Showtime, HBO Working With ISPs To Make Their Streaming Services Cap Exempt

from the here-we-go dept

Thu, Mar 26th 2015 6:11am — Karl Bode

As we just got done saying, while the new net neutrality rules are certainly a great step forward, there are probably more questions than answers in terms of just how far the FCC will be willing to go when it comes to policing anti-competitive behavior. For example, while the agency says it will keep on eye on "interconnection" fights, we won't know what the FCC will determine as "anti-competitive" until we see the agency act. Similarly, while numerous countries including Canada, The Netherlands, Chile, Slovenia and Norway all have neutrality protections that outright ban "zero rated" apps (letting apps bypass user caps), the FCC so far seems to think zero rating is perfectly ok.

That's potentially a problem, given the bad precedents set by programs like AT&T's Sponsored Data and T-Mobile's Music Freedom, which the FCC has indicated are ok under their interpretation of the rules. These programs profess to be boons to the consumer, yet by their very nature automatically disadvantage smaller internet players. As such, the future of neutrality involves violations accompanied by skilled sales pitches that result in consumers not understanding -- or in some cases even cheering -- when the idea of net neutrality is compromised.

First case in point is HBO and Showtime, which appear eager to determine just where the FCC intends to draw the line. According to a new report in the Wall Street Journal, both companies are working closely with ISPs on deals that would not only give their upcoming streaming video services delivery priority, but would exempt them from carrier usage caps:"Those companies have talked to major broadband providers such as Comcast Corp. about having their Web TV services treated as “managed” services, according to people familiar with the discussions. In effect, that would move them away from the congestion of the Internet, which they fear will only get worse as more people opt to stream movies and TV shows on the Web.

The other benefit: A separate lane would be exempt from monthly data-usage thresholds operators enforce for public Internet traffic, saving customers from the surcharges that can kick in if they binge on too many episodes of “Game of Thrones” or “Homeland."
The article's descriptions of things like "managed services" and "special treatment" are phrased so ambiguously I get the impression the Journal's reporters may not have fully understood what their sources were telling them. However, there's no ambiguity to the idea that Showtime and HBO are interested in having their content specifically made exempt from what are already arbitrary usage caps. The article proceeds to note that Comcast, with a merger awaiting regulatory approval, is nervous about running afoul of the FCC. Dish Network, meanwhile, makes it clear they'd see such a deal as a neutrality violation:

"At least one emerging online TV player, Dish Network Corp.’s Sling TV, believes the managed-service arrangement would be a negative overall. “It’s a bad thing for consumers and a bad thing for innovation,” said Roger Lynch, Sling TV’s chief executive, adding that big companies like Dish could afford to cut special deals like this but small companies can’t. "It makes a mockery of net neutrality,” he said, adding that Sling would strike such a deal only “under duress,” if other companies did first."

So again, while our new net neutrality rules are certainly a solid step forward, until we see what the FCC specifically determines is a violation -- and how the consumer complaint process will work -- it's hard to tell just how effective they're going to be. If it's ok for T-Mobile to exempt the biggest music services as part of its Music Freedom plan, is it ok for ISPs to similarly exempt Showtime and HBO from their usage caps? Where exactly is the line going to be drawn? The rules don't specifically say, but they won't be worth much if the FCC considers usage caps and "pay to play" cap bypass schemes just innovative market pricing.

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Filed Under: data caps, exempt, fcc, hbo, managed services, net neutrality, picking winners and losers, showtime, streaming, video streaming, zero rating
Companies: hbo, showtime

65 Comments

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Anonymous Coward, 26 Mar 2015 @ 6:25am

Simple solution - no caps.
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Anonymous Coward, 26 Mar 2015 @ 6:33am

Re:
That is what they are setting up, but only for contents from existing gatekeepers.
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DannyB (profile), 26 Mar 2015 @ 7:04am

Re:
Even better solution: no exceptions for anyone like Netflix, HBO or Showtime. And especially no exceptions to the caps for the ISP's own content. They should all be subject to the same limitations.

This would ultimately lead to the underlying solution of no caps. Or caps so high that nobody gives it a thought when watching streaming.
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Anonymous Coward, 26 Mar 2015 @ 7:06am

As bandwidth is a finite resource, the flip side of allowing pay-TV streamers users to pig-out on bandwidth means that someone else will have that bandwidth taken out of their allotment. ISPs traditionally hit P2P users the hardest, claiming that the internet was never intended for downloading audio and video files. Although ISPs might not be as vehemently anti-P2P as they were 5 or 10 or 15 years ago, we'll see if that class of users will serve as the sacrificial lambs whenever network congestion becomes a problem.

And it's a foregone conclusion that neither the FCC nor anyone else in the government will ever make a peep of protest if ISPs should again go on the warpath against P2P users and throttle them down -- 'network-neutrality' be damned.
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Anonymous Coward, 26 Mar 2015 @ 7:08am

Re: Re:
No - I mean no caps, no matter what.
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Anonymous Coward, 26 Mar 2015 @ 7:10am

Re:
What have these corps done with the taxpayer funded subsidies that were supposed to go toward expansion of their capabilities
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RD, 26 Mar 2015 @ 7:26am

Re: Re:
Executive bonuses and stock buybacks, of course. What other use would they put that money to after all??
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Anonymous Coward, 26 Mar 2015 @ 7:26am

If they succeed with this, even if storage will be abundant later, the ISPs will keep the caps on purpose, just to be able to CONTINUE to extract money from these companies.

These companies are IDIOTS.
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Jon Renaut (profile), 26 Mar 2015 @ 7:35am

Not sure I oppose zero rating
How is zero rating really different from, for example, my ISP offering me discounted subscriptions to Hulu+ or HBO's streaming service? In both instances, the ISP is telling me, "If you use our service and the service of our preferred partner, you get a discount".

And of course this gives an advantage to the bigger partners because they're the ones that people want to sign up with. But it's always going to be easier when you're the big, successful company. We aren't trying to take away the advantages of being successful.

I'm not saying to let them do whatever they want, because clearly there is a line where a business partnership becomes collusion. I don't know where that line is, but I think a simple zero rating deal falls well into the business partnership side.
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Anonymous Coward, 26 Mar 2015 @ 7:35am

Re: Re: Re:
Two more to add to the list of "what do ISPs spend taxpayer-subsidized money on":

1.) corporate mergers (buying out the competition and becoming a monopoly is never cheap)

2.) Lobbying (to make #1 possible)
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AntiDirt, 26 Mar 2015 @ 8:01am

I guess the article's author doesn't understand the phrase 'Corporate Sovereignty.'
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DannyB (profile), 26 Mar 2015 @ 8:09am

Re:
> bandwidth is a finite resource

Yes, but that finite limit is determined by the capacity that the ISPs build. It is practical to build capacity to deliver streaming TV to everyone. The ISPs who are also cable companies already do that in order to deliver their own digital content to customers' homes.

> claiming that the internet was never intended for
> downloading audio and video files

The electrical grid was never intended for anything but a few electric light bulbs.

The roads were never intended for the major trucking we have today which displaced rail shipping.

Telephone lines were never intended for modems. Etc, etc.

If I am within my bandwidth limits, what I use my packets for is none of the ISP's business.

The customers, NOT Netflix / Showtime / HBO etc are the ones who should be paying for the bandwidth they use. The video providers likewise pay for their use of bandwidth at their end, to their 'ISP' (if that term even applies to their connection).
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John Fenderson (profile), 26 Mar 2015 @ 8:10am

Re: Not sure I oppose zero rating
"How is zero rating really different from, for example, my ISP offering me discounted subscriptions to Hulu+ or HBO's streaming service? In both instances, the ISP is telling me, "If you use our service and the service of our preferred partner, you get a discount"."

In my view, there are two key differences. The first, and easiest, difference is that offering discounted subscriptions is actually honest. Zero rating is a bit slimy. The second, and more important, is that offering discounted subscriptions doesn't encourage ISPs to degrade the internet service of people who don't want the subscriptions. Zero rating does. The idea is that ISPs should not be giving preference to any traffic based on who that traffic is coming from.

But, really, this zero rating nonsense is merely a symptom of the underlying disease: there needs to be a clear separation between ISPs and content providers. It's bad for everyone when the same company is doing both.
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Jon Renaut (profile), 26 Mar 2015 @ 8:18am

Re: Re: Not sure I oppose zero rating
But aren't the rules in place now explicit about not degrading service?

I don't really love the idea of zero rating, though as others have mentioned, I'd like to see the caps go away and make this moot rather than forbid zero rating. But I don't really understand why you think it's slimy?
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Anonymous Coward, 26 Mar 2015 @ 8:24am

Re:
The sun is also a finite source of heat as it has a finite source of fuel to use before it will die. In practical terms though, bandwidth congestion is not quite the major concern that large ISPs and Telcos would have you believe. The worries about bandwidth congestion are largely manufactured or at best purposely allowed to happen through negligence in order to foster a the fear that is then used to justify such practices.
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Dave Cortright (profile), 26 Mar 2015 @ 8:37am

Re: Re: Not sure I oppose zero rating
Sounds like prior restraint to me, opposing someone doing something because the something they do might eventually lead to bad things in the future. Why don't we just punish those hypothetical bad things when they actually if and when they come to pass?

I think of internet bandwidth like other utilities: electricity, gas, water. What if GE offered a line of appliances that let you use them as much as you wanted, and the gas, elec, and water used by them didn't show on your bill? Isn't that just smart marketing, and good for the consumer?

Of course first thing I'd do is turn them into a utility hub for my house, having them feed to all other devices and appliances. GE can subsidize my whole house :-)
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Anonymous Coward, 26 Mar 2015 @ 8:56am

Re: Re: Re: Not sure I oppose zero rating
Here's the rub: Although the end result is the same, TECHNICALLY they aren't degrading service. They are purposely allowing the service to be degraded naturally via negligence by not upgrading the switches and routers that handle traffic to their users for peering agreements in order to try to force content providers to either route the traffic through metered switches that handle traffic for providers that have transport agreements or negotiate special direct connection agreements for the traffic so that they can be paid twice for it.

To belabor the road analogy: Imagine a city that decides to only do the bare maintenance on it's freeways in order to force people to use more toll roads (where they make money from tax dollar allocations as well as paying users instead of just the tax money) that are always kept in tip top shape. It's not like they are purposely going out and making potholes in the existing freeways though.
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Anonymous Coward, 26 Mar 2015 @ 9:07am

Re: Re: Re: Not sure I oppose zero rating
"What if GE offered a line of appliances that let you use them as much as you wanted, and the gas, elec, and water used by them didn't show on your bill? Isn't that just smart marketing, and good for the consumer?"

Utility conpanies have done that sort of thing for decades. Like giving you a lower electricity rate if you let them install their electric heat pump as a replacement for your existing gas furnace, ... or their air conditioner unit, etc.

In theory, everyone should be paying the same KWH price of electricity coming out of a particular power plant, but in practice that's rarely the case. It can vary almost as much as the price of airline seats.
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Jeremy Lyman (profile), 26 Mar 2015 @ 9:13am

Re: Re:
"Nothing will repeal a bad law like enforcing it"
While usage caps are not a law, the sentiment is similar.
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Anonymous Coward, 26 Mar 2015 @ 9:31am

Re: Re:
Cocaine parties.
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Anonymous Coward, 26 Mar 2015 @ 9:31am

Re: Re: Re: Not sure I oppose zero rating
Here's the problem there to bandwidth caps are artificial scarcity. There is no bandwidth shortage. Netflix and other streaming services, regardless of how popular they are, do NOT strain the capacity of their network. It never has. The bottle neck is at the connection to the edge provider and there are two ways the traffic comes in and out. One is metered the and the other isn't. The one that is metered is really for traffic that just passes through their network on it's way to other networks. The content provider pays for it because it's not paid for by their users. The ISPs are just trying to get paid for the same traffic twice. If it were a strain on their network it wouldn't matter which way it made it onto their network. Once it was on their network it would have the same result.
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Karl Bode (profile), 26 Mar 2015 @ 9:32am

Re: Re: Re: Not sure I oppose zero rating
It depends entirely on the implementation, though I always like Fred Wilson's exploration of why AT&T's Sponsored Data sets a bad precedent:

http://avc.com/2014/01/vc-pitches-in-a-year-or-two/

You're basically injecting a network gatekeeper right in the middle of a relatively healthy ecosystem, where they're suddenly letting companies with the deepest pockets obtain priority marketing and other treatment over small companies. This automatically disadvantages startups, nonprofits, or other smaller ventures and unnecessarily distorts the entire playing field.
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Rocco Maglio (profile), 26 Mar 2015 @ 9:33am

FCC misses the entire point of Net Neutrality
The entire point of Net Neutrality was missed by the FCC's massive changes. So the changes which may result in all sorts of new regulations of the Internet don't even fix the major issue of net neutrality. Net neutrality became a major issue because Edward Whitacre, Jr said on NPR that Bellsouth wanted a piece of the action from all the internet companies making money off his customers. He was going to do this by charging internet companies for access to his customers. After the FCCS massive changes the ISP are still allowed to double dip by charging for access to their customers. Great job everyone we were screwed.
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nasch (profile), 26 Mar 2015 @ 9:41am

Re:
As bandwidth is a finite resource, the flip side of allowing pay-TV streamers users to pig-out on bandwidth means that someone else will have that bandwidth taken out of their allotment.

Only if people are trying to use more bandwidth than is available.

Although ISPs might not be as vehemently anti-P2P as they were 5 or 10 or 15 years ago, we'll see if that class of users will serve as the sacrificial lambs whenever network congestion becomes a problem.

Netflix is a bigger bandwidth issue than file sharing, and I expect streaming video will increase as a percentage of internet traffic, not decrease.

And it's a foregone conclusion that neither the FCC nor anyone else in the government will ever make a peep of protest if ISPs should again go on the warpath against P2P users and throttle them down -- 'network-neutrality' be damned.

Personally, I think throttling latency-insensitive traffic such as bittorrent and email a bit to favor things like VOIP and streaming video and audio is better than letting everything degrade evenly - as long as all senders and receivers are treated the same. The best thing would be if the network could support everything without any throttling or degradation of course.
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nasch (profile), 26 Mar 2015 @ 9:45am

Re: Re: Re: Not sure I oppose zero rating
Why don't we just punish those hypothetical bad things when they actually if and when they come to pass?

The bad things are good things that might have happened but now don't. Can't really prove such a thing to punish it, so we need to set up circumstances that allow those good things to actually happen. The good things being new services and companies having a chance to reach users, and zero rated apps make that a lot harder, because it introduces a huge barrier to entry.
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John Fenderson (profile), 26 Mar 2015 @ 9:54am

Re: Re: Re: Not sure I oppose zero rating
"But I don't really understand why you think it's slimy?"

Because it's inherently dishonest. Instead of doing it the aboveboard way (discounting the cost of specific services), it's doing it the backhanded way (effectively raising the cost to everyone not using the specific services).

In this way, they can extract money from the people who aren't using their precious services to subsidize those who are. That's slimy.
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John Fenderson (profile), 26 Mar 2015 @ 9:56am

Re: Re: Re: Not sure I oppose zero rating
"But aren't the rules in place now explicit about not degrading service?"

The rules that are being put in place only prohibit specific types of degradation. There are a lot of other types that remain perfectly acceptable by the rules.
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Karl Bode (profile), 26 Mar 2015 @ 10:01am

Re: Re: Re: Not sure I oppose zero rating
"Why don't we just punish those hypothetical bad things when they actually if and when they come to pass?"

They are coming to pass.

I consider AT&T's sponsored data a "bad thing" and a horrible precedent in that it allows big companies to gain previously unobtainable leverage over smaller operators. And yet here we are with the FCC simply considering it a "creative" pricing model because it's just ambiguous enough to hide the anti-competitive intent below a layer of PR speak.
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John Fenderson (profile), 26 Mar 2015 @ 10:03am

Re: Re: Re: Not sure I oppose zero rating
"Why don't we just punish those hypothetical bad things when they actually if and when they come to pass?"

Generally, a lot of the bad things aren't hypothetical at all -- they've been done. But there's also the underlying issue of corruption. Given the outrageous amount of influence these corporations have over our government, once they start engaging in unacceptable behavior it becomes almost impossible to make it stop.

Honestly, these sorts of solutions are far from ideal and have numerous problems. But our choice seems to be between these flawed solutions or allowing the rot to continue. Ideally, the thing to do is to fix the corruption problem -- but it's hard to see a path forward on that task that would be effective within the lifetime of myself, my children, or my grandchildren. In the meantime, we need to settle for flawed, stopgap solutions.
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Uriel-238 (profile), 26 Mar 2015 @ 10:06am

All this time I've had sonic, thanks to its availability in my location.
I am terrified of being forced to move to a Comcast-monopoly zone.

And now I have yet another reason.
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Jon Renaut (profile), 26 Mar 2015 @ 10:06am

Re: Re: Re: Re: Not sure I oppose zero rating
Sure, but aren't heavy users of nearly every service that isn't billed per unit subsidized by lighter users? It's cheaper for both partners to do it this way rather than discount the service. So, while I don't get warm-and-fuzzies from the idea, either, I have a hard time faulting the companies for doing the deal this way.
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Jon Renaut (profile), 26 Mar 2015 @ 10:08am

Re: Re: Re: Re: Not sure I oppose zero rating
Ah, ok, I guess I need to actually read the rules.
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Jon Renaut (profile), 26 Mar 2015 @ 10:16am

Re: Re: Re: Re: Not sure I oppose zero rating
Startups, nonprofits, and small ventures are always at a disadvantage in terms of marketing and other treatment. They have less to offer in terms of money or name-recognition or any number of things, so they have less bargaining power and won't be able to get deals like the big players can.

While I don't like the effect this could have on the VC market, I don't think that banning zero rating deals is the right way to deal with it.
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Anonymous Coward, 26 Mar 2015 @ 10:32am

Re: Re: Re: Re: Re: Not sure I oppose zero rating
That's how it works when there is ACTUAL scarcity. But this is ARTIFICIAL scarcity. Also there is a conflation of two different unrelated metrics here: Bandwidth caps penalize people who use a lot of bandwidth OVER TIME which is completely unrelated to available bandwidth at any given moment which is the metric that affects whether traffic is slow or not.
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Jon Renaut (profile), 26 Mar 2015 @ 10:39am

Re: Re: Re: Re: Re: Re: Not sure I oppose zero rating
It's two different metrics, but at the same time, those who use a lot over time are more likely to be using it at any given moment, so the two are definitely related. And bandwidth isn't infinite, so I wouldn't call it artificial scarcity. It may only be scarce because of ISP's unwillingness to invest enough in infrastructure, but that's still actual scarcity.
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John Fenderson (profile), 26 Mar 2015 @ 10:51am

Re: Re: Re: Re: Re: Re: Re: Not sure I oppose zero rating
"It may only be scarce because of ISP's unwillingness to invest enough in infrastructure, but that's still actual scarcity."

I disagree with that. I call that the very definition of artificial scarcity.
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nasch (profile), 26 Mar 2015 @ 10:58am

Re: Re: Re: Re: Re: Not sure I oppose zero rating
There is also the problem that the people paying are not the customers. If it were a situation of me paying to exempt a particular service that I like from my usage cap, that would be a different story (still a bad one, but different). Instead, the service has to pay, and since I only have one cell carrier*, if the service wants to get to me and everyone else on that carrier, they're at a disadvantage if they don't or can't pay. So the market gets distorted.

* replace with ISP if that's what we're talking about
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Jon Renaut (profile), 26 Mar 2015 @ 10:59am

Re: Re: Re: Re: Re: Re: Re: Re: Not sure I oppose zero rating
It costs time and money to invest in infrastructure, so that is an actual limit on the supply of bandwidth.

It always comes back to the point that Mike Masnick has made a million times - if there was real broadband competition, most of these problems would take care of themselves.
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nasch (profile), 26 Mar 2015 @ 11:05am

Re: Re: Re: Re: Re: Not sure I oppose zero rating
Startups, nonprofits, and small ventures are always at a disadvantage in terms of marketing and other treatment.

But that's a natural consequence of a market economy. Zero rated apps are a feature of an uncompetitive market where each player controls access to huge groups of potential customers. Imagine if instead of four national cellular carriers, there were 30. How far would one of them get trying to do business this way when some of their competitors were instead running a state of the art network with high speeds and no caps, and thus no need for zero rated apps? They'd be out of business in a week.

We're not at the point of having strong competition in wireless or fixed broadband, but that doesn't mean we shouldn't do something to limit the problems this lack of competition causes until we can get there.

I don't think that banning zero rating deals is the right way to deal with it.

What do you think is the right way to allow zero rated apps without penalizing services that cannot afford to buy them? Or do you find that penalty acceptable?
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Karl Bode (profile), 26 Mar 2015 @ 11:06am

Re: Re: Re: Re: Re: Not sure I oppose zero rating
"Startups, nonprofits, and small ventures are always at a disadvantage in terms of marketing and other treatment."

So making it more so makes any coherent sense?

"While I don't like the effect this could have on the VC market, I don't think that banning zero rating deals is the right way to deal with it."

Well you're in luck, because the FCC agrees with you. Unfortunately allowing preferred content providers through what are already arbitrary usage caps spits in the face of net neutrality all the same.
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Thrudd, 26 Mar 2015 @ 11:12am

The simple but impossible
The real solution would be to make the infrastructure a utility and outlaw content generators from controlling any part of it.

Let the generators live or die by the market.

If not then charge back all those subsidies including the rights of way with interest changed using those lawyer fee tables. Would never happen but it's a nice little horrible dream.
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Anonymous Coward, 26 Mar 2015 @ 11:16am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Not sure I oppose zero rating
Except you left out one thing. Netflix offered to pay for the upgrades and Comcast refused. The hope here is with Title II standards will be set and regulated by the FCC to keep them from allowing them to degrade.
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Anonymous Coward, 26 Mar 2015 @ 11:27am

Re: The simple but impossible
The problem here isn't control from the content supply side but rather the control of the infrastructure acting as a gatekeeper. They aren't exactly trying to keep Netflix from reaching their customers so that they will watch Comcast's offerings instead. That plan failed long ago. Now they just want to get paid twice for Netflix traffic to their users.
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Anonymous Coward, 26 Mar 2015 @ 11:43am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Not sure I oppose zero rating
Also important to keep in mind. All the while you are saying that the expense of upgrading the switches necessary to provide the service that they have promised to their customers is possibly a barrier too high, Comcast in the same breath is asking that the public allow it to spend $45 BILLION to consolidate the cable broadband market even further. Really? You've got to be kidding.
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Tufloss, 26 Mar 2015 @ 11:55am

Compare to Railroads of 150yrs ago
For those who aren't sure why zero rating is such a problem, look at the railroad industry of 150 years ago.

A large part of the reason trust busting became so important/necessary on both sides of the aisle (i.e. T.R. Roosevelt, and Grover Cleveland) was because of the stranglehold the railroads had on interstate commerce.

The railroad would give favored rates to their friends or subsidiaries and make it next to impossible for competitors or individuals to compete.

For example a rancher would have to pay hypothetically $1 per head of cattle to transport them, but the large conglomerate would only have to pay $0.25 per head. This would practically force that rancher to sell his cattle to the conglomerate rather than try to sell them himself.

Often it was even more onerous than this with railroads literally refusing to ship the competitors products, or creating barriers so high as to have the same effect.

The end result was the Interstate Commerce Act of 1870.
The internet is the modern day telegraph, Post roads, railroad, etc.

Allowing a company in one area of business (Internet or railroad; especially an infrastructure business) to purposefully interfere with other businesses in another area (Ranchers, Entertainment companies, software providers, etc.) creates perverse incentives that harm the overall free market and consumers.

PS. Those who think the Federal gov't should have no role in governing the internet should consider that the Internet serves the same purpose as the old Post Roads/Office did when the US was founded, communication between people spread out throughout the nation and beyond.
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Jon Renaut (profile), 26 Mar 2015 @ 12:17pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Not sure I oppose zero rating
Whether or not Comcast should be allowed to do the merger is a different conversation, and is also a problem that would be solved if there was real competition.
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Anonymous Coward, 26 Mar 2015 @ 12:25pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Not sure I oppose zero rating
But crying that it is too expensive to upgrade when you want to spend that kind of money to become an bigger monopoly especially when someone offers to pay for it for you but you refuse is a pretty clear indication that isn't the real reason you aren't upgrading it.
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Zonker, 26 Mar 2015 @ 12:31pm

Re: Re: Re: Not sure I oppose zero rating
Because those bad things have already come to pass and it will only get worse over time.

T-mobile already zero rates preferred music services on their plans. But if you wanted to stream music directly from your music library on your home computer, it gets counted against your 4G LTE usage cap. Both are music streams, different sources, treated differently. Once you listen to more than your 4G LTE cap from your home computer music stream, ALL of your remaining internet bandwidth for the rest of the month is degraded to 3G.

How long would you keep streaming music from home to your phone instead of paying to stream from one of their preferred music services? How would your music selection change if your ability to stream your independent music collection available only from your home computer was limited, but your ability to stream only top 100 musicians signed to a major record label on commercial services is not? Do you think that you could negotiate a zero rating for your home music stream with T-mobile, even if you could afford it?

This is not a hypothetical, it's happening now.
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John Fenderson (profile), 26 Mar 2015 @ 1:02pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Not sure I oppose zero rating
"if there was real broadband competition, most of these problems would take care of themselves."

I think we're all in agreement about that!
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Jon Renaut (profile), 26 Mar 2015 @ 1:05pm

Re: Re: Re: Re: Re: Re: Not sure I oppose zero rating
It's not making it more so, it's failing to make it less so. I don't mean to be splitting hairs - I think there's a real difference there.

Any time you apply any regulation to a market, it's going to distort the market. Sometimes the benefit to society at large will outweigh the cost to those involved in the market, and sometimes not.

At the end of the day, we don't really care about net neutrality for its own sake, right? We care that we can all get an internet connection that functions as we expect it to. Making a bunch of rules about what ISPs can and can't do is one way to work towards that goal, but I'm really not convinced it's the best way.
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Anonymous Coward, 26 Mar 2015 @ 1:50pm

Re: Re: Re: Re: Re: Re: Re: Not sure I oppose zero rating
Let this Zero rating become the norm, and caps will come down, and ten any web site you want to use regularly better pay your ISP to get a zero rate. Note that 5G a month will not cover staying up to date with conversations on Techdirt.
Also this sort of manipulation of who you can get large volumes of data from could damage the likes of Reddit.
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ltlw0lf (profile), 26 Mar 2015 @ 2:02pm

Re: Re: Re:
"Nothing will repeal a bad law like enforcing it" While usage caps are not a law, the sentiment is similar.

Unfortunately, as with most current laws, it is unevenly enforced, which is always the problem with the statement.

In a perfect society, all laws are evenly enforced (or not) and thus the Mayor, the police, the Senator, and the President all feel the pain of bad laws along with the 'little people' they serve. Unfortunately, most laws are written with exemptions and exceptions, meaning that the only people who feel the effects of a bad law are the once most sensitive to the effects of the bad law (the poor, the marginalized, etc.) Since those people don't have much say in the matter, enforcing the law does little to repeal it (although, with John Oliver and Jon Stewart, it certainly gives them good material for their shows.)

Certainly, the FCC taking a hard line stance of enforcing caps on everyone or no one would be ideal, but given the current stupidity from the ISPs, suing the FCC even when the FCC gave them all the exceptions they need and they've already admitted that the rules won't matter much, I suspect this would just result in more lawsuits and more of the same.
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nasch (profile), 26 Mar 2015 @ 2:53pm

Re: Re: Re: Re: Re: Re: Re: Not sure I oppose zero rating
Any time you apply any regulation to a market, it's going to distort the market.

In a tautological sense, yes. But good regulation improves competition, information balance, etc. Leaving markets entirely to themselves doesn't turn out well - and it often doesn't turn out to be a free market.

Making a bunch of rules about what ISPs can and can't do is one way to work towards that goal, but I'm really not convinced it's the best way.

No, it isn't the best way, but the best way isn't available right now, so we need to do other things. This is one of the things that is necessary IMO in lieu of the ideal solution.
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Al, 26 Mar 2015 @ 3:08pm

Bill for actual bandwidth
Bandwidth does cost money, not very much money but it's non Zero, so how about if ISP's want to bill for bandwidth they bill the way they are billed at the 90th or 98th percentile, per/Mb, then you could actually argue about congestion rather than a transfer cap, I use less bandwidth transferring 1 GB @ 100/Mb than at 7/Mb and cause less congestion on the local pipe. Allowing the big ISP's to frame the discussion is GB/Month is a mistake, and staying with there narrative of transfer == bandwidth is playing into there hands.
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Anonymous Coward, 26 Mar 2015 @ 4:06pm

Re: Bill for actual bandwidth
The existence of zero rate agreements, and the time to enable the deliver of content once they are in place, demonstrate congestion is being used as a means of market manipulation, rather than congestion being a real problem.
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Al, 26 Mar 2015 @ 4:23pm

Re: Re: Bill for actual bandwidth
Correct what I am saying is that since what is happening is TRANSFER CAPS not bandwidth caps there is no argument to be made since if I download 1 GB of data @ 100 Mb I take up a much smaller part of the pipe than if I download the same amount of data over a 7 Mb connection, in truth the local loop is irrelevant anyway since the ISP to ISP connection is what costs money but even billing on what percent I use to my Near-low would make for a more rational discussion.
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Anonymous Coward, 26 Mar 2015 @ 4:47pm

Re: Re: Re: Bill for actual bandwidth
Providing zero rate services for streaming sources has an interesting effect on bandwidth demand, it increases it during period of maximum bandwidth demand, i.e. evenings and weekends, when more people have free time to use such services. Therefore congestion is largely an artificial problem created for purposes of manipulating a market.
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Al, 26 Mar 2015 @ 5:16pm

Re: Re: Re: Re: Bill for actual bandwidth
It's why there has been traffic shaping since the internet, I don't have a problem with it and I doubt that anyone does, but again that is not what is happening, GB/Month is not doing anything to relieve any actual congestion there might be since it does not differentiate when you are taking up X of the pipe.

My Cell provider reduces my access or bandwidth after I exceed a certain number of GB but this has nothing to do with how much bandwidth I am using only an arbitrary amount of TRANSFER which again takes less bandwidth the more bandwidth I have.

Cable around here layed multi hundred bundles of fibre about 10 years ago, it is interfaced with the local exchange over 10 Gb per port, the cost is all capital marginal cost is almost zero around 80-90$ @98th percentile last time I knew and that was around 2003
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Anonymous Coward, 26 Mar 2015 @ 6:24pm

Re: Not sure I oppose zero rating
Any "discount" is from a bullshit made up restriction on the number of bits you can transfer per month, which has no relation to bandwidth.
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Anonymous Coward, 26 Mar 2015 @ 6:30pm

Re: Re: Not sure I oppose zero rating
Yes, bandwidth does not mean what it used to mean. It has been misused for many years now, to the point where few complain anymore.
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Anonymous Coward, 26 Mar 2015 @ 6:34pm

Re: The simple but impossible
There used to be restrictions upon the number of tv/radio stations one company could control in a market segment. The deregulation fanatics lobbied for changes - look what happened.
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Pragmatic, 27 Mar 2015 @ 6:53am

Re: Re: Re: Re: Re: Re: Re: Not sure I oppose zero rating
Sometimes the benefit to society at large will outweigh the cost to those involved in the market, and sometimes not.

I had wondered for years what was meant by "free market." Now I've learned that "those involved" are the people meant to be free, and that society at large is not included in this. And there I was, silly me, believing that DEMAND was every bit as important as SUPPLY!

Seriously, though, are we not ALL "involved" in the market, either as buyers of goods and services or sellers of those things? And aren't we all a part of society at large?

For the market to be free, all protectionist barriers need to be removed so competition can flourish. That means clamping down on anti-competitive practices and gouging instead of hoping that customers will finally choose "nothing" instead of bad service to force a change in company policy.
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PRMan, 27 Mar 2015 @ 7:45am

Re: Re: Re: Re: Not sure I oppose zero rating
But you could upload all "your" music to Google or Amazon and play it free all day.

Also, I stream music all the time in my car and I have never come close to even 1 GB on Sprint a month.

So, while I agree that the T-Mobile thing sets a bad precedent that can be abused in the future, I don't agree that it is bad right now.
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John Fenderson (profile), 27 Mar 2015 @ 8:09am

Re: Re: Re: Re: Re: Re: Re: Not sure I oppose zero rating
"I'm really not convinced it's the best way."

It's not the ideal way, but I honestly can't see any other available option. Do you? I'd love to hear about alternatives.
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Z, 5 May 2015 @ 8:01pm

Re: Not sure I oppose zero rating
The zero-rating is a clear violation of anti-trust as it has traditionally been known. For example, Rockefeller's railroads did this with products like iron and oil. Using preferred rates for railroads, they could essentially make or break companies and monopolize markets. This was illegal then, and preferred or cap exemptions remain illegal by the standard today.

In short, either data needs to be uncapped or the cap needs to apply to all data, regardless of source. To do otherwise leads to a balkanized, inefficient, and unfair market.
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