The Net Neutrality Strawman: No One Is Stopping Broadband Providers From Charging More

from the understanding-net-neutrality dept

Fri, Aug 1st 2008 3:32am — Mike Masnick

While I don't think that passing laws in favor of net neutrality is necessarily the right way to go about things, it really is amazing to watch anti-net neutrality types completely make up bogus arguments in favor of their position. We pointed this out exactly two years ago, when lobbyist Mike McCurry wrote a blatantly bogus editorial, claiming that Google didn't pay a cent for its broadband bills, and that it was arguing in favor of net neutrality to avoid having to pay for broadband. This was an outright lie -- and I challenged McCurry to agree to pay Google's bandwidth bill. Not surprisingly, McCurry declined -- though, the organization he represents, Hands Off The Internet, has shown that it reads Techdirt and doesn't mind quoting us out of context when it furthers its telco-funded argument.

Yet, here we are again, with anti-net neutrality supporters are making completely bogus claims about how net neutrality somehow prevents them from charging more. The Wall Street Journal is running an anti-Kevin Martin editorial, claiming that his decision to sanction Comcast for traffic shaping is a victory for net neutrality supporters, and then stating:

Net neutrality proponents.... would prohibit Internet service providers from using price to address the ever-growing popularity of streaming video and other bandwidth-intensive programs that cause bottlenecks.

That's simply untrue. No one is saying they can't charge more for bandwidth. Again, does anyone really believe that Google isn't paying a ridiculously large bandwidth bill? Instead, as Tim Lee describes, net neutrality has absolutely nothing to do with price. What the telcos are really trying to do is get you to pay twice for the same bandwidth. That's because internet connectivity has always been about paying for the connection from your home to the "cloud." We each pay for that connectivity from the ends, to the middle of the network. So, note, all of those connections are fully paid for.

What the telcos are trying to do with breaking net neutrality is also get companies providing services to pay again for connectivity from that middle out to users. As you'll recall, those users have already paid for that bandwidth themselves. So, the telcos are, in effect, looking to double charge for bandwidth already charged for.

This has huge implications when you think about it. After all, if everyone providing content and services to the middle also has to pay to deliver that to the ends, then it makes the initial connection that much less valuable. Telcos may be shooting themselves in the foot by trying to do this. In double charging companies for the bandwidth consumers are already paying for, they may make it such that consumers are a lot less willing to pay for it, since it will be a lot less useful. Note that none of this says that the telcos can't charge what they want for the initial bandwidth -- from the customer to the middle. Net neutrality advocates are simply saying it doesn't make sense to then charge again to send content from the middle outward. After all, it's already paid for, and who pays for "half a connection" anyway? The reason you pay for a connection is to get on the net. Not to get to the middle where the next tollbooth exists.

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Filed Under: double charging, net neutrality, prices

28 Comments

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wasnt me!, 1 Aug 2008 @ 4:14am

isn't the only deterant from charging higher prices >>> competition?
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inc, 1 Aug 2008 @ 4:32am

I run a server and have to pay to connect to that cloud. I don't see why I would pay extra for the privilege of connecting to ISPs. Some freedom you have with ISP dictators wanting to control everything you do.
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Anonymous Coward, 1 Aug 2008 @ 5:02am

The other part of net neutrality
Is treating all protocols equally.

If it weren't for the FISA thing, I totally would want to push for ISPs to get the shaft and for all their networks become public utilities. Of course I think phones should be the same way.

IF America was working the way it was intended, that wouldn't be an issue. But so far some morons have managed to give the keys to people that will abuse the ride. No point in giving them the car to make it easier for them to do.
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James, 1 Aug 2008 @ 5:27am

Mike is right
They want to double charge.. because its "easier" and the charges are more hidden from the consumer.

The right way for them to do this it to create a tiered system for bandwidth pricing. If video and file sharing are costing them more then have one pricing tier that excludes it, for lower bandwidth users, and one that includes it for higher bandwidth users... this would seem to address their needs.
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Uglytruth, 1 Aug 2008 @ 5:52am

Mike McCurry is a Whore . . .
Like all lobbyists his job is to get government preference for who ever pays him, in this case telcos (he is an ethically vacuous tool). Telcos like any other industry dont want anyone (including the state) limiting thier business with regulation. The sad part is of course, you get guys like McCurry that convince Telcos they must fight this tooth and nail (because that�s how he makes a living) and they waste so much time and energy "fighting" things, instead of putting those resources toward actually improving their system (thereby removing the need for state involvement). If there is a god, then McCurry and his elk will surely have a special place in hell with a suitably annoying ironic punishment for all eternity (feel free to think of some LOL).
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Where's the Argument?, 1 Aug 2008 @ 6:03am

I just don't get it
If any of these supposed arguments held true water then I should be making a class action suit against the cable companies for not providing me free HBO and premium services because I only pay for basic cable! It's all coming 'down the wire' but they're restricting me from watching it!!! NOT FAIR? DUH. Last I checked a company can charge as little or as much for a product as they deem fit. They also CONTROL the product and in many ways it's usage. Take Verizon for example, you buy a phone with GPS but in order to USE what you bought you'll need to pay $10 a month more! Ok, here's a simple answer... sell internet services by PORTS, you want to browse the web that's a port 80 charge of $X, included in the basic package we'll include ports for email, ftp and let's see.. how bout IM... Then we have the MOVIE channel that lets you purchase designated streaming ports for $X more. Gee what does that sound like??? Net Neutrality or more GOVERNENMENT intervention into private business?
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Anonymous Coward, 1 Aug 2008 @ 6:05am

Re: Mike McCurry is a Whore . . .
"Elk?" Ha! Ha!
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John, 1 Aug 2008 @ 6:16am

Re: Mike is right
The problem with tiering around content types is that it is inherently not network neutral. The underlying premise of network neutrality is that all packets are treated equally, regardless of their payload. That said, tiering can absolutely take place based on bandwidth utilization - though metering isn't a model most consumers are comfortable with. The key to making this work is to promote competition for broadband provisioning, and finding a way to cut through the local/township level red tape (ie - corruption) that locks in regional exclusives for favored providers - especially in the cable markets.
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James, 1 Aug 2008 @ 6:24am

Re: Re: Mike is right
For the record, I meant Mike Massnick here, and I never said tiering around content type but bandwidth utilization.

I see no reason why users can't get their head around that, and as an upside it would keep them from just downloading anything and everything since they will need to be at least somewhat mindful of their bandwidth. This doesn't seem much different than a person not leaving their faucet running endlessly because they are charged by their water usage.
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Joe, 1 Aug 2008 @ 6:30am

Aren't cable bills high enough already
I pay for high speed internet but I have to say it's over priced...same goes for cable, and their "triple play packages" which only last 1 year. I will be canceling the majority of my cable services soon.
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Bryan, 1 Aug 2008 @ 7:03am

Where is the smoking gun?
Aside from a silly comment made by Ed Whiteacre (what? 2 years ago now? 3?) ... where exactly are the quotes from telcos, Comcast, RoadRunner or whomever which evaluate to "we want to charge twice for the same bandwidth" ??

From what I've seen, Whiteacre's comment kicked off a swirl of controversy which has occasionally resulted in badly-worded proto-legislation that *did* seem as if it would regulate what bandwidth-sellers could charge. Which they naturally fought against (as they should have!).

But I've never seen it baldly stated (or even boroquely implied in legalese) that they were actually building out rate structures designed to double-charge for bandwidth. I'm open to the idea that maybe this happened and I missed it - but I'd love to see the proof.

Thanks for the opportunity to comment.
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chris (profile), 1 Aug 2008 @ 7:17am

the telco's brought this on themselves
they oversold their networks, plain and simple. if you have a plane with 100 seats, and you sell 120 seats, 20 people have to potential to go without seats and you have to either book those 20 on another flight or give them their money back. the telcos either have to either book us on other flights (make more bandwidth available) or give us our money back. what they want to do is keep our money and get someone else to pay for additional flights.

the telcos tell us that we get Xmbit/sec down and Ymbit/sec up for $Z/month unlimited. but the truth is that they can't provide us with that. they sold 120 seats for a 100 seat flight to new york and are telling us that new york has to pay them to deliver us there because there aren't enough seats on the plane. that isn't our problem, nor is it new york's problem. the DSL providers and the cable providers can't deliver what they sold us.

if they just said at the beginning that $X/month buys you Xgb of transfer, which is what web hosts have to pay, we wouldn't be in this mess. they lied about "unlimited" bandwidth and are using double talk to avoid admitting they screwed up and then lied about it.

they used lies like "unlimited" and told us that they were investing in new networks to provide even more bandwidth.

what they really did was waste money on backhaul lines during the DotCom bubble that they never lit up and bought up their competitors to assemble a cartel version of the old bell monopoly (call it the telecartel). remember all those scandals/bankruptcies/mergers in the late 90's and early 2000's?

that's all well and good, but dark fiber and anti-competition doesn't help us consumers get to the net any faster, in fact, it slows us down.

now that the internet using public wants to use the "unlimited" bandwidth that they sold us years ago to make calls and watch video, they want to get paid again to deliver on their lies.

google, vonage, youtube, xbox live, and even bittorrent were built on the idea that the telcos would let us use the bandwidth that we paid for. if we can't actually use it, then why are we paying for it?

the real reason that they don't want us to use voice and video over the internet isn't bandwidth, after, all they have all that dark fiber. no, it's that they want us to buy voice and video services from them, and they want to use their monopolies on "the last mile" to degrade service to their competition so their offerings are more attractive.

the only reason that the telco's can get away with this is the change in policy of the FCC. the FCC used to enforce neutrality, then it stopped. the passing of neutrality legislation is to make enforceable the FCC's previous policy.
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Anonymous Coward, 1 Aug 2008 @ 8:06am

So, Mike, you know what a strawman is? I am confused because about 90 percent of your arguments are strawmen. Explain...
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Al, 1 Aug 2008 @ 9:02am

Net Neutrality is bs....
The piece opens with "While I don't think that passing laws in favor of net neutrality is necessarily the right way to go about things..."

Specifically, "the right way to go about things". People can't even articulate very well what Net Neutrality is for!

Most of NN is about slowing down the telcos. This concept that all traffic is 'equal' ludicrous. Why would it be equal? Nothing is equal in the world. Why should my movie that I'm paying for (the content) not get a higher priority than some p2p traffic where many people are stealing content?

And let the telcos and cable companies charge more. It means that competition can be attracted and the normal process of innovation can continue. If NN is enacted, innovation will slow down and so will competition. It's hard to see.

So for those of you that are not Socialists, NN is just a bad idea. For those of you with Socialist leanings, you'll need to do extra work to see that this socialistic idea is just plain wrong and bad for people.
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Anonymous Coward, 1 Aug 2008 @ 10:29am

Re:
indeed! too bad there isn't much of that thanks to our horribly corrupt government.
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Mike (profile), 1 Aug 2008 @ 10:45am

Re: Net Neutrality is bs....
Most of NN is about slowing down the telcos.

Um. No. It's not. Never has been, never will. Don't set up ridiculous strawmen.

This concept that all traffic is 'equal' ludicrous.

Other than it was part of the initial design of the internet, and part of what made it work. But, you know.. details.

Why would it be equal?

Because the network is just a dumb network, this way it could handle whatever came its way without special negotiation. It's worked quite well for quite some time.

Why should my movie that I'm paying for (the content) not get a higher priority than some p2p traffic where many people are stealing content?

That's a total tangent and actually has nothing to do with net neutrality, but it makes for a nice strawman.

You make the implicit assumption that the network can't handle both equally. And then you make silly claims about "stealing" when you actually mean "sharing". So... let's try again.

And let the telcos and cable companies charge more.

No one is stopping them from charging more, which was the point of this post -- which apparently you chose not to read.

If NN is enacted, innovation will slow down and so will competition. It's hard to see.

Hmm. Competition right now is *limited* thanks to gov't intervention in the market. NN has nothing to do with that.

So for those of you that are not Socialists, NN is just a bad idea

I'm hardly a socialist, but you haven't explained why NN is a bad idea, other than showing that you have no idea what it's actually about.
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Al, 1 Aug 2008 @ 11:57am

Re: Re: Net Neutrality is bs....
From Wikipedia: Bob Kahn, Internet Protocol's co-inventor, has called the term "net neutrality" a slogan, and states that he opposes establishing it, warning that "nothing interesting can happen inside the net" if it passes: "If the goal is to encourage people to build new capabilities, then the party that takes the lead in building that new capability, is probably only going to have it on their net to start with and it is probably not going to be on anybody else's net."

I totally agree with the above. NN is a form of Socialism applied to the Internet. The Internet should be regulated as little as possible and NN is a dangerous precedent for it not only is a bad idea to begin with, it opens things up for even more regulation. The Internet world will turn into a world of lawyers and lobbyists and the innovators will be realigned.

The argument that the network is "dumb" is silly, too. It's complicated and it will have to get even more complicated to handle the traffic load. Just like chip designs are loaded with statistical algorithms to improve performance (because not every instruction or operation is "equal"), the same is requited of modern telecom networks.

You also don't think NN won't affect competition or future growth, but that is the entire reason for NN: it's like a tax on innovation.

Nothing is "equal" so the application of NN to force equality is really regulation. And regulation is designed to slow things down. As Kahn implies, it's best to keep the Socialist hands of government away from the internet.
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Mike (profile), 1 Aug 2008 @ 1:04pm

Re: Re: Re: Net Neutrality is bs....
I totally agree with the above. NN is a form of Socialism applied to the Internet. The Internet should be regulated as little as possible and NN is a dangerous precedent for it not only is a bad idea to begin with, it opens things up for even more regulation.

You are confusing two separate things:

(1) the concept of net neutrality
(2) legislation net neutrality.

You are assuming they are the same. I'm in favor of (1), not in favor of (2). So all your arguments are about (2) and have nothing to do with (1).
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Al, 1 Aug 2008 @ 2:48pm

Re: Re: Re: Re: Net Neutrality is bs....
I'm not confused: the concept of NN is bad and the legislation is worse.
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Mike (profile), 1 Aug 2008 @ 3:37pm

Re: Re: Re: Re: Re: Net Neutrality is bs....
I'm not confused: the concept of NN is bad and the legislation is worse.

We agree on legislation, but you've failed to explain why the concept is bad, especially considering how important it was to the growth of the internet as a useful tool.
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Al, 1 Aug 2008 @ 9:43pm

Re: Re: Re: Re: Re: Re: Net Neutrality is bs....
Ahhh, maybe you didn't read what I wrote. NN is a bad idea because not all traffic is equal. Paid-for movies should get a higher priority than P2P. Maybe VOIP should too. Emergency traffic should get priority.

The fact is there is not infinite capacity. So somehow the bandwidth has to be allocated. This isn't a hard concept.

So we have two facets: a) bandwidth is not infinite and b) that there are different types of traffic.

People go to schools to learn about how to deal with capacity issues. NN basically criminalizes some network management techniques.

As for the internet always has treated traffic the same, that's not true. Maybe in the good 'ole days it was true - when most data was textual and long before hi-res video, bit torrents, etc.

Anyways, in aggregate, I wrote enough to point out how silly NN is.
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qez, 1 Aug 2008 @ 10:56pm

Re: Re: Re: Re: Re: Re: Re: Net Neutrality is bs....
Paid-for movies should get a higher priority than P2P.

What if the paid movie is distributed with P2P protocol?

And why should paid content have higher priority?
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Al, 2 Aug 2008 @ 3:18pm

Re: Re: Re: Re: Re: Re: Re: Re: Net Neutrality is bs....
That's the point. The only thing that matters is that there are choices. By limiting the internet with NN, choices are removed.

Somehow this Marxist/Socialist/Modern Liberal nonsense has creeped into the internet. When we buy a hamburger, cheese is extra. Ya want a better seat on the plane, then you can pay for it. Ya want a faster connection, then it costs extra. Ya want Evian, then it costs more than some other waters.

Let the carriers raise the prices. The alternative technologies (especially in the wireless area) will just break even sooner!

The more regulation put on the internet and these carriers, the harder it will be for startups to undermine them. As regulation increases, lobbying becomes more important than technology. And that means lawyers and bottom feeders. NN is a direct path to ruining the internet.

Part of what we are paying the carriers (and companies like AMD, Intel, nVidia, etc.) is their expertise to figure out the statistics in order to get the best performance.

If the government came in and said that chips had to perform floating point operations as fast as integer operations ("Computation Neutrality"), we know that it's a stupid idea. It's stupid because there is plenty of computational capacity for 95% of the users out there. As computing moves into the cloud, there will be other bottlenecks. Do we want the government to decide what should be "equal"? No, of course not.
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qez, 3 Aug 2008 @ 12:44am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Net Neutrality is bs....
Say what?

By limiting the internet with NN, choices are removed.

How is NN going to limit internet?

When we buy a hamburger, cheese is extra. Ya want a better seat on the plane, then you can pay for it. Ya want a faster connection, then it costs extra. Ya want Evian, then it costs more than some other waters.

Like Mike already said, NN doesn't prevent ISPs to charge more. You already pay more for faster connection.

You didn't answer to my earlier questions. I would like to hear your answers.

It seems that we have quite different understanding what NN means because your comment doesn't make that much sense to me.
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Al, 3 Aug 2008 @ 12:12pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Net Neutrality is bs....
I'll repeat what Bob Kahn said: Bob Kahn, Internet Protocol's co-inventor, has called the term "net neutrality" a slogan, and states that he opposes establishing it, warning that "nothing interesting can happen inside the net" if it passes: "If the goal is to encourage people to build new capabilities, then the party that takes the lead in building that new capability, is probably only going to have it on their net to start with and it is probably not going to be on anybody else's net."

So please tell me what NN is going to limit. Remember it's regulation, so it's going to slow something down. If I'm wrong, please tell me where?
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Mike (profile), 3 Aug 2008 @ 10:25pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Net Neutrality is bs....
I'll repeat what Bob Kahn said: Bob Kahn, Internet Protocol's co-inventor, has called the term "net neutrality" a slogan, and states that he opposes establishing it, warning that "nothing interesting can happen inside the net" if it passes: "If the goal is to encourage people to build new capabilities, then the party that takes the lead in building that new capability, is probably only going to have it on their net to start with and it is probably not going to be on anybody else's net."

I like how you keep repeating Bob Kahn, but fail to acknowledge what Vint Cerf has to say about net neutrality:

"The remarkable social impact and economic success of the Internet is in many ways directly attributable to the architectural characteristics that were part of its design. The Internet was designed with no gatekeepers over new content or services. The Internet is based on a layered, end-to-end model that allows people at each level of the network to innovate free of any central control. By placing intelligence at the edges rather than control in the middle of the network, the Internet has created a platform for innovation. This has led to an explosion of offerings – from VOIP to 802.11x wi-fi to blogging – that might never have evolved had central control of the network been required by design."

So please tell me what NN is going to limit. Remember it's regulation, so it's going to slow something down. If I'm wrong, please tell me where?

Again, you are falsely claiming that NN is a regulation. We're talking about the principle without the regulation.

Learn to separate the two and you might learn something useful.
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qez, 3 Aug 2008 @ 11:07pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Net Neutrality is bs....
This is what NN means to me: "A neutral broadband network is one that is free of restrictions on the kinds of equipment that may be attached, on the modes of communication allowed, which does not restrict content, sites or platforms, and where communication is not unreasonably degraded by other communication streams."

So please tell me what NN is going to limit. Remember it's regulation, so it's going to slow something down. If I'm wrong, please tell me where?

So NN would "limit" Comcast from torrent-throttling, it would "limit" Time Warner Cable to favor its own movie download service.

I don't know where Bob Kahn gets the idea that nothing interesting would happen if NN would be established but I see it quite the opposite. If ISPs are allowed to restrict the usage of internet, then it would be more difficult for content providers and users to benefit from this great invention.
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Anonymous Coward, 4 Aug 2008 @ 6:44am

I say the government should put the telcos and cable monoplists over a barrel: They can have us drop the whole new neutrality issue, If and only if we can get TRUE competition in the broadband space.
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