Tech Broiler

Jason Perlow and Scott Raymond

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

By | January 3, 2011, 1:32pm PST

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.

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 »

Topics

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.

Disclosure

Jason Perlow

My Full-Time Employer is IBM. I write as a freelancer for ZDNet.

Disclaimer: The postings and opinions on this blog are my own and don't necessarily represent IBM's positions, strategies or opinions.

I own no investments or direct financial instruments in the companies I write about.

Biography

Jason Perlow

Jason Perlow, Sr. Technology Editor at ZDNet is a technologist with over two decades of experience with integrating large heterogeneous multi-vendor computing environments in Fortune 500 companies. A long-time computer enthusiast starting the age of 13 with his first Apple ][ personal computer, he began his freelance writing career starting at ZD Sm@rt Reseller in 1996 and has since authored numerous guest columns for ZDNet Enterprise and Ziff-Davis Internet. Jason was previously Senior Technology Editor for Linux Magazine, where he wrote about Open Source issues from 1999 to 2008.

In his spare time, Jason is an avid amateur chef and food writer, where his work reviewing New Jersey restaurants has appeared in The New York Times. He is also the founder of the popular food web site eGullet and blogs about restaurants and cooking at OffTheBroiler.com.

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Net Neutrality is Wonderful and Necessary
BDA123 21st Jan 2011
Great article and great comments. Sounds like a great future. Pay for just what you want. The way it should be. No more stupid contracts. The fact that ISPs are also content providers is a conflict of interests. Eliminate the conflicts and the consumer wins. You either make money by providing access to the internet (basically a commoditized, regulated, utility function if you will), by selling great media content for a competitive price, or you sell for a low price (or give away) media content and sell advertising. Companies can still make plenty of money but they must innovate and reduce costs. Consumers win because they get what they want and only pay for what they want. Sure one show or movie may be more expensive, but you aren't subsidizing the worthless ones. Let Hollywood take the gamble, besides it is what they are good at.
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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

>>
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?
@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.

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

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.
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@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.
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.
@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.
gets involved, you get high prices and shortages. Always.
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@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.
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Just a few random counterexample
JohnVoter 5th Jan 2011
@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.
@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 still had me cringing...

"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."

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 SIM-card-free, 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, we already have that, and have done for some time now

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!!
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Net Neutrality is about not restricting data. The corporations (be it cable, phone, satellite, or cellular) are perfectly welcome to meter said data. Nothing wrong with charging more for using more, setting up tiered pricing services, etc.

Where proponents of Net Neutrality draw the line is when companies like Comcast start using packet inspection and shaping to control what kinds of data you have access to.

It's none of their *censored* business what I'm downloading.
@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 **** if you go out of business, you have been soaking your customers with your monopoly for way too long!"
@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?
@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.
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What do we need ISPs for?
JohnVoter 4th Jan 2011
@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

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.
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Models for sustained competition
JohnVoter 4th Jan 2011
@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

Well now, if you're going to resort to facts and reason...
@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.
@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"
I agree with that statement, and I'm a liberal (but not hard left wing) guy.
ISPs already throttle services by charging for a tiered speed system. And they charge 'what the market will bear' as opposed to 'competitive pricing.'

Congress, FCC and other agencies involved should 'nationalize' all networks and make them the NEW interstate highway system with current network owners as managing partners. The first step is to end the monopoly of cable providers and other communication companies. This would ensure REAL competition of providers which is not present now due to non-competitive structures.
@J Hartsock

Answer to the problem: L I N E S H A R I N G! Britain realized that a long time ago, it's time for the United States to realize that as well.
@J Hartsock

A simpler solution: Prevent local municipalities from allowing forced monopolies with these "franchise fees". These are agreements local governments make with cable providers so that they get a segment of the land with guaranteed zero competition. Prevent that practice and possibly force cable providers to overlap on geographic areas so that customers have a choice between providers. I've never had an option to choose anyone other than Comcast for broadband or cable TV until I moved to another town... now I have Charter as my only option. In both locations, I paid whatever they demanded with no option to move to another provider. I also had to pay the monthly "franchise fee" which was turned over to the local government as Comcast's and Charter's pay back for keeping a monopoly.

Prevent the franchising and force geographic overlap and you'll get true competition which will force prices down and force better customer support, and of course, will increase consumer choice.
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Give the man a cigar.
frgough 4th Jan 2011
The problem everyone is whining the government should fix is a problem the government created.
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A better solution
JohnVoter 4th Jan 2011
@Digital Video Expert
A better solution is to kick the ISPs out of the publicly owned right of way and replace them with municipal service. Data transmission is a commodity, like electricity and water.

Then when we have a last mile service that operates at cost, dedicated forever to allowing consumers to use whatever online services they want, then every American will have access to a thousand cable TV providers, and the millions of innovative online businesses that have resulted in free consumer choice can continue to THRIVE.
@frgough
What frgough meant to say is that the internet, one of the greatest innovations of the last 100 years, was invented by the United States government. All that uncontrolled innovation is a problem, according to frgough.
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Socialism in a Capitalistic Country
jessiethe3rd 4th Jan 2011
@J Hartsock Man I wish we could take a page from the UK or even Canada (10 years ago mind you before CAD started outsourcing all it's critical infrastructure.) In a place like the US you have cities and states going bancrupt and the government refusing even more essential services funding to help "cut the pork spending budgets.) I have seen some cities in the US take a very direct approach to it but by far none of them have the ability to stay up with the curve. It's sad and all along we'll continue to be bent over backwards because if there is one constant in a capitalistic society its the need for greater profits, greater margins, and higher dividends for the market.

This is no longer a democracy in the US, it's a Corporatocracy.
are going bankrupt because of liberalism, not capitalism.
@frgough
Of course! The irresponsible behavior of AIG, Lehmann brothers, Countrywide, and those private investment houses and rating agencies that conspired to convert junk mortgages into AAA rated securities, sold by the billions to banks around the world and precipitating the greatest economic crash since the Great Depression... none of this had anything to do with private companies doing what they thought would make them money.

Oh, by the way, mortgages sold to poor people was a tiny fraction of the problem. Even there, if you think the brokers involved did this for anything besides profit, you must by smoking something.
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Jason you rock but...
OneTwoc21 3rd Jan 2011
so many typos, not like you, hungover? :P
@OneTwoc21 The first published draft always looks like that.
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Totally useless to me
daemian2k Updated - 3rd Jan 2011
So in other words all this boils down to pricing and how much bandwidth a user can access over a network? I was really hoping this would make ISPs expand out with their infrastructures so they could be accessible to more people. In other words this is totally useless to me, I already pay for "tiered" and "metered" service with Hughes Net my only other option is dial-up. I'm already paying twice as much for less than half as a regular DSL user being with hughes net which only allows me 350MB in a 24hr period for $60 / month. So, I really have nothing to look forward to and forget about smartphones, I can barely get a GSM / Edge signal. I hope this passes, to really give ppl something to gripe about and they can experience what those who cannot access high speed has to go through.
IS NOT NET NEUTRALITY! It is the exact goddamned opposite of net neutrality!
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If the infrastructure is there for broadband access for people to use copius amounts of data, (games movies, downloads, etc). I'm missing why this is an issue with phones. simply tie the phone system into the internet backbone and add more cell towers. Build up the infrastructure. Make everything unlimited and charge us a bit more for the comodity. Although I do agree with the concept of a no service phone as it would be pretty sweet if i could buy GBs from multiple carriers that never expire -important, so roaming isn;t an issue. It would also be cool if the phone was smart enough to gague how much traffic was on a particular carrier's network and switch over for better network bandwidth, so long as credit was available.
True net neutrality is impossible with the current corporate-controlled government of the US. And too many other countries are following the lead of the US in allowing corporations (too often, they are branches of the Big Pharmaceuticals here in the US, too...and Microsoft, et. al) to dictate what can and cannot be law. The DMCA, while it does have good points, also fouls the intent of copyright by extending it to 125 years past the death of the author. How do you gauge the death of an author, when said "author" is a corporation too scared of free use of their old material to allow it to drop into the public domain? The same thing will happen to the "net neutrality" laws, since the big corporations will spend the big money to make certain their best profit will be protected, and to hell with the consumer's rights.
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Enron & broadband as a commodity
dhindublin 4th Jan 2011
I almost (thank God I didn't) bought stock in Enron when they announced they were going to commence trading broadband capacity on the commodities markets. But they did have their fingers on the pulse of the future.

It's an evolution, albeit probably short-lived market demand on the state of accessibility. It's going to be a have versus have not world if they have their way...

Don't get me wrong, i'm a Libertarian, but the free markets all prosper when the advent of information technology is at the very least made accessible to the most people. This isn't social welfare. And government interference in a free market always leads to an us versus them scenario.
The most important message in this article is "it will almost certainly cost you more than it does now". Basically we are all going to get screwed to get basically the same service we get now. Instead of getting more for less, as it should be since the price of technology should go down as it matures, we will pay more for the same. In some instances for the same lousy service.
@Al_nyc
You are correct but missing the point. It is not the technology we are paying for, it is the consumption of data. We (as Americans always do) keep demanding more and more but don't want to pay for it.

Sure the telecoms make money, that's why we do business (to make money). McDonald's makes money too, but you don't hear their lard ass customers comlpaining because they pay more for 2 Big Macs than they do for one. Why should this be any different?
@Al_nyc You'll have a choice... here's your choice:
* Go with a broadband provider who charges by data connect
* Go with a advertising company (like Google) who is super cheap but you sell your private life even further down the stream

There will be options - this is why you see Google buying up spectrum - they most certainly want in... at the end of the day it'll all culminate to you paying with your pocketbook or your privacy... either way you will pay.
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skipped to the chase
sparkle farkle Updated - 4th Jan 2011
net neutrality in any form has no chance until the fcc gets some teeth. Actually any form of regulation stands no chance unless they can survive a lawsuit. Really it's the status quo right now. If paying for bandwidth means that I can have as much as I want, I'm all for it. the measures allowing for paid traffic preference won't last long. Once everyone starts paying it's all the same. It's just another way to collect money. The real problem is the monopoly between content providers and the internet providers. When they become the same entity (NBC and comcast) there is no competition, and no fairness to the additional charges. Hopefully the fcc WILL regulate the monopoly aspect, as it did with the bell's etc.
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The FCC's teeth
JohnVoter 5th Jan 2011
@sparkle farkle
Actually, according to the U.S. Supreme Court "Brand X" decision, the FCC has the authority under U.S. law to impose so called "common carrier" regulation on broadband internet.

To quote Justice Thomas:

"At issue in these cases is the proper regulatory classification under the Communications Act of broadband cable Internet service. The Act, as amended by the Telecommunications Act of 1996, 110 Stat. 56, defines two categories of regulated entities relevant to these cases: telecommunications carriers and information-service providers. The Act regulates telecommunications carriers, but not information-service providers, as common carriers. Telecommunications carriers, for example, must charge just and
reasonable, nondiscriminatory rates to their customers, 47 U. S. C. ??201?209, design their systems so that other carriers can interconnect with their communications
networks, ?251(a)(1), and contribute to the federal universal service? fund, ?254(d). "
****************************
Previously, the FCC declined to classify broadband as a telecommunication service, but the recently voted on "open internet" rule finally classifies broadband as a telecommunication service and subject to "common carrier" rules.
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MONEY MONEY MONEY - GREED GREED GREED
fm-usa Updated - 4th Jan 2011
It's getting to the point now there are SO-so many POP-UPS and Advertisements on webpages that it's eating up the Bandwidth that I pay for.

THEREFORE . . .
We all should start back-charging these websites for the use of our PAID Bandwidth.

WHAT THE HECK
It'a all about MONEY!

.
@fm-usa

You bring up a good point. Many of those ads are videos or animated themselves and over your browsing period could add up to quite a bit of bytes. Maybe the ad revenue needs to go to the ISPs and the Website just like it does with TV where in some cases the TV Provider gets a kick as well as the channel you are watching. I mean TV Providers do not charge more if you watch more TV now do they.

But I do agree it is all about money and greed. The ISPs saw that video streaming services were gaining popularity and wanted to cash in on that to get more money. I have said it many times before but I will say it again. In most cases providing internet is little overhead providing you have reliable lines and networking equipment. They are just providing the pipe for the content and not the content itself so they are just trying to double dip by charging fees based on the type of content you send over their pipe.
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" there will be seamless, blanketed, end-to end coverage across the country." I will believe that when it happens, it might but that's a big statment for only 9 years away.

"In the year 2019, besides driving flying cars, stopping for lunch at the streetside ramen shop and chasing down rogue Replicants," Nice touch - Like that!
@ItsTheBottomLine I'm glad someone was amused by it
@JohnVoter


This is a favorite line from corporate America in recent years: all regulation does is raise prices for the consumer. If we are regulated, we will punish consumers. Thus, don't regulate us.

In the first place, corporations, especially in non-competitive arenas like fixed broadband, already charge what the market will bear. The idea that corporations have been showing restraint in what they charge consumers and raise prices only when their costs go up is laughable. If their costs go up, the higher costs are likely to come out of their profits, which is one reason they fight regulation so ferociously.

We tried non-regulation during the George W. Bush years, and if you recall, it did not work out well.
The corporations are quite right about the rising costs of regulations. You might think or believe that, those companies will have to take less in profit, but, it ain't gonna happen.

Whenever a company gets taxes hiked on them, the cost of doing business also goes up for that company. Do you believe that they'll just pay those taxes? When regulations are passed, and thereby increasing the costs of doing business for a company, do you believe that, they'll just pay for the increased costs? If you do, then you're living in a fantasy world.

Who is it that is really paying for higher corporate taxes and for higher regulatory costs? It ain't the businesses. I'll give you one guess....

Nope! You got it wrong!

Businesses don't pay taxes, and they don't pay for the higher costs of regulations. They may be officially paying the taxes, but, it's not coming out of their corporate chests. It's all coming out of the pockets of consumers. That's one thing that most people, aka: consumers, don't really understand. While they may believe that raising taxes and passing regulations are for the common good, the common good is actually taking a hit at every step of the way.

When taxes are raised, those taxes are usually passed on to the consumer in the form of higher prices for the goods and services from that company. Thus, it may seem that the company is "paying taxes", but in reality, it's the consumer paying those taxes, even if indirectly. The same with regulations. If a regulation increases the cost of doing business, the business will just turn around and pass on the costs to the consumer in the form of higher prices for goods and services.

And, what happens when a company cannot survive with higher taxes and higher regulatory costs? They either go out of business or move operations and jobs overseas.

Nothing is without consequences, and the consequences of high taxes and costly regulations are being felt as a downturn in the economy.

Chances are that, with more government regulations and higher taxes, the people end up with higher costs for everything and with fewer companies and fewer jobs. The symptoms for high-handed government intrusion and high costs are out there, and people are refusing or are incapable of noticing that. That's why there are so many people out there who continue to believe that the solutions lie with more government regulations and higher taxes. The bigger government gets, the more costly it gets, and the less money there will be in people's hands and in corporate hands. There are repercussion which people have to start to understand.

BTW, what "deregulation" are you talking about that "didn't work" during the Bush years? Chances are that you're wrong there too.
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Can of worms...
jessiethe3rd 4th Jan 2011
@adornoe@... You're opening up a can of worms here. I'll just say this - businesses are not "honest." They are not good at "self-regulating." They exist for one reason... and ONE reason only - profits. With rights of human-beings they can do just about everything a human-being can do in the US - ultimately this is a country that is built on capitalism... democracy is the wolf's clothing - you vote in this country by not buying and buying said goods. That is your vote. Casting a ballot in a box is for show as 9 out of 10 politicians are one in the same.

With that said, I'm not an advocate of super high taxes but I am an advocate of balance... I am no hater of the liberatarian cause, however, those who believe that business can regulate all markets and be responsible for insuring checks and balances to their practices are very ignorant of this countries continued boom and bust syndrom. Unchecked business runs rampant and acts as a psychopath... no respect to the earth, no respect to people, no respect to society.
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You're opening up a can of worms here.

So, where exactly is the can of worms you're talking about? Reality can be bothersome to some people, but eventually, they have to face the facts.

I'll just say this - businesses are not "honest."

Businesses are not "inanimate" objects. They are composed of people, and people are not perfect and by extension, no business will perform with perfection. Nevertheless, businesses are trying to survive, just like every individual in the country.

They are not good at "self-regulating."

The free-market was very good at "self-regulating" way before government became so intrusive with its regulations. Whenever a company made mistakes which pissed-off it clientele, that clientele would find a friendlier relationship with the competitors. You're probably going to ask about "what competitors" in the current state of things, but, a lot of the problems with lack of competition came as a result of government setting up the current structure to a lot of businesses, like the ISPs and communications sectors. Without government making the decisions about how and who was going to operate in any particular sector, chances are that we'd have more competition in many sectors.

They exist for one reason... and ONE reason only - profits.

Well, DUH!

The profit motive is what drives people to start businesses, and that same profit motive is what causes businesses to want to expand. Without profits, and lots of it, chances are that, we'd just be another 3rd world country looking for handouts from whoever was the successful country at the moment.

Get a grip and get with reality.

The demons you perceive are what's gotten the U.S. and a lot of other countries out of the cave ages and away from the middle-ages. The profit motive is what's created wealth unmatched in any period of history. There is absolutely nothing wrong with profits. There is a whole lot more wrong with poverty, and that's what always happens with high government intervention into the free-markets.
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Great article and great comments. Sounds like a great future. Pay for just what you want. The way it should be. No more stupid contracts. The fact that ISPs are also content providers is a conflict of interests. Eliminate the conflicts and the consumer wins. You either make money by providing access to the internet (basically a commoditized, regulated, utility function if you will), by selling great media content for a competitive price, or you sell for a low price (or give away) media content and sell advertising. Companies can still make plenty of money but they must innovate and reduce costs. Consumers win because they get what they want and only pay for what they want. Sure one show or movie may be more expensive, but you aren't subsidizing the worthless ones. Let Hollywood take the gamble, besides it is what they are good at.

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