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Why network neutrality is a big deal

By stretch | Wednesday, October 28, 2009 at 12:41 p.m. UTC


(Image not mine.)

Posted in News


October 28, 2009 at 2:01 p.m. UTC

The longer I live the more I feel like I live in a financial version of the Matrix.

October 28, 2009 at 2:13 p.m. UTC

I think I'll start the paperwork to become an ISP myself so I don't have to deal with this crap.

October 28, 2009 at 2:20 p.m. UTC

The flip-side could be said to be socialised "single-payer network plans", issued by big government.

Removing the red tape of regulation will entice competition, not government mandates. Although gov't-enforced net neutrality appears worthy and innocent at first study, is the following page the direction we really want the snowball to roll?

Let's keep government out of our network decisions, and not get over-excited over the propagandists and fear-mongers. So long as private businesses are allowed to freely compete, prices will always level off.

October 28, 2009 at 2:20 p.m. UTC

that makes me sick.

October 28, 2009 at 2:27 p.m. UTC

@joem: Network neutrality regulations are to protect consumers; the issue you referenced, while a concern, is in no way related to the rules being drawn up by the FCC.

As it stands presently, competition among ISPs in the US is virtually nonexistent, and things are quickly getting worse (as indicated by the recent trend of silently implementing transfer caps). For a better understanding of the proposed regulations, see this article.

October 28, 2009 at 3:04 p.m. UTC

@joem: Let's, as a society, learn exactly what the term "socialist" means so we stop Fox News'ing that word around like that, please. For those who are actually arguing against Net Neutrality have one of two things going on: An agenda not of their own, or a total ignorance to how the Service Provider system really works. One of those on their own is bad enough, together they are lethal.

October 28, 2009 at 3:37 p.m. UTC


i am all about enticing competition, but in the residential broadband market there is absolutely none. most markets in the US are served by 1 monopoly telephone company and 1 monopoly cable company. that's not competition, that's duopoly.

the wireless companies also have residential phone monopolies, so they will not open up their 3g networks to the point that they could be replacements for DSL or cable high speed internet access.

competition would also make this sort of legislation unnecessary, but since there is no such competition we have no choice but to turn to the necessary evil of legislation.

so if the cable and telecom cartels want the government to stop interfering with their networks, then give up your monopoly/duopoly status and allow competitors into the space like BPL, muni-fiber and muni-wifi. if you want to keep your positions as cartels, then you have to submit to gov't regulation that ensures equal access.

they can't have a government granted monopoly AND have no neutrality regulations.

October 28, 2009 at 4:04 p.m. UTC

Nice illustration of how important network neutrality is. Would you care to tell us its source ?

October 28, 2009 at 4:39 p.m. UTC

@liotier: It was posted on Imageshack (or similar image host) and linked in a comment on a Reddit story I can't seem to find now.

October 28, 2009 at 4:57 p.m. UTC

@stretch Found it...

I wonder why the author did not post it on his own site to get some recognition for his very nice work.

October 28, 2009 at 5:22 p.m. UTC

Surely this would open up a market for ISPs in favor of net neutrality. I would never accept anything else, even if it means paying more.

October 28, 2009 at 10:33 p.m. UTC

@stretch: I referenced the issue as a reminder that government intrusion into private businesses also come with unintended consequences. There is what is seen and what is not seen, as Bastiat would say. Whenever competition is limited in any market, it's important to find the source of the problem. More often than not, that problem is a regulation or monopoly imposed by the same government that is asked to fix the problem.

Regulations have a tendency to be formed at good faith, then either fail or snowball into problems that were never initially thought up. Even worse, the same regulatory authority decides to push the envelope even further, and freedoms we once had on the internet are lost.

@Digital: Again, regulations tend to snowball. Just as government tends to grow, so does big business--usually with the help of a big government. An honest law for an honest cause can easily turn into a problem or market distortion not first seen.

My point was obvious sarcasm that the opposite extreme would potentially be just as bad, and that we should be careful what we wish for. I am neither ignorant nor have an agenda. Rather, I have an understanding of political and economic history from broad ideological standpoints.

@chrizzle: Great points. Government granted monopolies of any kind leads to uncompetitiveness. Therefore, our petition should not be asking the government for regulation, but demanding them not to allow monopolization of telecommunications, or any industry for that matter. Let upstarts and businesses from outside markets compete for your subscription.

Regulations in any market hinder growth and competitiveness, to the contrary of their (usually) good faith purposes. Opponents of such regulations aren't always in bed with big business, but often have a strong grasp of the social and economic problems that tend to follow. We're lucky to be in such a mostly unregulated industry. Imagine if we were required to be licensed by government boards, who dictated how we should do our jobs. Sounds a bit crazy? Look at the industries around you.

October 28, 2009 at 10:56 p.m. UTC

Is this real? Where did this come from? Just because you put an inflammatory graphic on your blog doesn't really mean anything

October 28, 2009 at 11:20 p.m. UTC

@alex that's worked out well for Cable TV companies has it? There's a rash of available choices for cable service in your area?

@joem the government doesn't provide high speed links; companies do. Ask Verizon how many million they invested in FIOS. It costs money to bury fiber or cable, buy or lease right-of-way, etc., and once the line is in your neighborhood or house, the likely hood of a competing service coming in drops to almost zero.

As it stands, public opinion and the fear of government oversight has been the only thing stopping them from completely monopolizing their lines so far. But if the encroach slowly, capping transfers, then "shaping" traffic, etc., convincing people that its really OK, and there's nothing wrong with it, we're screwed, as well as lubing the gears in congress (telecom lobbying is a rather big business, on either side of this issue). How about if you live someplace where there isn't a BigName LEC? What if VZ or AT&T isn't your ISP? How long before this type of tiered pricing is applied to the Qwests and the Level3 carriers? You get a discount or a kickback for every 10000 subscribers you have on a limited plan?

The biggest problem is much of our copper infrastructure is reaching its limits. Providers don't want to bury new cable. They don't want to install new DSLAMs, or cable nodes, etc. They want to keep riding the money train, soaking people for more money, for the same or less service.

That's not stopping the demand though. The Netflix On Demand, YouTube, Hulu, etc. In 5 years the amount of content distributed online will make today's current usage look miniscule (just like the usage of 5 years ago looks so tiny compared to today's). That's banking on the hope that the entire system doesn't collapse on itself in another year or two.

October 29, 2009 at 1:13 a.m. UTC

this reminds me a lot of the tragedy that was AOL.

October 29, 2009 at 4:41 a.m. UTC

@nick: It is well understood that the government does not provide high speed links. The likelihood of competing services again depends on the market in the area. If Comcast were offering 50mbps to every home for $20/mo, sure other businesses may not be so quick to drop their lines as well. On the contrary, if the price was ridiculous, competition would be more enticed to come in.

My Comcast residential monthly bandwidth cap of 250GB is an astronomical amount...for now. Just as 25GB would have been a decade ago, should there have been a cap. Businesses have to make a profit too, you know, as dirty as that word seems to have become these days. If I owned an ISP, I might think about capping 1% of my subscriber base that sucked up 95% of my bandwidth as well (bogus numbers for argument's sake). There's at least three sides to every story.

Infrastructure is always pushed to its limits. That spurs innovation and new technologies. We really don't want government bureaucrats deciding how networks should be priced or interconnected, and finding out where that may end up. Regulating growth will only slow it down. You can't always buy into the hysteria that the sky is falling:

If I were looking at today's internet a decade ago when similar arguments were circulating, I'd not only be amazed that IPv4 is still alive and well, but that we've got practical television on our computers without the internet ever buckling. People have a tendency to run to the government to fix perceived problems. Often enough, that's the source of the problem in the first place. Let's not get too hyped up, and let the market and industry compete with each other and work things out as they have for so long.

October 29, 2009 at 6:14 p.m. UTC

@joem I disagree that if the rates were ridiculous another provider would come in. Take rural environments as one example. If you're the only phone company, you're it. If you provide high speed, you could theoretically charge whatever you want, and those who want high speed bad enough would have no choice to pay for it. No company, telcom or not, is going to bury any line that they won't recoup the cost on within 10-15 years (guesstimation, i don't know the exact math and economics of it, but I know it ain't good).

You missed the point about infrastructure. The infrastructure was pushed and taxed years ago. The advancements were made years ago. In newer subdivisions and developments, nobody runs copper outside the house; optical lines are going in that support gigabit speeds (or faster) right into people's homes. They aren't being lit at those speeds, but they are capable. The older subdivisions, nobody wants to incur the cost, they'd rather ride it out until those houses become derelict and are revamped in favor of new ones. 50-70 year cycle times on buried communication lines is not good or wise, or the way we're going to get the country connected. Few are the ISPs bucking that process and actively pushing and burying optical into existing divisions.

The problem is there is no competition in the market, and hardly anybody is going to make the upfront investment in order to bring competition into the game. And this isn't a "perceived" problem, its one that's been predicted for the better part of a decade now.

October 29, 2009 at 11:01 p.m. UTC

@nick: Living in rural environments has problems that go with it, such as a more limited access to services. For a business to lay a line down a block with several homes in a rural neighborhood or with hundreds of homes in a suburban neighborhood, wouldn't you logically expect the rural community to pay for larger portions of the pie? That's just economics. If regulations forced a service provider to do so anyways, than the costs would be pushed to all other subscribers, or the service provider just wouldn't service the area in the first place. Then, should we really wonder why our suburban or urban rates are going up? So basically, you are right in assuming a company may think twice about burying a line in a rural area, as it wouldn't make much economic sense. Living in a rural area has it's advantages and disadvantages.

I'm understanding what you're saying about infrastructure, but perhaps still missing the point you're trying to make. Are you suggesting that ISPs be forced through regulation to lay new lines? Surely that would jack up rates for the rest of us, just as it would if the same lines were laid in rural communities. Pushing the government to dictate how and where a service provider should conduct it's business is not only illegal on constitutional grounds, but will cost us more as well, and put some providers out of business. Talk about a competition killer, that would lead to demands of bailing out the telecom industry. Regulation is a slippery slope.

There isn't no competition, there's perhaps limited competition. In some markets I would agree that there is virtually no competition, but again, for what reasons? It's important to distinguish the reasoning, whether it's lack of demand or plain doesn't make economic sense. When it's neither of those reasons, there's a strong possibility that a branch of government has something to do with it, whether it's regulatory or a granted monopoly. Using the gov't to strong-arm businesses to place infrastructure where it doesn't make economic sense will only harm all of us in the long run.

I should note that I'm on the side of people that want net neutrality, per se. Just strongly disagree in the methods of accomplishing such. Regulation rarely solves problems, only takes one step forward and two steps back. We should really focus on the cause of any monopolies and lacks of competition in each market, because in any industry where the economics make sense, competing businesses will always pit against each other to win over you, the consumer. Imagine the amount of additional overhead network engineers would have if gov't had rules imposed at the router level.

October 29, 2009 at 11:28 p.m. UTC

Wow that would totally suck if that ever happened. That would be the death of the internet.

October 30, 2009 at 11:44 a.m. UTC

While discussion is great, please consider registering if you find yourself posting a good number of comments; registered members' comments are published automatically without having to wait for me to wake up and okay them.

Telecom Guy
October 31, 2009 at 6:39 a.m. UTC

People think that the idea of net neutrality is a new thing, when in fact the telecoms have respected net neutrality prior to there being regulation. Privacy is worth big big money now, and companies like ATT are fighting it now because there is big profit in fucking over the customers and forcing them to do whatever the telecoms please. Telecoms were only meant to be the gateways to the internet, not the police and the profiteers of your personal information. A friend of mine works for a company that builds boxes with software to sniff ISP customer traffic for the sole purpose of advertising to those customers. I'm talking about injecting html in your web browsers, and sniffing every packet you send out. It's really akin to wiretapping, and completely fucking evil. Those who seek to abolish net neutrality, a principal that the internet has lived by since its inception don't know what they have coming to them. I've worked in telecom engineering for years and I promise you your local ISP is thinking up ways to force you into paying more and fucking you over for every penny they can get. The best way to do that is to abolish your freedoms on the internet.

October 31, 2009 at 2:02 p.m. UTC

@Telecom Guy: The sad reality is you can't trust big business or big government to protect your freedoms on the internet. Look at the track record of loss of freedoms from either party's administration over the past century. Corporatist lobbyists and bureaucrats always put on a show of their successes in tackling a problem, then you come to find out all the mischief that has happened behind the scenes against the cause. History repeats itself, let's not get fooled again and trust either side.

Our best luck is competing businesses, and finding the cause of why that may not be happening. If government is in the way, root out the problem. If a case in court cannot be made against the telco's for the sake of our freedom of privacy or other shady monopolistic means, perhaps judicial reform is the banner to hold. The greatest fallacy here is that government will make it all better.

November 2, 2009 at 6:07 a.m. UTC

@joem: Telecoms are natural monopolies. Removing all "government intervention" means they control the market, unregulated, and do whatever they please. The idea that competition is the solution here is insanely foolish. The government has to lay down guidelines ("regulations") regarding what is and isn't acceptable behavior (business practices). No industry functions without regulation. Regulations are just laws governing what businesses can and can't do. You don't think we should repeal fraud laws, do you?

The Internet seems to be working just fine the way it is right now. Let's not fuck that up with some theory that we can "fix" it with "competition". There is no natural competition here.

November 2, 2009 at 1:27 p.m. UTC

@MysteryMantle: Actually, competition among service providers has worked beautifully in countries like Sweden, Japan, and South Korea, who are all years ahead of the US in terms of broadband performance and availability. Unfortunately, the telecom industry's grip on the government is so tight I doubt we'll ever experience that degree of choice in the US. As such, network neutrality regulations are necessary.

Further, assuming the "if it isn't broken, don't fix it" stance here is terribly naive; the actions of many large service providers across the country over the past few years do not bode well for the consumer. Comcast, for example, has already gotten caught covertly throttling customer traffic, and numerous cable providers have recently implemented hard transfer caps in their plans to stifle competition from online video against their legacy cable offerings.

November 2, 2009 at 4:55 p.m. UTC

@stretch: How dare you actually draw from other countries as an example of how backwards the US really is! Shame on you! Don't you know that only dirty anti-americans actually look to working models as examples!! Only the true American just follows what is in the best interests of multi-billion dollar companies and, generally, what doesn't work at all.


On a serious note: It isn't amazing only because of how many people are against this. But, how many of those people are just private people who are just a simple wage-slave. I have Comcast and constantly am constantly having my access throttled. I used to think it was because I was sharing packets and checksums with my fellow peers. However, I realized that it's not only when I'm sharing packets and checksums but when I'm just plain surfing the internet.

I have no competition where I live, absolutely none at all. My friends and family all have different ISP's and they all do the same thing. There is no other way to fix this than Net Neutrality. If people have a problem with the government then that's their own problem.

I know I'm paying out money each month for internet service. I'm NOT paying Comcast to specifically advertise their own companies by controlling my access to certain sites and applications. Anyone who thinks this is government intrusion, I want you to pay a heavy toll to your local city/municipality/township every time you pull out of your driveway, then when you get on the highway, pay a state and federal toll. What? You don't want government intrusion into your personal lives, and since the roads are provided by the government by your tax money, your using government services. (Oh, also send your mail by FedEx or UPS all the time.) See how silly this anti-government fad is?

A guest
November 2, 2009 at 6:20 p.m. UTC

@MysteryMantle: Assuming business cannot function without government intervention and regulation is Keynesian at best, and corporate/fascist at worst. Broadening your economic views to include laissez-faire schools (Chicago and Austrian, for example) will give you a better understanding. These are the economic theories that founded America, and this "foolish" idea of largely deregulated competition is what made our economy the strongest in the world in a very short period of time (assuming you are American). Not intending to indulge into economics here, but it's this mindset that has slowly but surely been putting the shackles on our economy, especially over the past several decades.

Clearly by naming regulation we weren't talking about the common (and legitimate) law against fraud, but regulatory laws and agencies that micro-manage industries. Who regulates the regulators? Utopian belief will say us, but sadly, usually the lobbyists of the same corporations that monopolize. This is another fallacy that stifles competition, and then we wonder how we got here.

The point is you can't really trust big business or big government, because they are in bed with each other. Saying don't fix it and then suggesting regulation is contradictory. Again, there is no Utopia, and competition is always the greatest ally the consumer has. We need to investigate the causes of limited competition, not band-aid the problem with regulation and find that the treatment is only a road-block, or potential new host, for the disease.

November 3, 2009 at 1:24 p.m. UTC

@joem My point is that as long as the company owns the lines to your house, its a natural monopoly, as several others have pointed out. Time Warner isn't going to be able to compete with Comcast for cable service to your house if Comcast owns the line. And multiple providers are NEVER going to bury new lines to compete, nor should they have to.

but once those lines are in the ground, they are a monopoly. The electric and water industries are regulated in this regard (or Duke would be capping me for my "heavy use"). Telecom isn't. Comcast IS capping me and telling me how much and what kind of traffic I can have and use. They don't WANT me watching Hulu and canceling my Cable TV. They don't WANT me to buy all my shows through iTunes or Amazon.

Phone companies don't WANT you to use VoIP or Skype or Audio chat, they WANT you to have a long distance plan, or a cell phone, etc. Does nobody remember the all-out war that was needed just to get naked DSL in some markets?

Cell phone companies don't WANT to become a wireless ISP, which is why AT&T is now talking about limiting iPhone use, which is like 3% of their phones and 40% of their data use or something like that. Rather than trying to bump their infrastructure and accommodate it, they're busy handicapping phones so you have to buy ringtones through them. Or telling you that you MUST get a data plan on any smart phone or phone with a QWERTY keyboard (my latest battle, since my mother wants something easier to text on, but doesn't want or need a data plan).

To date, sure, most telecom has had scruples and haven't been abusing their power. Evidence suggests that time is coming to a close.

November 4, 2009 at 2:25 a.m. UTC

@peelman: On the contrary, in many metros--Tampa Bay for example--Bright House, Knology, and Verizon all compete for television, internet, and phone. Satellite and dialup competes, albeit barely.

The water utility business charges by the gallon. The power company charges by the watt. Cell phones by the minute. Once upon a time, long distance was by the minute, too. Should we really be that surprised when internet usage and bandwidth grows exponentially, that a service provider might want to put a high ceiling on a low single-digit percentage of internet users, likely users running a whole lot of P2P? They don't want you to use more of their resources at the same price, however we should be glad we're able to.

Remember when Prodigy, Compuserve, and AOL charged by the hour? Competition ended this, not regulation. Companies don't want to ever have to upgrade, but their competitors did, so they have to keep up. Competition gave us this, not congressional mandates.

@Andy_la_rue: More like a pro-big government fad that's been going around lately. The pro- limited government fad started 233 years ago. We can learn a lot from history, domestic and foreign, and keep it from repeating itself.

@stretch: You make decent points, but I have to disagree with your solution. Big business is so buddy buddy with bureaucrats, that we need to allow the bureaucrats to regulate the internet? Have to read between the lines a bit. This is part of the reason we don't want bureaucrats to regulate the internet. That would be jumping out of the frying pan and into the fire.

God help us when bureaucrats begin to decide what content on the internet should be regulated, as well. In the name of "helping the citizen and consumer" or "protecting from cyberterrorism", there's no limit to what a politician or bureaucrat may amend or tack onto existing regulation, once the initial foundation has been set for them to be able to do so. Public good buys votes, no matter what the consequences are when they are out of office. What's terribly naive is believing that could never be around the corner. Again, we have to be careful what we wish for.

November 6, 2009 at 9:40 p.m. UTC

Information, whatever shape it takes, isn't electricity, which must be derived by consuming things (coal, nuclear fuel) or generated by expensive hydroelectric dams or windmills or solar cells, etc, or water, which has to be purified, and delivered by massive pumps. Both are exponentially more expensive to create and deliver than data service. (don't get me started on cell phone providers...the minute-by-minute crap and the cost of SMS messages vs the volume sent/received should be illegal)

There is a MAJOR difference between me letting all the faucets run in my house, turning on every light and electrical device, and saturating my cable modem. The cost difference between consuming utilities like electric and phone are real, consumable, tangible things. The cost of data service varies miniscule amounts whether i'm using all or nothing of it; the only thing that really changes is the amount of electricity used and that's negligible. What DOES cost is the bandwidth my provider buys from THEIR provider. When my provider oversells their lines by an excessive amount, and then has trouble keeping up with demand during peak hours, is that the consumers fault, or the providers? I don't buy this "shared responsibility" bullshit on that front.

Prodigy, Compuserve, and AOL charged by the hour, but they didn't provide the lines going to your house, your phone company did. Maybe they WERE your phone company, but they weren't mine. Back then you paid a phone bill, oftentimes with a second line added on, and a dial up bill; or you ate the cost of a hideously expensive ISDN line.

And while i'm glad that "many metros" have competing services, many don't. And more still are the places outside cities that don't and probably will NEVER have competition. You really want to wait on the providers to decide to try to compete for business in those areas? You would be willing to spend a million bucks to lay fiber to one housing development then COMPETE with the other guy (who may have a substantial portion of their cost paid off or written off already) for service?

I will leave out the politics of the matter, they aren't relevant. If you want to be afraid of your government, be my guest, Fox News will welcome the additional viewer.

November 15, 2009 at 8:47 p.m. UTC

@peelman: A service provider's infrastructure, just like an electric or water company's infrastructure, must be maintained. In addition, a service provider must also continuously upgrade their infrastructure to the latest equipment to keep up with ever increasing bandwidth requirements and technologies, something an electric and water company, for example, doesn't have to do nearly so often. Imagine if the water company had to continuously lay bigger pipes to the same parts of town. Obviously we're not exactly comparing apples with apples, but the point is made. There are many factors here, but the fact remains, service providers have their overhead costs just as much as any other utility company. The major difference is that other utilities don't exactly have to worry about the frequency in technological advancement and scalability as the service providers do, and that costs money.

If every customer capped their purchased bandwidth at the same time, the service providers would not be able to keep up--over-subscription. Just the same if everyone in town flushed their toilets at the same time. The electrical pulses obviously takes up a minuscule cost of resources, however the infrastructure does cost money to roll out, and re-roll out to keep up with the times. Don't forget about customer service and the other costs related to any business.

The point made with dialup companies was the cost savings over time. Costs per bit have dramatically decreased. 14.4kbps charged by the hour versus 6mbps charged by the month (for example) is a major difference. No gov't regulation forced the expansion of bandwidth, but consumer demand and corporate competition did. Despite being part of an exponentially growing industry, we're never satisfied.

Complaining that places inside a smaller suburban or rural area don't have the same utility bandwidth as a metro is pretty ridiculous. That's like demanding a three-lane highway between a barn and the farmer's market. You're not going to get the same facilities in a city or town outside of a metro as you would inside of one. Simple supply and demand plays here. Should the costs really be subsidized by having folks in a metro area pay for expensive lines to low density areas? That's like demanding the local water company to replace well water with city water and sewage in rural areas, and expect the metropolitan area to pay for it in their taxes. There are perks to living either in a metropolitan or low density area, but definitely no utopia.

Everything is political -- net neutrality is politics. I however don't appreciate being compared to a "Fox News viewer", as I'm not fond of their news outlet any more than the others. They are corporatists on the most part, just as many other outlets just push big government. Opposing big government doesn't always make you a Republican, sometimes just an intellectual keen to political economic history. I'm trying to make an intellectual argument here to show that their is a legitimate alternate opinion, not act immature and label folks. The problem isn't that I'm afraid of my government, but that folks have so much trust into it. Ask the Native Americans how much they trust their government. Big government is just as monopolistic and untrustworthy as big business, let's not kid ourselves. Let's just make a hypothetical argument and ask, if you do trust the current Congress and administration, who's to say you will trust the next?

January 18, 2010 at 7:37 p.m. UTC

@peelman: If the government forces a company to eat the cost of laying down lines, the company will stop laying them down. If the government pays for the lines they have to spend more money which is both a political and economic mess. If cities lay down there own lines than the voters are happy until the tax bill increases- come next election no more lines will be laid. If the government removes it's barriers to competition (and in fact encourages it in that way) well that might help a bit, but it wont fix the problem. If any of us wants to fix our wallet problem with ISP's, don't wait on someone else to fix you, just pay the piper for doing his job and get clever about what you want.

February 26, 2010 at 11:03 a.m. UTC

Where does this image come from ?

I want to use it for a conference on the net neutrality.

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