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Net Neutrality: A Guy in the Trenches
My son had a little discussion with one of his millennial friends on Facebook about Net Neutrality. I took the liberty of writing direct responses to his friends’ points, which I publish here for your review and comment. (Their points are in block quotes.)
Jodie says I can’t just cast aspersions, I should educate you young people. So here goes. But first, my bona fides. I’ve worked in IT for nearly 30 years, longer than you guys have been alive. I currently work directly in the telecom industry and interact with all of the major carriers, and many of the minor ones. I am responsible for bandwidth provision throughout the country, as well as some locations internationally, and I have a deep, expert understanding of how the industry works. My opinion isn’t based on what I read on Facebook. It’s based on experience and understanding.
The reality of this is entirely opposite of how he’s explaining it.
No, it is exactly how he is explaining it. [Ben] Shapiro obviously doesn’t fully understand the issue, most people don’t because they aren’t experts in the field (which I am). But he has the basics exactly right.
Netflix was already basically forced to pay to have their internet traffic kept up to speed (right around the time that ISP/Cable companies suffered (if I remember correctly) one of their biggest drops in cable TV subscriptions. Netflix was once small, and thanks to a no-favoritism internet, was able to thrive and succeed the way it is today.
Nonsense. Netflix is a $9B corporation. The rules that were repealed yesterday went in to effect in June 2015. Netflix was a $5.5B corporation in FY2014 and had experienced 25% YoY growth. The notion that Netflix was “able to thrive” because of “no-favoritism” internet is unsupported by the facts. That said, of course, a $9B corporation wants the government to regulate some of its costs away. How else to keep the little guy from becoming a competitor? Further, in 2015, the year net neutrality rules went in to place, Netflix was consuming close to 40% of the overall bandwidth, and making cold, hard cash doing it. Of course, they should kick in some do-re-mi to fund the infrastructure. Of course, they should.
Now imagine you’re trying to start a web service; be it an online store (Amazon-esque), social network, or even a webpage for your own small business. Net neutrality would’ve given your small website as much of an opportunity to be loaded at high speed than any other website out there. Without Net Neutrality, Comcast now has the power to tell you to pay “$x” monthly (on top of your monthly plan/package, domain rental, etc.) or we’ll throttle your traffic down to bare minimum (just like they did with Netflix).
Also nonsense. First, Comcast already throttles you at the source, based on the class of service you purchase. But even so, you think the bandwidth in use by your aunt’s little jewelry business is even a drop in the bucket? It’s chicken scratch by comparison to the bandwidth in use by the bigs. In actual fact, the opposite of what your friend is saying is true. Comcast isn’t going to charge you because your use is small. They are going to make Netflix pay because they put the most strain on the infrastructure.
Now consider this from a consumer standpoint. Do you enjoy social media? GREAT NEWS! Our new social media package lets you browse all your social media websites at full speed, only $5.00 more per month! How about Netflix? Streaming package, $10 per month! Do you play video games online? You do?! How about the video game package, another $10 per month! Rinse and repeat for any number of categories/prices.
First, this isn’t going to happen, because #Capitalism; but if it did, great! That’s actually great news! Pay for play. Why should gramma who reads e-mail and plays solitaire on her tablet fund “the internet?” You know who should be paying top dollar? Us. We use the crap out of the Internet. So an a la carte option for bandwidth consumption is actually a good thing for consumers.
The internet is one of the most, if not THE MOST pivotal piece of modern technology. It is monumentally important in global infrastructure, and they (3/5 people, who the public never voted for, they were appointed) just voted to give control over traffic to an oligopoly.
There is some truth to this, though I won’t say “the internet” I’ll say “bandwidth.” Bandwidth is to the current century what container shipping was to the last. (n/t @roblong) But guess what? Bandwidth costs money. Real money. And a lot of it. Someone has to pay for the infrastructure, which is constantly under strain, and constantly being upgraded. Constantly.
Now, basic economics lesson: who pays? Someone has to pay. Because a Cisco CMTS costs a boatload of cash (we bought an “end-of-life” CMTS for our lab, used, for $150k, to give you a sense of what one costs). So who pays? The consumer. Always. Always. Always. You are going to pay for it one way or another. And that’s the end of it.
I realize the progs want something for nothing, make the rich pay for it, whatever. That just ain’t the way the world works. Anyone who says different is ignorant of basic economics. Now, as far as the 3-2 vote, keep in mind that the rules put in place were voted for on the same split, by a similar group of unelected bureaucrats. As long as we are trying to save representative democracy while we are arguing for nonsense, let’s remember that.
And let’s remember that Congress spent 10 years trying to pass laws in various forms, but because our system is so broken, and we are so divided, it never happened. Let’s also remember that Tom Wheeler’s FCC, on the same day they voted in the Net Neutrality rules, voted in rules overriding individual states’ ability to regulate within their own states. Another blow to federalism. So if we are going to wring our hands, let’s wring our hands for real. Let’s not pick and choose.
This doesn’t just effect the US either, this effects the world. Anybody, no matter their location, trying to access information/a website hosted in the US will be at the mercy of the ISPs/whether the host paid for priority traffic. That opens an entirely different can of worms.
Strawman argument. For all the reasons above this is a bogus argument. Plus, it happens now, anyway. Try looking at the BBC UK version of their website. You can’t. Because #GovernmentRegulation. And you can get around it, anyway, using VPN technologies. So, nope, ain’t buyin’ it.
While a lot of this is kind of “guessing games” as to what ISPs will actually do now that they have the power to do it. They have already shown exactly what they intend to do when they bullied Netflix into paying big bucks to keep their traffic up to speed. If Netflix has to pay, then so will you, in subscription costs (expect a higher Netflix cost and a higher internet bill). This benefits nobody but the ISPs, and they’ll try and twist it any way they can to come off as the nice guy.
They’ve always had the “ability to do it” and only haven’t for the last couple of years. So this is another strawman argument. Plus, I love how people hate the corporations when it suits them, but they don’t when it doesn’t. “If Netflix has to pay, then so will you!” That is a basic truth of economics, see above. I wish you guys would adopt this sort of attitude when you are calling for taxes and regulations on these companies. But you seem to forget it most of the time.
My final point: this industry is changing, and it is changing fast. Net Neutrality rules are backward looking. And they stifle innovation. We don’t know where the industry is going to end up, but those of us who are in it have a pretty good idea. And it is going to get better and better for the consumers of bandwidth. The very last thing we should be doing is regulating bandwidth providers as if they were a phone company. It’s just backward thinking.
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They don’t want anyone they know to pay for it. Except maybe those evil corporations. They’re fine with that.
Edit: Great article btw, @spin, it answers some questions I had and informs me as to some great ways to answer some stupid stuff in an intelligent way.
We had the answer to your question decades ago:
Ronald Reagan Quotes. Government’s view of the economy could be summed up in a few short phrases:If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.
This has been a great post and discussion. It’s gotten me thinking and reading much more on the topic.
Wading through some of the links here, I stumbled upon this graphic from 2015:
I have no idea how accurate this data is, but it certainly opened my eyes: while everyone mentions how this is really about Netflix et al., I hadn’t appreciated that streaming makes up well over half of all internet traffic.
Perhaps our arguments could gain better traction if we made more people aware of the fact that, as far as bandwidth is concerned, the internet is now primarily a home entertainment-delivery vehicle. I wonder how many people are aware of the fact that the internet is really just Blockbuster Videos with a moonlighting job as a global community and shopping platform.
If anyone has any more data on the type of usage, I’d be very interested. I suspect that the “other” categories in the chart above hide a sizeable fraction of music streaming/video/gaming/”other” (ahem) entertainment platforms. It would be interesting to see a simple comparison of “all home entertainment” vs “all other uses” of bandwidth.
And a few other random questions, if any of our resident experts have the patience:
The debate is constantly framed as content providers (e.g. Netflix) vs. ISPs (e.g. Comcast). But I’m reading about companies like Level 3 I’d never heard of before. How many other players are there besides the ones consumers interact with, and how important is their role in the net neutrality debate?
If a small number of users/uses take up so much bandwidth, why don’t ISPs just charge by MB volume instead of all-you-can-surf?
Why not? If they’re using nearly half of all bandwidth, and their entire business model requires streamed content to provide a similar experience to watching something on DVD or cable, wouldn’t they at some point bear the costs of ensuring their end user’s experience in a world of limited bandwidth?
Adding more delicious irony to the issue: Netflix’s business model allows up to five users per account. The users don’t even have to be in the same household. And the subscription price is only about $10/month. My guess is that less than half of Netflix users are actually paying for the service.*
… And thank you, @spin, for ‘splaining the issue in layman’s terms. I couldn’t figure out what had all my left-leaning friends in such a tizzy.
There are tons of companies out there running fiber and providing bandwidth both to customers and in between carriers. Their role in the debate? The same as others I guess. But they are of course subject to the same rules.
I was discussing Zayo yesterday with a colleague, and I’d thought they were just a regional lit fiber provider. Not so. They own a bunch of companies that gives them network access throughout the US and in to the UK.
Well, it’s always something getting them in such a tizzy.
I’m not sure why Guru says that. Certainly Netflix doesn’t want to pay it. It’s extra cost that degrades the bottom line. But Netflix surely has paid Comcast, at least. And I agree. If 40% of the traffic going over, say, Comcast’s public network is Netflix, then why shouldn’t Netflix foot some of the bill for maintaining and upgrading that network?
Someone told me “Well Comcast makes so much money, they should pay it themselves, instead of giving it all to their top executives.” Well, if someone is going to make that statement, then we really have nothing more to discuss. I’ll go and read some more Sherlock Holmes (which I enjoy more than arguing about this stuff), and they can go get another Che t-shirt.
Am I alone in thinking that unmasking @spin in a public debate against NN could create career troubles for him? The jacobins remain in high dungeon, as they sharpen their pitch forks. Then again, they always are in high dungeon.
It probably doesn’t need to be pointed out to the Ricochet crowd, but the problem with blocking web sites is going to be more severe with government control than without. But there are no truly private companies in this business, not when President Obama could haul the social media companies into his office and talk to them about how to stop terrorist narratives (i.e. how to stop conservatives).
They already do, sort of. Comcast adds charges if your residential account sucks down more than 1TB in a month. I haven’t got there yet with a streaming TV, Xbox, 2 phones, 5 computers, etc., but Spin has come close before.
Also, if everyone up to 1TB is paying the same price, then granny watching 3 cat videos a week and emailing 5 viruses a month to her family is paying substantially more per bit than her grandson who is bumping up against the cap watching midget porn videos, ganking noobs on his PS4, and binge watching every Marvel Universe title on Netflix. There are probably more people overpaying for their usage than underpaying, and ISPs aren’t going to upset that apple cart.
That’s a really average margin. I might buy some of the greed crap if it were in the 50% range. Funny, most angry millennial droolcup-wearing chowderheads’ dream jobs are working for IT/software companies, whose margins are orders of magnitude higher than Netflix’s.
Consistency takes a holiday, when you’re an idiot.
google’s is 24%
It still exists because that vote was only the first step. There is a process that must unfold before it is enacted and Dems will fight every step of the way. Already the leftie AGs are lining up their lawsuits. I expect even Repubs in Congress who know nothing will be bought off by the fear mongering.
One bandwidth-hog pajama boy called me a Fascist because I prefer less government regulation rather than his desire for more government regulation of the private marketplace.
Another feared throttling and banning of content and used China as an example of government controlled internet that works.
I recommend two books by an econ prof at Clemson who was an FCC economist, THomas Hazlett. One is an Encounter Broadside pamphlet called The Fallacy of Net Neutrality. The other is his newest, The Political Spectrum. It isn’t just about net neutrality but rather discusses the long history of the spectrum and government’s role in influencing, often poorly, the spectrum (radio, TV, cable, phone, cellular).
That is funny.
Howcome Obama did so many things with a wave of his hand or the flourish of a pen, but we have to go through agonizing, drawn-out procedures to undo them? Isn’t it supposed to be easier to break things than build them?
Is this due to the nature of the universe, or to Republicans being Republicans, or to the Deep State being the real government and Trump being a usurper, or what?
And what about the move to take away the states power to regulate the internet within their borders. Are we stuck with that forever?
That was good, but it was topped by the sentence that followed.
@spin – Do you believe that revoking Net Neutrality will mean we can get a higher QoS (Quality of Service) for interactive video – Skype calls, etc.? I’m looking forward to consistent quality video calls to my kids some day.
Well, that is an interesting question. I really do not have any trouble with video calls except when we go across the pacific to India. And I blame their end. I do not know if you can pay for higher QoS on cable connections. Further, since Skype is a peer-to-peer system, I wonder how that affects it. I mean, it a pure network you could do QoS on a video call, for sure. But there’s a lot in between you and your kids, so it’s a question mark in my head right now.
That said, bandwidth is exploding. I talked to a guy yesterday who’s got a 1Gb fiber connection to his house, and it ain’t horrible expensive. So it’s coming, QoS or no…
I work for a company that is owned by folks who are quite conservative in the areas of fiscal policy and regulation of business. They are quite progressive in other areas and have no issues hiring people of varying faiths, ethnicity, sexual orientation, etc. I put that in so some jacobin reading this doesn’t think they have standing to come after us.
I think most of the folks within leadership positions share my opinion of Net Neutrality, largely because many of them have had long experience within the industry. That isn’t to say that we don’t have some young progressives who disagree. But by and large, as I’ve said, most of the people who understand the industry are apposed to the rules. And those who do understand it but are still in favor of the rules imposed by Net Neutrality do so because their “stick it to Big Telecom” ideology overrules their common sense.
A NN aspect about which no one else has posted (at least I haven’t seen it) concerns legal standing. Prior to 2015, the FCC had the legal right to regulate Title II services. In 2015, Title II was expanded to include broadband carriers. That meant Comcast was put in the same bucket as Verizon, the bucket the FCC could legally regulate. The recent action undid the action of 2015.
This is a good primer, although it has its own bias.
I bring it up because content providers (Google, esp. YouTube), Facebook, Netflix, Hulu, etc. keep getting mentioned, yet they have always been outside the scope of direct regulation.
The companies who are potentially regulated are US broadband carriers like Comcast, CenturyLink, and AT&T. There are also lesser known big bit pipe carriers like Zayo Group and GTT. The point is they can regulate you if you’re in the business of moving info on circuits, fibers and satellite feeds.
The fear is that the enriched (evil?) content providers can’t be regulated directly, but since the connecting pipes can be regulated, there is hope. Really smart(?) policy wonks can craft lengthy word salads capable of preventing the inherently evil ones from oppressing the masses. Sound familiar?
The rubber meets the road, so to speak, where the unintended consequences of said word salads do hand-to-hand combat with evil dollars manipulating the hapless bit carriers into unknowingly doing wicked deeds.
PSA: The previous paragraph is accurate in spirit, however it’s more a test of the effectiveness of mixed metaphors in a run-on sentence.
Will regulation stifle innovation?
Will the absence of regulation unleash the dogs of capitalism on unsuspecting consumers (who are willfully paying for the content)?
Will Jen sleep with Ryan even though he identifies as a fire hydrant?
To find out, tune in next time the The Government of Our Lives.
I need you to explain this more. Because in every conversation I’ve had with proponents of Net Neutrality, the content provider is the good guy, and the bandwidth provider is the bad guy. They don’t want Facebook regulated. But they what Big ISP regulated.
Wasn’t there a NN person in the news a few days ago who was the recipient of a lot of hate for suggesting that? I’m not sure; I didn’t save the article.
But about the same time I did find this article by a Republican who wants Facebook regulated:
http://dailycaller.com/2017/12/08/roger-stone-time-for-real-net-neutrality/
I sympathize in that I see it as a real problem that needs to be dealt with, but one that would most likely be made worse by government regulation. I wouldn’t necessarily be against regulation that requires more transparency on how these companies censor the media, but even that is fraught with danger.
I’m sorry, but you see what as a real problem? Are you referring to net neutrality here?
Censorship by Facebook, Google, and Twitter.
Content providers don’t fall under a law that permits regulation except for the child porn/obscenity statutes. Even then it’s not easy to enforce.Net Neutrality simply places the broadband providers into a classification where they can be regulated by the FCC, the guys who regulate the phone (narrowband) network. The policy extremes of the argument are:
It seems wanting all internet traffic to travel on equal footing is the position of pro-regulation camp. They want to lock down the ISP so the wealthy content providers can’t get an advantage that will disadvantage the little guy . Classic zero-sum thinking.
The “free to cut deals” position is from the no-regulation camp. They say we developed a game-changing internet platform by keeping it open to innovation. May the better mouse trap win.
Regardless of your policy orientation, their is a third issue: what is technically possible in the current internet schema? As was mentioned upstream aways, if you know the traffic will remain in one ISP you can do much more than if the data will cross boundaries to another operator. Yes, they cooperate, but they can’t all support the same advanced features. Why would an ISP prioritize traffic of any kind? Because it benefits him. Why would it benefit him? Because he has a deal with YouTube/Google.
I can’t see any ISP prioritizing traffic unless someone (content provider) is paying for it.
Oh ok. That of course is fundamentally different that the Net Neutrality discussion, as I am sure you are aware.
But we can cover it anyway. I am not inclined at all to think that intervention by the government is the right thing to do. I do think that Conservatives and all “right of center” folks in America (and indeed, the entire westernized world) need to spend a lot more time looking for and consuming political news. They cannot sit at their computer, or with their iPhone in hand, and expect the right of center viewpoint to scroll past them. So I think the problem is one we have to solve.
As long as this thread is still alive, I have something of a geek question:
From what I have recently read, most of the internet congestion problems are due to home entertainment content (i.e. streaming movies/TV), and most of the bottlenecks are not with the ISPs themselves but with the upstream connections between the entertainment content providers and the ISPs.
Most people get their internet through cable. And most cable companies have spent decades providing customers with motion picture home entertainment without interruption. So it seems strange that cable companies are essentially providing the same service they have for years without congestion issues, yet this great new technology causes bottlenecks in transmission.
My questions are: is this due to inherent differences in providing motion pictures by “cable” instead of “internet”, even though its using the same coaxial line? And why don’t the cable companies just go back to hosting the content themselves instead of just re-routing content from upstream providers? If Comcast simply bought/created its own version of Netflix with servers located at its distribution centers, wouldn’t that solve the underlying issue?