leaves the cable companies, who are rapidly consolidating, and the bigger, post-merger, debt-and-infrastructure-heavy, incumbent telecom providers to choose from. Unfortunately, they all have the same business plan now: milk the infrastructure and perpetuate monopolies and oligopolies, just like the pre-Internet days.
I live in a dense suburb of a major American city. If I want broadband, I can get it from Verizon, Comcast or RCN. Or I can pay a 100% monthly premium for a slower-than-cable SDSL connection from an independant DSL provider. Maybe I'll pay extra because I have some applications which benefit from unfiltered ports, and better upstream bandwidth, but I doubt it. And can I really expect my non-technical friends and family to do the same? For a principle, which almost never gives them any benefits?
Public Interest Research Group has some good analysis of the consumer-unfriendly results of telecom mergers.
http://www.pirg.org/consumer/media/reports.htm [pirg.org]
When someone tells you "The Market will determine the optimal solution for consumers," they usually mean "The monopolies created by deregulation will be very profitable and the consumers get what they deserve." If it's a corporate spokesperson, they're buying (and writing) the legislation to re-shape the market. Why do you think these guys try to block all municipal ISP programs? They're allergic to competition. Look at SBC - they've built or bought all the infrastructure they care to build and now it's time to raise the prices and cut service levels. They could never do this with a truly competitive telecom market.
Why wouldn't you try to get your elected representatives to oppose such legislation? What other avenues are left? Start your own telecom business and compete with Verizon or SBC for those lucrative local phone customers? Not likely - the barriers to entry are too high. Sure, there's lots of dark fiber out there, but there's no excess capacity in the last-mile, local-loop side of things.
-Don
PS - What, exactly, is the ideology that takes the SBC chairman's statements about preparing to gouge consumers and turns that into "Consumers win! Everybody wins!"?
Re:Two word solution! (Score:3, Insightful)
What really pisses me off... (Score:5, Insightful)
They won't be able to have it both ways. Unless Congress gives them some sort of statutory immunity, which I doubt will happen, expect the lawsuits to start from the RIAA, the MPAA, anti-pornography nuts, etc.
Re:Barriers to entry (Score:4, Insightful)
How many new tier 1 providers popped up in the past year?
"They are only bad if they're given the ability to use force, and only government can grant that ability."
Your calls for deregulation are nothing more than allowing those companies to continue to reap the benefits of government force (namely, all those wires run through eminent domain) without having to abide by any of the stipulations through which they gained access to that force to begin with (the requirement to be a common carrier).
The only fair way to deregulate is to tear up the network entirely and let these people build without the advantages of government forcing property owners to sell easements or keep the radio spectrum clear. This is not something I see you supporting.
Re:Two word solution! (Score:3, Insightful)
What's the up-front cost of starting a DSL or cable ISP? Remember, you can't share existing last-mile facilities with the big guys (unless they charge you much more than you'll be able to charge your customers for the resulting services). What's it going to cost to build some new copper or fiber infrastructure, even in a dense urban area? How are you even going to get right-of-way access to buildings? Maybe you can lease the conduits from a power company, like some of the ISP's do. How are you going to connect to the Internet? Don't even think about the public peering points - they're kind of saturated and run by the incumbents. So you'll have to pay someone much bigger for IP's and bandwidth. Good luck with that.
The cable television and local phone service infrastructures took decades to build, with tons of public subsidies, tax breaks, and protective legislation. How are you going to buy enough legislative influence to keep the big guys from regulating you out of business?
In round numbers, I think you would need about a billion dollars.
Let's you and me take on the AT&T death star - how about it, dada21? Sell the ma-and-pa store and let's start talking to banks and VC's about how we're going to beat AT&T or Verizon or SBC in, you know, one or two big, high-margin metropolitan markets. We can do it, right? Just like you competed with Wal-Mart. It'll be easy, like shooting womp rats in your T-16 back home.
Re:Two word solution! (Score:2, Insightful)
While it is true that companies try to erect barriers to entry, the primary tool for doing this has historically been government regulation.
What drives consolidation is not an effort to limit competition, or even to eliminate a competitor. It is an attempt to lower the marginal cost of providing service, and thereby obtain a cost advantage over the competitors.
The problems come when the minimum marginal cost occurs at a volume which is a substantial fraction of the total demand. If, for example, the minimum marginal cost occurs at 1/3 the total market demand, the supply side of the market will stabilize at around three companies. Examples of this are the breakfast cereal and aircraft industries which have a small number of very large suppliers. The case where the minimum marginal cost occurs at nearly the total volume of the demand is called a "natural monopoly".
The communications industry is an example of an industry where the minimum marginal cost occurs at a large volume and therefore we can expect there to be a small number of providers. The consolidation occurs as a result of an effort to achieve minimum cost, not monopolistic tendencies per se.
One typical characteristic of these high volume marginal cost curves is that they tend to be "near minimum" for a long time before they hit "minimum". Consequently, these companies do not have to "push their advantage" price-wise very much before it becomes feasible for a competitor to come in at a much lower volume. This, along with the threat of losing market share to their large competitors tends to keep them honest.
This is according to the general rules you can find in any decent Micro Economics text book. For every rule there are exceptions, and that is what the Justice Department is for. They did it to "Ma Bell" and they can do it again if need be.
Therefore I am not as worried about companies asking for permission to set prices the way they want to, as I am about companies asking for new rules to frustrate the entry of new competitors.
Re:Two word solution! (Score:4, Insightful)
But surely these companies are bastions of virtue who would never dream of putting a squeeze on google, yahoo and microsoft for kickbacks. I'm sure Verizon would never ever block skype. I'm sure Comcast couldn't possibly have a reason to block bittorrent. There's not the slightest hint of conflict of interest and anyone who says deregulation in this instance is bad must be a commie/hippie.
Re:Two Tier Highways (Score:3, Insightful)
I don't agree that this situation is analagous to a 2-tiered Internet. In the case of highways, private toll roads are always competing with a free baseline service provided by the government (a service that is actually excellent in most respects). The private toll highways must be much better than the free baseline just to survive. In the case of the Internet, private ISP dupopolies will control all tiers of service; there is no free baseline to keep things reasonable. ISPs are free to limit their services to be as crappy as they want, and the insurmountable barriers to entry in their market (both physical and legislative) will keep competition from providing what consumers really want at a price they are willing to pay.
Now, if the government provided a free and decent baseline Internet service, much like the free and decent baseline road service, the situation would become much different. In fact, I would argue that they should do exactly this. The only problem with government Internet service is that it would be much more susceptible to regulation. Copyright cartels could lobby the government to implement draconian monitoring and DRM schemes on the public Internet, and the FBI could have a field day with wiretaps. Then again, on the plus side, free speech over the government's Internet would be truly protected by law. And if you decided you didn't like like what the government was doing with its Internet service, you could still opt to pay for a private ISP, which would by necessity be much better than the government's service.
Re:Two word solution! (Score:3, Insightful)
Because people were complaining about it. Two-Tier internet wants to go from open standards to what the Cell phone plan market is/was. People Want things to work simply. You buy a toaster in the USA or canada and you can go plug it in. No adaptor's needed. You go to the store buy phone plug it into your wall and you can make phone calls. (providing you pay for service). I don't mind paying a phone bill to make calls. But I shouldn't have to pay a bill for the right to download something from someone other than my ISP.
Two-tier Internet is like AOL. Sure you can surf the WWW, but you pay a toll when ever you do. You can't use itunes, or other services because AOL charges you extra because you didn't use AOL Music service.
It's a step backward. People are moving away from AOL for a reason. There is more to the Internet than one companies Idea of what you should see. People would have a fit if the government banned every news channel but Fox News, and every store but Walmart. But two-tiered internet will do just that. Combine that with the monopolies already in place, and the Consumer loses choice.
I don't know about you but I can get either Road Runner or DSL from the phone company. Sure earthlink and verizion can bill me but both have to go back through one of those two companies anyway.
Re:Two word solution! (Score:2, Insightful)
They'll do this but not roll out IPv6 (Score:2, Insightful)
Re:Two word solution! (Score:2, Insightful)
That's an interesting analogy. Unfortunatly when it comes to anything technology related, the majority of people making laws or other important decisions simply do not understand enough about what they're doing.
Re:That's because Wal-Mart sells garbage. (Score:2, Insightful)
The U.S. Department of Commerce will soon be defining "durable goods" as something
other than products with an expected lifetime of more than three years.
The problem with the original Ma-and-Pa example can be shown with cheap house paint:
When the cheappo Walmart '10 year' exterior paint needs to be done again in five years,
Ma-and-Pa paintstore are no longer around when consumers realize the need for quality.
"Lobbying Congress" (Score:3, Insightful)
They don't have to lobby congress - it's their network, they can offer whatever QoS they like.
People have been using different levels of QoS to consumer traffic than commercial traffic since consumers starting using the net - throttling P2P traffic isn't "news" and neither is port blocking. Plenty of ISP's block incoming ports, and not all providers route to all destinations, nor are they obliged to by any form of holy covenant (for example, MFN used to deliberately black hole traffic to ISP Manawatu Internet Services [insert long story here]). Blocking out going ports is likely to be slightly more contentious - and subject to regulatory interference - if they are trying to block outgoing common VoIP traffic and they are an incumbant fix-lined telco, but some ISP's already block specific outbound ports (specifically port 25 connections other than their mail servers as a Spam prevention measure).
Routing equipment, transit and fiber is not free to run and neither are the teams that have to design and manage them - as the network grows, costs increase, often dramatically (it's not just a case of "light another fiber" and it all scales magically). This is why providers arn't really keen on those guys who pay 19.99 UKP a month then do 400 GB worth of (mostly P2P) traffic every month - not only does your back bone capacity (fiber and switch equipment) need to be expanded when customers start using that much traffic, but your transit capacity and your connection to the POP/DSLAM - but all of that all twice over, for redandancy of course.
If you don't like the QoS a provider is offering - either pay for a better QoS (as private companies do - those that made large networks cost effective to run at all and without which the general public would still still be on dialup) or try and provide a non QoS'd service yourself and see what happens to your users ability to do simple things like surf the web or play online games when the leechers signup (after being kicked off the other networks). Oops! - the network is full of P2P crap, no bandwith left, packets dropping everywhere, hardware at capacity - customers all leaving, huge transit bill to pay - doh!
The truth is, the relatively small number of people who flood the network with crap P2P traffic - and it really is a small percentage - screw up the service for everyone else (driving up the contention on the line, driving up operating costs very noticeably and driving down other people's download speeds). To make things worse P2P clients (with things like Kazza, rather than Bit Torrent in mind) are typically horribly inefficent and consist largely of noise - not even geniune downloads of files or software people want. That people are doing this primarily as a way to get "OMG FREE WAREZ!1" because they can't be bothered to pay for software/media is reprehensible.
If people were primarily using more efficient clients like Bit Torrent in a resonsible way this would not be such a big issue, though users inclined to share a lot of files for extended periods of time would still be doing more traffic than their 9.99 UKP a month broadband account reasonably entitles them to. BT is a great way of preventing a site or transit connection to a specific provider from being overloaded by a sudden influx of traffic (such as the weekly patching of WoW) - and it does this in a way that benifits end users, the content providers and the ISP's (as it cuts traffic outside the network). However, as a sole transit mechanisim (e.g. for Warez) it's not as desirible or good for users or providers - if users want to start being able to serve files themselves (and so use as much bandwith as download providers use, and be able to offer similar speeds), they need to start paying the same rates companies like File Front / File Planet do for that privilage, because that's how much it costs the ISP to provide that sort
Re:Barriers to entry (Score:1, Insightful)