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Eric: On Net Neutrality

It is worth noting two things. First off, if you happen to be an American and you're reading these words, you've already been bombarded with information about Net Neutrality and Saving the Internet. And, you know. I'm on that side of all of it, too. Save the Internet, and all that.

If you're not an American, but you live in some sort of representative governmental system, you ought to be contacting your own legislators, representatives, Ministers of Parliament or the like as well. After all, the Internet isn't American, per se, and legislation that makes deep seated changes in the United States will have impact on all of you. I would think the European Union would be sending quiet messages across saying "screw with the Internet, and we're going to start talking about trade sanctions." Or some such.

That's not really what I'm writing about, here.

I want to write about what happens if this legislation passes.

Specifically, I want to write about what happens to the companies that actually start trying to throttle the internet based upon their premium service.

Simply put? If you work for one of those companies? Keeping that resume up to date is in order.

See, I may be a liberal, but I'm a liberal who actually believes that the Market forces really do exist and really do correct mind numbingly stupid mistakes. And the day that COPE and such legislation passes... the day that telecoms start insisting people charge fees for 'premium access...' is the day that smart companies will absolutely decimate those telecoms in the marketplace.

Think of it. Google, Intel, Microsoft, Skype, Vonage, eBay, Earthlink, Amazon.com and Yahoo are all proponents of Net Neutrality. And of course they are -- they have no interest in paying premium fees to companies they don't even do business with. You think they won't throw their massive support behind backbone companies that pledge to "stay net neutral?" You think Earthlink and other ISPs won't start advertising that their DSL service "doesn't come with a toll booth?" You think hosting companies won't flock to those backbones that agree to provide broad service without 'tiers,' and you think that new backbone companies won't spring up to provide new routes free of this kind of interference?

Of course they will. Hell, I halfway expect Google to announce "Google Net" the week after this thing passes.

Remember America Online and CompuServe, and how they had huge amounts of premium content? These days, AOL's biggest selling point is a messenger service anyone on Earth can use. And as for CompuServe?

Is anyone reading these words a member of CompuServe? Anyone?

Didn't think so.

By the same token, if the only people out there who have trouble getting to Google, eBay or Amazon.com -- or small mom and pop websites, for that matter -- are Verizon or Comcast broadband customers... do you honestly think Earthlink won't make a huge deal about that in their advertisements? I do. And if the hosting companies that connect to Verizon or Comcast or AT&T's backbones directly abandon them for backbones that won't require additional fees for 'premium' access, I can see a lot of corporate boardrooms with a lot of unhappy managers in them.

Am I saying we shouldn't fight to defeat COPE and its ilk? Not hardly. Passage would be inconvenient at best, and there would be Trouble. I signed the petition and I contacted my representatives beyond that. But if it passes, do I think that it would devastate the Internet? No, I really don't. I don't because there's way too many companies out there who would be more than happy to take Verizon and Comcast's lunch money and give them swirlies in the bathroom if those companies were stupid enough to give them such an obvious and powerful selling point.

Capitalism. It's a rampaging heartless beast. And sometimes that's a good thing.

Posted by Eric Burns-White at May 16, 2006 10:26 AM

Comments

Comment from: kirabug [TypeKey Profile Page] posted at May 16, 2006 10:46 AM

Is anyone reading these words a member of CompuServe? Anyone?
No... but they do still exist. The software's inefficient at best but at work, we get a few calls.

My first internet service, Prodigy, has gone the way of the dodo.

Net Neutrality seems so odd to even have to talk about. (Yes, I did contact the government folks, etc.) As soon as someone builds some kind of wall on the internet, someone builds a different way around it. I don't want the legislation to pass, because I don't want to have to find a different ISP should it do so -- but I will if I have to.

Comment from: Paul Gadzikowski [TypeKey Profile Page] posted at May 16, 2006 10:56 AM

My mother is still on Compuserve, but recently went to another service for her primary needs for convenience reasons. My primary service is the same local Louisville ISP I signed up with in 1995 even though we've moved.

Yeah, I went to SaveTheInternet.com (my message to my elected representatives was, "What if my telecom company decided to endorse your opponent for reelection?"), and I hope COPE can't cope, but you make encouraging points that the worst-case scenario isn't so bad.

Comment from: fuz [TypeKey Profile Page] posted at May 16, 2006 10:57 AM

Ah, the unexpected and relaxing pleasure of subscribing (at something of a premium) to an ISP that markets almost exclusively to geeks. I'm pretty sure they've got my back on this whole thing, and that's fairly nice.

However...

I too am a liberal who believes in Market Forces... Unfortunately I lack confidence that Market Forces are as predictable as you make it seem - there are more forces at work than simply competitive pressures of this kind. I can imagine a hypothetical situation in which the logical choice for every single ISP is to charge for premium access, and that general user apathy doesn't quite fight it. The 'net sliding slowly enough into death that users don't flock to the few ISPs that make a poor business decision based on ethics, and us ending up with only walled or pay-for-use gardens.

Not that I'm at all certain about this, but I also don't want anyone to think that this legislation isn't a profoundly bad idea with seriously awful potential consequences.

Comment from: HumanSockPuppet [TypeKey Profile Page] posted at May 16, 2006 11:01 AM

Same thing I've been telling anyone who got into a huge panic over the COPE issue.

Well-stated though, Mr. Burns. Eeeeeeeexcellent.

Comment from: ada [TypeKey Profile Page] posted at May 16, 2006 11:14 AM

Eric,
I have a horrible feeling that you're being too optimistic.
Most people don't care about these nuts and bolts details and, as long as they can actually afford whatever it is they want (or can raise the cash for the short-term at least) they will quite happily swallow the ads and pay up and enjoy the faster streaming for the films, or whatever.
I do hope that you are right, though.
(even if only this time)

Comment from: Kris@WLP [TypeKey Profile Page] posted at May 16, 2006 11:32 AM

As you've no doubt read on my LJ, I think the telecoms are shooting for nothing less than the destruction of the free Internet and the return of company-exclusive networks.

Consider this: the huge telecoms who want this legislation own the vast majority of the wires and fibers that the Internet runs on. They've already been vastly deregulated in how they can treat their customers- and Verizon, in particular, has used this deregulation to try to destroy a local Massachusetts ISP. These telecoms are led by men who openly seek monopoly power- in fact they're utterly shameless about it- and every ISP, every content provider, every aspect of the Internet is dependent upon their infrastructure.

If COPE passes, these telecoms will be -explicitly- permitted to slow down sites they don't like. However, COPE also defangs any Federal ability to enforce restrictions on -bans- on sites. The Feds would be unable to act effectively against, say, AT&T if AT&T decided to close its pipelines to Keenspot unless Keenspot ponies up massive access fees. The FCC, under COPE, is specifically and explicitly stripped of its enforcement powers on telecom companies.

So let's see: given the power to deny access to their wires at will, and to charge as they will for that access not only to end-users but to content providers, and given that the vast majority of the nation's wires is in their hands, do you really think AT&T, Verizon, and the other big telcoms will hold back?

Based on my experience with Diamond Comics- who have acted time and again to enforce their monopoly on print comics in stores, even when those actions worked to further reduce the readership of comics in general- I'd say they'll jump at the chance. They don't care how much of the pie gets smashed up, so long as the slices they end up with are bigger than anyone else's.

If COPE goes through, I don't know where market alternatives will find a -way-, not when every market alternative will have to deal with the telecoms merely to get online at all.

Comment from: 32_footsteps [TypeKey Profile Page] posted at May 16, 2006 12:50 PM

Well, I naturally oppose COPE, but I imagine that all content producers on the Internet do.

I just hope you're right about the free market, Eric. As the cliche goes, nobody ever went bankrupt by trying to profit on the stupidity of the American people.

Comment from: Doug [TypeKey Profile Page] posted at May 16, 2006 1:06 PM

Aside from this subject, there's also the sudden "unfortunate" increase in gas prices. Apologists and pundits explain that despite the posted record profits of both of the industries involved, it's all a matter of free market economics and the greedy Government taxation that's causing the problem and that these measures are all aimed at deregulating something that Government has no business regulating in the first place.

I heard the identical explanations and arguments before during the "energy crisis" in California, just before Enron exploded messily all over the place.

I guess I'm just getting cynical in my old age. Or it could be that I've gotten better better at detecting the mindless raw greed that sometimes infects corporations.

Comment from: Eric Burns [TypeKey Profile Page] posted at May 16, 2006 1:22 PM

If Exxon and Mobil started charging an extra fifty cents a gallon, Citgo and Shell would eat their lunch money. They would advertise hard on how they're the friend of the consumer, and they would sell incredible amounts of gas.

The capacity to route around problem areas on the internet makes it prohibitively simple for groups of backbone providers to eschew these regulated services and offer all their customers the same deal. That in turn will cause a migration away from the other models.

That's the point I'm making. It's not that we don't have to defeat COPE and its ilk -- it's that COPE is a stupid freaking idea for the businesses who are trying to do it.

Comment from: hitch [TypeKey Profile Page] posted at May 16, 2006 1:34 PM

for the record, compuserve is AOL.
as is Netscape.

Comment from: hitch [TypeKey Profile Page] posted at May 16, 2006 1:41 PM

heh...also, for the record, compuserve is the only place in all of our networks where we still host pornography of any kind.

Comment from: 32_footsteps [TypeKey Profile Page] posted at May 16, 2006 1:56 PM

It might be a stupid idea, Eric, but what if the public is more stupid? Or what if they manage to build such a monopoly that they quash any smaller ISP that tries to break ranks?

I can understand putting faith in market forces... but don't forget, market forces resulted in U.S. Steel, Standard Oil, AT&T pre-1982, Microsoft Windows... The skillful can manipulate market forces, which is why laws like COPE need to be defeated, to prevent a situation where they can be manipulated.

Comment from: Foolsfolly [TypeKey Profile Page] posted at May 16, 2006 2:14 PM

Many of the smaller internet providers, if trying to remain net-neutral, would face a special connundrum. As many of them don't own the wires and infrastructure, they're at the mercy of the big corporation that do.

Given what COPE is intended to do, I can't see Comcast doing anything but charging more to a small, net-neutral, provider that's wanting to use Comcast's cables to get to the users. Someone still ends up paying the big corporation for the access.

Comment from: miyaa [TypeKey Profile Page] posted at May 16, 2006 2:22 PM

I kept wondering if this has anything to do with Switzerland and it's famous political neutrality. (Which make me wonder, if Switzerland is suppose to be neutral, why is their flag a red flag with a white plus sign?)

Comment from: kirabug [TypeKey Profile Page] posted at May 16, 2006 2:33 PM

The skillful can manipulate market forces, which is why laws like COPE need to be defeated, to prevent a situation where they can be manipulated

Or, to take a slightly different point of view, COPE needs to be defeated so that market forces can be manipulated. Because if you can truly manipulate market forces on an even playing field for a significant amount of time, hey, you've earned it. But COPE would throw the playing field out of whack, at which point we'd have no opportunity to let the market do its own dance.

Comment from: Daven [TypeKey Profile Page] posted at May 16, 2006 3:46 PM

Well, I agree. What you said makes a lot of sense. I went batshit because I see this as a first step toward getting unwanted content off the Internet by the Government.

Yes, I see conspiracies behind every bush. NO, I take that back, I see Bush behind every conspiracy.

This legislation is not very wise and it will make the managers panic if it passes, but it is also a foot in the door to start legislating against various websites. Like the "Get pornography off the Internet" campaigns, like the NetSurfer software, like the "blocking software in all public libraries" and so on. IT's one small step at a time until there is no recourse. And if they do it gradually enough, people won't care and will support it, like the "no gay marriage" and the "no more abortions" have happened.

So yeah, it needs to be fought now to stop that toehold from happening in the first place.

Comment from: Tevorcet [TypeKey Profile Page] posted at May 16, 2006 4:53 PM

Unfortunately, the problem is simple. As you say, Eric, if one or two of the major oil companies raises the price of gas by fifty cents, it follows that their competitors will profit. But what if they raise it by 1.5 cents a gallon? More likely than not, nothing.

Even if Exxon was boycotted, for any reason, and the other oil companies reaped the rewards, those companies don't have the capacity to produce enough oil to meet supply. So prices would increase, and those companies would buy oil from someone with plenty of it...Exxon.

When companies almost hold a monopoly, the free market starts to break down. I believe in it too, but not when there are so many ways to play the system.

Comment from: Polychrome [TypeKey Profile Page] posted at May 16, 2006 5:40 PM

Tevorcet,
The companies that are pushing this don't have an oligopoly.
Earthlink is a major ISP that's opposed to it, I'm pretty sure they own a bunch of fiber.
And Google has been buying up dark fiber for several years now.
I'm sure Google would be happy to provide internet service on a large scale.

Comment from: Zutto [TypeKey Profile Page] posted at May 16, 2006 5:53 PM

What concerns me more is that COPE is one step, if a major one, in a very persistent and years-long effort to eradicate market competition (in the telecoms, in this case). This should raise two concerns.

The first is, you can bet your sweet bippy that COPE would be making way for an even larger business plan with unseen consequences, because its enaction is not an isolated event. It is one patch in a fabric of corporate strategy. Thus it is very hard to say "COPE will ONLY allow this or that to happen, and that isn't so bad." I very highly doubt mega-corporate strategy won't see the next thing coming, or will settle for what COPE alone would bring.

The second concern is that even if COPE is knocked out, the people who push, lobby and spend for devices like it to be born will still be in business (as always) and will find another way.

The general idea? Let's not back down -- we gotta stay on our toes. But hey, I know that's preaching to the choir. :)

Comment from: John Lynch [TypeKey Profile Page] posted at May 16, 2006 7:50 PM

the day that telecoms start insisting people charge fees for 'premium access...' is the day that smart companies will absolutely decimate those telecoms in the marketplace.

Problem is Eric, they hold monopolies in large segments of America. You're choice is internet with a particular telecom. Or no internet.

Also, once the people who "own" the lines start throttling the internet connections, won't every other internet company that uses those lines be afffected? After all, they're stuff has to pass the throttled lines.

And I do hope you're right. But all it takes is all the big companies (the ones that own most of the backbone) to say "I think this is a good idea" and there will be no alternatives. It'd be great if even one of them says "I think this is a bad idea." Just as it would be great if an oil company went "I don't think we need to gouge our customers as much."

Comment from: Minivet [TypeKey Profile Page] posted at May 16, 2006 10:24 PM

You seem to take the capitalist system in a unifeatural way, Eric. Remember that capitalism does not equal free markets -- monopoly capitalism, or cartel capitalism, is still capitalism. The the raging beast you speak of is the power of free markets ("liberalism" in its older meaning), but that's something that has to be fought for.

Yes, as you point out, defecting from a cartel can reap a company huge profits, but one should not equate that with the power of the untrammeled market to normalize price levels. In practice, a company may defect -- or it may not. The more companies there are that might defect, the closer to inevitable it becomes; but cartels do succeed sometimes. A company weighs the short-term profits it could make by defecting against the long-term profits of preserving a system that more stably gouges the customer.

In practice, I do hope in this case that the telecom structure can allow the saner companies to run around any attempts at favoritism; but in general, I think trusting capitalism to naturally bring about free markets and solve the problems of the consumer is like trusting the forces of History to inevitably bring about the dictatorship of the proletariat.

Comment from: Howard Tayler [TypeKey Profile Page] posted at May 16, 2006 11:35 PM

I'm with Eric on this one. I trust market forces to keep the telcos from exploiting COPE in the ways we're all fearing. Adam Smith's Invisible Hand is poised to sucker punch anybody trying to pull something like that. Information systems are notoriously hard to control.

In everything I've read about COPE (and I could be wrong), there will always still be a slow lane. If your favorite site gets relegated to the slow lane, the text-based grass-roots movements will do just fine in getting the word out, regardless of what lane the telcos try to put them in.

Ultimately I believe that, should COPE pass, we'll see telcos recognizing the value in "good karma." They'll probably make all their money establishing private, extremely-high-speed circuits between large corporate sites -- fast lanes none of us would ever have a need for -- and everything else, from iTunes to YouTube, would be in the "as fast as it ever used to be" lane. That's probably not the way the proposed legislation is worded, but I suspect that's the low-hanging fruit these telcos are trying to pick. And if "internet opinion" is any indicator, it's the only fruit they'll ever be able to reach.

--Howard

Comment from: Mithandir [TypeKey Profile Page] posted at May 17, 2006 2:55 AM

Err ...

Of course people will protest or seek another company if their ISP suddenly decides "Hey, let's block google". No question about that. Well, not much. However it's not the big sites that are at risk, I think, but the little ones. And with COPE those companies that wish to block out half the internet can make THAT a selling point. By blocking out porn sites, for instance. Or CNN. You know, things parents rather not have their children/spouses read. And if that ISP just happens to block out, say, Altavista too ... well there's google, right?

Bigger problem yet and that I haven't seen people mention yet: non-http traffic.
Bandwidth limits for Bittorrent anyone? Who's going to protest that one? "Hey I can't download my illegal mov ..er ... why are you of the RIAA looking at me like that?"

Comment from: Kaychsea [TypeKey Profile Page] posted at May 17, 2006 6:14 AM

OK, if it becomes a question of access wars then people will flock to those ISPs that allow unfiltered access to their favourite systems.

But what if the likes of Verizon use the extortion, errr, access fees to subsidise the end user. Then the user sees slightly slower or alternative services for a cheaper rate. They won't put their prices up, they will drop them pointing at the fact that they can afford to help out the little guy now that the giants like Google are being forced to ante up.

Once the competition is dead or so compromised by lack of operating capital they can start scalping the end users. And that is capitalism in action.

Comment from: Christopher B. Wright [TypeKey Profile Page] posted at May 17, 2006 9:27 AM

I'm not convinced that if the thing passes the market will be able to correct any misbehavior on the part of the winners. I *hope* that's the case, but the computer industry has a short but sordid history of doing whatever the fuck it wants without any fear of retribution.

The main problem here is that I think this is going to wind up being a back door for phone companies that are also in the ISP business who have been trying to get the courts to allow them to charge higher rates/deny access to independent ISPs using their land-lines. That's a one-two punch right there, if this thing passes *and* if the telcos get absolute control over their hardware, there isn't a damn thing Microsoft or Google is going to be able to do but pay up.

Comment from: kellandros [TypeKey Profile Page] posted at May 17, 2006 11:03 AM

Market forces react to imbalances. They "correct" things only in terms of cost. If [Insert ISP here] becomes the only one who does not throttle back or restrict their access, then they can charge a premium for this(they offer more content, features than the others; what was standard now costs extra on everyone else).

The previous dodging of higher costs was VoIP, since data transfer costs via the internet backbone does not hit taxes and other government fees, or access charges from other company's networks. I'm starting to wonder how much this current legislation is related back to this?

Comment from: kamagurka [TypeKey Profile Page] posted at May 17, 2006 11:36 AM

Capitalism is fucking awesome.

Comment from: Eric Burns [TypeKey Profile Page] posted at May 17, 2006 10:20 PM

It is worth noting, just for clarity's sake, I'm not saying we don't need to defeat COPE. We do. It is a bad idea and a bad bill.

It's just, I'm also convinced that it represents a monumental misstep on the part of those telecoms who support it.

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