Net Neutrality Bill

Great Debates
21

I don’t think you’re getting it.

They are required to maintain the network, required to by law and regulation. The costs to maintain an organization capable of maintaining these networks are largely supported by traffic rates - long distance rates, local service rates, ISDN rates, DSL rates, etc.

All of these rates are either under the control of the regulatory agencies/the PSC’s of the various States, or exist in a situation where competitive pressures have made it impossible to raise them. Protocols and standards have arisen, from back when the internet was 4 computers in Western states, that dictate that all traffic is “equal”… because, it was assumed that the traffic itself wouldn’t impact the financial structure supporting the network.

However, that’s not the case. There are certain types of traffic, particularly VoIP, that uncercuts the financial underpinnings out from underneath the internet. VoIP essentially offers the hosting networks negative revenues, as every VoIP call that starts/ends in the ISP’s network does not pay the ISP any fees. (As opposed to your Sprint, et al, cell phone, which pays BellSouth, et al, a small fee for every call connected to a BellSouth customer).

So… the regulatory structure states that you must offer internet backbone traffic at rates significantly lower than residential/business calls, one that allows the engineers at Vonage to be able to offer long distance calls for, say, .01/minute. However, to support the cost of this infrastructure, you have developed a business model that helps subsidize it partially (or largely) through the use of long distance calls @ .5/minute.

Every minute of a Vonage call costs you $.04. Reach 1,000,000 minutes, and you’ve lost $400,000 of revenue to support the network.

You can’t raise your long-distance rates - you’ll lose all your customers! You can’t raise your traffic fees - the regulatory process will take 2 years for all the states! You can’t forbid somebody from using your network to exploit the regulations against you - that’s against the law!

Now personalize: You have a job that pays you .10 for every call you make. Your neighbors kid comes in to your house, calls your clients, and sells them the very same service (using your phone) for .06. You try to stop the kid, but you are told that he has as much (if not more! Because he isn’t a “dinosaur” :rolleyes: ) right to undercut you using your resources because of a concept known as Net Neutrality, a concept that people define for your ever financially-bleeding ears as being “all information is equal”.

But it’s not… some information is costing you $.10/call.

And as long as the infrastructure of the internet is maintained by for-profit companies with no legal protections and no financial protections to protect their investment, whose business model is under constant attack from the very users which use the network, the concept of Net Neutrality can not and will not live much longer.

22

They were not.

The current rules allow BellSouth and Sprint to charge each other for each call made to/from each others phone network. Net Neutrality laws, as I’m reading them, do not allow for Sprint to charge Vonage for Vonage’s use of Sprint’s phone network, other than at a volume bitrate for their use of Sprints data servers.

That’s the problem - it isn’t set up so that source and destination have an equal financial burden for the use of a phone/data network.

23

So, every time I download an image off the Internet, that costs the ISP money too? Every SDMB thread I view, every IM I receive, they lose money on all of those? But they’re required by law to lose money? Yeah, I can understand why they’d be upset. Why, if I were in that situation, I’d get out of the network business entirely!

Or are you saying something other than that they can’t afford to charge the amount they do for Internet traffic? Because they do, in fact, already charge for it. And a byte sent via a VoIP system costs the company that owns the pipes just as much as a byte sent to a Web browser.

24

That’s too close.

The real problem is that the internet started as a government network, with standard government rules regarding equal access. The procedure known as “Net Neutrality” was developed with no consideration to any potential financial (or use) implications to the network - given that it was governmentally-funded, the idea that the use of the network could undermine the financial support of that network was inconceivable in 1967-1995.

With the decommissioning of NSFnet back in '95, the internet “backbone” became the province of for-profit companies - the whole thing: rules, wires, protocols, etc.

However, the same rules that were perfect for a government-run network w/ no financial worries do not work as well when the network is run by private companies.

If you’re the government, and your network is supported by taxes, what do you care if somebody is using the network to undercut ATT long-distance rates? You don’t - you join them.

If, however, you’re ATT, and the network is supported (because of the regulatory structure) by long distance rates, what do you care if somebody is using your network to undercut your rates? You do - you care a lot.

I’m just trying to figure out how people think the internet is going to be run if the backbone providers are severely hampered in their ability to provide maintenance, or if they go out of business altogether?

25

No, if you read closer, you’ll see that my argument is focused on VoIP and other revenue streams that are traditionally used to maintain the networks.

Bringing up stuff like the SDMB is irrelevant and a straw man. The pricing structure for hosting the SDMB is fine as long as the SDMB isn’t undercutting SBC’s revenue stream every time it uses SBC’s network. It’s when that happens that people bitch.

26

Wrong - if used to connect to a SBC phone customer, it actually incurs an extra expense onto SBC. If the byte originates from a former customer, it incurs a potential loss. Reread my arguments.

27

Or, more simply, the telco can charge Vonage so much that Vonage is forced to sell their services for 10c a minute.

And that’s why net neutrality is important.

28

Okay, first off… are you saying that out of the money that someone would have used to place a long-distance call the traditional way, some would have been diverted off to pay for internet upkeep? (I realize that it’s hard to divide telecommunications into internet and non-internet, but that seems like a sensible question.)

Well then, if the way that people are using the internet causes a decrease in the number of traditional long-distance calls placed, then I agree that something needs to be done to maintain the revenue streams that will maintain the networks, but I’m not so sure that the responsibility of making these payments must be laid at Vonage’s door.

My philosophy in general is that nobody is entitled to money for the sake of ‘the way things have always worked.’

In terms of your personalized example… it seems very bad to a lot of us because we haven’t made agreements that anyone in the neighborhood can come into our house and use our phone. But I don’t see the problem in the kid undercutting you and delivering a better value to your clients… assuming that he can provide it.

Maybe the lesson is that the people who are running the internet shouldn’t be in a position where they’re competing with its users - though I have to admit I have no clue how to arrange a new position for them.

29

If the problem is volume [certain content/service providers using so much bandwidth it cuts into profits] then the solution seems fairly simple. Tweak the laws to make it slightly easier to raise traffic fees to keep up with profits while continuing to treat all traffic as equal. The companies that are using this massive amount of bandwidth will pay signifigantly more while those who aren’t will see a neglible increase.

If providers truly can’t raise their rates to make a profit that does seem like a problem. However, abandoning the “net neutrality” standard seems to be throwing the baby out with the bath water.

Yes, but to make the analogy more accurate you’d have to mention that the person has two jobs. One job is making calls and a second job is proving phones for the “neighborhood kid” to use. Now if the neighborhood kid has figured out a way to do your job cheaper… that seems like a market issue.

A closer analogy would be: You sell apples and apple pies. Aples are a buck a buschel and 5 bucks for a pie. You can make 3 pies with one buschel of apples. The neighborhood kid figures out a way to make ten pies per buschel and sells them for 2 bucks a piece.

In this scenario, net neutrality means that the government has decided that access to apples should be universal and you can’t charge the kid more then you charge everybody else. So what do you do?

Well first of all you raise the price of your apples by a few cents. It won’t effect most people but since they kid is buying them by the crate he’ll see the biggest increase and your profits will go up accordingly.

In the meantime, you either get out of the pie selling business or figure out how he’s making pies so cheap.

30

Note that the single most commonly cited company that the telecos want to charge extra to is Google, not Vonage.

Google is not in the VoiP business. Google is not a threat to telecos.

Google is viewed as a company that is making a lot of money. The old companies would much rather that the money Google is making went to them instead.

This is all about charging twice. It in no way shape or form matters the least to the telecos and cable companies what is inside the bits they are transmitting. What matters is whose bits they are sending. They want to charge extra for certain other companies bits.

Such a change would radically alter the Internet as we know it.

Back in the first heydays of monopolies, old John D. made a deal with the railroads. Standard Oil got a good rate, all other oil companies got a bad rate. So standard oil became a monopoly.

The Trustbusters stepped in and said that the RRs were common carriers. They had to charge everybody the same amount.

History is repeating itself. Except there are no Trustbusters anymore.

31

It’s not just telcos. Suppose you have an Internet business selling books. As your business takes off, your telco comes to you and says, “you need to pay extra for your connection.” So now you have to raise your prices, which hurts your sales. Maybe you have some special service that allows you to compete with Amazon.com. But as the price goes up, you can’t compete.

Without neutrality, the telcos can pick and choose which Internet business will succeed and which will fail. It ultimately will devolve into a protection racket: “you have a nice little Internet business here. Shame if something happened to it. Pay up to keep it going.”

32

I’ve been undecided about this net neutrality issue, but after reading through this thread it seems to me sorta like this:

The water company provides me with water. It also happens to make raspberry jam.

The water company is legally obligated to provide me with water that comes into my house at 40 psi. I have figured out a way to make raspberry jam that is more delicious than the water company’s jam, it costs less, but I’m still using the water company’s water.

Now that water company wants to charge me more for water because I’m undercutting their raspberry jam business.

I’d say the water company needs to get out of the raspberry jam business if it can’t keep up, but it can’t stop selling me water at 40 psi, for the same price it charges my neighbors who have 40 psi water and all they use it for is flushing their toilet, taking showers and watering the lawn.

Do I have this about right, or am I missing something?

33

It’s more like this:

The water company gets its water from several private reservoirs. Up until now, the water company has paid the owners of the reservoirs nothing for the water. But now that customers are, for some reason, using vastly increased amounts of water, the water company has taken to the odd notion that the private reservoir owners should pay them to carry water to the public, who also pays for the water on delivery.

The result of this is, the private reservoirs tell the water company there will forwith be a charge for every gallon of water taken from the reservoirs. The water company cries foul, and can’t figure out why their customers are pissed they screwed up a good thing.

34

I found this thread to be interesting, informative, and confusing at the same time.

35

It’s obvious why AT&T cares about this. What is much less obvious is why I should care that AT&T cares. As far as I am concerned I don’t care if cable or long distance companies go tits up.

You must be shroomin’ if you think the internet will go tits up. Companies will charge enough money to maintain the networks and make a profit. What they shouldn’t be allowed to do is use their control over the internet to hold companies hostage for more money.

36

Think of the internet as a highway system with automated drivers. Google wants to send a car my way, i.e. a bit of data. They pay a toll to put the car onto the highway, and when it gets to my exit I pay a toll for the car to exit the highway. These tolls pay for the maintainace/construction of the highway system. Now many companies own the highway system, and two different companies are taking the tolls. I pay my toll to get the car off of the highway system to Company A, and Google pays Company B to put it on. On the cars way to my house it might travel on Companies C-F’s highways. These companies all have agreements that allow any car to travel through their part of the highway, no matter who is getting the toll money.

Now what is happening is that Company A sees that a lot of cars getting off at their exits, or travelling through theirs portions of the “highway” are coming from Google. Since Company B is collecting Google’s enterance tolls, Company A is not seeing any of that money (Though they are being paid for their service through the exit toll). Companies C-F don’t see any of this money, but they are paid by those entering/exiting bits of data at their exits. Traffic on the internet is such that this disparity is evened out. That is they collect tolls on another bit of data that passed through everyone elses highways.

Now everyone but company B thinks to themselves, hey Google is making a shit load of money, I want some of that. How are they going to do it? Well, remember that they control the “exits” that go to Google’s customers, and a lot of the highways inbetween them. What all the companies say is that they are going to provide a faster “exits” for Googles “cars”, and faster transport through their part of the highway system, for a nominal fee of course.

What in reality that means is that they are going to force Google to pony up some cash or they will blackball them on their “exits” and their portion of the highway. In other words, they will send Google’s cars much slower through their system unless they get some cash.

Now neither Google nor I are using Companies C-Fs highways for free becuase of the reciprosity agreement. Nor is Google or I getting a free ride if we put more “cars” into the system. If someone puts/takes more data into/out of the system they pay more tolls. The arrangement right now is more or less fair, but the telecoms would rather make more money.

37

That works, but it could be augmented for completeness. That is, Company B not only owns the highway system, but they also manufacture cars and trucks. They want to send some (possibly inferior) cars my way in place of the ones I’d normally receive from Google. To horn in on Google’s market, Company B can either charge Google extra so that I can receive Google’s cars OR they delay my reception of Google’s cars. It’s a win-win situation for Company B.

But limiting Google’s cars isn’t all that lucrative, as they’re econo-boxes – very small and not greatly affected by small delays (although there is a buttload of them). Vonage’s 18-wheelers, however, are hugely affected by delays, take up more space on the highway than Googles’, and are similar models to the ones that Company B sells as its bread-and-butter. The same technique that can be applied to Google (without too much impact) can be applied to Vonage – and it becomes a win-win-win situation, such that Company B can charge more, delay reception, and reduce Vonage’s sales to increase their own. Not because Company B makes better trucks, mind you, but because they own the highway.

38

Yes, this gets more and more confusing. And I could see it getting messy.

Ten years ago I could pick up my phone and call my friend in Germany, and the call would cost, let’s say $20.

Along comes the innernetweb, and I can run my chat program and type back & forth with my friend in Germany all day. Except, if I were using AOL at the time when they charged by the minute, that chat could end up costing me $500. People thought that was insane, and AOL and everyone else went to a base, monthly fee. Everyone was happy again.

Then they add audio to my chat. Then video. Now I can teleconference with my friend in Germany all day, for no more than my base monthly innernetweb bill.

“Can’t have that,” say a whole bunch of greedy bastards. Let’s make it so every single ISP between Lev & his friend in Germany can charge his ISP.

Now, I can video chat with my friend in Germany all day if I want to, but all those ISPs are monitoring my chat, they’ve ID’d it as video chat, and they’re all demanding money from my ISP.

Now, you know additional fees & charges always get passed on to the consumer, so my ISP is going to start charging me $5/hour when it sees I’m video chatting. So now I’m paying $50 to chat with my friend in Germany all day.

I can see consumers quickly crying “foul!” if this goes the way it looks like it would go. Everybody is going to be charging everyone else like crazy, and my ISP is going to monitor every packet of data I get, and charge me different rates based on whether it’s audio, video, voice, TV, etc.

Based on my current internet habits, I could see my monthly ISP bill getting ridiculous.

We might as well kiss cool websites like YouTube goodbye. Say goodbye to downloading TV from iTunes.

Won’t it be fun when all you can afford to do on the internet is stare at your ISP’s homepage all day?

39

I’m with you on this. Very confusing stuff going on in this thread. But the main reason for this message is this is an USA law, yes? so how does this effect the rest of the world? For example myself in Oxfordshire, UK paying £15.99 a month for BT ADSL and (I think) an 8gb monthly download limit?

40

I think you’re missing the point. You, the consumer, must connect to the Internet through an ISP. Let’s say you choose AOL (although it could just as easily be AT&T or anyone else). Once connected, the most common thing you do is search. Google looks like a free site to you, but they really make money from advertisers every time you use their service. Forget phone calls. This is about the ISP wanting a cut of Google’s ad revenue.

Here’s how it works: Behind the scenes, AOL cuts a deal with MSN making them the “preferred search engine.” All traffic between MSN and AOL is given priority. Let’s say Google won’t pony up. Then all traffic between Google and AOL is given a significantly lower priority. The Internet can’t “route around” this problem, because it’s happening at your ISP. You can only send or receive data through that ISP (AOL, in this example), so if they decide Google will be slow and MSN will be fast, you’re stuck with it.

Killing net neutrality would greatly benefit the big ISPs (including telecoms and cable companies), as they have tremendous leverage to force content providers to pay for preferred routing. It would be a huge blow to the small content providers, as most of them wouldn’t be able to afford to pay bonuses to ISPs to get their content across.

As a consumer, your overall Internet experience would slow down, and access to your ISP’s portals and “preferred partners” would speed up.

Killing net neutrality would be a very bad thing.