My friend Andy Regitsky, whom I have known for more than 30 years, follows the FCC, blogs about them, and teaches courses on — among other things — how to read and understand their confusing orders. Andy knows more about the FCC than most of the people who work there and Andy says the new Net Neutrality order will probably not stand. I wonder if it was even meant to?
You can read Andy’s post here. He doesn’t specifically disagree with my analysis from a few days ago, but goes further to show some very specific legal and procedural problems with the order that could lead to it being killed in court or made moot by new legislation. It’s compelling: Andy is probably right.
I’m not into conspiracy theories, but this Net Neutrality situation suggests a strong one. Let me run it by you:
1 — The new FCC Chairman, Tom Wheeler, comes from the cable TV and wireless industries where he worked as a top lobbyist. He’s a cable guy.
2 — Wheeler proposes the exact sort of Net Neutrality rules we might expect from a cable guy, keeping the Internet in Title I of the Communications Act as an Information Service and allowing ISPs to sell fast lanes to big bandwidth hogs like Netflix.
3 — The big ISPs, having got a lot of what they wanted, still smell blood, so they take the FCC to court where much of the order is struck down — enough for the FCC to either back down or rewrite. Wheeler decides to rewrite.
4 — Somewhere in there comes a phone call to Wheeler from President Obama and suddenly the former cable guy becomes a populist firebrand, calling for Internet regulation under Title II, just as Verizon threatened/suggested in court.
5 — The new order is exactly the opposite of what the big ISPs wanted and thought they might get. It’s Armageddon to them. What are they going to do? Why sue of course!
6 — The new order is seriously flawed as Andy points out. It’s a mess. But at this point it’s also the law and if life is going to get back to something like normal all sides are going to have to come together and agree on how to move forward. Verizon or some other big ISP can sue and get changes, but will they get the right changes? They didn’t the last time.
7 — The better solution is for Congress to change the current law or write a new one. But this is a Congress that’s against the President, though maybe not solidly enough to override a veto.
8 — So the big ISPs have their lobbyists lean on Congress to write such an Internet law but make it one that won’t be vetoed. The Internet goes back under Title I as an Information Service but Net Neutrality is codified and maybe even strengthened. President Obama gets the law he wanted all along but couldn’t rely on his party to produce.
Can this have been the point all along?
There is no way the big boys will let the people have the Internet. They have to own and control it like everything else that might influence public opinion.
Depressingly likely.
@TerrySmith: Cynicism is the converse of cheerleading. The pertinent difference between the two is that cheerleading does not pretend to be objective. Cynical shaming is but a poor substitute for actual knowledge.
Ya, but there’s always a chance this could blow up in the faces of the cable/telecom group. The internet has shown a resiliency in the past to deter control:
Monitored email—->encryption proliferates
Block websites—>proxy connections.
Choke data speeds—>….black swan…?
Could be some type of “internet overlay” using cell phones and other wireless connections.
Me, always the optimist. (Like Winston Smith, hearing the proles commotion in the street. He at first thought it was a revolution, but it was only a minor uproar about a decrease in the rations…)
a phone call to Wheeler from President Obama and suddenly the former cable guy becomes a populist firebrand,
Along with 4 million comments, and calls from companies like Apple calling for the same thing President Obama did. I suspect Wheeler caught a whiff of torches, tar, and feathers.
Congress to change the current law or write a new one
This Congress can’t approve an Attorney General that would replace one the majority hates with a burning passion, network neutrality will never even get to the floor.
As much money and lobbying power as Comcast, AT&T, Verizon et al have, I think you underestimate what lengths Google and Facebook may have gone to in lobbying for Net Neutrality.
Begun the corporate wars has
Good one!
Is this like the fast food wars is Demolition Man???
“Conspiracy” might be overstating it. Just the usual political maneuvering. But it’s not a stretch. I was thinking along the same lines, because Obama himself also has ties to Comcast:
http://articles.philly.com/2011-08-24/business/29922380_1_comcast-executive-vice-president-president-obama-comcast-s-roberts
But then, if Obama is playing a longer game, he might be setting up the Republicans for a populist backlash. It will be fascinating to watch.
“Never attribute to malice that which is adequately explained by stupidity.”
These days we get both…
.. on Faux news!!!
.. or MSLSD.
There are few cases that this doesn’t cover, and those are mostly greed.
According to this article, Google likes Net Neutrality except those pieces that it got pulled.
http://nypost.com/2015/03/28/google-controls-what-we-buy-the-news-we-read-and-obamas-policies/
It’s like any other piece of massive regulation, subject to capture by the big players who work the regs to their own benefit and the detriment of their competitors.
As for me, I can’t see what all the whining is about when it comes to charging more for more bandwidth usage. I pay a certain fee when I take the Mass turnpike in my car. A trucker in a four axle truck pays a higher fee and the eighteen wheelers pay top dollar because they cause more wear and tear on the road.
The same goes for providing more bandwidth, the ISP has to install faster and more complex gear to make it happen. Over time the technology improves and becomes cheaper so that we all benefit in the end. What was expensive and scarce in the past becomes cheaper and widely available with time. Maybe not right away, but it’s always happened in my lifetime.
AFAIK there’s nothing in net neutrality, as discussed and proposed, that prevents charging by the byte (or, more likely, gigabyte). What it’s prevents, or is supposed to, is charging Google $X/byte but charging the Republican National Committee $X^2/byte. The requirement is that you charge everyone the same amount of money for the same service.
Net neutrality is not what passed, but a much larger set of rules that made Internet into a public utility to be regulated by the government. So every new service is subject to their control based on this reclassification like it is phone service.
The internet is already regulated by the FCC. The question is what level of regulation will apply.
“We’ve already established what you are ma’am. Now all we’re doing is negotiating a price.”
I have decades of experience pricing IT products for extremely large corporations. I am extremely qualified to explain how ISPs should allocate their costs to customers and determine how the price their products should be determined.
In regard to ISPs’ products, there are 4 elements that define what a customer has been provided:
1. Transmission and reception speed (bits per second)
2. Transmission and reception quantity (bits per month)
3. Transmission and reception latency (milliseconds to complete initiation)
4. Transmission and reception quality of service (percent success in achieving minimum speed and latency – 1 and 3 above)
Problems have occurred because ISPs are not charging customers appropriate amounts for these 4 factors. This distorts the fairness of cost allocation among ISP’s customers and obfuscates what the appropriate prices for the products should be.
Suggesting that ISPs should charge everyone the same amount regardless of the amount of these 4 factors a customer receives is, of course, ridiculous. No rational discussion is suggesting that.
There is a concern that ISPs charge too much for their products. This is not a reason to unfairly allocate cost. ISPs should not be allowed to charge too much for their products. There is not enough competition in the market and price controls are necessary.
There are concerns that if ISPs start allocating cost on the basis of these 4 factors that they will over-charge some or all of their customers even more than they currently do. This is not a reason to unfairly allocate cost. ISPs should not be allowed to over-charge their customers or unfairly allocate costs.
There is a concern that ISPs might start charging smaller users more per usage of the 4 factors than larger users. That would obviously be unfair and it should not be allowed. Customers who use more of the 4 factors should proportionally pay more.
With regard to users who are financially unable to pay for their fair share of a product’s cost – it is perfectly acceptable to provide whatever subsidy is deemed appropriate – but, it should be completely transparent as to the amount of the subsidy received and the subsidy should not be hidden in the prices paid by unsubsidized customers and the subsidies should not come from other customers. How (or if) a society supports financially challenged citizens is a topic beyond the scope of this discussion.
There is a concern that small businesses cannot compete with large businesses if cost allocations were different than they are today. This is not sufficiently logical to support incorrectly allocating costs to small businesses. If small businesses cannot compete with big businesses if internet access costs are fairly and accurately allocated and if this is considered to be an appropriate concern:
Then, it would be appropriate to provide subsidies to small businesses. The subsidies should be transparent and easily known. The cost of the subsidies should not be hidden in or part of the prices paid by unsubsidized businesses. How (or if) a society supports financially challenged small businesses is a topic beyond the scope of this discussion.
There is a concern that ISPs perform “traffic shaping” in unfair ways and charge inappropriate amounts. Customers should pay for what they receive on a fairly allocated basis. Those who use more should pay more. ISPs should not be allowed to charge prices that do not correctly reflect the cost of what is received.
There are technical and theoretical complications that involve the fact that there are multiple customers involved in the transmission and reception of data over a network. This is a complex issue. A simple way of explaining the correct allocation of cost is as follows: a transmission should be performed at the lower paying customers’ rate – regardless of whether it is the sender or receiver.
Ideally, if it were possible, if one party of a transmission wants to pay for temporarily upgrading the other party’s service for the specific transmission between the 2 parties, the cost of doing so should be allocated appropriately. Obviously this is a complex thing to do and would be difficult to perform.
And… this is the crux of the “Net Neutrality” issue. Within the context of an environment where costs are currently not being allocated fairly and priced appropriately, how would a corporation such as NetFlix provide its multimedia streaming service and be charged the appropriate amount for doing that on the internet? Obviously NetFlix should pay more to have a higher level of service. The price that NetFlix should pay for a higher level of service should appropriately reflect the cost of doing so.
To suggest that no one can have a different level of internet service is, of course, ridiculous and obviously not what is currently being done today. In the current environment different users are paying different amounts for different levels of service (albeit inaccurately and unfairly). The current inaccuracy and unfairness does not seem to be the current issue. Apparently individuals are concerned that the situation of internet access pricing may become even more unfair than it is currently. But, that certainly does not support restricting NetFlix from paying an appropriate amount for a higher level of service.
Thus, the concern of NetFlix paying additional amounts for higher levels of service is specious. The real issue is that the current pricing for internet service is unfair and individuals are concerned that it may become even more unfair.
Perhaps what is happening is that the ISPs have historically implemented irrational pricing of their products and when they try to implement changes that better match price to usage it upsets customers.
Obviously customers should expect to pay more if they get more.
Another reason ISPs may have problems implementing price changes is because customers think that ISPs charge too much for their products. Customers may think ISPs may attempt to charge more for what is already overpriced products. The customer’s beliefs may be incorrect.
Here’s how I understand Net Neutrality:
( I just made up numbers… you get the idea )
———————
– Net Neutrality options:
$100 High End: unlim GB, 500MB/s+
$60 Mid Level: 5Gb/mo, 200MB/s
$15 Low End: 2GB/mo, 15Mb/s
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———————-
– Without Net Neutrality:
All plans include 1Hr/day Facebook, ISP mail, 10GB general traffic + $3/GB overage unless specified.
$100 Platinum: unlim Facebook, unlim YouTube, your choice Google, yahoo or MS email, 50GB Low Latency/high speed data, 100GB general traffic
$40 Thrify Package: Google mail, 500 Whatsapp texts, 30GB general traffic
$10 Survey Supported: respond to 3 customer surveys a day and get our base Facebook, ISPMail and 10GB general traffic for a steal.
Add Ons:
$10 Video Gold add-on: unlim YouTube,
$10 Facetime add-on: 200 minutes of Facetime
$10 MS Family: 200 minutes of Skype, unlim YouTube popular, 50 min Youtube IndyArtist,
$20 Sport Add-on: 5 hours of ESPN Live, unlimited replay, unlimited away games. discounted VR local.
$50 Gamer Add-on: 100GB super low latency high speed access to the top 10 action games.
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Note: Facebook, Skype, ESPN, Email etc access do not use your general traffic allotment so long as you have not gone over those specific service allotments. Once the allotted caps have been met you may continue using those services until your general traffic cap has been met. Once the allotted general traffic cap has been met your service will not be interrupted and you will be automatically charged $3/GB.
Note: once your Facetime minutes are used up you can continue to use Facetime so long as you have general traffic remaining.
ijones,
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I agree with the possibility that ISPs are pressing for irrational and unfair pricing schemes. This is because ISPs have always implemented irrational and unfair pricing schemes.
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For example, originally ISPs charged the same regardless of how many bytes you uploaded and downloaded per month. That is obviously irrational and unfair.
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If one customer downloads 10 times as much as another customer, obviously he should pay more.
jjones,
Also, by the way…
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Unlimited download quantity per month is irrational It is not possible and fails to define a reasonable cost for a specific amount of product.
I agree completely that “unlimited” is not a good metric… surely you recognize it from cell phone billing lingo?
I guess I needed to write it as unlimited* 😉
LOL…
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And that further illustrates my point.
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If the federal government does not step in and force the ISPs to use rational and fair billing processes, the US internet is going to become a mess.
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We do not want an Internet design distorted by irrational allocation of costs.
At a predetermined maximum bit-rate and a maximum amount of time per month, there is a physical limit to how much can be downloaded in a month. To a consumer, unlimited really just means “We aren’t going to cut you off if you download at full speed for the entire month”. “Unlimited” pricing can be priced rationally given the other factors in the service plan. The trouble is when they advertise unlimited and then start throttling so that they can fit even more “unlimited” customers on the same channel/trunk.
If they’re going to institute usage caps in (non-wireless) pricing, they better have some in the 500GB to 1 TB range for video consumers. 150GB to 250 GB is inadequate for cord-cutters.
Bruce C.,
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I agree with your comments.
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If ISPs start implementing caps, then as a product manager I know that prices for some of the ISPs’ customers should go down.
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The ISPs originally disingenuously attempted to create additional profits by instituting usage-caps without appropriately decreasing costs for individuals who used very little bandwidth.
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Individuals intuitively suspected that the newly instituted usage caps were unfair… even though they didn’t understand the exact cost allocations that were being irrationally implemented.
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ISPs have created a trap for themselves in which they don’t fully understand why and how they ended up being trapped within their current pricing schemes. Their problems are caused by their greed and inherent dishonesty that doesn’t allow them to see how simple, fair pricing is the solution to their problem.
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Often dishonest, greedy individuals feel opaque pricing provides an advantage in maximizing profits in financial transactions. Intelligent customers know to avoid opaque pricing whenever possible. Opaque pricing is irrational and serves no useful purpose.
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Unfortunately this situation has caused an irrational discussion called “Net Neutrality” to take place.
‘Quantity’ (number of bits delivered) is the irrational way to look at this. I don’t want my monthly bill to fluctuate – so I prefer being billed for a given set speed per second. The key here is I want to be able to use that speed (baud rate) anytime I choose to without limitation – to ensure a certain quality of experience with whatever I am doing, be it streaming video, playing a multiplayer online game, or sharing a Skype call with mom.
A quantity billing scheme wouldn’t address the quality issue – and even though you might be able to download a lot of data at a slow speed over a long period of time, any service that may require near real time performance might still come up short under such a scheme. So, what are you really paying for?
Re: “any service that may require near real time performance” The way to solve the real-time performance issue, at least for TV, is to eliminate the need for real-time performance whenever possible. Use old-fashioned OTA, old fashioned cable TV with a DVR, or Internet downloads for future playback. The internet streaming model, currently imposed by content providers, is extremely wasteful of bandwidth since it requires a separate connection to each viewing device at the time that viewing is done (prime time). The cable and OTA models allow everyone to tap into a singe stream, and to view the content whenever they choose if they add a DVR.
Robert, everything correct, except in “…Net Neutrality is codified and maybe even strengthened”, substitute “Fast Lanes” for “Net Neutrality” and a gleeful poke in Obama’s eye by Congress.
It’s all about making the Internet safe for Hollywood. That’s all, nothing else. The film and television industry learned the lesson of Nappster: Don’t let your stuff get lose on the Internet, once it goes on to someone’s hard drive it’s gone forever. By forcing a circuit-switched “streaming” model on a network that wasn’t designed to do that, Netflix et al broke it. Now, instead of admitting they screwed up and going to a more network-friendly model, they’re going to attempt to legislate engineering and network design.
Oh, and don’t forget that the FCC is funded by service fees. So you WILL get a ‘net neutrality tax.
I read as far as this and stopped reading:
“If the record demonstrates that broadband providers have all the tools to damage net neutrality, surely there would be numerous examples of these providers actually damaging the Internet while lightly regulated under the current rules.”
Smells like bad faith.
Agreed. The best example I can think of is the performance comparison between a normal ISP to Netflix connection and one made over a vpn, so that the ISP couldn’t see the data. http://lifehacker.com/use-a-vpn-to-bypass-your-isps-throttling-of-netflix-or-1608538080 . (ISP in these examples include Verizon and Comcast.) Yet the ISPs do have a point that IPTV can be very costly (i.e. wasteful of bandwidth) due to its current non-recordable streaming model that requires a separate connection to every device on the network every time those devices display content, even at prime time. As a result, it should be paid for by the IPTV users, not by those customers who pay for cable or OTA TV, each of which makes far more efficient use of bandwidth.
Whenever big events occur, conspiracy theorists come out of the woodwork, like crickets. This is exhibit #7,481 of that phenomena. Lets move on to something else that is a reasonable representation of the real world.
Yo, Bob –
Are you still blogging at Forbes? I only ask because I visit there exclusively to get more Cringley, but there’s been nothing new since “Anatomy Of A Layoff: How IBM Is Likely To Spin This Week’s Force Reduction” back in January.
Let me know if I should stop bothering.
BTW, even though I like the stuff you write here, what you write for InfoWorld is good, too.
Tenaya
Same here. Checked out Forbes for awhile, but now nothing….too many concurrent projects I assume?
If a cable that carries the internet runs under public land, then the public has the right to regulate it. How wireless carriers get away with raping their customers is appalling. Trying to spin the regulation of the internet into a pure supply and demand proposition only underscores what most people fear, and that is a telecom industry that operates without adequate regulatory constraints.
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