President Obama Urges FCC to Make Internet a Utility

Obama proposes four 'net neutrality' rules.

net-neutrality-bits-cables

President Obama argues that ”An open Internet is essential to the American economy, and increasingly to our very way of life” and should therefore be regulated like a public utility. Therefore:

I believe the FCC should create a new set of rules protecting net neutrality and ensuring that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online. The rules I am asking for are simple, common-sense steps that reflect the Internet you and I use every day, and that some ISPs already observe. These bright-line rules include:

  • No blocking. If a consumer requests access to a website or service, and the content is legal, your ISP should not be permitted to block it. That way, every player — not just those commercially affiliated with an ISP — gets a fair shot at your business.
  • No throttling. Nor should ISPs be able to intentionally slow down some content or speed up others — through a process often called “throttling” — based on the type of service or your ISP’s preferences.
  • Increased transparency. The connection between consumers and ISPs — the so-called “last mile” — is not the only place some sites might get special treatment. So, I am also asking the FCC to make full use of the transparency authorities the court recently upheld, and if necessary to apply net neutrality rules to points of interconnection between the ISP and the rest of the Internet.
  • No paid prioritization. Simply put: No service should be stuck in a “slow lane” because it does not pay a fee. That kind of gatekeeping would undermine the level playing field essential to the Internet’s growth. So, as I have before, I am asking for an explicit ban on paid prioritization and any other restriction that has a similar effect.

If carefully designed, these rules should not create any undue burden for ISPs, and can have clear, monitored exceptions for reasonable network management and for specialized services such as dedicated, mission-critical networks serving a hospital. But combined, these rules mean everything for preserving the Internet’s openness.

Later in his statement, he draws an analogy with telecom utilities:

To be current, these rules must also build on the lessons of the past. For almost a century, our law has recognized that companies who connect you to the world have special obligations not to exploit the monopoly they enjoy over access in and out of your home or business. That is why a phone call from a customer of one phone company can reliably reach a customer of a different one, and why you will not be penalized solely for calling someone who is using another provider. It is common sense that the same philosophy should guide any service that is based on the transmission of information — whether a phone call, or a packet of data.

So the time has come for the FCC to recognize that broadband service is of the same importance and must carry the same obligations as so many of the other vital services do. To do that, I believe the FCC should reclassify consumer broadband service under Title II of the Telecommunications Act — while at the same time forbearing from rate regulation and other provisions less relevant to broadband services. This is a basic acknowledgment of the services ISPs provide to American homes and businesses, and the straightforward obligations necessary to ensure the network works for everyone — not just one or two companies.

Nick Gillespie, who lampoons the plan under the headline “Obama: Government Should Regulate Internet to Keep it Free,” turns the president’s analogy back on him:

Reason contributor and Clemson University economic historian Thomas W. Hazlett defines Net Neutrality as “a set of rules…regulating the business model of your local ISP.” The definition gets to the heart of the matter. There are specific interests who are doing well by the current system—Netflix, for instance—and they want to maintain the status quo. That’s understandable but the idea that the government will do a good job of regulating the Internet (whether by blanket decrees or on a case-by-case basis) is unconvincing, to say the least. The most likely outcome is that regulators will freeze in place today’s business models, thereby slowing innovation and change.

Obama is old enough to remember Ma Bell, which was even worse to customers than today’s cable and Internet providers. And he is smart enough to recognize the Orwellian contradiction in introducing onerous new regulatory regimes in the name of keeping anything “free.” The FCC has never been particularly adept at acting in the “public interest.” The less control it has over the Internet (and TV and anything else), the better off we will all be.

Texas Senator Ted Cruz responded with a clever turn of phrase on Twitter, dubbing net neutrality “Obamacare for the internet.”

While I’m inclined to share Gillespie’s worry that regulation will stifle “innovation and change” in what is, after all, still a burgeoning industry, it’s hard to see how the first three suggested “bright line” rules would have that outcome—and very easy to imagine how blocking or throttling would. The fragmentation we’re seeing in the rest of the telecommunications industry—with certain television shows, movie studios, music labels, publishers, sports packages, etc. relegated to a single provider or at least excluded from one or more of them—is really bad for consumers, at least in the short run.

So long as NFL Sunday Ticket is available only to DirecTV customers, they have a huge leg up on the competition for delivery. Whether Comcast’s Xfinity or Verizon’s FiOS are better products otherwise is a moot point to those who want to have every NFL game available on their television package. That’s the free market at work, I suppose, but what if Xfinity makes a similar deal with the NCAA for college football and basketball games? And FiOS does the same for the NBA or MLB?

I’ve got no interest in streaming Taylor Swift’s latest album, for example, but don’t like the fact that it’s not on Spotify—even though I’m not a Spotify customer. Similarly, while I’m a Netflix customer and enjoy some of their original programming, I’m not a fan of the trend of requiring customers to subscribe to multiple services and use multiple devices in order to access programming.

I’m somewhat amused, however, by the president’s fourth principle: “No paid prioritization. Simply put: No service should be stuck in a ‘slow lane’ because it does not pay a fee.” While I support this notion in principle, for reasons similar to my concerns about the fragmentation of entertainment services, I’d note that we’re going in the opposite direction with the example Obama’s analogy is drawn from. Our road network is our oldest public good and so sacrosanct to a functioning economy that even Adam Smith insisted that they were a core government responsibility.  Yet, in the DC area at least, we’re in the process of massive construction of toll roads to allow those with the ability to pay to escape the horrible traffic of I-95 and other congested arteries. Surely, the Internet isn’t more essential to the economy than the road network?

FILED UNDER: Economics and Business, Government, Science & Technology
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Rick DeMent says:

    The only think that will “stifle innovation” is allowing really big companies to cut deals with ether other or divisions within their ow unimaginably huge mega corp that have nothing to do with serving consumers and everything to do with limiting choice though the own semi-monopoly position.

    While companies may have a legitimate beef about some customers who hog tons of bandwidth (yes I’m looking into the mirror right now), cutting backroom deals with content providers (who are often simply different divisions of the same company) is not the way to deal with it. It is the most anti-competitive, market distorting kind of nonsense we should have started to put the brakes on 25 years ago. They simply need to tier the cost of providing the bandwidth in accordance with what the market will bare and bam, their problem is solved. And I say this as someone who would almost assuredly lose in this kind of regulatory environment. But that’s not the point and never was, it about further consolidation and limiting choice for consumers.

    Having said that the cost of bandwidth in this country is freaking outrageous, the rate we pay is based on a monopoly by a few powerful players who are bent on choking off anything that sounds like innovation. It’s particularly galling when you think that the american taxpayer has funded everything from the development of basic protocols, software, the protection of that IP another area that is sorely in need of an overhaul) and heavily subsidized the copper for delivery. The idea that these crooks are trying to claim some kind of “free market” argument to justify what is essentially cornering the market on bandwidth, is not only insulting, but is also exactly the kind of issue that you can’t, under any circumstance, get people to care about until long after the deed is done and Doug has the hook already set in his mouth.

    Teddy Roosevelt where the hell are you.

  2. I’ve got no interest in streaming Taylor Swift’s latest album, for example, but don’t like the fact that it’s not on Spotify—even though I’m not a Spotify customer.

    Let’s be clear: Taylor Swift pulled her music from Spotify because the payouts were pennies. Spotify did not exclude the music. Macy’s carries things Nordstroms doesn’t, and vice versa. Target has exclusive products. So does WalMart. AT&T had a 5 year exclusive on the iPhone. This is business. Obama is calling for regulation on things that haven’t really happened yet.

  3. MarkedMan says:

    This is the libertarian problem in a nutshell. The world learned really hard lessons about monopolies and the damage they could do, and fought for decades to free up markets from their distortions. Libertarians want to throw out all that real world experience because of a bunch of dorm room debates they had where they convinced each other they understood markets better than everyone else because, well, Ayn Rand. Their arguments usually consist of sarcasm and blather and they feel they have won an argument when they’ve executed a really snarky put down. It looks like that is playing out here.

  4. Argon says:

    The main problem is that the ‘road builders’ are also the ones who sell you gas and only connect to roads where other gas providers pay a fee for that connection to other roads. It’s a perfect setup for anti-competitive shenanigans.

    In a world where there was true competition, ISPs would be actively building connections to other networks so that they can claim to have the best and most reliable access to services like Netflix. But just the opposite happens today. Instead, they throttle or charge other services for preferred connections. It’s a walled garden.

    Make ISPs compete for providing fast connections to users instead of content. Separate the content and delivery by making internet delivery a common carrier service. Case in point: Consider the players who have lobbied for state laws to prevent towns and cities from setting up their own ISPs. Why wold they do that?

  5. Rick DeMent says:

    I’m sorry thought this was a Doug post … My bad.

  6. James Joyner says:

    @Rick DeMent: I think the libertarian “unintended consequences” argument has merit. Broadband, especially as it applies to mobile, is still relatively new and we don’t really know where the industry is headed. I’m fearful of stifling innovation through well-intentioned regulation based on the status quo. But there are real world dangers out there, too, that we need to protect against.

    When the net neutrality issue first came on my radar screen a few years back, the pressure was from the other direction. Streaming services, including Netflix’, were just coming into wide usage and there was a reasonable argument coming from ISPs that they ought to be able to throttle or charge more for those customers and/or companies because otherwise everyone else was going to have slower Internet. But, with consolidation in the industry, there’s a greater danger that a Netflix will partner with a Comcast, say, and not only give their service a fast lane but put competitors into a slow lane.

  7. Rick DeMent says:

    @James Joyner:

    I think the libertarian “unintended consequences” argument has merit.

    Well all arguments in this regard “have merit” what I am fascinated with is why the obvious and already in play consequences, many which you cited, seem to be of little concern to you and libertarians in general. We have seen what is going on with the near monopoly control content providers are coalescing around and frankly if anyone can cite an example of how those practices are mid-wiving the kinds of innovation that will expand consumer choice at lower prices I would be all over it. But I have not seen one example of how expanding monopoly control has done that. Innovation that only hoovers up more cash for consumers is not the kind of innovation that moves the ball down the field. I mean really, they broke up Hollywood studios for a lot less then the consolidation that is going on now yet Libertarians seem to want to look the other way at the obvious and concrete negatives that this consolidation has left us with.

    The solution for ISP’s is to simply tier bandwidth. Bam problem solved in a way they doesn’t hand over more power to companies that have too much of it already, any other issue that come up can be dealt with though forbearance provisions. The status quo has produced remarkable results, in this case the greater danger is upending that framework for a system that has no clear benefits other then you know unicorns and enriching the all ready well enriched.

  8. stonetools says:

    @William Teach:
    Adam Smith:

    People of the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public or some contrivance to raise prices.

    One of the many Adam Smith quotes that libertarian types forget. The plain fact is that government often must regulate competition in order to promote competition. TR recognised that a century ago, and Adam Smith almost 150 years before that. Unfortunately, Ed Gillespie ignores history in favor of propoganda and slogans.

    Obama is calling for regulation on things that haven’t really happened yet.

    Yeah. We call that “forward planning.” Its something intelligent humans do.

  9. Console says:

    @James Joyner:

    In a normal market, the solution should be to build more bandwidth. The only reason the issue arises is because in America, ISP’s are direct competitors to streaming video sites. It’s fundamentally a problem of monopolies and conflicts of interest. The monopoly can “regulate” itself to profit without having to actually deploy capital.

  10. Hal_10000 says:

    @MarkedMan:

    I don’t know any libertarian who favors the monopolistic model we have now. The monopolies on telecon service didn’t just happen. The entire country is divided into little fiefdoms assigned to the the big telecoms. In most areas, they are the only provider of internet or cable service. That is not, in any way, a “free market”. And that is a model that was pushed by mainstream politicians of both parties and supported by the likes of Meredith Baker and many others, who went from regulating the telecoms to work for them (although, really, those are the same job; one just pays better).

  11. C. Clavin says:

    Whenever I hear the extremist right wing-nuts (and especially the ones who like to pretend to be pirates) screaming about the free market and not stifling it with regulations…I immediately think of Enron. In the midst of that debacle Cheney and Bush were saying the same thing…the problem didn’t exist and the markets can solve everything.
    Yet here we are again…with Republicans, claiming to be conservative, arguing for the very same lack of regulation that causes crisis after crisis. History shows that a strong regulatory system is essential to the success of capitalism. What is Conservative about denying history?
    We are late in beginning this discussion…but that’s nothing new. We can still get this right…but not if one side of the discussion is again railing on with their tired reflexive radical catechisms and refusing to even begin to deal with the real world.

  12. Console says:

    @Hal_10000:

    The problem is that monopolies have to be broken up by government action or regulated. The idea that some monopoly that was artificially created by the government will magically fix itself if the government stopped regulating it is where Libertarians start leaving the real world.

  13. C. Clavin says:

    Libertarian is awesome…right up until it leaves the college dorm room and gets the slightest exposure to reality.

  14. Sirkowski says:

    The Libertarian’s idea of a free market is a monopoly. They are as politically immature as Anarchists.

  15. David M says:

    Comcast opposes net neutrality, so my dislike of Comcast pretty much means supporting net neutrality is my default position, even before evaluating the arguments.

  16. Scott says:

    Comcast, soon to absorb Time Warner is an Internet provider. It is also a content provider. Netflix, Hulu Plus, Amazon, etc are content providers that have to stream over lines its competitor (Comcast) provides. There lies the problem. Internet providers should be separate from content. providers. There is too much conflict of interest and totally anti-competitive.

    Second big problem is that there is little competition in internet providers (ISPs). There is cable (Comcast, Time Warner) and there is telephone (ATT, Verizon). That’s it. (I don’t count satellite as a viable ISP).

    Having regulations is not Government takeover of the internet. Regulations are just that: regulations, not ownership or control. The language that is used by the radical right needs to be fought because it is false.

  17. DrDaveT says:

    Obama is old enough to remember Ma Bell, which was even worse to customers than today’s cable and Internet providers.

    The hell she was. I remember Ma Bell too, and the basic level of service was vastly better than what Comcast or Cox provides.

    What is true about Ma Bell is that new technologies were introduced slowly, especially new technologies like fax that actually interfered with Bell’s ability to provide the basic service.

  18. DrDaveT says:

    Yet, in the DC area at least, we’re in the process of massive construction of toll roads to allow those with the ability to pay to escape the horrible traffic of I-95 and other congested arteries.

    You don’t see a difference between “if you pay a fee, we’ll let you use a premium service” and “if you don’t pay a fee, we will deliberately cripple the default service”? HOT lanes are the wrong analogy. What the cable companies want is more like the guy at the stoplight who will smear your car with dirty water if you don’t give him a couple of bucks.

  19. Argon says:

    @James Joyner: “Broadband, especially as it applies to mobile, is still relatively new and we don’t really know where the industry is headed. ”

    Pretty simple, IMHO. Broadband is headed toward increasing flow and reducing latency. Period.

    You’ve got pipes (from those who supply and enhance distribution), suppliers that pump data into the pipe, and applications that ‘drink from the pipe’. Period.

    The problem is that Verizon, AT&T, Comcast et al. want to sell pipes AND sell data to consumers. It’s easier for them in the short term if the consumers are kept captive. And entry costs for piping data the last mile to consumers are such that it acts to minimize competition. Right now I’m lucky to have coax and fiber options but they’re only available because they grew out of two legacy systems (cableTV for coax and telephony for fiber ). No one else is laying more hardline to my home. [Aside: Mobile broadband is not an alternative. It simply doesn’t have the rf spectrum to compete on data throughput].

    As I mentioned earlier: If there was real competition, the conglomerates would competing like true ISPs by trying to provide the best, more reliable connections to content delivery services.

  20. anjin-san says:

    @ James Joyner

    I’ve got no interest in streaming Taylor Swift’s latest album, for example, but don’t like the fact that it’s not on Spotify—even though I’m not a Spotify customer.

    A. What does this have to do with the topic at hand?

    B. Streaming services are systematically screwing artists so that a few people can make vast amounts of money. The problem is so serious that is is actually putting entire genres of music at risk of more or less vanishing. Swift is using her market muscle to fight back – good for her.

    Zoe Keating on streaming

    Marc Ribot – If Streaming Is the Future, You Can Kiss Jazz and Other Genres Goodbye

  21. DrDaveT says:

    James, I’m intrigued that you didn’t address the core argument here — namely, that broadband access is no longer a luxury, but rather something sufficiently central to the well-being of the nation that it needs to be guaranteed at a minimum level for everyone.

    Is that true? At present, I can see arguments both ways. Will it be true at some point in the near future? I think that’s pretty clear — education all by itself will rely on it enough to justify the “public utility” argument. But that’s just the basic service; it doesn’t address what kind of pricing for premium services should apply. The real challenge is in drawing the line between ‘basic’ and ‘premium’ in a way that isn’t obsolete next Tuesday.

    Once again, it comes down to a question of whether the country is better off if everyone has access to a minimum of something, or if the more fortunate can have access to really cool stuff that evolves more quickly while the less fortunate get little or none. Unlike current Republicans, who always come down on the same side of that argument, I have to take them case by case. I’m enough of a geezer to feel that life without smartphone is neither a poverty trap nor culturally crippling, but that may be changing.

  22. anjin-san says:

    Obama is old enough to remember Ma Bell, which was even worse to customers than today’s cable and Internet providers.

    I’m older than Obama. This is simply not true.

  23. Jenos Idanian #13 says:

    @anjin-san: It is physically painful for me to say this, but I’m with anjin here. The breakup of the Bell System was a mistake. Or, at least, the way it was done. It took a system that, while imperfect, was the envy of the world and broke it up into several dysfunctional components.

    And the technological powerhouse that was Bell Labs is now owned by the French…

  24. anjin-san says:

    @James Joyner:

    I’m fearful of stifling innovation through well-intentioned regulation

    What innovation? The US, globally, is 31st in download speed. Upload speeds? The U.S. ranks 42nd with an average upload speed of 6.31 Mbps, behind Lesotho, Belarus, Slovenia.

    http://theweek.com/article/index/257404/why-is-american-internet-so-slow

    And we are the country that invented the internet.

    How is American exceptionalism looking? Out internet service is worse than Estonia’s.

    The innovations already exist. We are not employing them because the game in the US today is about a handful of people making incredibly large amounts of money, not innovation and high quality service for the people who pay the bills.

  25. James Pearce says:

    @Hal_10000:

    I don’t know any libertarian who favors the monopolistic model we have now.

    Every time a libertarian (or a conservative) argues against net neutrality policies because their fear of government….they are favoring the monopolistic model we have now.

    Whether they know it or not.

  26. MarkedMan says:

    @anjin-san: I agree with your sentiment. Heck, the free access in the United Lounge in the Tokyo airport is the fastest internet access I’ve ever had! While even paid access in the US is at least one order of magnitude slower, if not two. But I have to call cherry-picking on Estonia. Skype cut a deal with that country of 1.3 million to base there if the country upgraded its infrastructure to be top tier.

  27. MarkedMan says:

    @Hal_10000: I agree with you on your main points that the current system is non-competitive and that de facto bribery of politicians help to perpetrate and extend it. As to what libertarians believe or don’t believe, I guess my position is that their analysis in general is so far from reality based that it is a waste of time to try to figure out where they stand on a particular issue.

  28. ernieyeball says:

    @anjin-san: I’m older than Obama. This is simply not true.

    I started working in the Telecommunications Industry (landline telephone) in 1973. That 35 year career took me to 14 states and countless cities and towns. From Houston, Texas to Clarence, Missouri. From Anaheim, California to Rome, New York and all points in between, including Sleepytown where I live, everyone hated the Phone Company all the time.

  29. MarkedMan says:

    @ernieyeball: I have to agree with ernie here. Ma Bell stifled innovation in a horrible way. You could only buy a phone from them. It took decades before the touch tone phone became popular because they charged quite a bit more for the phone, and they charged the equivalent of about $10/month (in today’s dollars) to use it instead of the old rotary one. The quality of the voice lines did not improve for well over a half a century. And most people only had one phone in a house because they charged every month to add another one. And had equipment that they could attach to your line from the telephone pole to see if you had ‘illegally’ attached another one. They improved nothing for decades and were completely unresponsive to their customers. To my mind they were the archetype of everything wrong with a regulated monopoly.

    This doesn’t mean the lesson should be “de-regulate utilities! the world will be wonderful” The stupid Reagonomics way we de-regulated the power industries in state after state has led to higher and unpredictable prices (sometimes 3-4 times higher), much poorer maintenance and infrastructure (now that the western PA electrical lines are maintained by a de-regulated NJ company my family and friends there see days go by before power is restored after a snow storm and virtually no regular tree trimming). De-regulation is hard, and the Gingrich/Reagan view of the world is so simplistic (no rules! markets everywhere! Al Gore is fat!) that de-regulating with their techniques is virtually guaranteed to end in disaster.

  30. anjin-san says:

    @ernieyeball:

    everyone hated the Phone Company all the time

    Well, there was less stuff to hate back then. Ma Bell was a big target. Besides, do you know anyone that does not hate Comcast or AT&T?

  31. Jenos Idanian #13 says:

    @ernieyeball: I started working in the Telecommunications Industry (landline telephone) in 1973. That 35 year career took me to 14 states and countless cities and towns. From Houston, Texas to Clarence, Missouri. From Anaheim, California to Rome, New York and all points in between, including Sleepytown where I live, everyone hated the Phone Company all the time.

    Er… there was a second consistent factor in your experiences. Maybe it was you that they all hated?

    (Sorry, couldn’t resist. I didn’t really mean it, but it was too good a line to let lie.)

  32. Hal_10000 says:

    @Console:

    I agree. The monopolies have to be broken. @James Pearce: This is one of the few uses of anti-trust law I would favor. The break up of Ma Bell was very popular in libertarian circles and a break-up of Ma Comcast would be even more popular.

    And I’m not seeing what net neutrality has to do with cable monopolies (regardless of what one thinks of it).

  33. James Pearce says:

    @Hal_10000:

    And I’m not seeing what net neutrality has to do with cable monopolies

    Anti-trust laws don’t have much to do with net neutrality. Net neutrality is a technical problem. It disheartens me to read things like this from James:

    “there was a reasonable argument coming from ISPs that they ought to be able to throttle or charge more for those customers and/or companies because otherwise everyone else was going to have slower Internet”

    If internet congestion is a real thing (count me among the skeptical) it’s not going to be “solved” by charging more or throttling someone. That protects a business plan. It does not provide a solution to the problem.

    Sure, one could argue the prices will serve as some kind of sorting mechanism, discouraging power users, or that the money collected will be invested in infrastructure upgrades, you know, a technical solution to a technical problem, but that’s basically horseshit.

    One look at how these companies actually operate and you realize the problem is themselves. It’s the way they run their business. They don’t want to compete. They want to consolidate. They skimped on bandwidth at the consumer level and the culture got ahead of them. They don’t just sell internet service. They sell creative pricing structures and two year contracts. That’s what they compete on.

    I’m paying for a DSL line and there could be a wifi-enabled cell tower on every light pole on the block???? Yeah, let’s give them more money, see if it happens.

  34. ernieyeball says:

    @anjin-san:.. do you know anyone that does not hate Comcast or AT&T?

    Since CATV is not available at my address it is not on my radar. The closest CATV provider to me is Mediacom. People bitch and gripe about their service all the time. I couldn’t care less.
    I actually worked a contract sales job for them one time. They screwed up the orders I solicited for them so badly I don’t think they could find their ass with both hands.
    I read the items in Consumer Reports reporting customer satisfaction for cell phone service. AT+T is usually toward the bottom and Verizon Wireless gets the kudos.
    I once heard a waitress at a coffee shop here in Sleepytown squeal “I LUV Verizon!” She was playing with her new iPhone.

  35. ernieyeball says:

    @Jenos Idanian #13: Maybe it was you that they all hated?

    No. They were usually grateful that I had fixed their telephone line. They were mad at the first three guys the phone company sent out that made the problem worse.

  36. Mikey says:

    @James Pearce:

    If internet congestion is a real thing (count me among the skeptical)

    Why would you be skeptical? It is real and documented. It occurs pretty often on peering links between backbone carriers like Level 3 and the mid-level consumer-facing ISPs like Comcast. A lot of it has been due to Netflix streaming, which is the single largest chunk of bandwidth consumption on the internet during parts of the day, although it is less so now that Netflix is directly peering with Comcast (a paid peering agreement, which would be permitted under proposed net neutrality regulation).

  37. James Pearce says:

    @Mikey:

    Why would you be skeptical? It is real and documented.

    We’re talking about packets of nearly identical size containing only 1s and 0s that could, in theory, travel at the speed of light. What you’re describing is a bottleneck that is allowed to exist. It’s not baked into the system.

    Comcast is merger-happy. We know that. We’ve seen it. Do you know who Level 3 just merged with? Do you know how recent it was?

    A lot of it has been due to Netflix streaming

    From a certain perspective, sure……

    But think about this for a second. In 2014, what does Comcast think people are doing with their internet connection? Did they think we were just using it for our gmail accounts and keeping in touch with grandma via AOL messenger?

    I mean, I’m not just streaming Netflix, I’m streaming Amazon Prime, Vudu, Hulu, Youtube, and doing so while my nephew’s playing Xbox Live in the other room. I might even check my bank balance or be Skyping with someone. Someday people’s appliances will be hooked up to the internet. I don’t have any yet, but I know people who do.

    Quite frankly, an ISP that gets bogged down by Netflix streaming is an ISP that should go into another business.

  38. Mikey says:

    @James Pearce: Well, as a telecommunications engineer by profession, I can tell you it’s a bit more complicated than simple 1s and 0s.

    First, the congestion isn’t in the last mile. The connection from you to your servicing ISP isn’t the problem. The problem is back in the peer connections. The big backbone ISPs like Level 3 and XO complain that the mid-levels aren’t provisioning enough capacity on their side of the connection and therefore the ports are all saturated (90% utilization and above) which means packets will get dropped. That’s not a super-huge deal with non-real-time applications like web pages and even some gaming, but it’s murder on real-time stuff like streaming video and VoIP. The non-real-time stuff just asks for the packets again, but the real-time stuff doesn’t even use a protocol that permits it–they’re all best-effort. So you get buffering, jitter, etc.

    The mid-levels complain because the top-levels and content providers are constantly asking for the pipe to open wider, and in case you haven’t checked lately, that ain’t cheap. Many peering agreements were done well before streaming anything, and they’re settlement-free, i. e. neither side pays because at the time it was a true peering–neither side pushed appreciably more data than the other, and everyone wanted to be able to talk end-to-end. Today, it’s different–the mid-levels are having to receive firehoses of data and they’re sending back half as much. But the top-levels and content providers don’t want to pay for it, and since no ISP is obligated to interconnect, the mid-levels just won’t expand infrastructure unless it’s financially beneficial.

    The local providers don’t have much problem because they’re a lot easier to provision. There’s a big pipe that goes to a box in your housing development, it’s engineered to provide the necessary bandwidth, there’s a “home run” from the box to everyone’s house. Easy peasy. (Well, not exactly, but a whole lot closer than the stuff way up the chain.)

    My big worry with any application of common carrier regulation to the internet is it will bring with it an obligation to interconnect, which will mean pricey upgrades to infrastructure. The mid-levels will push for paid peering, and the top-levels and content providers will balk, and the users will get stuck with the bill. Or we’ll just see congestion go through the roof and streaming video will really look like crap.

    Now, Netflix agreed to paid peering with Comcast, so there may end up being a lot more of that. Whether it gets passed on to the consumer would remain to be seen.

  39. James Pearce says:

    @Mikey:

    Well, as a telecommunications engineer by profession, I can tell you it’s a bit more complicated than simple 1s and 0s.

    It is, that’s true. I didn’t mean to oversimplify or appeal to magic or anything.

    (Indeed, the complexity of it is what leans me towards “net neutrality” type regulations and away from the ideological, and often warranted, suspicion of regulatory action.)

    I do want to ask about this:

    My big worry with any application of common carrier regulation to the internet is it will bring with it an obligation to interconnect, which will mean pricey upgrades to infrastructure. The mid-levels will push for paid peering, and the top-levels and content providers will balk, and the users will get stuck with the bill.

    Aren’t the pricey upgrades to infrastructure now necessary and somewhat overdue? With all of the traffic now, which of course is not just for “the web” anymore, shouldn’t “obligation to interconnect” be considered? Wouldn’t that actually be a boon to many more industries than just telecom?

    I’m not just thinking of tablet computers and streaming TV boxes, nor just “smart” appliances. I used to work in telecom, but now I’m in the digital cinema business. The stuff we’re doing now wasn’t even possible a decade ago. Isn’t it time the ISPs caught up?

  40. MarkedMan says:

    @James Pearce: James, you hit the nail on the head. And Mikey, it sounds to me like you are saying “this is difficult, maybe too difficult, and it will upset the way things are”, to which I point out that 30-40 other countries are doing it better and cheaper than we are (and god-help-me, when did we become such a nation of “It’s too hard, nothing can be done”?). As for the second point, upsetting the way things are being done is exactly the point. Sure, if it’s not done right it will go badly, but that applies to any change.

  41. Mikey says:

    @James Pearce:

    The stuff we’re doing now wasn’t even possible a decade ago. Isn’t it time the ISPs caught up?

    That’s the debate–the content providers and consumers are asking that question, but the ISPs are complaining that content providers are pushing more and more data through them without any provision to pay for the needed expansion of infrastructure. They don’t want to pass the cost on to consumers, who would understandably balk, but the content providers and top-levels are basically saying “You have to take what we send, and if you don’t, congestion is your fault.” So there’s a kind of stand-off going on.

    There are a couple distinct issues here, actually, that are getting conflated–one, the asserted need for net neutrality rules, and two, the possibility of applying common carrier regulation to the internet. IMO the net neutrality rules are a solution in search of a problem and common carrier status for the internet, without some important forebearances, would be detrimental. But I don’t doubt some change in regulatory structure is coming, and if done right I could be proven wrong in my opinion. I am keeping an open mind, anyway.

  42. Mikey says:

    @MarkedMan: It’s not necessarily difficult–I mean, the rulemaking could actually be relatively simple (relatively meaning “relative to how this stuff usually gets done”). My concern is that any application of a stricter regulatory regime could lead to problems down the road, especially considering how fast the technologies are changing. But as I told James Pearce, I’m willing to keep an open mind.

  43. Matt says:

    @James Pearce: Thank god I’ve won the lottery by moving into an area where I can get cable service from a small local company. First time I’ve had a choice despite living in several states and places. This small company allows for unlimited downloads and gives MORE speed then advertised. I’m paying for a 6.25 megabyte download but I always get +7 with regular speeds of 8 MBps if the server I’m downloading off can handle it. This company is trying to spread into other areas but timewarner and comcast are doing everything they can to block the expansion.

    Overall for 45 bucks I’m quite happy with them. It’s too bad that the big companies are crushing or absorbing the small ones..