Net Neutrality Equals Theft?

from the who's-stealing-what-now? dept

Fri, Mar 10th 2006 2:44am — Mike Masnick

Yesterday, I pointed out, with disbelief, a new report from the Progress and Freedom Foundation that actually claimed that open spectrum discouraged innovation and investment, despite plenty of clear examples where that was false (WiFi) and other examples where the system they advocated (expensive auctions) resulted in spectrum auctioned off for billions of dollars that was then never used. However, it took barely 24 hours for PFF to top itself. They put on an event, where the co-founder of the group actually said with a straight face: "Net neutrality is, in fact, the theft of property rights from [broadband] infrastructure providers. It's simple regulatory theft -- the transfer of ownership from one group of people to another group of people." This is wrong on so many levels, it's hard to believe that anyone actually pays good money to PFF for their thoughts on things -- until you realize that the companies paying PFF that good money are those broadband infrastructure providers who don't want network neutrality at all.

First of all, that statement ignores that plenty of broadband infrastructure was built up as a government backed monopoly, using our tax dollars that was later privatized with the promise that it would be kept open and neutral since we all paid for it. While many telcos are now replacing that infrastructure, they still do have the right of way to lay new infrastructure that almost no one else actually haves -- granting them monopoly (or in some cases, duopoly) rights. It's these issues that display the importance of network neutrality. However, if PFF wants to talk about "theft," perhaps they'd like to comment on all of the regulatory subsidies granted to the broadband providers over the years, in exchange for promised services that they never delivered (and probably never will)? That seems a lot more like theft than simply requiring that monopoly infrastructure plays fair with services that run on that infrastructure.

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GS Arnold, 10 Mar 2006 @ 3:39am

Emminent Domain?

I've been telling people for a couple of years that we're probably edging toward a point where local governments will declare emminent domain and take control of the communications copper as a public utility and rent access to the telcos and ISPs.
Now, before you think that's crazy, consider this. It's like electric power. We normally think of that as a privately owned (non-government) utility. However, where I live (Cuyahoga Falls, Ohio), the city owns and operates the power station and all of the cables. We're even on our own grid! Not only were we entirely unaffected during the big summer blackout a couple of years ago (2003?), but our electric bills are as much as HALF what they are in surrounding cities and townships that have to buy their electricity from First Energy/Ohio Edison.
We've seen stirrings in the local paper from folks starting to throw ideas around about maybe doing the same with natural gas and I hope they do - it's been one of the really great things we didn't find out about until AFTER we moved into our house.
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?, 10 Mar 2006 @ 4:10am

Re: Emminent Domain?
I live off of rural power, our city runs its own utility, and our power and gas prices are way meaga higher than if we would tap into the private gas / power providers.
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RevMike, 10 Mar 2006 @ 4:40am

How can you sleep at night...
where I live (Cuyahoga Falls, Ohio), the city owns and operates the power station and all of the cables.

How can you sleep at night knowing that you are stealing from the major utility companies?

Won't somebody think of the shareholders?
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giafly, 10 Mar 2006 @ 4:44am

All your information are belong to us
When you send your information via broadband, these guys think they own it. (They also think broadband over power lines will work, which is just as bizarre.)

I hereby claim ownership of all the air that passes through my lungs. You "atmospheric property thieves" must pay me $1 for every breath that contains any of my molecules, which is almost every one (related calculation).
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Chris, 10 Mar 2006 @ 5:27am

Re: How can you sleep at night...
This is where the telcos are full of it.
Imagine if your electric company tried to extort more money from stove/oven/dryer manufacturers since those appliances are using more power than other home appliances and needs another tier of wire?

Sounds retarded, and it is. But for some reason, the telcos think it's ok when we'd never stand for the practice in other places.
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discojohnson, 10 Mar 2006 @ 5:47am

Re: How can you sleep at night...
Imagine if your electric company tried to extort more money from stove/oven/dryer manufacturers since those appliances are using more power than other home appliances and needs another tier of wire?

wow, good analogy chris. nor does the power production industry extort money from the ISPs because they are using all this power to operate the internet; i'm sure that the HQ of any ISP or tech industry (google, ms) pulls a lot more power than the regular guy, and probably more than most comparably sized businesses (more hardware to power).
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Paul, 10 Mar 2006 @ 6:16am

Re: How can you sleep at night...
Actually that's a bad analogy. The Power company gets paid by Kwh so if your stove runs more or isn't as efficient they get more money from you. If you apply the power company analogy to ISPs they would get paid per mb of data downloaded. This would lead to people using the internet less. I don't think that's what anyone wants.
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lar3ry, 10 Mar 2006 @ 6:18am

Re: How can you sleep at night...
i'm sure that the HQ of any ISP or tech industry (google, ms) pulls a lot more power than the regular guy, and probably more than most comparably sized businesses (more hardware to power).
Actually, being a business, the electric companies do charge them differently since they are on a different tier of service. Not a good point.
With regard to ovens/stoves drawing more power, we deal with that by putting them on different circuits in the house. This is where the analogy is broken (as can any analogy, when stretched to the point of extremity).
The original point that the broadband companies have taken money for services they never delivered, I think that this would be a good thing for congressional hearings. Of course, if congress makes them pay it back, the companies will simply raise their rates.
If the broadband companies want to "tax" VoIP by specifying a different tier of service, then that tier better have QoS guarantees... after all, isn't that what they say they are providing?
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Chris, 10 Mar 2006 @ 6:19am

Re: Emminent Domain?
Funny, I live right next door (in Tallmadge). I've always been jealous of the Falls electric situation.

Even more frustrating is the fact that my electric/gas bill could be half as much too. That BS "transition charge" that amounts to near half of my bill serves no purpose. It was supposed to go away in 200x, then in 2006, and now they've bumped that fees lifetime again. Jerks.

Once Tallmadge went budget group electric/gas, my transition charges dropped dramatically, which means they're crap charges that most people are getting ripped off.
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Dam, 10 Mar 2006 @ 6:19am

Re: Eminent Domain?
Excellent comment. My town resells power from the Northeast grid and it is substantially cheaper than the major utility provider one town over. I'm glad to see I'm not the only voice for this proposal.
Just as local governments build and own the roadways, which are then used by all kinds of vehicles that pay taxes to use them, so should the new fiber and copper infrastructure be owned by the taxpayers of local municipalities and regional governments.
This is not a money-losing proposal. Renting bandwidth to competing internet / media providers would be a boon to the local tax base and would absolutely stimulate more content developement.
The reason this concept may never see the light of day is the big utilities are afraid of it and will work to defeat it.
Although I would oppose an eminent domain taking of private property, I think the next highways to be built should be owned by the taxpayers, not some big company that can restrict access as it ses fit.
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Chris, 10 Mar 2006 @ 6:23am

Re: How can you sleep at night...
Right. Don't take my analogy to literally. It's only meant to point out the sillyness of the telcos intentions here.

The point is, I pay my electric bill, and Maytag pays their electric bill. Starting another tier of electric delivery and payment just because the electric company would like to be "compinsated" for their "build-out" is an absurd thing, since they're already being paid for their service.
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Andrew, 10 Mar 2006 @ 6:33am

Re: Eminent Domain?
"I think the next highways to be built should be owned by the taxpayers, not some big company that can restrict access as it ses fit."

We'd rather leave it all to the government to restrict access as it sees fit? In the event that the "taxpayers own the roads," some government agency will inevitably be set up to "administer the public's wishes." Normally, I'm not your stereotypical anti-government ranter, but isn't the point behind capitalism that companies compete over who gives the best service? Isn't the larger problem that all the telcos prefer not to compete and just mainain their own monopolies? Maybe Americans largely aren't putting up enough fuss because they're worried they'll lose all access?

Correct me if I'm wrong, really.
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Sean, 10 Mar 2006 @ 6:40am

network segregation
Its really scary how these companies are attempting to frame network segregation as the rights of companies. Although they are speaking with half-truths coupled with flat out lies, watch for them to keep pushing this "unbiased networks" are "theft" ideas, and start pushing for their "seperate but equal networks".
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Wolfger, 10 Mar 2006 @ 7:52am

Re: How can you sleep at night...
Actually that's a bad analogy. The Power company gets paid by Kwh so if your stove runs more or isn't as efficient they get more money from you. If you apply the power company analogy to ISPs they would get paid per mb of data downloaded. This would lead to people using the internet less. I don't think that's what anyone wants.
But we *do* pay per mb of data downloaded, after a fashion. We pay for a certain potential. I pay to get "up to 8Mb/s". I actually only receive 6Mb/s (or less), but I am still paying for up to 8Mb/s. Now they want to double-dip and get paid *more* when I actually approach the full 75% of what I am paying for... It's larceny on multiple levels.
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Darren, 10 Mar 2006 @ 8:22am

Re: Eminent Domain?
I think the next highways to be built should be owned by the taxpayers, not some big company that can restrict access as it ses fit. You don't think that Governments wouldn't restrict access as it sees fit?
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Eric, 10 Mar 2006 @ 8:59am

Re: How can you sleep at night...
Actually, they *do* get paid for utilization, though it's usually hidden from consumers by their retail ISP. It's the ISPs that pay for bandwidth to backbone owners; they then apply flat charge to all users regardless of consumption, and many institute monthly caps.
Same principle in the powergrid world is used by many highrise buildings, where tenants pay a flat monthly fee regardless of consumption, and the building owner pays to utility company the actual usage. This is usually done to simplify (read: lower cost) metering (1 meter per building, rather than 800 or whatever), and building owners come on top (i.e. what they collect is higher than actual usage simply because most tenants never utilize the amount of power their monthly fee would buy).
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Luke, 10 Mar 2006 @ 8:59am

REMC
I'd like to go to an REMC method. Prices are not extrememly different, but the service is owned by the users.

The share holders are the exact same people who use the service...no third party holding shares that may or may not use the service.

While the REMC isn't a perfect model it is one that retains the ability for the user to make a difference in how the service will be distributed and how the system will be maintained.
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Marc Kriger, 10 Mar 2006 @ 10:31am

If Comcast Managed the Public Library System: A Hy
News Flash: US Government Signs 10 Year Contract with Comcast to Maintain the Public Library System.
For an undisclosed amount of money, Comcast has agreed to develop and maintain the Public Library system: all buildings, land, and access routes. However, in the agreement, library systems and librarians will continue to be responsible for all book and media purchases.
Comcast chairman promises �easy, fair and unfettered $49.95 access for all, brightly polished door knobs, and most importantly, clean bathrooms� Additionally, he says the company has promised the government to expand the system to meet consumer demands, with the help of continued and plentiful subsidies, grants, and tax breaks.
Inside of Comcast Corporate Office:
Corporate Lackey #1: �Look at this, it says here on page 2 that �Content Providers and Publishers are growing exponentially to meet accelerating customer driven, and there�s been an upsurge in related stock prices--creating Instant billionaires across the nation�
VP of Business Strategy and Corruption: �Hmmm, �I�d sure like a piece of that action, who doesn�t want to be a billionaire? But, how is the question?�
Corporate Lackey #1: How about�.
VP of Business Strategy and Corruption :( interrupting) Shut up, I�m not talking to you, you peon. I�m simply scheming out loud. Hmmm., Now let�s see, If I could find a way to charge those wealthy publishers and content providers loads and loads of money for the privilege to get their books on �MY� library shelves, why, why, why, that would be lucrative AND fiendish�
Cut to Comcast Boardroom:
VP of Business Strategy and Corruption: �So I was thinking, If I, I mean, we could charge the publishers loads and loads of money to carry their books on �My, I mean, OUR� library shelves, why, why, why, that would be lucrative AND fiendish, no, Mr. Chairman?
Comcast CEO: �Lucrative Yes, Fiendish, Yes, However, I�m afraid we only maintain the buildings and the land. From my recollection, the library systems and the librarians are responsible for all book and media purchase, as requested by customers. For us to decide what content gets into the system would be pretty risky: People would cry �foul, censorship, monopoly, Microsoft�
VP of Business Strategy and Corruption: But what if we charge those greedy publishers every time they come to the library to deliver their goods into the system, that surely that would be legal? Who could argue with that? Those who pay more get more: expedited access for our preferred publishers.
Comcast CEO: Legal Counsel?
Legal Counsel: �I think that would still consitute censorship if we don�t allow access to those can�t pay, or won�t pay. But perhaps we could instead grant them limited access to the public libraries when business is slow.
Comcast CEO: A fine and brilliant idea. Put it in the minutes those who don�t pay our ransom can come and deliver their wares to the system on Thanksgiving and Christmas.
Legal Counsel: But, sir, the public library system is closed on those days. That wouldn�t fly to give them access on those 2 days only
Comcast CEO: How stupid of me, you�re right, that wouldn�t fly. Let�s give them Thanksgiving, Christmas and the 4th of July, Independence Day.
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Marc Kriger, 10 Mar 2006 @ 10:35am

If Comcast Managed the Public Library System: A Hy
If Comcast Managed the Public Library System: A Hypotheticl One Act Play

News Flash: US Government Signs 10 Year Contract with Comcast to Maintain the Public Library System.

For an undisclosed amount of money, Comcast has agreed to develop and maintain the Public Library system: all buildings, land, and access routes. However, in the agreement, library systems and librarians will continue to be responsible for all book and media purchases.

Comcast chairman promises �easy, fair and unfettered $49.95 access for all, brightly polished door knobs, and most importantly, clean bathrooms� Additionally, he says the company has promised the government to expand the system to meet consumer demands, with the help of continued and plentiful subsidies, grants, and tax breaks.

Inside of Comcast Corporate Office:

Corporate Lackey #1: �Look at this, it says here on page 2 that �Content Providers and Publishers are growing exponentially to meet accelerating customer driven, and there�s been an upsurge in related stock prices--creating Instant billionaires across the nation�

VP of Business Strategy and Corruption: �Hmmm, �I�d sure like a piece of that action, who doesn�t want to be a billionaire? But, how is the question?�

Corporate Lackey #1: How about�.

VP of Business Strategy and Corruption :( interrupting) Shut up, I�m not talking to you, you peon. I�m simply scheming out loud. Hmmm., Now let�s see, If I could find a way to charge those wealthy publishers and content providers loads and loads of money for the privilege to get their books on �MY� library shelves, why, why, why, that would be lucrative AND fiendish�

Cut to Comcast Boardroom:

VP of Business Strategy and Corruption: �So I was thinking, If I, I mean, we could charge the publishers loads and loads of money to carry their books on �My, I mean, OUR� library shelves, why, why, why, that would be lucrative AND fiendish, no, Mr. Chairman?

Comcast CEO: �Lucrative Yes, Fiendish, Yes, However, I�m afraid we only maintain the buildings and the land. From my recollection, the library systems and the librarians are responsible for all book and media purchase, as requested by customers. For us to decide what content gets into the system would be pretty risky: People would cry �foul, censorship, monopoly, Microsoft�

VP of Business Strategy and Corruption: But what if we charge those greedy publishers every time they come to the library to deliver their goods into the system, that surely that would be legal? Who could argue with that? Those who pay more get more: expedited access for our preferred publishers.

Comcast CEO: Legal Counsel?

Legal Counsel: �I think that would still consitute censorship if we don�t allow access to those can�t pay, or won�t pay. But perhaps we could instead grant them limited access to the public libraries when business is slow.

Comcast CEO: A fine and brilliant idea. Put it in the minutes those who don�t pay our ransom can come and deliver their wares to the system on Thanksgiving and Christmas.

Legal Counsel: But, sir, the public library system is closed on those days. That wouldn�t fly to give them access on those 2 days only

Comcast CEO: How stupid of me, you�re right, that wouldn�t fly. Let�s give them Thanksgiving, Christmas and the 4th of July, Independence Day.

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Russ, 10 Mar 2006 @ 10:39am

Re: How can you sleep at night...
The Telco�s do get paid for the bandwidth that other companies are using. It is in most cases sold to a company at a certain rate for a fixed cap on the amount of traffic that runs through the pipe. If they exceed that cap then they pay addition costs related to that excess usage. So as far as the Telco�s wanting to charge for that usage, they already do. They seem to be wanting to charge (or extort) more to these companies that already pay for their connectivity. They will control the pipe if our politicians do not do their job and protect the interests of those who voted for them.
As we move away from an open internet system in the US to one that will be controlled by only a few, let's look at another concern. The Telco and cable companies will be able to control all of the traffic on the net. If someone were to not agree with them, then they would be able to completely block all traffic to that particular IP address used by that entity. Scary thought! Do we really want the large Telco�s and the large cable companies to have that much control? Given their history and their current statements the Telco�s have not shown a high level of trust. The Government is currently working on new legislation and we can only hope that Network Neutrality is something that is added to this with serious ramifications for not keeping it open.
The other problem with the way things are headed is that ISPs that are buying from the Telco�s are facing hard times ahead as the Telco�s lock down their networks to keep any competitor out. There needs to be some type of legislation added to the new laws that protect your right to keep your service with a provider other than the Telco. Because the way things are headed right now if you do not have a wireless or some other form of broadband in two to three years your only choice may be the cable company or the Telco both of which have a monopoly (basically) in most of the US. Most areas have only one provider for each of these services.
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james, 10 Mar 2006 @ 10:55am

Re: How can you sleep at night...
If you apply the power company analogy to ISPs they would get paid per mb of data downloaded. This would lead to people using the internet less. I don't think that's what anyone wants.

while "using the internet less" may not be something that most folks are gunning for, i bet the MPAA and RIAA in addition to the backbone providers want lots of people to spend their internet time consuming less bandwidth.
eventually, that's what it will come to. we'll no longer pay 12.95-49.95 per month flat fee for our internet service without a bandwidth/month cap. big business (google, yahoo, apple, etc) won't get hurt by this whole net neutrality debate and impending showdown. the network will treat their traffic indiscriminately just as it does now. who will end up getting it in the end is the same as always-- you, me, the guy next door, grandma, etc.
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Dave, 10 Mar 2006 @ 11:33am

Re: How can you sleep at night...
This is my biggest problem. I am stuck with comcast no matter how bad their service gets my threats to cancel will fall on deaf ears because there is no competition. If they start messing with my Sunrocket them I may be forced to go DSL. But with the cost of local phone service it is as muc has cable. I don't want limits on my bandwidth and government ownership would be worse because there wouuldn't be hope of competition. The only solution is more competition. That is the only place were we win. If it takes more subsides I don't care, as long as it so companies can move in on their competitors.
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Hersh, 10 Mar 2006 @ 12:27pm

No Subject Given
It's true that it would only be fair to insist on net-neutrality for infrastructure that is already in place, that the government (and our tax dollars) possibly had a hand in building. However, it's a little lame to insist that people HAVE to allow net-neutrality on any NEW pipes they build.

There probably won't be as fast an improvement in infrastructure if telecoms aren't allowed to pay for that investment by charging the Yahoos and Googles for premium services. Consumers as we have seen aren't so keen on paying for faster services until they can see the applications that utilize these faster services (the chicken and the egg problem, since these apps don't show up until the consumers are there). So it's not like Telecoms will be able to build the faster infrastructure and expect to recoup the investment by charging consumers for faster lines.

Anyway, perhaps a happy medium would be to force neutrality on existing pipes, and let anything go on the new ones.
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Steve Magruder, 10 Mar 2006 @ 12:43pm

PiFFle!
Funny... this organization is actually opposed to progress and freedom. Their opposition to net neutrality says it all. Their "threat to property rights" piffle is outrageous--they already receive full payment for their infrastructure from their Internet access customers--but not unusual for greedy sociopathic corporatists--they now seek DOUBLE PAYMENT. The real problem is that because their other business models are failing, they want to squeeze more revenues from the Internet (thus squeezing out a lot of political speech), in the process attacking true freedom and democracy itself.
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Steve Magruder, 10 Mar 2006 @ 12:50pm

Re: No Subject Given
It's funny how PiFFle and people like yourself miss the elephant in the living room: Why not raise rates on Internet access customers? Aren't those revenues supposed to cover the ongoing infrastructure costs?
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Anonymous Coward, 10 Mar 2006 @ 12:59pm

Re: No Subject Given
However, it's a little lame to insist that people HAVE to allow net-neutrality on any NEW pipes they build.
Unless of course, those "new" pipes are built on those "old" right of ways or depend on the the "old" infrastructure in some way, as so far they all do.
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Mike (profile), 10 Mar 2006 @ 7:09pm

Re: No Subject Given
Anyway, perhaps a happy medium would be to force neutrality on existing pipes, and let anything go on the new ones.

That's been the strategy lately, actually, but it's misleading. The companies are still using the same basic equipment and the rights of way that they were given before. In other words, they're still a gov't protected monopoly (and, in many ways a natural monopoly, as it doesn't make sense to dig up everyone's backyard for every company that comes along and wants to offer a network).

Hopefully, wireless technologies will catch up, so that the basic issue of laying pipes doesn't matter any more... but we're still not that close to that day yet.
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bob, 11 Mar 2006 @ 8:04am

yea
Just remember folks...
not giving me money = THEFT!
Why are you all stealing from me and depriving me of the wealth I could have if you'd given me the money?
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Anonymous Coward, 11 Mar 2006 @ 12:22pm

Re: Re: Eminent Domain?
You're wrong.

I realize that "highway" is a metaphor, but instead of speculating on how the government WOULD behave, why don't we take a look at how the government ACTUALLY behaves when it comes to literal highways.

Is the government arbitrarily picking and choosing who can use the roads?

No.
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Brirish Paul, 2 May 2006 @ 9:53am

Re: Re: Eminent Domain?
You may want to take a quick read of British history from 1945-1980 before promoting the idea of state ownership. What you are suggesting is based upon the false premise that government is less incompetent and corrupt than private industry.

As a country that hasn't been down that road, I would implore the USA to avoid that mistake by learning from ours!

British Paul.
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mastmaker, 12 May 2006 @ 12:44pm

Re: Re: How can you sleep at night...
Not really a bad analogy: You DO NOT HAVE infinite data download capacity. I have a 6mbps connection. So the total number of bits I can download is theoritically limited to 6mbits * 3600 seconds * 24 hours * 30 days = 15552 Giga bits or 1944GB. Try using anywhere near 1/10th of that capacity and you would be facing 'termination of service'. However, that's not my point.

My point is that I paid $50 (or whatever it is I pay) for a monthly capacity of 1944GB. If I use a few MB of that for VoIP, why should the broadband company care? They got their money, didn't they?

And once I have paid the money for the data, why should they go and extort google and MSN regarding the same piece of data? Have the telcos turned smugglers?
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Jim Lippard, 13 May 2006 @ 9:30am

Re: Re: Re: How can you sleep at night...
$50/mo doesn't cover the expense of building fiber to the home, is the point. What the telcos don't like to talk about is the special favors they've gotten from the government for their current infrastructure (a monopoly on local service, universal service fees to subsidize rural access, free access to rights of ways, etc.).
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