Apparently We Are All Confused And Killing Net Neutrality Will Be Just GREAT For Startups

from the Godzilla-was-simply-misunderstood dept

Thu, Feb 20th 2014 1:58pm — Karl Bode

What if I told you that the ham-fisted attempts by giant telecom corporations to abuse their gatekeeper positions anti-competitively are actually great for startups and consumers? Yes, I'd slap me too. Still, this appears to be the central thesis of a new Wired editorial by TechFreedom's Berin Szoka and George Mason University’s Mercatus Center's Brent Skorup, who insist that killing off net neutrality is just what Internet underdogs need. According to Szoka and Skorup, what you think of as entrenched legacy bullies taking every opportunity to play dirty is really just a "two-sided market" at play (like adorable puppies in a meadow!):

"Everyone assumes that cable companies have all the market power, and so of course a bigger cable company means disaster. But content owners may be the real heavyweights here: It was Netflix that withheld high-quality streaming from Time Warner Cable customers last year, not vice versa. As WIRED recently noted, “Netflix is hardly without leverage” (Time Warner lost over 300,000 subscribers). Similarly, it was ESPN that first proposed to subsidize its mobile viewers’ data usage last year."

There's some half-truths and falsehoods in that statement used for effect. One, Netflix's Open Connect Content Delivery Network is free for any ISP to join, and will speed up Netflix streaming by hosting Netflix caching servers on the ISP network. Netflix ranks ISPs by streaming performance, and while Netflix does "name and shame" ISPs in the hopes they'll join their CDN, joining is free and it benefits all parties involved.

Time Warner Cable (who chose not to join, like Comcast and Verizon) did try to feebly argue this was a neutrality violation, but Netflix responded by making Super HD streams (previously only available for CDN partners) available for all ISPs. It's also worth noting Time Warner Cable lost 300,000 subscribers because of their retransmission feud with broadcasting giant CBS and the resulting blackout, not because of imaginary Netflix "leverage."

As for ESPN being the one who came up with sponsored data, they're simply wrong; AT&T was the first to propose the idea of charging content companies in order to bypass user bandwidth caps (first pitched as "1-800 data" or "free shipping" a few years back). Verizon liked the idea, and ESPN being ESPN, was the first company with enough cash and cold ambition to think this was a good idea. The biggest problem with AT&T's Sponsored Data is that while ESPN might be able to pay to play, smaller startups and businesses can't -- creating an unlevel playing field where one didn't exist formerly. The editorial somehow forgets to discuss that angle of AT&T's awful idea.

By artificially inflating content company leverage and intentionally under-selling incumbent ISP power, Szoka and Skorup try to pretend that what we're actually seeing at play here isn't an entrenched TV and broadband industry (with a long history of anti-competitive behavior) fighting a disruptive new streaming Internet video industry, it's a healthy "two-sided" market relationship where incumbents are just doing an awesome job innovating:

"ISPs and carriers like AT&T, Comcast, and Verizon face what economists call a “two-sided market.” In this case, they — and other tech firms — can receive revenue from two major sources: content providers (through sponsorship or ads), and consumers (through subscription fees). While TV broadcasters traditionally relied almost entirely on the former, cable programmers like HBO and Showtime rely almost entirely on the latter. But most technology firms use a combination of both ad support and subscription fees. So it makes sense for AT&T, Comcast, Verizon, and others to do what most media firms (and that includes app creators) do: develop a balanced revenue stream from both the content side and the customer side to ensure profitability while making the service affordable."

That's a leap. Consumers pay for bandwidth. Content companies pay for bandwidth. Wireless carriers already profit handsomely on both ends and across the middle. What sponsored data and arbitrary usage caps do is allow the wireless carriers to charge yet another "troll toll" for wireless bandwidth already paid for. They get away with this double dipping because they enjoy regulatory capture and abuse their market position while regulators nap, not because of healthy markets. But in Szoka and Skorup's world, you're asking for trouble if you dare question telecom companies' motives for double dipping:

"...we also need to ensure content providers don’t undermine incentives to invest in the capacity they themselves need — or block the business model experimentation that may be needed to drive that capacity."

This idea that if you don't let telecom companies experiment with predatory pricing we'll face capacity and investment problems has been a cornerstone of sloppy telco logic for a decade. It's at the heart of the repeatedly debunked exaflood argument, and while Szoka and Skorup do yeoman's work trying to sell it as sound new theory, all they've really done is put some lipstick on a dead horse and given it a swift kick. It's a manufactured and frankly odd defense of predatory incumbent pricing practices that the pair claim will "bring down the cost of services for consumers" (protip: that hasn't happened, doesn't happen, and will not happen).

I'm all for honest debate on competitive markets, but a recent bout of painfully un-nuanced Wired editorials featuring Szoka seem more like Colbert-esque satire than honest discussion. Whether it's pretending that an FCC with a history of apathy, incompetence and deregulatory tendencies is a bigger threat than predatory monopolies or the insistence that incumbent ISPs are faultless for any part of the country's broadband competition problems, you'll notice one common refrain: the nation's giant telecom companies can do no wrong and it's always somebody else that's to blame. If Wired's recent editorial selections really are intended to be satire making fun of the nation's phone and cable companies, then I must say it's excellent, amazing work on Wired's part.

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Filed Under: berin szoka, brent skorup, broadband, net neutrality, startup

131 Comments

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Anonymous Coward, 20 Feb 2014 @ 2:12pm

I was wondering when you were going to cover this. It seemed like it was just too much of a "WTF?" story that I didn't think you would pass it up.
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sorrykb (profile), 20 Feb 2014 @ 2:21pm

I'm all for honest debate on competitive markets, but a recent bout of painfully un-nuanced Wired editorials featuring Szoka seem more like Colbert-esque satire than honest discussion.

As far as "honest debate" goes, Szoka and friends' recent articles have about as much credibility with me as articles from PRWeb. Although, at least with the Wired articles there is a little disclosure notice on TechFreedom's funding.
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Anonymous Anonymous Coward, 20 Feb 2014 @ 2:35pm

FCC or FTC
It sure seems to me that it is the FTC that is responsible for the lack of competition. 4 in a market is competitive? Really? DLS or Cable is competitive? Really?
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KoD (profile), 20 Feb 2014 @ 2:38pm

This type of shit fills me with impotent rage.
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Anonymous Coward, 20 Feb 2014 @ 2:49pm

Re:
I also noticed that they conveniently left comments off on that article. With the typical readership of Wired I can only imagine they would be blasted into oblivion in them had they turned them on.
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That One Guy (profile), 20 Feb 2014 @ 3:11pm

'Everyone has a price, some are on the dollar menu'
So I wonder how much it cost them to buy him?

Also, I wonder if they remembered to take off the price tag before sending him off to write crap like that?
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Berin Szoka (profile), 20 Feb 2014 @ 3:21pm

Karl, thanks for your commentary, as gracious and nuanced as ever. A few initial responses:
- OK, so AT&T proposed Sponsored Data before ESPN. I stand corrected. So what? Do you disagree that content owners may in fact have more market power, or that much of the market power often attributed to cable/broadband (for example, blaming them for higher cable bills) actually belongs to big programmers?
- Second, as for that "recent bout of painfully un-nuanced Wired editorials featuring Szoka seem more like Colbert-esque satire than honest discussion," which part of my piece with Geoff Manne explaining what the DC Circuit's Net Neutrality decision actually meant did you find un-nuanced? Was it the part where, unlike most knee-jerk libertarians, I didn't applaud the decision as a victory over regulation and another defeat for the FCC, but instead pointed out that the FCC actually won far more than it lost? Or the part where I pointed out that Section 706 could allow the FCC to regulate not merely Net neutrality but lots of other things I'm sure you'd hate, from mandating copyright enforcement to trying to "clean up the 'Net"? Did you find Harold Feld's concerns about 706 in Maggie Reardon's CNET piece similarly "un-nuanced?" Or did you actually read both, set aside your fixation on the need for a particular kind of Net neutrality regulation, and think for just a moment about the dangers of Section 706? Did you note that Geoff and I point out that the FCC can, consistent with the data roaming decision, regulate edge/ISP deals to make sure the terms are reasonable and non-discriminatory?
- For the record, I didn't chose the title of either piece and was annoyed at both. On the January piece, it's not actually true that the FCC "Lost on Net Neutrality," just as it's not true that anyone has "Killed Net Neutrality." Net neutrality lives on via Section 706.
- What kind of corporate shill for the cable industry would write, as I did in Wired last summer, that we should do everything we can to level the playing field so that companies like Google Fiber, CenturyLink, Sonic.Net and Verizon can build out competitive infrastructure? Did you actually read that piece? (I didn't choose that title either.)
- On this point, I will reiterate my work at TechFreedom, and before that at PFF, has been supported by both ISPs and edge providers, currently including Comcast, Verizon, AT&T, Google, Amazon, Facebook and Yahoo! I don't think any of them would continue to support our work if they found it "painfully un-nuanced."
- Give a listen to (or read the transcript of) my debate re the Cable - Time Warner cable merger on Diane Rehm on Monday and, please, let me know if anything I said there is inaccurate or un-nuanced. I'd love to know.

Again, thanks for being so gracious and nuanced. You, sir, are a scholar and a gentleman.
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Urgelt (profile), 20 Feb 2014 @ 3:49pm

Correct.
I caught the article on Wired and commented there. Crazy damned Wired. Increasing market power of cable companies through augmented monopolization does not help net startups.

The only reason I can imagine that the article survived editorial review at Wired is the authors sponsored the article. Paid Wired handsomely to publish it. Which, if true, means the authors themselves were hired guns on behalf of the cable companies involved, Comcast and/or Time Warner. None of which was disclosed at publication.

Follow the money, journalists, and I think you may find some juicy dirt.
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TechLaw, 20 Feb 2014 @ 3:56pm

Re: Re:
Wired did allow comments. I'll copy-n-paste the one that I'd left there:

While I appreciate reading a different perspective on net neutrality, this article does not address what I see as the fundamental problem.

First, I think we should remember Comcast's role in making net neutrality an issue back in 2007 when it was proven that they were selectively interfering with their customer's data. Comcast was attempting to push bittorrent traffic off of their network because of the amount of bandwidth used by their customers using bittorrent. When confronted about their actions, Comcast lied, denying that they were engaging in such shenanigans.

Second, nearly all customers who pay for broadband internet have *mostly* unlimited data (subject to somewhat-vague data limitations) but aside from that they are presumably free to access data from the internet how and when they choose. Comcast/xfinity doesn't advertise "speeds up to 50 Mbps - - but only at 2am on Wednesdays" or " - - only when browsing pictures of cute cats." The ISPs advertise a service that they know that customers want - and should be held accountable to the standard which they themselves advertise.

So, what net neutrality represents to many consumers is an obligation that they believe the ISPs have to their customers: to provide that speed for which they are paying.

If Comcast / ATT / Verizon / etc have oversaturated a region and cannot maintain that speed - the ISP has an obligation to increase capacity for that region and stop selling a service level which they are unable to meet.

If I am paying for 50 Mbps but in order to use Netflix that speed is insufficient then I need to pay for a higher speed and that is my problem as a consumer; if 50 Mbps is sufficient but the ISP is unable to meet the bandwidth demand then the ISP needs to pay for more robust infrastructure and that is their problem as an ISP.
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Brent Skorup, 20 Feb 2014 @ 5:02pm

Open Connect is "free"
One, Netflix's Open Connect Content Delivery Network is free for any ISP to join, and will speed up Netflix streaming by hosting Netflix caching servers on the ISP network. Netflix ranks ISPs by streaming performance, and while Netflix does "name and shame" ISPs in the hopes they'll join their CDN, joining is free and it benefits all parties involved.

Berin needs no defending but this is, as you put it, a half-truth used for effect.

Open Connect is not free; it is "free." Ars spoke with Sandvine CTO and cofounder Don Bowman and this is what he and Jon Brodkin said about Open Connect:

The offer is "free," but ISPs would have to host equipment dedicated to Netflix, letting Netflix save money on transit fees.

Some ISPs believe this is a win-win on both sides and for consumers, but ISPs who think otherwise have a valid point, Bowman said. "If someone comes to you and says, 'hey I'm big, I want differentiated service, I'd like to move close to your consumers, so can you please make 40 inches of space and 5,000 watts of power available at 100 sites, thanks very much,' you would normally say, 'I'm in the business of selling that�here's my price list."
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Anonymous Anonymous, 20 Feb 2014 @ 5:48pm

Re: Open Connect is "free"
Sounds specious to me. If the end user wants [Redacted] then their provider (ISP) is gonna provide that. Customer clicks on x and the ISP sends it. Could it be that this CDN arrangement is of benefit to the ISP? I don't know the answer to that, but I have also not seen how it could be a detriment, except where it benefits a potential competitor in a secondary business.
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Anonymous Coward, 20 Feb 2014 @ 6:02pm

Re:
Just curious, does one really need a four year journalism degree to write fluff pieces excusing narcissistic overbearing corporate behavior? Because it seems that just about anyone can do it. You don't need fancy pants degrees, just good connections, reasonable compensation and a general lack of conscience.
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Anonymous Coward, 20 Feb 2014 @ 6:12pm

I'll bet Szoka and Skorup got paid very well for this article.
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Berin Szoka (profile), 20 Feb 2014 @ 8:16pm

Re: Correct.
I can assure you, Wired asked me to write the latest piece -- and it was they who chose the headline.

But I will note that your assumption is perfectly consistent with how nearly everyone else seems to think about Net neutrality: "This doesn't feel right to me. There MUST be some evil corporate plot afoot."

In short: ready, fire, aim
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Berin Szoka (profile), 20 Feb 2014 @ 8:38pm

Re: Re:
A "four year journalism" degree? Who are you referring to? I have a degree in economics from Duke and a law degree from the University of Virginia, clerked for a federal judge, and practiced Internet and communications law at Latham & Watkins, one of the world's very largest law firms, before moving to the think tank world in 2008.

I mention this for two reasons:
- Unlike Karl, I actually write "nuanced" legal analysis, such as pointing out that the FCC actually won, while other libertarians claimed -- truly without "nuance" that the decision was a loss for the FCC
- Unlike journalists, if I really wanted to sell out to corporate America, I could go back to a law firm and work for them as a client -- and make several times more money.

So, please, you my disagree with me, but let's not try to reduce this to the simplistic logic of "We disagree, therefore you must be insincere."
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Andrew D. Todd, 20 Feb 2014 @ 8:50pm

The Deficiencies of Lawyers' Calculations (to Brent Skorup, #10)
I note that Brent Skorup makes great play with the observation that Netflix's interconnection unit requires 5000 watts of electricity, and 40 inches of panel space at each location.

A five thousand watt electric service, at seven cents per kilowatt-hour, would come to about three thousand dollars a year. However, that is for an installation large enough that a carrier only has a hundred of them, that is, for an installation serving a good-sized city, something on the order of a million people. The pro-rata share of that electricity is on the order of a tenth of a cent per customer. Five thousand watts sounds like an impressive number to the naive, but it is rather less than the wiring of a typical apartment, or the output of a small motorcycle engine.

Such switch-rooms are often physically huge, as they were originally built for far more primitive equipment than is now used, such as electromechanical relays, and even the ancestral Strowger machines. The central switch-room for a city may be a couple of hundred feet wide, the size of a ballroom, and the suggestion that a forty-inch panel would be a gross encroachment is ludicrous. The probable annual rent of such space, say ten square feet, bearing in mind that it is not usable as retail space, and is probably windowless, might be somewhere in the low thousands. Again, when pro-rated out over the number of customers served, it again comes to a fraction of cent.

These figures are not exact of course, and are, no doubt, oversimplified, but they are correct in terms of orders of magnitude. We are talking about something which is cheap compared to the advertising postcards which the various telephone and cable companies send out. Even the cheapest kind of bulk-rate postage costs at least a couple of pennies per piece.

These are the kinds of points which would occur instinctively to the mind of an engineer, but of course Szoka and Skorup are not engineers-- they are merely lawyers. They are not, perhaps, capable of grasping the technical evidence which leads one to the conclusion that the telephone and cable companies are primarily interested in establishing monopolies.

http://en.wikipedia.org/wiki/Strowger_switch
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techflaws (profile), 20 Feb 2014 @ 10:57pm

Re: Re: Re:
I have a degree in economics from Duke

So, please use what you learned there about economics and explain to us how telco's double dipping is somehow efficient and good for customers (and society).
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Anonymous Coward, 21 Feb 2014 @ 4:32am

Re: Re: Correct.
If it walks like a duck and quacks like a duck... It's actually.... A CHICKEN!
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Anonymous Coward, 21 Feb 2014 @ 4:41am

Re:
Oh now, everyone who supports net neutrality is a "kneejerk libertarian"? Your bias is showing. You might want to get someone to take a look at that.
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Anonymous Coward, 21 Feb 2014 @ 4:55am

Killing Net Neutrality Will Be Just GREAT For Startups
Killing Net Neutrality Will Be Just GREAT For Startups who bypass the central distribution model and go fully encrypted peer to peer with bitcoin payment.
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Anonymous Coward, 21 Feb 2014 @ 5:05am

Re: Re: Re:
It doesn't take an economics degree to see that trickle down economics, which is essentially is your argument, doesn't work and only fosters bad corporate behavior, especially when the corporations involved have the notorious history of such behavior as do the telcos and media conglomerates, as well as Comcast.
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Anonymous Coward, 21 Feb 2014 @ 5:20am

Re: Re: Re: Re:
A good journalist would have addressed that.
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Anonymous Coward, 21 Feb 2014 @ 5:23am

Re: Re:
"everyone who supports net neutrality is a "kneejerk libertarian?"

Haha, yeah - if that were true, the libertarians would receive a larger percentage of the vote.
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Karl Bode (profile), 21 Feb 2014 @ 5:28am

Re:
"OK, so AT&T proposed Sponsored Data before ESPN. I stand corrected. So what? Do you disagree that content owners may in fact have more market power, or that much of the market power often attributed to cable/broadband (for example, blaming them for higher cable bills) actually belongs to big programmers?"

"So what" that you were wrong? BROADCASTERS have significant market power, but that's not entirely what you were arguing. You were trying to pretend smaller video streaming operators have equal leverage with giant companies like Comcast, which simply isn't true. I don't buy this "two-sided" market argument, sorry. It pretends there's no such thing as incumbent telecom network gatekeepers with long, rich histories of anti-competitive behavior, and it tries to pretend video streaming operators are much more powerful than they actually are.

"Second, as for that "recent bout of painfully un-nuanced Wired editorials featuring Szoka seem more like Colbert-esque satire than honest discussion," which part of my piece with Geoff Manne explaining what the DC Circuit's Net Neutrality decision actually meant did you find un-nuanced?"

How about the part, like all of your editorials, where incumbent giant broadband companies are infallible and completely blameless? Or the part where you pretend the FCC, which really has largely deregulated industry for more than two decades while doing nothing about key consumer issues, is a diabolical agency secretly planning to "over regulate?"

"Or did you actually read both, set aside your fixation on the need for a particular kind of Net neutrality regulation, and think for just a moment about the dangers of Section 706?"

Actually I don't have any fixation on a need for a "particular kind" of neutrality regs, because I think the FCC should focus on improving competition first and foremost. Yes, 706 is legally untenable, but you needn't worry -- what you're going to see Wheeler do is a set of cross-industry voluntary guidelines instead of real regulation because he knows this. Why is it do you think that AT&T isn't worried about any of this if the FCC really was a serious threat to "over regulate"? They'd be howling if your argument were true.

"For the record, I didn't chose the title of either piece and was annoyed at both. On the January piece, it's not actually true that the FCC "Lost on Net Neutrality," just as it's not true that anyone has "Killed Net Neutrality." Net neutrality lives on via Section 706."

I never complained about the titles, I complained about the errors within the stories and the stories themselves. Mainly the conflations and omissions, most of which you still haven't discussed or defended (like you ignore how AT&T Sponsored Data could create an unlevel playing field for wealthier content creators).

"What kind of corporate shill for the cable industry would write, as I did in Wired last summer, that we should do everything we can to level the playing field so that companies like Google Fiber, CenturyLink, Sonic.Net and Verizon can build out competitive infrastructure? Did you actually read that piece? (I didn't choose that title either.)"

I don't believe I called you a "corporate shill," so I can't comment there. :) And the editorial you reference was effectively blaming the lack of broadband competition ENTIRELY on local governments, which as someone who has written about the industry for more than a decade, I can tell you is unfounded.

"On this point, I will reiterate my work at TechFreedom, and before that at PFF, has been supported by both ISPs and edge providers, currently including Comcast, Verizon, AT&T, Google, Amazon, Facebook and Yahoo! I don't think any of them would continue to support our work if they found it "painfully un-nuanced."

I won't bother much with this unless you're willing to show us your books (you're not), but because you receive money from numerous industries doesn't mean much to me in terms of whether the money you DO get from broadband providers influences your editorials.

"Again, thanks for being so gracious and nuanced. You, sir, are a scholar and a gentleman."

You're welcome! Thanks for reading!
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Anonymous Coward, 21 Feb 2014 @ 5:29am

Re: Re: Correct.
Perhaps you could provide a rational enunciation of why conflict of interest should be allowed in this case, and in general, while avoiding the disingenuous corporate talking points.
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Karl Bode (profile), 21 Feb 2014 @ 5:33am

Re: Open Connect is "free"
Feel free to talk with Sonic.net CEO Dane Jasper (which I have in my quest to understand it). He's a great guy. He'll explain to you that hosting these servers is painless and the cost is minimal. And hosting them benefits EVERYONE. complaining because of forty inches of shelf space seems like a stretch. They also can refuse to host them and now still get Super HD streams.

The article's core point was that some Netflix services were being "withheld," and that's not actually happening.
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Andrew D. Todd, 21 Feb 2014 @ 6:03am

Re: The Deficiencies of Lawyers' Calculations (to Brent Skorup, #10)
I have said this previously in another thread, but I'll repeat it: that the underlying components of telecommunications networks, such as lengths of optical fiber and transistors in chips switch at T-bit rates or better; that, consequently, networks have more or less infinite economies of scale towards their centers; and that the costs of networks are overwhelmingly in the subscriber loops.

http://www.techdirt.com/articles/20140206/06594726111/comcast-backed-lobbyist-insists-seattle- doesnt-want-faster-cheaper-broadband.shtml#c481

When a telecommunications company claims that it can only afford to offer one kind of high-speed service, and not another kind, the company is invariably being "economical with the truth."

What may have a certain plausibility, depending on circumstances, is the claim that the company cannot afford to provide any kind of high-speed service to certain remote locations, which have unusually long subscriber loops. There are places, notably in the rural South, where people don't have cable television at all, but get their video from satellite dishes instead, and the telephone company insists that it cannot do any kind of DSL. The present case is not such a case however. It is a dispute between two competing video-on-demand services, one of which belongs to the ISP.

Where will it stop? During the last month's bad weather, what with the difficulties of getting out (*), I telephoned the local pizza parlor, ordered pizza and salad for delivery, and then got them to stop at the local store and get me a large quantity of fruit juice as well. I don't suppose one of the big pizza chains would have agreed to do anything so unconventional, but this was a small business (not exactly "mom-and-pop," but more "bro-and-sis"). Does the telephone company think it can put a fifty or hundred percent surcharge on bottles of Apple, Orange, and Grape juice, just because they are ordered by telephone?

(*) An Alaskan archaeologist I once knew in graduate school, about the time that Mssrs. Szoka and Skorup must have been in the first grade or thereabouts, used to observe that in the Far North, people starve to death because they get "treed" by the weather, and they freeze to death when hunger drives them out into the open. A happy thought.
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Brent Skorup, 21 Feb 2014 @ 6:05am

Re: The Deficiencies of Lawyers' Calculations (to Brent Skorup, #10)
I literally copied the words of Sandvine's CTO, so this was not the observation of a "mere lawyer."

And the problem, I presume, with ISPs providing space and electricity free to Netflix is that you will soon have a line out the door at hundreds of locations for every marginal content company who wants free interconnection. Since you've provided no justification for turning anyone away, the costs quickly add up.
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Urgelt (profile), 21 Feb 2014 @ 6:14am

Re: Re: Correct.
Berin, you ducked the question of whether the article you wrote was funded by Comcast, Time/Warner, or a proxy for the cable industry.

Just how independent was this journalism?

It doesn't *look* independent. It *looks* like shilling for the cable industry. How else should we take an argument that strengthening monopoly powers for the cable industry will actually benefit small startups on the net, an argument supported by irrelevancies having *nothing* to do with small startups? Netflix has tremendous market power, therefore all the small startups have market power? Sheesh.

Once again: if Comcast is handed more monopoly power, and if government fails to regulate its prices and activities, as so often is the case in the US with respect to monopolies, then it *will* exploit its market power to suck money from consumers and other net suppliers alike.

It's disturbing to me that a disingenuous front of pundits has arisen in recent years whose main purpose seems to be to encourage market monopolization, as if that were somehow a good thing for an economy. It's a good thing *only* for the monopolies in question. That's basic economics, which if anyone on this good Earth should understand, it's you, with your legal and economic educational background. But somehow, having gotten that wonderful education, you ignored all of that and became a champion for monopolies.

There is no justification to be found in economics for your advocacy. It's not merely a case of there being weak justification. There's *no* justification. So why are you advocating this way?

Who paid the bill for this piece?
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Andrew D. Todd, 21 Feb 2014 @ 6:48am

Re: Re: The Deficiencies of Lawyers' Calculations (to Brent Skorup, #10)
With reference to what the CTO of Sandvine says, in formal logic, that is known as the informal fallacy of The Appeal to Authority. You will find it in the standard freshman logic textbooks. The difference between engineering and hard science on the one hand, and, say, law on the other, is that in science and engineering, the Appeal to Authority is not merely theoretically invalid, but operationally invalid. One analyzes official pronouncements from the standpoint of first principles, and if they don't check out, it doesn't matter if the speaker is the CEO of General Motors, or the CEO of Boeing, or the Secretary of Defense, or The Celebrity Known as Elon Musk. Likewise, it doesn't matter if the person analyzing the statement is a sophomore at Siwash State. A brief familiarity with Sandvine's business interests might raise questions about the objectivity of any official of tht company.
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Joel, 21 Feb 2014 @ 7:03am

Re: Re: Re:
If the FCC wasn't run by a true corporate shill I might agree with on the point that the court ruling could be an overall win. Section 706 as a principle was upheld but since the FCC is trying its bet to simply skirt the issue instead of taking the logical, obvious, court suggested route of declaring ISPs common carriers it will be a net loss from a consumer perspective. I would really love to see a well augured disagreement to that. You know with real evidence.
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Berin Szoka (profile), 21 Feb 2014 @ 8:04am

Re: FCC or FTC
It's worth noting that the Department of Justice, back in 2006, lobbied hard against requirements that new broadband providers build out to an entire franchise area, pointing out that this creates an enormous barrier to entry. See, for example, http://www.justice.gov/atr/public/comments/216098.htm

Google Fiber might never have happened had the Bush DOJ not pushed against such requirements. Today, Google Fiber uses a "neighborhood rally" to determine whether there is sufficient demand in a neighborhood to merit building out to homes there initially. But they install the hardware everywhere, so they can built out those connections in the future, and they make special efforts to drum up interest in minority and poor neighborhoods.
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Anonymous Coward, 21 Feb 2014 @ 8:34am

Re: Re:
Also Net Neutrality didn't originate as any kind of political agenda. It was a core concept of those that originally designed the Internet WAY before it was used for commercial purposes. To pretend that it was created as a liberals bent on sticking it to the corporate man is a bit of a revisionist in terms of history.
[ link to this | view in thread ]
Anonymous Coward, 21 Feb 2014 @ 9:11am

Re: Re: The Deficiencies of Lawyers' Calculations (to Brent Skorup, #10)
And to drive your point home about Comcast's claiming can't afford the upgrades necessary to improve their service and provide what their customers want (which includes access to Netflix with a good viewing experience at that), yet they want permission to spend $45 billion (with a "b") to acquire
Time Warner. Do they really think the public has the word "stupid" written across their foreheads?
[ link to this | view in thread ]
Andrew D. Todd, 21 Feb 2014 @ 9:13am

Re: Re: FCC or FTC
I tend to regard Google Fiber as essentially a theatrical gesture rather than a practical communication system for mass-adoption. It's like Google's self-driving automobiles. AT&T U-Verse, on the other hand, is good engineering. Remember what I said that the subscriber loop is the whole shooting match. No designer can do very wrong, who finds a way to salvage as much of the existing subscriber loop as possible. So U-Verse sets out a cabinet in the neighborhood, which shortens the copper wire runs to 1000 or 2000 feet, and provides an optical-fiber backhaul to the central office. Because the optical fiber might be shared by a hundred houses, it is not too expensive, and the short copper runs can handle 20-50 Mbits. At present, the cabinets are big enough that householder sometimes have hissy fits about them, but that will soon be corrected by ongoing miniaturization. My test of a legal regime is whether it leads to steady and uneventful installation of such cabinets.

Now, of course, AT&T wants to leverage this into various kinds of commercial monopolies, up to and including groceries, and that's something different.
[ link to this | view in thread ]
John Fenderson (profile), 21 Feb 2014 @ 9:13am

Re: Re: Re:
Net neutrality discussion began as a way to work around the fact that the FCC refuses to do what is obviously right & correct and declare that ISPs are common carriers.
[ link to this | view in thread ]
John Fenderson (profile), 21 Feb 2014 @ 9:15am

Re: Re: The Deficiencies of Lawyers' Calculations (to Brent Skorup, #10)
"Since you've provided no justification for turning anyone away, the costs quickly add up."

This makes no sense whatsoever. That a company decides to engage in a sharing arrangement with Netflix in no way obligates them them to engage in similar arrangements with anybody else. They need no "justification" for turning anyone away. "We don't want to" is completely sufficient.
[ link to this | view in thread ]
John Fenderson (profile), 21 Feb 2014 @ 9:16am

Re: Killing Net Neutrality Will Be Just GREAT For Startups
Yeah, until the ISPs start severely throttling VPN traffic.
[ link to this | view in thread ]
Anonymous Coward, 21 Feb 2014 @ 9:19am

Re: Re: Re: Re:
Sure the discussion started that way but the principle existed from the initial design of the Internet.
[ link to this | view in thread ]
Andrew D. Todd, 21 Feb 2014 @ 9:50am

Re: Re: Re: FCC or FTC
The roll-out of high-speed internet access resembles the prior roll-out of electricity. There is a useful book on the latter subject:

David E. Nye, Electrifying America: Social Meanings of a New Technology, 1880-1940, MIT Press, Cambridge, Ma., 1990.

One of the points Nye makes is that there was a distinction between an American pattern of electrification, which tended to stress "gee-whiz" projects, and a European pattern, which tended to stress electricity for indivual houses at the earliest possible date. In Europeaan terms of reference, what matters is to raise the minimum standard of access, to say that everyone gets the first megabit for, say, fifteen dollars a month, rather than to try to dream up gigabit home uses.
[ link to this | view in thread ]
Anonymous Coward, 21 Feb 2014 @ 10:00am

Re: Re: Correct.
Honestly, your side made more sense when you used to analogies.
[ link to this | view in thread ]
Karl Bode (profile), 21 Feb 2014 @ 11:49am

Re: Re: Re: FCC or FTC
I agree there's theater with Google Fiber, but that was kind of their plan. The goal was to light a PR fire under existing providers by pretending that Google Fiber was a threat that could pop up in your town eventually, and create a discussion nationally about why speeds are slow and prices are high. In that regard it's quite successful.
[ link to this | view in thread ]
Karl Bode (profile), 21 Feb 2014 @ 11:51am

Re: Re: Re:
"Unlike Karl, I actually write "nuanced" legal analysis, such as pointing out that the FCC actually won, while other libertarians claimed -- truly without "nuance" that the decision was a loss for the FCC"

Was that the same nuanced analysis where you claimed that the FCC, an agency with a history of significant, consistent deregulation and fear of making any truly bold regulatory moves was on the cusp of going regulation mad and destroying the Internet?
[ link to this | view in thread ]
Karl Bode (profile), 21 Feb 2014 @ 11:53am

I'd also expect the entertainment industry to start waging a bolder war on VPNs and Proxies as they're used to dodge the Six strikes program...
[ link to this | view in thread ]
Andrew D. Todd, 21 Feb 2014 @ 2:25pm

Re: Re: Re: Re: FCC or FTC
Of course, here is something I wrote several years ago, trying to get the big picture. Think of your favorite telco executive walking through a sanitary sewer, with a shovel, hoe, or similar implement, under orders to clear an obstruction...

http://www.techdirt.com/articles/20090713/1916365532.shtml#c105

More seriously, as I see it, the endgame is nationalization and municipalization, and the argument is mostly about the price.
[ link to this | view in thread ]
Urgelt (profile), 21 Feb 2014 @ 3:25pm

Re: Re: Re: Re: FCC or FTC
Hey, Andrew, that's an interesting analogy.

Let's pursue it a bit further.

Electricity is pretty much 'net-neutral.' It's sold in units having nothing to do with how it's used.

What would electricity sales look like if electricity was *not* net-neutral?

The supplier would be able to dictate different prices for different uses. If, for example, it wanted to encourage the use of Westinghouse refrigerators and discourage other refrigerator brands, it could manipulate electricity pricing by brand. It could even force refrigerator suppliers to pay a fee so that their products aren't disadvantaged.

Why didn't this happen when the electrical grid was rolled out? Simple. It would have cost too much in metering devices and meter reading, given the technology at the time.

And now it's sort of cemented in place. The public wouldn't be receptive to price manipulation intended to gouge more profits out of electrical device suppliers (and ultimately, of course, consumers).

That's where propaganda like the Wired article might one day find value to electricity monopolists. Once electrical devices are internet-connected, there's no need for crude meters or meter-readers. Usage data can be collected automatically. This *could* give electricity suppliers leverage to extract money from electrical device suppliers - but first they'd have to bamboozle the public with propaganda telling them all the ways it would supposedly advantage *them.*

All lies, of course.

Alas, well-funded think tanks exist whose sole purpose is to find ways to exploit monopoly powers. I suppose this is one area they'll get around to in time.
[ link to this | view in thread ]
Anonymous Coward, 21 Feb 2014 @ 6:02pm

Re: Re: Re: Correct.
Yeah - I didn't think you would .. or could.
[ link to this | view in thread ]
Andrew D. Todd, 21 Feb 2014 @ 6:11pm

Re: Re: Re: Re: Re: FCC or FTC
Well, the early history of electricity was just about as messy as anything else. Your "imaginary" description is substantially the historical truth. Human nature hasn't changed very much. Electricity could come in various different voltages, in AC or DC, and, if AC, in various different frequencies. Different electric companies often did make their own different kinds of electric appliances, which they sold to their own electricity customers. Look at Thomas P. Hughes, Networks of Power, for the gritty details. England, in particular, had a crazy-quilt of different systems, which were eventually bridged together with large numbers of motor-generators. That is, a motor on one system of electricity spinning a generator on another system of electricity. Germany, on the other hand, tended to rational central organization, with one kind of AC, generated by big efficient plants, hydro-powered if possible. The United States was somewhere in the middle. To this day, even when the voltage and frequency of the electricity in various countries are the same, the electric plugs may not be. USB is about the closest thing there is to a truly universal electric power standard. In the United States, execution by electrocution was an incidental byproduct of the "scare wars" waged by the rival (Westinghouse) AC and (General Electric) DC camps. They zapped pigs and cows at country fairs, using the opposing system, and eventually the State of New York decided to zap a murderer named William Kemmler. As late as the 1930's, the makers of home windmills for farmers were making their own lines of appliances, wired to take the kind of electricity the windmill makers found it convenient to generate. The question is, do we really want to go through that business all over again?
[ link to this | view in thread ]
Urgelt (profile), 21 Feb 2014 @ 8:19pm

Re: Re: Re: Re: Re: Re: FCC or FTC
Internet standards are still evolving, but we don't have the same degree of confusion that surrounded the standardization wars of the early electricity age. Thankfully!

To answer your question, no. We don't want to go through that business again. But if the 'internet of things' takes off, electricity suppliers *could* be in a position to determine which device is sucking how much power. Automatically, no meter readers required. And once they have that information, they *could* try to use their market power the same way Comcast wants to use its market power: to dictate terms to other market players who rely on their bandwidth.

It's called 'monopsony' in economics: where the market power of a monopoly enables it to dictate terms, not just to consumers, but to suppliers.

There is no conceivable way that the exercise of monopsony powers to enrich a monopolist is advantageous to either small startups or consumers.
[ link to this | view in thread ]
Marcus at Ideal Media, 19 Mar 2014 @ 2:20pm

Net Neutralitly is a Fib
Love it Carl. Real tech journalism. In all reality, it seems as though 'net neutrality' is nothing but a term as service providers like Time Warner Cable and AT&T have real control over data streams, bandwidth and other luxuries afforded to premium telecomm providers.
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Re:
You
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Once Elon Musk sends his fleet of internet satellites up there, and we get high speed internet without wires, and that every Tesla on the road becomes part of a mesh network, and every Tesla super station also act as a powerful broadcasting hub, we'll do away with big telecoms.
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http://www.agengamatwalatra.com/cara-mengobati-tbc-kelenjar/
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bahaya infeksi usus, 19 Aug 2018 @ 11:57pm

bahaya infeksi usus
greetings, good luck.

http://www.infeksiusus.klikwalatra.com/bahaya-infeksi-usus/
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ciri ciri infeksi rahim, 23 Aug 2018 @ 9:31pm

ciri ciri infeksi rahim
I really like your article, hopefully we can work together well.

https://infeksirahim.klikwalatra.com/ciri-ciri-infeksi-rahim/
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ciri ciri infeksi pencernaan, 23 Aug 2018 @ 11:21pm

ciri ciri infeksi pencernaan
Hopefully we can work together well

http://www.infeksipencernaan.klikwalatra.com/ciri-ciri-infeksi-pencernaan/
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Pengobatan Nyeri Sendi Pada Anak, 29 Aug 2018 @ 7:06pm

Obat Nyeri Sendi
treatment of joint pain in children
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penyebab infeksi rahim, 31 Aug 2018 @ 11:16pm

obat infeksi rahim
Hopefully this can be good cooperation

https://infeksirahim.klikwalatra.com/penyebab-infeksi-rahim/
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Ciri Ciri Maag Kronis Kambuh dan Sudah Parah, 14 Sep 2018 @ 1:57am

obat maag kronis
Your article is very interesting. Hopefully later you can cooperate well.

https://www.maagkronis.klikwalatra.com/ciri-ciri-maag-kronis-kambuh-dan-sudah-parah/
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Pantangan Makanan Penyakit Gondok, 21 Sep 2018 @ 12:49am

obat gondok
Your page is very good. I like it very much. Hopefully I can cooperate well.

https://www.gondok.klikwalatra.com/pantangan-makanan-penyakit-gondok/
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Tanaman Obat Untuk Sinusitis, 25 Sep 2018 @ 1:53am

obat sinusitis
This article is very good. I am amazed and like it, hopefully it will be better in the future.

https://www.sinusitis.klikwalatra.com/tanaman-obat-untuk-sinusitis/
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Manfaat Jahe Untuk Infeksi Usus Besar, 28 Sep 2018 @ 1:26am

obat infeksi usus besar
Your article is very satisfying, and deserves thumbs up. Spirit and success

https://www.beritahidupsehat.com/manfaat-jahe-untuk-infeksi-usus-besar/
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