News Is Net Neutrality Really Necessary?

[NobodySpecial]

I don't see how the FCC can force them to provide equal access to a competitor without compensation (from the competitor) - or a lower rate on their lease payment on the trunk line - to accommodate mandates.

They are being compensated - you are buying bandwidth from them.

Suppose there was only one oil refinery producing gasoline for your area (which there probably is for most of the US) and they sign a promotion deal with GM so that the gas costs twice as much for a Ford driver.
Well it's a free country - a competitor can always build their own refinery and gas stations and supply Ford and GM drivers equally

 

[nismaratwork]

If they lease bandwidth from the Government - that lease should be the starting point of all discussions. Next, it sounds as though Comcast does own everything from the trunk line to their customer's (tv, computer, or phone) equipment.

I don't see how the FCC can force them to provide equal access to a competitor without compensation (from the competitor) - or a lower rate on their lease payment on the trunk line - to accommodate mandates.

It's very tricky, but you're picking up the essentials rapidly. A few corrections:

Comcast owns a very small amount of cable leading from the point where they establish a local network, but even then because of older rulings others can carry on the some portions of the same lines. Think of it this way, if I switch from Comcast to Time Warner, nothing physical changes from the point where coaxial cable leaves my wall, out of my home or building... etc. The government has been very careful from the beginning to make sure that they'd have similar controls over cabled (and now fiber) communications that they did over broadcast and radio. They already had the phone system as a template, and that's probably the best analogy.

Now, the thing is Comcast DOES limit how much you can download per month: 250 Gigabytes, which they claim covers over 99% of their customers. I would argue that 250GB is going to be less than enough with Netflix and similar services through gaming consoles and other devices, and the rapid growth of digital distribution of legal goods such as games.

Anyway, my point is that Comcast can protect their profits by not allowing me to (as they see it) overuse their service and force them to narrow their profit margin. They can't however, tell me how to allocate that 250GB beyond the obvious: it must be legal use. The issue here is that Comcast (again, just an example) shouldn't be allowed to tell you who you can spend your time with.

MY point is that technically, it's absurd trying to block traffic on the scale Comcast proposes without expecting the rapid use and evolution of countermeasures. They can throttle you down to 1 GB per year, and you can opt out, but they can't tell you not to download 1GB of Swiss Mountain Porn.

NobodySpecial has the point down: a competitor can come in and simply offer the same service on the SAME LINES, but in the 'old' model, just the way that AOL was crushed.

 

[WhoWee]

They are being compensated - you are buying bandwidth from them.

Suppose there was only one oil refinery producing gasoline for your area (which there probably is for most of the US) and they sign a promotion deal with GM so that the gas costs twice as much for a Ford driver.
Well it's a free country - a competitor can always build their own refinery and gas stations and supply Ford and GM drivers equally

Please clarify your (they and you) designations. It's my understanding Comcast leases bandwidth on the trunk line - does NetFlix also lease space on the trunk line?

 

[nismaratwork]

Please clarify your (they and you) designations. It's my understanding Comcast leases bandwidth on the trunk line - does NetFlix also lease space on the trunk line?

HERE you come to the crux of the issue:

Netflix buys bandwidth too, like an ISP, but it only needs to extend for a short 'distance' before it becomes traffic on some ISP somewhere. So, for Netflix the primary challenge for streaming video is actually keeping their servers smoothly humming and their network clean and clear, all while refining the art of when to allocate the most bandwidth (it's pricey).

An ISP carries, as it's essential service, all content from OUT THERE, through their network TO YOU. They don't have to constantly run or hold Netflix's catalogue, but anytime A makes a call for that resource at B, the ISP's JOB is to carry it at their advertised speed to you. To keep their service fast they can:

1.) Buy more bandwidth
-increase monthly prices
or
-lower profit margins (by no means losing profitability)
2.) Throttle how much throughput you're allowed per month
-Comcast does 250GB/month, but not parsing what makes that 250.
3.) Throttle specific traffic (packet shaping is an example) from sites that are using a disproportionate amount of your bandwidth.
-Problem A: Netflix, MS Live, iTunes and TV... etc... are all LEGAL.
-It's easy to get around this if your target is illegal activity.
-Illegal activity is being eclipsed by the massive amount of money being found in digital distribution
PROBLEM: Netflix wants there to be as little additional cost to you as possible to get their service. For them, and others in digital distribution the calculation is simple:

Users Reached = Profit.

For the ISP it's: User's Paying + (250GB - X) = Profit (where X = how much the enduser consumes of that 250GB).

See the conflict? The ISP doesn't get any more money because you spend your pre-paid month of their service looking at HD video on Hulu, but Hulu is thrilled at this development.

So, if the ISPs want to go to war over this, they'll be fighting the people who use their service on the supply side as well.

 

[nismaratwork]

WhoWee: You're asking all of the right question btw.

 

[WhoWee]

Now, the thing is Comcast DOES limit how much you can download per month: 250 Gigabytes, which they claim covers over 99% of their customers. I would argue that 250GB is going to be less than enough with Netflix and similar services through gaming consoles and other devices, and the rapid growth of digital distribution of legal goods such as games.

Anyway, my point is that Comcast can protect their profits by not allowing me to (as they see it) overuse their service and force them to narrow their profit margin. They can't however, tell me how to allocate that 250GB beyond the obvious: it must be legal use. The issue here is that Comcast (again, just an example) shouldn't be allowed to tell you who you can spend your time with.

QUOTE]
It seems the best thing Comcast and others can do is modify their current agreements with cost schedules above the 250GB level. Next, they could inform clients of their on-going/cumulative level of use - much the way a cell phone provider discloses minutes used or available (until the cost increases). Perhaps each time a client attempts to download a movie, the ISP can inform them of the impact of their decision on the specific account? This would prevent customers from incurring additional costs - unless that is their intention.

 

[NeoDevin]

ALSO POST number 83 NeoDevin:
"No. The parts allowing companies to charge more for more bandwidth (if such things are actually mentioned in the rules, and not just commentary added by the news organizations) are redundant and unnecessary. Companies will still be able to offer unlimited bandwidth contracts if they choose, or offer finite bandwidth packages. This part hasn't changed.

The parts preventing them from charging more for some types of data than others were necessary. This prevents ISPs run by cable companies from using a (near) monopoly to shelter their cable services (or any other such conflict of interest). I only wish they could have covered all mobile bandwidth with the same rules (that you pay for bandwidth, irrespective of what you choose to use that bandwidth for). "

If we can focus on the NetFlix and Comcast scenario for a fairness check. I'm not an expert in this area. I'm going to post my understanding and will defer to the experts to clarify anything I mis-communicate.

Comcast has invested significantly to run cables and develop their networks. Comcast has sold their cable services to millions of subscribers. Comcast pays for cable content and re-sells to clients. Comcast also provides internet access in a bundled package (as well as phone).

NetFlix purchases content and re-sells (actually rents) to either subscribers or renters. NetFlix is available via US Mail or as a download. NetFlix (or client) pays the US Mail to deliver content. NetFlix does not pay Comcast to deliver content - but clients do pay Comcast for internet access.

Comcast and NetFlix are in competition for movie rentals. They may or may not offer the same content.

The new regulations will require Comcast to provide NetFlix equal delivery capabilities - at no cost to NetFlix.

If my understanding is correct, I don't believe this is fair to Comcast. NetFlix has a delivery option via US Mail (that isn't required to offer a discount to them). If the same Comcast clients (on the cable side) want a TV channel that Comcast doesn't offer - they do without.

Ultimately, the movie studios (manufacturer) might be the winners in the future. It sounds as though all they need to do is sell movie subscriptions directly to (retail) internet subscribers - cut the cable (wholesaler) provider out completely?

The US mail and Comcast have different delivery models. The US mail charges delivery to the sender (who tacks it onto the price that the receiver pays). Comcast has already charged the receiver for the bandwidth. They are trying to charge the sender for the same bandwidth, in order to protect their other business interests.

Imagine what the outcry would be if the US mail decided to start charging both the sender and the receiver. Take it even further, and suggest that the US mail does this, but only for mail sent by political parties in opposition to the one currently in power (US mail is government run, right? Canada Post is, at any rate).

Comcast essentially wants to be able to charge the consumer twice for the same bandwidth. Once directly, on their monthly bill, and once indirectly, as a charge to Netflix, which must then pass it on to the consumer. Comcast is able to do this because they have a near monopoly in place in many regions. In the long run this monopoly would (might) be broken by other ISPs moving in offering more reasonable service, but not before Comcast is able to put most other streaming video services out of business with their monopoly. This happens on a much faster scale than the increased competition (due to the time needed to build infrastructure). Once most of the streaming video services are out of business, Comcast can drop the differential pricing, and remain competitive with other ISPs.

 

[NobodySpecial]

Ultimately, the movie studios (manufacturer) might be the winners in the future. It sounds as though all they need to do is sell movie subscriptions directly to (retail) internet subscribers

They are afraid this will not make them as much money (actually as individual executives they are afraid of any change)
At the moment they can sell packages - if a cinema chain wants the new Harry Potter it also has to take a couple of Rob Schneider movies that nobody wants. Similarly with cable packages - to get the movie/sports package you want you have to buy a bunch of base packages you don't want.

The companies have done their sums and realized that if they want to swap your $100-120 month cable package for direct rentals, you are either going to have to watch a lot of 99c/episode downloads on iTunes or they are going to have to charge you cinema-level prices for pay-per-view movies.

cut the cable (wholesaler) provider out completely?

The trouble is when the cable company is also an ISP and a studio - like Fox.

 

[nismaratwork]

Now, the thing is Comcast DOES limit how much you can download per month: 250 Gigabytes, which they claim covers over 99% of their customers. I would argue that 250GB is going to be less than enough with Netflix and similar services through gaming consoles and other devices, and the rapid growth of digital distribution of legal goods such as games.

Anyway, my point is that Comcast can protect their profits by not allowing me to (as they see it) overuse their service and force them to narrow their profit margin. They can't however, tell me how to allocate that 250GB beyond the obvious: it must be legal use. The issue here is that Comcast (again, just an example) shouldn't be allowed to tell you who you can spend your time with.

QUOTE]
It seems the best thing Comcast and others can do is modify their current agreements with cost schedules above the 250GB level. Next, they could inform clients of their on-going/cumulative level of use - much the way a cell phone provider discloses minutes used or available (until the cost increases). Perhaps each time a client attempts to download a movie, the ISP can inform them of the impact of their decision on the specific account? This would prevent customers from incurring additional costs - unless that is their intention.

The way it stands now Comcast has a monitor that customers can use, and the first time you go over the limit you're given a warning. Now, I'm not sure if a warning means an e-mail, or a call... you get the idea. Anyway, the second offense = suspension of your account for a YEAR.

...

A little ham-handed. There are plans above this at the home-owner level, and business solutions are extremely expensive. There is no intent to keep a high-use customer however... as you can see from their plan, it's effective for them to cut that growing minority loose.

 

[WhoWee]

The way it stands now Comcast has a monitor that customers can use, and the first time you go over the limit you're given a warning. Now, I'm not sure if a warning means an e-mail, or a call... you get the idea. Anyway, the second offense = suspension of your account for a YEAR.

They suspend your account? Why wouldn't they just charge you more?

 

[nismaratwork]

They suspend your account? Why wouldn't they just charge you more?

Honestly, I don't know... I can only speculate that those heavy users are less desirable. If you think about it, if you use 20 GB a month, max, but I hover around 200GB... we're paying the same money, but I'm infinitely less profitable. It's cynical, but maybe the final analysis is that quietly cutting customers is preferable to advertising prices that their competitors can then use against them in advertisements. I'd note: Verizon for instance does NOT have a limit on DSL or FiOS... so Comcast probably wants to deal with this quietly.

That's pure speculation on my part however, not any kind of insider knowledge. If there isn't a reason however, it's one random policy and extremely harsh. You cannot reinstate your account within that year... period... that must be a fairly shocking experience for the average consumer.

 

[Evo]

Honestly, I don't know... I can only speculate that those heavy users are less desirable. If you think about it, if you use 20 GB a month, max, but I hover around 200GB... we're paying the same money, but I'm infinitely less profitable. It's cynical, but maybe the final analysis is that quietly cutting customers is preferable to advertising prices that their competitors can then use against them in advertisements. I'd note: Verizon for instance does NOT have a limit on DSL or FiOS... so Comcast probably wants to deal with this quietly.

That's pure speculation on my part however, not any kind of insider knowledge. If there isn't a reason however, it's one random policy and extremely harsh. You cannot reinstate your account within that year... period... that must be a fairly shocking experience for the average consumer.

You are right that no one wants the heavy users.

 

[NeoDevin]

You are right that no one wants the heavy users.

And rather than simply charging people for what they use, they want to charge based on what the content is, in order to protect their other interests.

 

[WhoWee]

You are right that no one wants the heavy users.

What is the industry norm when personal users reach or exceed their maximim? Is Comcast alone in suspending the accounts of heavy users?

 

[JaredJames]

In the UK, the standard is to cut the speed of the person using excess.

For ADSL connections, it's usually a case of you having a monthly limit (mine is 40GB). The first time you go over it they warn you, the second time they slow your speed down to 10% of max for the next billing month. The third, well I haven't got that far.

For Cable connections, we only have the one and that's Virgin Media. They have peak caps. If you download more than 1500mb between 9am to 3pm and then a separate 4pm to 9pm, they cut your speed instantly from 10mb to 2mb for 5 hours.

For mobile users, they usually charge for excess use.

 

[nismaratwork]

What is the industry norm when personal users reach or exceed their maximim? Is Comcast alone in suspending the accounts of heavy users?

In the USA they are AFAIK, and as for a national GB/month-person unit?... Not sure. I would imagine, from my experience, that it would be highly regional, and partially contingent on the EXISTING quality of service; after all you won't see a hot spot even in populated regions if people are sufficiently limited.

AOL probably stands as a good example of an early way that this was approached, when they charged by the hour. Remember however, that they took advantage of a time when the technical hurdle to use another service was prohibitive. Given the multinational exponential growth of the internet in general and the WWW in particular, I think companies like Comcast aren't so much trying to turn back the clock as just squeeze ever dime they can out the present. Oil companies are draining the resource that supports them (I'm not debating at what rate, but ultimately this is true), and that seems to leave them able to drill. Why?... well, there's money to be made now, and when there isn't... well, look at AOL now. If ever a dry well analogy worked...

 

[nismaratwork]

In the UK, the standard is to cut the speed of the person using excess.

For ADSL connections, it's usually a case of you having a monthly limit (mine is 40GB). The first time you go over it they warn you, the second time they slow your speed down to 10% of max for the next billing month. The third, well I haven't got that far.

For Cable connections, we only have the one and that's Virgin Media. They have peak caps. If you download more than 1500mb between 9am to 3pm and then a separate 4pm to 9pm, they cut your speed instantly from 10mb to 2mb for 5 hours.

For mobile users, they usually charge for excess use.

re: bold: We're all at the "AOL Hourly Rate" when it comes to mobile... that is an unfortunate, but true fact that we have to live with for now.

 

[JaredJames]

I'm going to add a small caveat to my previous post, in that I currently have an "unlimited use" policy for internet on my phone.

I can literally hook it up to my computer and download as much as I want through it. A lot companies are now looking to get rid of this option as there are a number of users paying for these unlimited use policies and simply letting them download continuously and this small percentage (I believe it was around 2%) is using a high percentage of network capacity.

However, as with all policies such as my "unlimited" plan, there is a 'fair use' clause and if I do "take the p*ss" as the guy in the shop explained to me, they "will get a bit sh*tty with me" (all the phone shops words not mine). Although this clause is there, the plan itself does provide me with unlimited data usage and they can't charge me for using too much. So I'm not sure what they do.

 

[Evo]

And rather than simply charging people for what they use, they want to charge based on what the content is, in order to protect their other interests.

It's probably best to say charge for the media provided, like movies. because there is content that results in data (bandwidth usage) and there are "content providers" which offer media, which is the problem being discussed with the Level 3 Netflix deal that is irking Comcast and the Comcast/NBC merger.

Comcast's current quarrel with the Level 3/Netflix deal is bandwidth. Comcast is accusing level 3 of exceeding the amount of traffic passed back and forth based on their peering agreement.

http://news.cnet.com/8301-30686_3-20026071-266.html

This is also an excellent breakdown of this issues.

http://news.cnet.com/8301-30686_3-20024197-266.html?tag=mncol;mlt_related

 

[nismaratwork]

It's probably best to say charge for the media provided, like movies. because there is content that results in data (bandwidth usage) and there are "content providers" which offer media, which is the problem being discussed with the Level 3 Netflix deal that is irking Comcast and the Comcast/NBC merger.

Comcast's current quarrel with the Level 3/Netflix deal is bandwidth. Comcast is accusing level 3 of exceeding the amount of traffic passed back and forth based on their peering agreement.

http://news.cnet.com/8301-30686_3-20026071-266.html

Now, I just want to add... you need to keep in mind that Comcast isn't a company, but a region of utter darkness, at the heart of which is a crimson crystal throbbing with eldricht power and crackling with the ruinous flames of Gehenna. Within that, at the heart of the heart of the heart of Comcast, is a single guy in a well-cut suit flipping you off.

Just my take, I don't claim that I can back this up with MUCH solid evidence.

 

[Evo]

Now, I just want to add... you need to keep in mind that Comcast isn't a company, but a region of utter darkness, at the heart of which is a crimson crystal throbbing with eldricht power and crackling with the ruinous flames of Gehenna. Within that, at the heart of the heart of the heart of Comcast, is a single guy in a well-cut suit flipping you off.

 

[WhoWee]

It's probably best to say charge for the media provided, like movies. because there is content that results in data (bandwidth usage) and there are "content providers" which offer media, which is the problem being discussed with the Level 3 Netflix deal that is irking Comcast and the Comcast/NBC merger.

Comcast's current quarrel with the Level 3/Netflix deal is bandwidth. Comcast is accusing level 3 of exceeding the amount of traffic passed back and forth based on their peering agreement.

http://news.cnet.com/8301-30686_3-20026071-266.html

This is also an excellent breakdown of this issues.

http://news.cnet.com/8301-30686_3-20024197-266.html?tag=mncol;mlt_related

This was very helpful. I didn't realize the central role of Level 3 in the discussion. NetFlix is relatively insignificant in the larger picture.

 

[nismaratwork]

This was very helpful. I didn't realize the central role of Level 3 in the discussion. NetFlix is relatively insignificant in the larger picture.

Apple and MS aren't, and what Netflix does, they're trying to do as well. Live/Zune service, PSN, iTunes and TV... Netflix just happens to be very popular and a good face for thisl.

 

[mugaliens]

Their idea is rubbish. The only way to maintain net neutrality is for them to keep their hands off.

Having read a number of articles written on the issue, I've changed my mind, and now believe it's a good idea that companies controlling the hard-wired pipes be prevented from applying QoS weights to content.

Of course, this brings up two issues:

1. The quality of service of some streaming content, including voice and video, will suffer.

2. Good luck, FCC, on figuring out a way to detect this, much less do anything about it.

On third thought, I believe broad QoS standards should remain, but only if undifferentiated by provider. Thus, VoIP should retain a QoS weight which affords normal human voice communication, but without any differentiation between whether it's Comcast's VoIP vs Vonage, Skype, etc.

I still think #2, above, will rule.

 

[skippy1729]

I don't think it matters if this particular regulation is beneficial or harmful. It is the camel's nose slipping in under the tent.

Skippy