Net Neutrality wins; who loses?

According to the Wall Street Journal:

This was a campaign point by Obama, but I’ll admit I had kinda forgotten about it since the election. If I had been thinking of it, I would have guessed it was dead in the water simply because it had disappeared from conversation at most places where I hang out.

Same article.

Are you surprised? Pleased or displeased? What impact will this actually have? Is it battling a nonexistent problem? Google (and others) on one side and Comcast (and others) on the other, so this is hardly a David and Goliath struggle. It’s Goliath versus Goliath. And Goliath wins.

Net neutrality is a much more complex topic than the supporters of it generally realize. For example, if an ISP can charge more for high-bandwidth services, it can lower prices for people who don’t use that bandwidth. Now, the price has to be level for everyone. Also, if providers can charge more for super-high bandwidth services like real-time HD video streaming, they will have an incentive to upgrade their networks to increase revenue. Now, they may simply cap their speeds and say to hell with it, and we’ll lose out on the potential innovations that could have paid their own way.

For example, if a provider is willing to provide a special low-latency connection for gamers, and charge gaming companies extra to pay for the added hardware required, would that be a bad thing? If a startup wants to provide HD television over IP, with net neutrality that provider may simply find that the bandwidth is unavailable, because the large providers are not going to be able to provide that level of bandwidth to every customer they have, and they have no way to discriminate on price. So services like that may simply never happen.

The fact is, today about 20% of internet users use the vast majority of internet bandwidth. These are the people who run bittorent all day, who are heavy users of online video and other high-bandwidth services. The vast majority of people use the internet to read E-mail, surf web sites, and maybe watch the occasional Youtube video. But with Net Neutrality, the high-bandwidth users can’t be targeted and forced to pay more, so everyone else gets to subsidize them. Or at least, it’s possible that this is the case, because ‘net neutrality’ is a pretty fuzzy concept.

Of course, there are good arguments for net neutrality as well. Some fear that without net neutrality ISPs will start doing things like blocking Google or other big web sites unless they pay them more. But it’s not clear to me that on balance it’s a good thing.

Are you sure about that? I don’t think net neutrality means not being able to charge people for the bandwidth they use. It means treating different uses of bandwidth equally and not slowing or prioritising different uses. An ISP could still charge for bandwidth use, or offer more expensive low latency packages.

From google’s page on net neutrality:

From the wikipedia page on net neutrality:

I haven’t read exhaustively on the topic, but it doesn’t seem too vague to me. Although the internet is more complex, the phone company analogy is good. They can charge you for usage, but they can’t tell you who you can and can’t call.

I’d say it’s a good idea, based on my current understanding. It allows easier market entry, with new content makers able to enter the field and soak up bandwidth even without having large amounts of capital up front to pay off established entities. More potential competition, in other words, which is nearly always a good thing in my book.

And I don’t think it would mean that all consumers pay the same costs, as Sam indicates. There could be bandwidth caps, with people willing to pay more doing so up front, instead of content caps with the ISP as gatekeepers, with the danger of ISPs blocking competing firms or “undesirable” messages. In other words, there could still be a market, but it’d be a market that allowed the most possible competition without risking that firms would set up road-blocks that stifled future innovation or opinions contrary to corporate interests. But I do agree with Sam’s point that this is a fairly complicated issue, as is amply demonstrated by his own apparent mistake on the issue.

I certainly don’t understand all the nuances myself, either. But I have a feeling that with the right set of rules (which are still hazy right now), the people who are going to pay the most could be those who intend to use the most bandwidth, regardless of the sites they wish to visit. And that’s not a bad outcome.

My understanding, which could be flawed, is it has nothing to do with how much people pay for bandwidth by volume. It has only to do with bandwidth by legal content. The ISPs, like phone companies before them, aren’t allowed to deny you access or impede your access to legal content.

Can we wait until the FCC actually publicizes the new principles before debating them? Net neutrality means a lot of different things to a lot of different people.

I’d amend that by replacing “supporters” with “participants”; neither side gets a pass.

I’d also note that net neutrality and quality of service (QoS, which is the bulk of your focus) are not necessarily of a piece.

To me, the basic issue is separation of carrier from content provider. The problems crop up when the two overlap. In answer to the title question: if net neutrality wins, the content providers “lose” (in quotes because I don’t feel that reducing monopolistic advantage is really a loss).

What if they were allowed to provide a low latency connection for gamers, and therefore added an artificial delay to all game-related traffic and said “give us an extra $30 a month and we’ll remove it” essentially? You could say “go to the competition” except that availability of internet services is limited. You can’t switch to time warner because they offer better packages to comcast - whatever cable provider covers your area is what you get. If you’re lucky you’re close to a DSL station or have fiber optic available, but what if you don’t?

My understanding is that this isn’t what’s covered by net neutrality. Net neutrality covers the issue of how traffic is shaped and routed, rather than how much bandwidth any given user can have in total. Internet providers already do provide a tiered system. With cox, for example, I could pay something like (IIRC) $40 for 6MBs down/384K, $60 for 10/1, and more for a premium package. In other countries, it’s common for there to be total data transferred caps on a monthly basis. Providers in the US could still provide more or less bandwidth to different customers - they just aren’t allowed to say “you can’t block traffic from site A and give special low latency status to site B”.

The cable companies are probably in favor of a one tier pricing system anyway, since they like it when grandma who checks her e-mail and uses 200mb a month pays $50. My evidence for the assertion is that it’s how the system has essentially worked even though they could’ve split services into tiers earlier or implemented bandwidth caps if they wanted to.

I disagree. I would say that the bigger problems happen if they are separate. Suppose Comcast told Google to pay them $100 million per year, or Comcast will shape Youtube traffic so low as to be unusable. Google cannot choose not to send traffic over Comcast’s network if a Comcast customer wants to watch a Youtube video. Google’s only choices in this scenario is to either pay to keep Comcast’s customers using Youtube, or not pay and probably lose those customers.

The situation is even worse for up-and-coming content providers. If Comcast had demanded tribute from Youtube while it was in its nascent stages Youtube probably would have been stillborn. Today, there is at least the possibility that Google could win a PR war and Comcast customers could leave Comcast for a competitor. Small, up-and-coming companies would have no chance.

This isn’t a theoretical scenario. Executives at some large service providers have threatened to do exactly this(IIRC Virgin Media was the biggest).

I’ve (re-)read your response multiple times now, but I’m not quite sure what you’re arguing. What role is Comcast playing in your scenario?

I think you’re saying that Comcast would – to put the worst spin on it I can – attempt to extort money (as a carrier) from Google (obviously, as a content provider). IMHO, this is a free market/monopoly problem, not a net neutrality issue. That is, a market of competing carriers would provide two mitigating factors to the “extortion” issue: (1) consumers could choose the carrier that best suited their desires and (2) carriers would tend to offer the maximal access to content (due to competition). Granted, at this point in time, many localities do not have a choice in carriers.

But again, I’m not sure…are you arguing for/against net neutrality? Or about the (tangential) point of carrier/content provider overlap?

All net neutrality issues ultimately come down to a lack of competition in the market. This cannot be fixed; the market inherently has gigantic barriers to entry. If it weren’t for the existing cable and telephone networks being adapted for internet service, I doubt that we’d see any competition at all in the market.

As we can’t make the market competitive, we’ve left with regulating service provides to prevent abuses of market power.

I’m arguing that certain forms of net neutrality are extremely important to prevent abuses, and that the abuses don’t necessarily come from content provides also being service providers.

That’s how I understand it as well – the ISP can STILL charge me a premium for higher bandwidth use, but it can’t make it so that my traffic gets bumped to the back of the queue if a packet from a premium customer shows up.

As I said above, net neutrality means different things to different people. At its core, net neutrality means that services provides are not allowed to discriminate between packets based on something. The disagreement is always based on what that something is. The simplest version to understand is pure bit-level net neutrality: service providers aren’t allowed to discriminate between packets based on anything. Other forms of net neutrality are less stringent and allow service providers to discriminate based on some things but not others.

By the way, I’m been remiss in not mentioning earlier that I work for a company that produces deep packet inspection equipment, so I’m not completely unbiased on the topic. Imposition of pure bit-level net neutrality, for example, would put me out of a job.

You can always conjure up scenarios were someone might use a regulation or lack of regulation for nefarious ends. It might even happen. But it could also go the other way.

For example, perhaps providers will use the cover of net neutrality to start charging per-megabyte fees. If they aren’t allowed to do things like shape traffic and throttle back the bittorrent monsters, then all they can really do is implement bandwidth caps and monthly data caps and charge extra.

My real point was that if a service comes along that people would really like, but which absolutely has to have low latency or extremely high download speeds or some other ‘enhanced’ feature to make it work, it’s not clear how this feature could get to market if net neutrality prevents providers from charging extra for connections to that service to cover the added cost of high-speed switches, or fiber, or whatever. If everyone has to be equal, doesn’t that just make the lowest common denominator king?

If net neutrality ultimately results in de facto price caps on internet services, it will seriously damage innovation.

Bandwidth and data caps are certainly allowed, but again, without the ability to shape traffic, the only alternative providers are going to have is to impose bandwidth throttles on everyone, and monthly data caps on everyone.

If you have a kill app, and it requires low latency, what is the mechanism for getting it to market under net neutrality?

Also, I keep seeing an assumption that this is all a zero-sum game - that if an application needs higher bandwidth or special latency requirements, this will come at the expense of other users, that they will become second-class citizens to the premium services. I’m not sure there is evidence to support this. If the ISPs can charge more for low-latency connections, why wouldn’t they fund it by charging premiums and using the money to add capacity to the network? They do this today with T1 lines, for example. You can pay a premium and buy a direct T1 connection between two remote sites with guaranteed throughput and latency.

They’ve done bandwidth sharing and it’s worked because in the past. As the net increasingly moves towards things like high-speed video, it’s starting to become a problem.

This has been my understanding of it too.

Too many providers have vested interests in shaping things. For instance, Comcast provides movies via it’s cable system, “on demand” and the customer pays for this. But suppose he downloads the movie from a legal site. Well Comcast lost out on it’s “on demand” market."

So let’s say Netflix will let you download the movie. If Comcast could make it difficult to get a connection to quickly download a movie the consumer would just go to Comcast’s “on demand.”

There’s also pressure by movies and records to stop allowing torrent traffic.

The industry is saying it can’t sue everyone so let’s just let the ISP’s make it difficult to do. This is akin to the cops saying “People make plans to rob a bank over the phone, so the phone company should stop connections to known criminals.”

The thing is even if you don’t mean to, if you have a vested interest in making money you’re not going to help someone who’s going to prevent you from doing this? Well you won’t try very hard to help them anyway.

Competiton is the key. Where I live I can get 6.0mB/s download simply by playing off Comcast Internet against AT&T DSL. I just keep threatening to move and they always give me a half off rate. I’m sure at some point they’ll stop, but it does show competition helps consumers.

But not everyone has a choice.

Ah, OK. Personally, I see the threat of, for instance, a phone company (as carrier) to a VOIP company (a content provider) as a worse (and more likely) threat than what I’ve characterized above as “extortion”. But YMMV.

We’re in complete agreement about the bit I quoted.

Did anyone think to ask a ninja about this?

http://askaninja.com/news/2006/05/11/ask-a-ninja-special-delivery-4-net-neutrality?video=flash

I’d love to watch that, but Comcast says I need to use their video server or fork over another 10 bucks per month for the “External Online Video” tier.

They already do that.

There are already apps that need ultra low latency, flash trading for example, that flourish under current internet rules.

There’s nothing stopping ISPs from selling special low latency, high bandwidth, or large data transfer plans under net neutrality. What they can’t do under net neutrality is treat one data packet different from another data packet based on what that packet contains. This is based on real fears that they will throttle data from sites that compete with their product offerings. For example, could Vonage compete if they had to pay ISPs to not throttle their data, or Netflix On Demand movies, or Hulu, etc.

If the FCC imposes pure bit-level net neutrality, it would be illegal for them to offer low latency or high bandwidth options. This is why it’s pointless to speculate before the FCC actually unveils the new rules; until then everybody is just going to be arguing over the definition of network neutrality.