Netflix Rather Quietly Admits Verizon Isn't Throttling Netflix Streams

from the crying-wolf dept

A lot was made last week of the blog post by iScan developer David Raphael, who managed to get a front line Verizon support tech to admit Verizon was intentionally throttling Netflix streams (and essentially anything hosted on AWS) for home FiOS users. The resulting press cacophony largely consisted of outlets claiming that this was indisputable proof positive Verizon was violating net neutrality. Except as we noted previously, while anti-competitive shenanigans certainly aren't out of character for the telco, there really wasn't enough actual evidence proving that the problem wasn't the result of peering, routing, or other congestion issues, the kind that Netflix and YouTube users have been complaining about for much of the last year.

While some believe Verizon might be intentionally letting peering links saturate to their own benefit, the company issued repeated statements denying traffic discrimination, and blaming Netflix for the problems. Strangely Netflix wouldn't comment to anyone in the press on what was happening, but the company did for whatever reason feel free to tell J.P. Morgan analyst Doug Anmuth privately that Verizon is not throttling Netflix streams:

"J.P. Morgan analyst Doug Anmuth...says he has been talking to Netflix CEO Reed Hastings and CFO David Wells, and they told him they don’t think cable and telco companies are hampering the company’s video streams. Anmuth doesn’t have much to report on the topic, so here are his comments in their entirety: "Netflix does not seem overly concerned regarding Net Neutrality, and continues to believe that violations would be escalated quickly. Netflix also indicated that it has no evidence or belief that its service is being throttled."

Granted no "evidence or belief" doesn't mean Verizon isn't up to no good; the company has made an art form out of using bogus technical jargon to justify anti-competitive and closed behavior, especially on their wireless network. But the admission from Netflix (which sees a lot of the obfuscated peering data consumers don't) at least suggests Netflix can't prove it. It's not like Netflix has any vested interest in lying for Verizon's sake either; the company just got done threatening ISPs in an investor letter (pdf) that if ISPs were caught manipulating traffic anti-competitively, Netflix would "vigorously protest and encourage our members to demand the open Internet they are paying their ISP to deliver."

The entire story continues to be kind of fascinating in that despite press comments from a universe of very smart networking experts who claim to know what's going on, nobody actually knows what's going on. The full data simply isn't available to the public. A lot of people are claiming they're seeing throttling by their ISP, only to later realize they're not seeing the full picture. Claiming net neutrality every time the network farts is dangerous in that if we keep crying neutrality wolf without indisputable supporting evidence, less attention will ultimately come when a violation does truly occur.

Filed Under: bandwidth throttling, net neutrality
Companies: netflix, verizon

Netflix, YouTube Streaming Gets Worse on Major ISPs, Who In Turn Blame the Deep, Dark Mysteries of the Internet

from the what-the-hell-is-going-on dept

Last week this blog entry by iScan developer David Raphael saw a lot of attention as proof positive that Verizon was violating network neutrality. Specifically, Raphael observed that services using Amazon Web Services accessed from his home FiOS connection (including Netflix) delivered bits more slowly than services accessed on his business FiOS connection. As his supposed nail in the neutrality-violation coffin, Raphael provided a chat transcript from a Verizon rep supposedly "confirming" that the company was throttling select services. This "proof" then bumbled and stumbled its way around the Internet as evidence neutrality had been trampled.

Except as anybody who has spent any time on the phone with a support rep knows, what comes out of their mouths may or may not have any direct tie to this particular plane of reality. It's also worth noting that the kind of Netflix stuttering Raphael saw has been going on for much of the last year across numerous ISPs, long before Verizon's recent court victory over the FCC's neutrality rules. Verizon also denied they were manipulating traffic in a statement sent to all media outlets:

"We treat all traffic equally, and that has not changed. Many factors can affect the speed a customer's experiences for a specific site, including, that site’s servers, the way the traffic is routed over the Internet, and other considerations. We are looking into this specific matter, but the company representative was mistaken. We are going to redouble our representative education efforts on this topic."

While Raphael may have stumbled into Verizon shenanigans, what he saw could also be explained by normal peak network or peering congestion, and we've long discussed the problems with crying net neutrality wolf. Peering relationships are indeed complicated, with ISPs, content companies, and Internet backbone operators all engaged in an endless tug of war over video profits and peering imbalances (I recommend this piece last summer from Jon Brodkin at Ars Technica or this piece from last week by GigaOM's Stacey Higginbotham).

With that as background, fast forward to this week when Netflix released their latest ISP streaming rankings, which show that most of the nation's biggest ISPs have been dropping in regards to their Netflix streaming performance. ISPs that partner with Netflix's Open Connect CDN do better in the rankings, and major ISPs have tried somewhat feebly to claim Netflix's attempt to name and shame them into using their CDN is a sort of reverse network neutrality.

Still, Verizon FiOS (and DSL), Comcast, and AT&T's U-Verse services have seen major drops in the rankings not entirely explained by their refusal to use Netflix's CDN. Being large network operators, you would imagine that they'd be able to explain what exactly is happening to stink up millions of broadband users' Netflix experiences, though Comcast, AT&T and Time Warner Cable refuse to comment to the media on their collective performance nose dive. Netflix also refuses to comment. Verizon, with all of their network expertise, continues to blame the problems on either unknown Internet bogeymen or Netflix:

"We state unequivocally that Verizon’s broadband Internet access services deliver a pristine user experience to our customers at any time of day on every day of the week. This has been repeatedly proven through independent testing by the Federal Communications Commission (FCC), which has conclusively demonstrated that FiOS Internet consistently delivers both download and upload speeds in excess of what we advertise. In short, our Internet customers often get more than they pay for. How the Internet works can be complicated, and consumers should be aware of the fact that the integrity of their home Internet connection is only a portion of the streaming video quality equation. If their broadband connection is functioning correctly, the source of their frustration and the content they wish to see may be one in the same."

In summation, the only major ISP wiling to comment on why millions of people are having YouTube and Netflix issues on fast connections insists "it's complicated." So what's really happening? One theory du jour is that companies like Verizon are abusing their gatekeeper position and letting their peering points to companies like Netflix saturate in order to gain leverage in negotiations and rhetoric, while giving a leg up to their own CDN or services (like Red Box Instant by Verizon). Verizon's certainly no stranger to these kinds of tactics, but again, there's not enough data to prove that hypothesis, and while neutrality rules are dead, big ISPs aren't exactly eager to do anything to invite new neutrality regulations.

The reality is that despite the best guesses of some very smart people, the jury is out because we lack enough data to make full conclusions just yet. The good news is we should see some more robust data in the coming months as data from collection operations like MLAB comes to light in looming FCC ISP performance reports. In addition, YouTube has started ranking ISPs based on YouTube streaming performance, which will also hopefully shed a little more light on precisely which Internet bogeymen are to blame for your stuttering video feed.

Filed Under: broadband, david raphael, fcc, net neutrality
Companies: at&t, comcast, netflix, verizon, youtube

Innovation And Our Better Future Depend On Preserving Net Neutrality

from the giving-innovators-a-chance dept

Troma Entertainment would never have reached its 40th year as arguably the world's longest running independent movie studio if Net Neutrality or the Open Internet did not exist. I know, I know, some might say, "That would be a good thing." Haha! But without Net Neutrality, we probably would not have visionary innovations like Crowdfunding, Macklemore, Huffington Post, Youtube, Justin Bieber and maybe even Anonymous. Net Neutrality is essential to free speech and allows for a free and diverse Internet of equal opportunity. The Internet, our last democratic medium, is severely threatened as I write this. The American courts and the US government have effectively decided to nullify net neutrality and the major media/broadband conglomerates are down in Washington, D.C. 24/7 spending kabillions of dollars to lobby against our beloved Open Internet.

The mega cartel that controls world media has their ass in a tub of butter. They control or own the cinemas, newspapers, T.V. stations, radio and even Broadway “legitimate” theaters. The only competition they face is on the Internet.

On the Internet, the playing field is level. Troma can compete with Disney if Troma has art or “content” that is interesting or compelling. The mediocre “suits” who control media do not want to get up in the morning and have to think. It’s much easier to have an oligopoly club where they control the marketplace 100%. It’s a club of smugness that promotes cheap-to-make walking feces like the Kardashians or brainless blockbuster movies with non-stop explosions. The “news” we get in The New York Times or on TV is pre-digested baby food. Because of this mainstream disgrace, so many of us go right to the internet for our news, art and commerce.

Net Neutrality is defined as the principle that Internet Service Providers (ISPs) should enable access to all content and applications regardless of the source, and without favoring or blocking particular products or websites, but it’s more than that – it’s our freedom of speech! Free speech--not just giving it, but also free speech in the form of our right to receive diverse news, art, commerce or simply some fat, sweaty teenager blogging about Robin’s nipples in “Batman & Robin.”

The giant devil worshiping international media conglomerates want to create a super highway with expensive prohibitive tolls with faster and better internet for themselves. This will make it impossible for independent artists or innovators because they simply can’t compete. The result will be similar to US television, where the biggest companies own the networks and cable systems etc. and air constant iterations and reruns of their own content. It will become harder to get anything independent into the consciousness of the public. The Internet will become an NBC-ABC-CBS kind of world unless we the people take action.

In 2010, the Federal Communications Commission (FCC) created the Open Internet Order which set anti-blocking and anti-discrimination Network Neutrality rules. While the FCC claimed the rules would protect Open Internet, many of us Net Neutrality advocates felt the proposed rules had many loopholes and were made with the purpose of winning support from the telco lobbyists. Of course, we were right. The FCC stated that the rules would make it illegal for ISPs such as Verizon to block services or charge content providers like Netflix for faster Internet highways to their customers. Now, just a few weeks ago-the rules were invalidated by the US Court of Appeals for the District of Columbia because the FCC chose years ago to classify broadband providers in a manner that exempts them from treatment as common carriers and therefore has no right to regulate them.

If the court ruling stands, then ISPs can hike prices and charge content providers to deliver Internet traffic faster while also eliminating content providers that cannot pay the fees. As consumers, we need to be aware of our standing and that ISPs will now have more control over regulating the content sites we may want to see. If certain sites are faster while others are slow because they can’t pay the tolls, we will get pushed into using only the sites that are quick to load. Those of us who can’t pay the tolls on the super highway will be relegated to the bumpy, slow buffering dirt road. Troma and 1000’s of potential innovators will disappear. I predict Netflix and the like will make sweet-heart deals with the ISP/conglomerate club in order to close the door on competitive future innovators.

We will see the same thing happen with the Internet as we have with the car, telephone, food industry, and with television. People will be kept in the dark and given an illusion of variety, the sharing of information will be controlled by a few big conglomerates and change-the-world innovation like Kickstarter, Anonymous, Bitcoin, Troma and yes, 2 girls 1 cup will all be practically inaccessible. The biggest problem is how these 1st Amendment issues are intentionally being kept from the public. Beware of elected officials and TV talking heads who decry Net Neutrality as “purveyor of piracy and pornography.” This same bogus argument has been used by The Big (White) Boys and the MPAA since the time of VHS. The elite always throw a monkey wrench into new technology to delay it so they can and then take it over. They did it with VHS and they are now trying to do it with the World Wide Web.

We defeated SOPA (Stop Online Piracy Act) which had nothing to do with stopping piracy. It had to do with stopping competition on the Internet. Congress was surprised at the magnitude of the number of voters who protested against SOPA and who want to preserve an open internet. Many in Congress changed their position on SOPA as a result. We must all make our voices heard and let our elected representatives know that if Net Neutrality and Open Internet go away, they too will go away.

If you would like to learn more about our stance on Net Neutrality, please follow: www.lloydkaufman.com and www.troma.com
and on Twitter: @lloydkaufman

Filed Under: broadband, free speech, internet, net neutrality

New Net Neutrality Bill Introduced, Has No Chance Of Passing

from the this-is-not-the-solution-you're-looking-for dept

Well, this was inevitable, but a group of Representatives have introduced a new net neutrality bill, called the Open Internet Preservation Act of 2014, which attempts to bring back the FCC's rules that an appeals court struck down. The bill is more PR than anything else. For whatever reason (actually no good reason at all), net neutrality has become a purely partisan issue in Congress (Democrats for, Republicans against) and based on the fact that this bill only has Democrat sponsors, it means, first off, that it's only going to rekindle the same old fight without solving anything and go nowhere. But, more importantly, it's still the same old situation trying to kludge together a temporary solution for the real problem, which is the lack of a competitive market.

Filed Under: anna eshoo, congress, ed markey, fcc, henry waxman, laws, net neutrality

Canadian ISPs Pretend To Care About Data-Capped Customers, Plan To Offer Net Neutrality-Skirting 'Two-Tier' Data Plans

from the only-fixes-ISPs'-problem-about-where-to-grab-more-money dept

In Canada, where functional net neutrality rules are still in place, ISPs are looking to subvert these in order to double-dip on data charges or push preferred services. What they're aiming for is so-called "two-tier" data plans in which certain services won't count against users' data caps.

The premise of a two-tier Internet based on data usage stems from the proliferation of data caps among many providers, particularly for fast-growing wireless Internet services. The days of "unlimited Internet" are over at many providers, replaced by packages that include a fixed amount of data usage each month with expensive overage charges for those that exceed their monthly allocation.

Sensing consumer frustration with data caps, network providers have begun to offer access to some services or content that does not count against the monthly cap. The result is a new two-tier Internet: one Internet that counts against the monthly data cap and another that does not.

Rather than raise caps, lower prices on restrictive caps or eliminate them altogether, the ISPs are instead pushing for something not unlike AT&T's recently announced "sponsored data" plans. This would allow Canadian ISPs to either collect from internet services by having them pay "freight" on data or, failing that, push their own preferred platforms and services by having these not impact customers' data usage.

As usual, it's being presented as a "win" for customers. ISPs will "assist" frustrated users in staying under their data caps by either funneling them through ISP portals (and using these to push other preferred services) or by making a bit more money selling data usage to interested companies.

Canadian providers have also begun to examine how data caps can be used to differentiate between content. For example, Bell offers a $5 per month mobile TV service that allows users to watch dozens of Bell-owned or licensed television channels for ten hours without affecting their data cap. By comparison, users accessing the same online video through a third-party service such as Netflix would be on the hook for a far more expensive data plan since all of the data usage would count against their monthly cap.

All of this goes to prove that ISPs/wireless providers don't really care how much data their customers use. They only care how much money they can make from the data flow. This will encourage users to return to the good old days of buffet-style internet usage… provided, of course, that they use the ISPs preferred platforms and services. The message is clear: use all the bandwidth you want, just as soon as we've dipped our wicks into the revenue stream. As for the net neutrality concerns, the ISPs will likely address those the same way AT&T did. Everything's arriving at the same speed, sponsored or not, so what's the big deal?

The end result will be even less competition and users will be put in the position of using incumbent services (or inferior services) in order to avoid cap overages. Once these two-tier plans become the norm, the instinctual reaction from ISPs will be to further lower data caps. After all, users are getting so much data for "free," they're barely racking up overage charges. That's an unacceptable outcome, and very shortly, what's being pitched as a boon for frustrated customers will turn into a downward spiral of cap constraints and the elimination of competitive pressure.

Filed Under: canada, net neutrality

Losing Net Neutrality Is The Symptom, Not The Problem: Now Is The Time To Focus On Real Competition

from the beat-that-drum dept

For nearly a decade we've been trying to point out that the entire fight over net neutrality is something of a red herring. The concept of a neutral network is quite important for innovation. I think venture capitalist Fred Wilson does an excellent job talking about how much of a problem innovators might face in the future if we actually lost net neutrality, in that it would massively benefit legacy internet players over innovators:

Entrepreneur: I plan to launch a better streaming music service. It leverages the data on what you and your friends currently listen to, combines that with the schedule of new music launches and acts that are touring in your city in the coming months and creates playlists of music that you should be listening to in order to find new acts to listen to and go see live.

VC: Well since Spotify, Beats, and Apple have paid all the telcos so that their services are free on the mobile networks, we are concerned that new music services like yours will have a hard time getting new users to use them because the data plan is so expensive. We like you and the idea very much, but we are going to have to pass.

Entrepreneur: I plan to launch a service that curates the funniest videos from all across the internet and packages them up in a 30 minute daily video show that people will watch on their phones as they are commuting to work on the subway. It's called SubHumor.

VC: Well since YouTube, Hulu, and Netflix have paid all the telcos so that their services are free via a sponsored data plan, I am worried that it will hard to get users to watch any videos on their phones that aren't being served by YouTube, Hulu, or Netflix. We like you and your idea very much, but we are going to have to pass.

But, just because the court this week struck down the FCC's weak attempt at forcing net neutrality rules on ISPs without resorting to classifying them as telcos, it doesn't mean that the answer is to classify them as telcos and give the FCC a broad mandate over them.

And that's because net neutrality fights have always been the symptom not the problem. A symptom of what? Of a near total lack of competition in the marketplace, a problem that has only become worse over time. Telco lobbyists will argue that we don't need net neutrality because we have real competition, but they base that claim on the laughably inaccurate data that the FCC has put together at broadbandmap.gov. The FCC has been releasing totally bogus broadband data for years, and among the problems here are that it counts mobile data services as real broadband competitors, even though the big mobile data providers (often the same as the big telcos: Verizon & AT&T) don't let you actually use mobile broadband as a full time service (not to mention that the speeds and reliability are a lot lower, while the costs are much, much, much higher). The reality is that there is less competition, as you basically still have one cable provider and one DSL/fiber provider in most places, with the DSL/fiber telcos actively trying to get out of the wireline business to concentrate on the more lucrative wireless world.

So, rather than picking a fight that is unlikely to be won (i.e., trying to get a timid Congress and or FCC to back the idea of presenting new net neutrality rules by reclassifying broadband ISPs -- something that is seen as politically unfeasible) it's time to recognize what the FCC should have realized a decade ago, but has always avoided: focus on encouraging real competition.

Two separate articles about this week's ruling discuss this in more detail, and you should read both. First is Ryan Singel's post about how the FCC won't save net neutrality, and we should focus on building real competition. He argues the best path forward is through municipal fiber operations that offer open access to service providers. The big broadband providers have known all along that this is the most effective weapon against their fight for a monopoly, which is why they've lobbied hard to outlaw even the possibility of such competition in a bunch of states.

The other piece to read is former FCC staffer, now Wharton professor, Kevin Werbach's take on all of this, which comes to the same basic conclusion. Congress and the FCC don't have the stomach to reclassify broadband and put in place net neutrality rules, so it's time to focus on the real issue, and that's increasing competition:

The best hope for a dynamic, affordable, and innovative Internet is real broadband competition.

Most of the greatest barriers to broadband competition are at the local level: State prohibitions adopted at the behest of the incumbent carriers, difficulties with zoning and access to rights of way, and limited willingness to invest in the kinds of municipal open access fiber optic utilities that are wildly successful in cities like Stockholm. The FCC has been hesitant to confront these impediments, perhaps because it was so focused on net neutrality.

And the reason it was so focused on net neutrality was because it was unwilling to take on the real issue all along. It would provide lip service to competition, but never make any move to support real competition. But Werbach is correct: local state-level prohibitions have made real competition quite difficult. Getting access to rights of way is the biggest challenge in building a competitive network.

Google Fiber is no solution. It's only available in a few places, and there are no indications that it will go national. And, despite early promises to run its network on an open access basis, Google has since backed away from that promise. That's a big problem. Still, what we have seen is that real competition can make a difference. Whenever Google shows up with Google Fiber, boradband connections suddenly, magically get better for customers of competing broadband ISPs as well.

That's how competition works. It drives investment and innovation. I have tremendous respect for Marc Andreessen, but I think he is wrong in thinking that there can't be significant investment in broadband with net neutrality in place. Everything else he says in that link is correct though: faster, better broadband is key to all sorts of economic opportunity, but there's no evidence that we get that when there's no competition (and no net neutrality). Instead, what we need to do is to drive real competition.

That can be at the network level, but making it easier for local providers, whether municipal or (better yet) locally owned, or it can be at the service level. We've talked before about Australia's efforts to build a fiber network across the entire country, but then let service providers compete on the network. Those are all plans that can work. The focus needs to be on competition, because once you have real competition, the net neutrality issue fades away.

Why? Because any service provider that tries to double charge Netflix or Hulu or Spotify to get to you becomes an option that users will leave. Competition keeps broadband providers honest. But dishonest broadband providers have spent years making sure there is no real competition, and since the government refused to take on this real issue, it instead focused on some weak net neutrality rules.

Those rules are gone.

What they've left exposed is a broadband market that's massively lacking in competition. It's time to fix that problem.

Filed Under: broadband, competition, fcc, net neutrality

As Expected, Court Strikes Down FCC's Net Neutrality Rules: Now What?

from the not-the-end-of-the-world dept

Almost everyone I've spoken to (on both sides of the net neutrality debate) more or less expected the ruling that came down this morning in the DC circuit, in which the appeals court struck down the FCC's net neutrality rules because the the FCC had no mandate under the rules it used to issue that ruling. Basically, this is exactly what lots of us said at the start of this whole process. I've seen a bunch of reports overreacting to this today, from people saying that it's "the death of the internet." It's not. There are problems on both sides here. The telcos absolutely do want to abuse things to effectively double charge both sides. And that could clearly create significant issues with the basic end-to-end nature of the internet.

However, on the flip side, we should be equally concerned about the FCC overstepping its bounds and mandate in regulating the internet. Because that opens up the opportunity for the FCC to regulate all sorts of aspects of the internet in dangerous ways. So, this ruling is both good and bad. It stops the FCC from overstepping its bounds... but opens up the opportunity for the telcos to sweep in and try to upset the basic concepts of the internet. It's what happens now that becomes interesting. The court does leave open the possibility that the FCC could use other aspects of its mandate to establish net neutrality rules -- where it has a much more firm legal footing. In other words, the court is telling the FCC basically: you can establish net neutrality rules if you do it correctly.

Separate from that, it's possible that Congress could step in as well -- though the issue of net neutrality in Congress has become partisan, and thus toxic. Of course, in the meantime, it seems likely that the FCC will appeal to the Supreme Court, and there's a decent chance that the Supreme Court will take the case -- though I'd be very, very surprised if the Supreme Court came to a different ruling. The original FCC rule, while well intentioned, definitely stretched the FCC's mandate, and it's no surprise that it's now been slapped down.

Filed Under: broadband, congress, fcc, mandate, net neutrality
Companies: verizon

AT&T's 'Sponsored Data' Program An Admission That Data Caps Have Nothing To Do With Congestion

from the just-another-revenue-stream dept

AT&T is no stranger to making a mockery of net neutrality rules. It heavily influenced the rules themselves and has several times taken advantage of loopholes to push its favored apps and services. AT&T is now making another attempt to further subvert the concept of net neutrality with its "sponsored data" plan.

AT&T launched a new billing program called Sponsored Data Monday at its developer conference at CES, which shifts mobile data costs from the consumer to the content provider. The idea is to create a two-sided charging model for mobile data, letting app developers and content providers foot the bill for their customers’ data use.

AT&T and other carriers have been hinting at such a subsidized mobile internet for some time, but this is the first time that it’s actually put those ideas into practice. Under the program a content or service provider would pay AT&T to exempt their app, websites or even specific bits of content from consumers’ mobile data plans. Anytime someone consumed such exempted content on the mobile network, AT&T customers wouldn’t see it deducted from their data buckets. Instead, AT&T would subtract that data from a kind of universal data pool bought by the content provider.

By having developers and providers pay the "freight" for data, AT&T will once again be derailing net neutrality. A system like this will obviously favor deeper-pocketed entities, raising the barrier to entry for everyone else. Subscribers, nearly all of whom now have data caps, will be much more likely to use services and apps that don't cut into their monthly allotment. AT&T will also effectively collect twice on the data, once with the monthly service charge to subscribers (that isn't reduced if customers don't hit their caps) and once from any developers/providers who buy in.

AT&T tried to spin this positively, saying that purchasing a data allotment would work as advertising for apps, services or other content providers. "Free" means more subscribers should take advantage of the offerings, resulting in more traffic and business. Its reps were careful to mention that those "sponsoring" data would not receive preferential treatment in terms of having competitors throttled (as it has done in the past), but that obviously won't be necessary when data-hungry customers are looking for the best deal, data-wise.

AT&T even suggested this new model could be useful for BYOD businesses, allowing charges for data consumed on work-related apps to be covered by that business, rather than the subscriber. For subscribers, this may look like a great deal, but for AT&T, it's a new revenue stream.

But it's what's tacitly admitted by this program -- something AT&T avoids addressing -- that's the most interesting. Giving providers and developers the option to pay freight on data exposes these data caps for what they are: an arbitrary limit that exists only as new source of revenue.

Data-heavy apps and services will be the ones most likely to take advantage of AT&T's sponsored data program. Customers will naturally gravitate towards anything that doesn't eat into their data caps, especially if it's something like a streaming audio or video app/site. Any developer that buys in will see an uptick in use and the more data-heavy the offering is, the more likely it is that customers will take advantage of the "free" data.

Because of this, data usage by customers will go up, with the most data-heavy apps and services seeing the biggest increase in usage. According to the company line, caps are in place to prevent data hogs from creating network congestion and degrading service. But this program effectively encourages users to consume more data and use more data-heavy services. As long as AT&T is still making money (via data "sponsors"), then all previous handwringing about network stability no longer matters.

AT&T is likely facing a decline in income for data overages as consumers become more adept at staying under their data caps. The trend should remain unchanged, meaning fewer overages as time goes on. This fixes the income problem but does nothing to address the (false) concern AT&T deployed to justify its implementation of data caps. AT&T wants everyone to use more data, which will increase the amount it can collect from providers and developers. All in all, it's more evidence that equating data caps with network capacity is nothing more than a lousy spin job attempting to justify the replacement of unlimited data with multiple revenue streams.

Filed Under: bandwidth hogs, broadband, congestion, double dip, net neutrality, paying for access, sponsored data
Companies: at&t

Anti-Net Neutrality Advocates Back To Making Bogus Arguments

from the not-this-again dept

A month or so ago, a PR person sent me a ridiculously misleading (to potentially dishonest) Forbes piece by Ev Ehrlich, former undersecretary of commerce for President Bill Clinton, arguing against net neutrality. The piece was so ridiculous that I asked the PR person whether or not Ehrlich, in his current job as a consultant/think tank person, was working with any broadband providers. The PR person said he didn't know, and I figured I'd just ignore the piece. However, having now listened to a radio debate on KCRW about net neutrality that included Ehrlich making the same basic argument in a discussion with Tim Lee from the Washington Post, Harold Feld from Public Knowledge and Alexis Ohanian of Reddit, it seems worth highlighting just how confused and, well, wrong, Ehrlich is. Here's the crux of Ehrlich's argument:

But what does “open” mean? To some advocates, it means that all the data packets that carry everything over the Internet must all ride at the same speed and cost, a policy dubbed “net neutrality.” But it’s time to question whether that policy really works for all of us.

But this isn't true. And using it as the premise of his argument destroys any credibility Ehrlich might have. No one has argued that net neutrality means that there can't be differentiated speeds and costs. We all see this every day. We can all buy internet access at different price points and speeds already. So can the companies who provide services on the internet. No one considers that to be a violation of net neutrality (except, it appears, folks like Ehrlich who want to pretend net neutrality is about something it's not).

The actual concern is not about that. It's about the broadband providers then turning around and doing a massive double dip. That is, even if you've, say, purchased an access plan with certain speeds and the internet companies have purchased their access and bandwidth at their own speeds, the broadband companies want to also be able to go to those internet services and charge them again to reach you at the level both of you have already paid for. Basically, they're arguing that when you buy internet access, you're merely buying the right to reach from your end of the network to the middle. And that's it. They're saying you haven't bought the right to reach service providers' end points. So, what they want to do is get the internet service providers to pay a second time to "reach you" rather than just the middle. And, if they don't, they may degrade or even block access.

Ehrlich misrepresents nearly all of this, as he argues for a tiered internet:

And that means that the Internet has evolved in a way that makes it practical for different types of uses to travel at different speeds, the way you can buy Sears’ “best” or Sears’ “good,” or travel in express lanes for a fee. In the modern world, “neutrality” means that a heart monitor that connects a patient to an online medical service crosses the Internet no faster than a video of a cat playing the xylophone.

Again, almost nothing written here is accurate. You can already get higher bandwidth and higher speeds and pay more for them. No one has argued against that. You can also do things to increase speeds like using CDNs to cache content and put connections closer to the endpoints. No one is arguing against that, though if you read Ehrlich, you'd think it was so. Furthermore, no one is arguing that a medical service can't connect to a faster line (though, it makes a lot of sense to use a dedicated line for such things anyway). They're just saying that the end ISP shouldn't be degrading certain service providers to make them pay more. The basic concept is one of preventing discrimination -- such that Comcast can't favor (for example) NBC content over ABC content (or YouTube content). But, NBC, ABC and YouTube all need to buy their own high levels of bandwidth already from their own service provider. What they shouldn't have to do is then pay again to your service provider just to reach you at a reasonable rate. They've already paid their own service provider, and you've already paid yours.

I'm at a loss as to whether or not Ehrlich just doesn't understand this or if he's being purposefully misleading. From the article and his statements in the interview, it almost sounds as if he's been misled and is arguing from a position of ignorance. It honestly sounds like he's been given the broadband providers' talking points and is just repeating them, without realizing he's arguing about something entirely different.

If a newspaper wasn’t allowed to take money from its advertisers, the reader would have to pay more. It’s the same with the Internet; if a provider can’t charge the big websites for a premium connection (if they want one) then the consumer has to pay instead, meaning consumers subsidize the companies sending big data packets.

Again, this statement is so inaccurate as to be laughable. No one is arguing that internet services don't have to pay for their broadband connections and speed. The claim that newspapers are not being "allowed to take money from its advertisers" mistakenly and misleadingly suggests that internet service providers are getting something for free. They're not. The more accurate analogy here is like saying, imagine if your state refused to let Fedex drive on its roads without paying extra, and instead sells "exclusive" access to UPS. That's not about someone getting something for free: it's about the infrastructure provider blocking competition. That's the issue being debated, and it's really unclear if Ehrlich even understands this.

The one other laughable argument that Ehrlich lays out in the radio interview, but not the Forbes piece, is the ridiculous claim that most people in the US have four or more choices of broadband providers. He's again "technically" correct that the FCC has data making this claim, but the reality is quite different. First, the FCC's data is notoriously bogus. Pop your own address in at broadbandmap.gov and laugh, laugh, laugh at the results. There are generally two major problems with the data in that database, both of which completely undercut the argument made by Ehrlich and others that there's real competition for broadband, and that if you don't like what one company is doing, you can just switch to another.

Problem number one is that the speeds claimed are absolutely bogus. I live in the heart of Silicon Valley, and it claims that I can get 10 to 25 Mbps from AT&T. I know that's not true, because I had AT&T DSL here for many years, and despite me begging them repeatedly for higher speeds, they never offered me but about 3 Mbps (and that was only relatively recently). The FCC's data is notorious for massively overstating actual speeds. I recently switched off of AT&T to Sonic.net (which is freaking awesome). The FCC's database claims I can get 25 to 50 Mbps from Sonic. I wish! The best package the company actually offers me is a top download speed of 6 Mbps. And, of course, all of these speeds are "up to" anyway, meaning you rarely see them in real life.

Problem number two is much bigger. What Ehrlich is actually quoting includes wireless services, where he pretends those are competitive. They are not. Basically any actual mobile provider that offers internet access includes incredibly low data caps on broadband access, in the range of 3 to 5 Gb / month. Those networks are simply not designed to be your primary internet access, and pretending otherwise is pure folly. Plus, the speeds on those networks tend to be much lower than advertised. The reality is that almost no one actually has four choices. Most people have two: their cable company and their telco (I'm actually one of the few lucky ones who can also get Sonic.net). And, to make matters even worse, the telcos are actively trying to get out of the landline business, even to the point of pushing their customers over to the cable providers as they try to focus just on wireless. That means there may be even less competition before too long.

Now, I've made it clear repeatedly that I'm skeptical that the FCC or Congress can come up with a reasonable solution to protect basic net neutrality -- so I worry about those efforts as well. But I'm constantly amazed at the absolutely bogus arguments that are regularly trotted out by people who claim to be against net neutrality. There's a reasonable argument that legislation or FCC efforts could be a mistake that would make things worse -- but the arguments usually presented by telcos and their supporters don't even pass the basic laugh test, and that's absolutely true with Ehrlich's talking points in both the article and the radio interview. I still don't know if he's working with any broadband providers, but either way, he needs to get past their bogus talking points and argue what's actually being discussed.

Filed Under: alexis ohanian, broadband, competition, ev ehrlich, fcc, harold feld, net neutrality, telcos, tim lee