Abandoning Net Neutrality: When There's No Such Thing as a Free Internet

Abandoning Net Neutrality: When There's No Such Thing as a Free Internet

Summary: When all bits are not considered equal, bandwidth becomes a traded commodity. A Free Market, not Net Neutrality is in store for the continuing evolution of the Internet.

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TOPICS: Browser
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When all bits are not considered equal, bandwidth becomes a traded commodity. A Free Market, not Net Neutrality is in store for the continuing evolution of the Internet.

While many of you like myself were out of town during the holiday break enjoying some time away from work, or partaking of the mind-numbing substance of your choice to tide away the chilling weather and/or snowpocalypse that kept us all inside through the New Year, the Federal Communications Commission issued the 87-page long Open Internet Order.

The Open Internet Order imposes certain limitations on what they believe (emphasis on believe, because the FCC still needs to prove in court that they can actually enforce these rules) service providers can and cannot do regarding your connectivity as a broadband and wireless Internet services user.

Also Read: FCC Approves Net Neutrality Framework; Now the Politics Begin

So All Bits are Now Created Equal, right? Well, not really. While the Order adopts "basic rules of the road to preserve the open Internet as a platform for innovation, investment, competition, and free expression" the reality is that under the new FCC rules, if they pass muster in Congress, we're likely to see a fundamental shift in terms of how we consume and prioritize the use of data in broadband and wireless and how providers will charge us for it.

Under the Open Internet Order, the service providers get new restrictions, but they're also being given some additional leeway as well, hence the current trend of referring to these new rules as "Net Neutrality Lite". As consumers, we didn't get what we really wanted in terms of Net Neutrality legislation -- but neither did the big telecoms either.

So what exactly does this really mean? This is certainly going to translate into additional costs, but it also means the Invisible Hand of Capitalism and the Free Market will give consumers additional flexibility.

First, the (sorta) good news. Under the new rules, providers cannot block access to specific kinds of websites and services, such as Netflix or Hulu provided they are lawful. Additionally, "Paid Prioritization" is going to be history, based upon verbiage which states that businesses cannot favor one type of traffic over another (Improved Quality of Service) in the connection of one subscriber over another. The actual verbiage from the Order states:

A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not unreasonably discriminate in transmitting lawful network traffic over a consumer's broadband Internet access service. Reasonable network management shall not constitute unreasonable discrimination.

"A commercial arrangement between a broadband provider and a third party to directly or indirectly favor some traffic over other traffic in the connection to a subscriber of the broadband provider (i.e., 'pay for priority') would raise significant cause for concern," the Commission then elaborates. This is because "pay for priority would represent a significant departure from historical and current practice."

All of this is well and good, but did you read the bit about Reasonable network management? What does that mean? Well, this is what the FCC says it means:

"A network management practice is reasonable if it is appropriate and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service. Legitimate network management purposes include: ensuring network security and integrity, including by addressing traffic that is harmful to the network; addressing traffic that is unwanted by users (including by premise operators), such as by providing services or capabilities consistent with a user's choices regarding parental controls or security capabilities; and by reducing or mitigating the effects of congestion on the network."

So if you haven't nodded off and you're still following along, things such as throttling by ISPs in order to prevent congestion are perfectly okay. And while they can't block Netflix or Hulu or any number of 3rd-party services, ISPs have the right to adjust how much of it you can eat and how fast you can eat it. And they also have the right to charge for said bandwidth accordingly.

Also Read: Net Neutrality? More Like Neutered Neutrality (ZDNet Government)

But wait, there's more. These "reasonable management" restrictions only apply to fixed broadband connections, not wireless. Wireless providers are pretty much exempt from all of the new FCC rules outlined in the Open Internet Order with the exception of network transparency (disclosing in detail how their network management practices work) and no content blocking of lawful websites.

To better understand what we are dealing with, let me paint a picture of what the typical wireless and consumer broadband experience might look like, eight years from now.

Next: In the Year 2019 »

Well before the end of this decade, the wireless network infrastructure of all of the main US telecom providers will have been completely migrated to 4G -- there will be seamless, blanketed, end-to end coverage across the country. Use of legacy 3G and GSM/CDMA technologies will be completely de-incentivized and eliminated altogether. Everyone with a smartphone will be running on either LTE or WiMAX, and for network simplicity even "Feature Phones" if they still exist then will also be running on 4G.

With the move to 4G, consumers of wireless services are going to be able to pull down data at speeds much faster than they were before. But as we recently discovered, it's also possible to consume an entire month's 5GB allotment of Verizon LTE data in a matter of hours, depending on what applications are being used.

So it's a foregone conclusion that in the 4G universe, the "Unlimited Data Plan" is extinct. Wireless companies like Verizon and AT&T won't be able to afford it. They'll just go broke doing it, and end up like Clearwire.

However, there are both positive and negative aspects of the FCC's New World Order from the perspective of both consumers and service providers.

Firstly, I think we can reasonably assume that the concept of buying a separate "Minute" plan for voice traffic from the "Data" plan will probably need to be eliminated/re-evaluated based on the FCC new ruling as well as from ongoing smartphone consumer usage trends.

As everything with 4G will be end-to-end TCP/IP, your "Plan" is simply going to be Data, period, because whether you use Verizon's or Skype's or Google Voice's networks to carry your VOIP calls makes no difference -- all voice traffic is IP data, and anything that travels over that 4G connection is Data, period.

The bread and butter of the Voice business with wireless carriers is going away -- what they really want to charge you for is Gigabytes. And they will charge you for it. Every single byte. And it will almost certainly cost you more than it does now.

On pure 4G systems, you'll probably see 5GB and 10GB or more "Plans" and the carriers will go to war over who has the best pricing on these base plans and also who charges least for overages. As it is today, the customers will be spectators over the battle of the best coverage and the fastest and least expensive. Initially, they will maintain the status quo of devices being locked into specific networks, just as it is now, while we have transitional blended 3G and 4G networks.

But that status quo won't persist for long, because the integrated device chipsets that are coming out in the next few years will allow for commodity 4G smartphones to be built and sold at full retail for about $300.00 or less (I'm thinking realistically about $250.00 for a fully featured, top-of-the-line Android device, with basic devices selling for $100).

These devices will be able to communicate over all of the respective LTE and WiMAX networks of the competing carriers, without the consumer being locked into a two-year contract and they will obviously be cheap enough for purchase outright without requiring a subsidy.

In the year 2019, besides driving flying cars, stopping for lunch at the streetside ramen shop and chasing down rogue Replicants, you'll buy unlocked multi-network 4G smartphones at WAL-MART and Best Buy or even Amazon.com off-the-shelf, ready to go on the carrier of your choice.

So instead of calling yourself a "Verizon" or a "Sprint" or an "AT&T" wireless customer, you'll be able to buy "Data Credit" from anyone you want, in as little as 1GB chunks or possibly even less. Pay As You Go versus monthly contracts will be the preferred way of doing business as a consumer with the carriers, and you'll be able to switch carriers as often as you like.

It will probably cost you more in the long run, and it won't be like the good 'ol days of unlimited data, but you'll have freedom of choice.

You'll buy Data Credit at places like Walgreens and Starbucks --- perhaps on the very same pre-paid cards you use for your Chai Lattes. It wouldn't even surprise me to see 200MB or 1GB "boosts" from Verizon, Sprint or AT&T offered with $20 coffee cards for promotional purposes. 50GB T-Mobile cards for $200.00 at COSTCO and Sam's Club. Et cetera. You might even see the credit provisioning process for these providers manifest as Apps in iOS or on the Android Market.

You won't even have to worry about giving up or transferring phone numbers either if you flip carriers on a monthly basis -- you'll use services like Google Voice that give you unified messaging and your "Permanent" phone number, and your device's MAC and IPv6 addresses will be its unique identifier which will allow it to register on multiple networks simultaneously.

Next: It's all about the Gigabytes, Baby. »

With everything boiling down to Gigabytes, and with Pay as You Go becoming the norm, consumers will also need to have much more complicated self-metering habits. Smartphone OSes will need more sophisticated and much more detailed and granular accounting of which apps chew up what data and on what carrier.

You might find, for example, that the Google Voice app or the Verizon VOIP app that came with your Data Credit that you use for phone calls only chewed up on the average of 500MB this month on your 4G iPhone, but iTunes ate up 2GB for 4G music downloads and you did 5GB of FaceTime video calls, and you'll have to adjust your habits accordingly.

Maybe you'll think twice about doing an On-Demand download that 2.5GB Netflix or iTunes movie over 4G with your iPad or Android Tablet when you're on the road, since it will have a real cost attached to it.

So we know that Wireless will likely become the Free Market Wild West. What about Broadband?

We know from the FCC rules that Broadband providers now have to be transparent in their bandwidth management practices and can't block services like Hulu or Netflix, nor can they discriminate based on "Paid Prioritization". But if everyone decides they want to get their TV On-Demand thru services like NetFlix, Hulu or Apple TV, there may be additional costs associated with going "Out-of-Network".

What do I mean by Out-of-Network? For example, let's assume you are a Verizon FiOS customer, and you've decided to use it exclusively for your Internet broadband service and use Netflix and Apple for all your On-Demand movies, with your "Live" TV coming from Over-the-Air.

Under this scenario, It's at Verizon's discretion as to whether they charge you a premium or additional fees for going Out-of-Network for using your Apple TV, versus using their own On-Demand service with their DVR/Streaming hardware.

Their own hardware and services may be cheaper for them to offer to the consumer because they might have secured a bulk bandwidth deal with a CDN like an Akamai or a Limelight to deliver their own equivalent Pay-per-Play or monthly all-you-can-eat movies over FiOS versus an Apple TV. Or maybe Verizon might even build its own CDN to try to do it all in-house.

While Verizon cannot discriminate in terms of traffic prioritization between one customer and another assuming equivalent sized bandwidth going into the home, they can definitely throttle across the board (provided it doesn't degrade the service to the point of becoming useless) according to the new FCC rules if they determine that Netflix and iTunes movie downloads puts an undue strain on their Internet pipes.

Under these new rules, it may very well be less cost effective for a consumer to buy a straight-up broadband plan from Verizon and buy their services separately rather than use Verizon across the board for VOIP, live television and premium channels, On-Demand, DVR and also Internet broadband.

There's also nothing in the FCC Open Internet Order preventing them from offering tiered pricing plans which make using services like Netflix more attractive or even a metered bandwidth plan.

But at the end of the day, I think we're all going to be paying more. For everything. That's Net Neutrality for you.

How do you feel that the FCC's Open Internet Order will affect you as a consumer or a business? Talk Back and Let Me Know.

Topic: Browser

About

Jason Perlow, Sr. Technology Editor at ZDNet, is a technologist with over two decades of experience integrating large heterogeneous multi-vendor computing environments in Fortune 500 companies. Jason is currently a Partner Technology Strategist with Microsoft Corp. His expressed views do not necessarily represent those of his employer.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

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62 comments
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  • All I wanted was to use websites that I choose...

    All I wanted was to use websites that I choose...
    According to your predictions, we will all get a lot more from the FCC's open internet rules than that!

    If I read you correctly, we will see the commodification of wireless data plans. You can bet that the wireless phone providers will fight that tooth and nail, because turning a service into a commodity always drives down the price, often at the cost of profit margins.

    Even if we don't achieve that, the fact that ISPs will have to keep the internet open for home users means that we will continue the amazing innovation that consumers having free (in the liberty sense) choice of what web based services has already achieved.
    JohnVoter
    • RE: Abandoning Net Neutrality: When There's No Such Thing as a Free Internet

      @JohnVoter

      >>
      If I read you correctly, we will see the commodification of wireless data plans. You can bet that the wireless phone providers will fight that tooth and nail
      <<

      You didn't read that correctly. Wireless is not included in the FCC rules. He's prediction what will likely happen to wireless in a future without net neutrality.

      As for wired, what he's saying is that the new FCC rules will increase your ISPs cost of doing business, which will increase your monthly rates.

      Also, not said in this article: When the ISPs costs go up, they have less to spend on building out new tech, so technology advancement from that end will slow down.

      Is that what you wanted?
      Software Architect 1982
      • Commodification good for consumers, internet freedom priceless

        @Digital Video Expert
        From the article:

        "To better understand what we are dealing with, let me paint a picture of what the typical wireless and consumer broadband experience might look like, eight years from now...

        Firstly, I think we can reasonably assume that the concept of buying a separate ?Minute? plan for voice traffic from the ?Data? plan will probably need to be eliminated/re-evaluated based on the FCC new ruling as well as from ongoing smartphone consumer usage trends.

        As everything with 4G will be end-to-end TCP/IP, your ?Plan? is simply going to be Data, period, because whether you use Verizon?s or Skype?s or Google Voice?s networks to carry your VOIP calls makes no difference ? all voice traffic is IP data, and anything that travels over that 4G connection is Data, period.

        The bread and butter of the Voice business with wireless carriers is going away ? what they really want to charge you for is Gigabytes. And they will charge you for it. Every single byte. And it will almost certainly cost you more than it does now."

        Excepting the author's conclusion, with which I take exception, this fits very well with the definition of commodification: The transformation of goods and services into a good for which there is demand, but which is supplied without qualitative differentiation across a market.

        Contrary to the before mentioned conclusion, commodification ALWAYS leads to lower cost for consumer since consumers have the opportunity to pick the company that offers the lowest $/GB.

        <b>BTW, ISPs will have to learn to live without the sale of my freedom to use whatever web site I choose.</b>

        That doesn't actually INCREASE the ISPs cost of operation, though they will of course try to impose arbitrary increases in pricing until such time they are kicked out of the publicly owned right of way, to be replaced by municipally owned services.
        JohnVoter
      • A free (in the liberty sense) and open internet

        @Digital Video Expert
        To restate:
        ISPs will have to learn to live without profiting from the sale of my freedom to use whatever web site I choose.

        I never agreed to sell my ability to use web sites (and online services) of my choosing.

        Towns and cities never agreed to, nor could they, to sell my ability to use web sites of my choosing when the ISPs took up residence in publicly owned right of ways.

        The federal government, inventor and proprietor of the original internet network, never agreed to, nor could they agree to, to sell my ability to use whatever website I choose when they permitted commercial interests to connect to this publicly owned network.

        ISPs, which own only a tiny part of the physical component of the internet (the so called last mile), and which exists only by virtual of the forbearance of towns and cities which own local public right of way, want to leverage that control into control of the entire internet.

        There is a phrase for the use of such leverage to deny access of consumers to businesses: anti-competitive behavior.

        It violates the rules of the US government owned internet, to which commercial interests have chosen to connect. It violates the Sherman anti-trust act. It threatens the creation of millions of innovative internet based companies. It cannot and will not be tolerated.

        If the FCC open internet rule prohibits such villainous behavior, which I think it may, then yes that's what I wanted.
        JohnVoter
      • Well, your analysis lacks one important fact, INNOVATION.

        Verizon wireless, ATT, and many of today's telco's may be destined to extinction.

        The cost of having smartphones will go down drastically these coming years, and the internal computing capacity will increase greatly.

        It will be easy to achieve higher compression rates using more complicated algorithms and new ideas may easily derail your scenario.

        Technological Innovation derailed Morse code, the telegrpah and old landlines. And we are in the brink of a new technological era, where computing power will explode which opens up a huge new set of capabilities.
        Uralbas
      • Smashing the illusion of free internet infrastructure

        @Digital Video Expert
        The implicit argument that you, and the author, make is that consumers don't have to pay for internet infrastructure if we merely allow the ISPs to sell consumers liberty to use the web sites (and online businesses).

        This is false. The consumer is the only source for infrastructure investment.

        You can disguise, but not change, this fact by selling out consumers' freedom to use online businesses as they choose AND endangering the ecosystem of innovative, competing, online businesses that consumer choice has made possible.
        JohnVoter
    • One thing you can always be sure of. When the government

      gets involved, you get high prices and shortages. Always.
      frgough
      • frgough demonstrates the opposite of reason

        @frgough
        You are aware, I suppose that prejudice is when you pre-judge an outcome? For example, when you make blindingly broad and unsubstantiated conclusion.
        JohnVoter
      • Just a few random counterexample

        @frgough
        The federal government is "involved" in the manufacture of aspirin and all other OTC headache remedies in that production is regulated by the FDA. And yet, aspirin is simultaneously cheaper than dirt and safe.

        To pick another example, cell phones are regulated both in the sense that they are required to use assigned frequency spectrum and, like most other electronic devices, with regard to whether they create electronic interference in other communication devices. And yet I can pick up a throwaway (prepaid) phone for about $10 from any drug store in America. High prices and scarcity?

        Oh, and their is a little thing called the internet. Invented by the U.S. government, and yet the location for millions of innovative and competing online businesses. Why don't you read the ENTIRE list of web sites when you google "store" and get back to us on the scarcity and high cost for businesses to get their own online domain (web address).

        On the other hand, I can see why you would want the federal government to keep their nose out of the import of toys, so that our kids could still be enjoying the benefits lead based paints on their toys. Moron.
        JohnVoter
    • You Yanks really must have a cr@ppy telecommunications infrastructure...

      @JasonPerlew

      if whilst here in Australia we aren't exactly on the world stage in some ways (price competitiveness for one), reading the following from page 2 [i]still[/i] had me cringing...

      [b]"In the year 2019, besides driving flying cars, stopping for lunch at the streetside ramen shop and chasing down rogue Replicants, you?ll buy unlocked multi-network 4G smartphones at WAL-MART and Best Buy or even Amazon.com off-the-shelf, ready to go on the carrier of your choice."[/b]

      We essentially already have that (even available from supermarkets) and have done for years. Now I'm assuming that by "ready to go" you are not implying [i]SIM-card-free[/i], but rather unlocked and able to pop in ANY mobile phone (cell-phone for you guys) provider's SIM as I choose? As I said, [b]we already have that, and have done for some time now[/b]

      Now granted, if buying from say a supermarket, a discount department store (Target, Kmart etc), or a post office; I'm going to be buying the phone with a bundled SIM from the telco forward-selling the phone... but here's the thing. The SIM cost nothing and I don't have to use it! The phone is unlocked and I can take it to ANY telco and either sign up for a BYO CAP pay-by-the-month plan (for substantially less than a plan with a bundled phone), or for any offer pre-paid plan (and many of those also offer capped rates).

      How do we (along with much of the developed world) have this?? It's called standardised (and consistent) telecommunications infrastructure, and federal regulations that disallows many of the games your telcos play over in the US. Why you Yanks put up with it I just can't figure out!!
      kaninelupus
  • RE: Abandoning Net Neutrality: When There's No Such Thing as a Free Internet

    @olePigeon

    Yes, there is something wrong with 'charging more for using more' when companies like Comcast (coming straight from a friend who WORKS for Comcast) only pay 5 dollars per 500GB's of bandwidth. So, they are making a 2000% profit on my back each month!
    That is more than damned well enough!

    It's time to put some REAL neutrality with teeth in it and tell these companies "Sorry, unlimited plans only... I don't give a shit if you go out of business, you have been soaking your customers with your monopoly for way too long!"
    Lerianis10
    • RE: Abandoning Net Neutrality: When There's No Such Thing as a Free Internet

      @Lerianis10

      It doesn't matter how much your ISP pays for data. What matters is if what you pay is worth it to you. If you pay it, then clearly it is. They're not just charging you for the bandwidth... there's an enormous amount of infrastructure that they have to build and maintain to get that bandwidth to your house. Not to mention their cost of advertising and their cost of customer service, etc... They don't make 2000% profit. You have to factor in ALL of their costs.

      >>
      It's time to put some REAL neutrality with teeth in it and tell these companies "Sorry, unlimited plans only... I don't give a **** if you go out of business
      <<

      Yah, that'll work out great! Why don't we just tell them they're not allowed to make a profit... let's go further and tell them they have to do it at a loss. THAT'LL get companies climbing all over each other to be ISPs, won't it?

      If they're forced to provide unlimited only, then you can bet their pricing will go up to cover it. Now, YOU'RE subsidizing the people that are using more. Is THAT fair? Of course not. Pay for what you use is the fairest possible pricing. Or, are you one of those that downloads hundreds of gigs per month and you're wanting everyone ELSE to subsidize YOU?
      Software Architect 1982
    • RE: Abandoning Net Neutrality: When There's No Such Thing as a Free Internet

      @Digital Video Expert

      "..They don't make 2000% profit. You have to factor in ALL of their costs."

      I would agree with you but I have been told by many that work in the industry that the internet is very high profit because they are not providing the content, just the pipeline. Of course that needs to be maintained but not at the prices they are claiming.

      Much of this looks like ISPs like comcast trying to make a buck off the growing popularity of services like Netflix Streaming. What's wrong with just keeping the data cap like Comcast has a 250GB a month. I can see paying extra for a higher cap but not based on the content of the internet you are doing. You come close to hitting that cap you get a phone call and/or email stating that you may lose internet if cap is reached or be charged overage. Like Cell Phone minutes. I mean are the ISPs going to credit you if you go way under that cap? I don't think so.
      bobiroc
    • What do we need ISPs for?

      @Video Expert
      What do we need the current crop of ISPs for? Absolutely nothing. Go to Europe, and you will find service at 4 times the speed for 1/2 the price. In Europe they recognize the simple and obvious truth that ISPs are using the PUBLICLY OWNED right of way and they are REGULATED into better service.

      If the European ISPs don't want to take over for the cable companies and wired telephone companies (an opportunity which I am sure they would salivate over), then let the local towns and cities take it over.

      My city operates its own water and electric service and they do a great job. Data transmission is a natural commodity. Time to stop pretending that the ISPs add any value.
      JohnVoter
    • RE: Abandoning Net Neutrality: When There's No Such Thing as a Free Internet

      @JohnVoter

      But making the Internet a utility would mean we still have the problem we have now...a lack of choice in service providers. I know my electric bill would drop if I got to choose between two or more competing entities for power.

      I have a choice between three different ISP's where I live.....two DSL providers and 1 cable provider...two of which offer downloads of 10Mbps minimum.

      Oh...and I don't have a bandwidth cap like many others do.

      Competition does work.
      VRSpock
    • Models for sustained competition

      @VRSpock
      Real competition is certainly a model that works. One problem is that businesses with a local monopoly are generally willing to engage in anti-competitive behavior -- for example temporarily reducing prices to an unsustainable level to "break" the competition; or engaging in shall we say collaborative pricing --
      to keep that monopoly.

      If you think of the ISP as the on ramp to a highway, you can have a healthy competitive environment of businesses along the highway, even if the highway (or in this case the on ramp) is publicly owned.
      JohnVoter
    • RE: Abandoning Net Neutrality: When There's No Such Thing as a Free Interne

      @ JohnVoter

      Well now, if you're going to resort to facts and reason...
      bswiss
  • RE: Abandoning Net Neutrality: When There's No Such Thing as a Free Internet

    @olePigeon

    What I don't get is ISPs like comcast are not providing the content (unless it is one of their own sites) they are just providing the highway. Basically they want to take the highway and change it to a toll road and I think they are going to extort customers. I have friends that work for Comcast and AT&T and they tell me that their internet is high profit since they are just providing the lines and not the content. Aside from the cost of maintaining them and upgrading them once in a while there is no cost for how much bandwidth is being used aside from the cost of slowing down when the highway gets congested.
    bobiroc
  • RE: Abandoning Net Neutrality: When There's No Such Thing as a Free Internet

    @olePigeon

    I agree, ISP's should, and always have been, able to charge for actual bandwidth usage. People have a 500GB cap because they pay a measly $50 to $70 per month for bandwidth.

    You want unlimited bandwidth? Then fork out $150 plus per month for it and stop expecting to schmooze from those who spent all the money building infrastructure.

    Net Neutrality is about preventing ISP's from being bias against data because the ISP has an existing conflict of interest. (i.e. Comcast Cable/NBC owned HULU vs. Netflix ).

    Net Neutrality is not about people getting cheap bandwidth, despite the extreme left wanting to make it go in that direction.
    VRSpock
    • Net neutrality is not about people getting cheap bandwidth

      @VRSpock
      "Net neutrality is not about people getting cheap bandwidth"
      I agree with that statement, and I'm a liberal (but not hard left wing) guy.
      JohnVoter