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Thursday, April 27, 2006

Network Neutrality

There's a battle going on in Congress, and it could effect any of us who use broadband internet today.

I'm guessing that's quite a few of you.

Personally, I'm getting tired of the victim excuse in American politics. You can't critique the Iraqi war, because it might hurt the feelings of our soldiers (but, apparently, getting them shot and blown up isn't a problem). You shouldn't talk about intelligence failures or illegal intelligence activities because it might hurt the morale of our intelligence agents (I'm so trying that one on my boss for my next review. It's not that I failed ... it's that you're insulting me).

And now, we have to let the telecoms charge for preferred internet traffic because the poor things have been doing all the dirty work while companies like Microsoft, Yahoo and Google have been getting a free ride.

That's right. The telecoms are victims now. That's precisely the argument Republican Joe Barton used in defending knocking out an amendment which would secure the internet as we know it now. Now, traffic on the internet is blind. Everything from that NiWiFi game you played last night to uploading pictures of your cat is treated exactly the same. The broadband pipes which ship it from one location to another could care less about the content, and everything gets treated differently.

The problem the telecoms have with that is that they don't control the traffic and hence, can't charge a premium. If they did, they could charge you more to have your grandmother's photo upload faster compared to your NiWiFi game. And some of the comparisons the proponents of this "preferred net" make sound not so bad. It's like FedEx, they say. If you want to be sure you grandma's photo gets their faster, you'll just pay a little more.

What's the harm in that? Everyone loves grandma.

The harm is that the comparison doesn't make any sense. Using a snail mail analogy to compare modern broadband delivery of content is idiotic. Consumers aren't the ones asking for this, big businesses are the ones asking for this. Nobody down here on Planet Earth is asking to pay $10 extra for grandma's photo to make it in nine seconds instead of twenty. People like AT&T are asking for it so that they can deal out who can deliver high def movies in the future ... and who can't. With AT&T, of course, making money hand over fist for every movie being downloaded.

Consumers are already getting more than they need. iTunes offers a robust method of delivering television shows and now movies, and yet it's overall market saturation is minimal. Technology and the industry is evolving fine with the Internet as it is ... which is exactly what has the telecoms worried. They see people like Skype being able to hone into their core business by running on top of their own broadband pipes and they really, really don't like it.

So they want Congress to make it OK for AT&T to be able to charge Skype ... or whoever AT&T chooses ... for better delivery. Once again, it's not that people can't use Skype with the current net ... it's just that the telecoms can't control it.

Republican Joe Barton needs a reminder that a lot of Congressmen need these days. He doesn't work for American business.

He works for Americans.

And I'd hope that he either gets an attitude adjustment or a new job.


By the by, same goes for Democrat Bobby Rush, of my homestate of Illinois.



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9 comments:

Jason "Botswana" Cox said...

Does it ever just make you spontaneously shudder to think about the fact that most of the people making laws that effect our everyday lives are people so removed from normal everyday life that they no longer have a concept of it?

How much do you want to bet the two politicians you just mentioned have no clue behind even the most basic concepts of "this here Internet thing"?

Josh said...

Yeah - I do think about it, and it does make me shudder. I email my reps and I get form letters back. I've complained about spam does to modern communication and I get silence.

When Barack emailed me about the video game legislation in Congress (also a form letter), I responded pointing out that in Illinois, his own state, such laws have done nothing but cost the taxpayers hundreds of thousands of dollars. Response? Silence again.

And now this.

And it's not just the internet. It's television and radio as well. The only time Congress "got it" was when it came to telemarketing. How old is telemarketing? I don't know, but it's precisely the number of years Congress is behind on the curve.

And in our current climate where politicians have less and less accountability - because years of questionably legal gerrymandering will make it harder to knock out incumbents and oversight is little more than a publicity stunt ... I'm not sure they are in a position to start caring.

Brett said...

Ummm. The assets that transfer the Internet's traffic aren't public property. They are private property. Saying the owners can't choose to make use of the property as they wish is like saying Google shouldn't be able to charge for advertising.

A company's ability to price its services as it sees fits are part of the free market system. When a company increases its prices, the profit potential attracts new competitors into the market. The end result is that supply increases.

If an investor has a choice between investing a dollar in AT&T or Google, which do you think he/she would choose under net neutrality? Google of course. Investors go where the growth potential is.

What do you think AT&T will do if it can't enjoy growth in its current business? It will divest and move on. Generally, capacity doesn't grow without investment.

Your opinion reflects a short-sighted populist mentality that doesn't look at actual market dynamics... just more drink-the-Kool-aid group think from Internet-"savvy" members of the media.

Brett

Josh said...

The assets that transfer the Internet's traffic aren't public property

You should read up a little more on how these things works. Thing of substantial public interest are of the domain of legislation, it's why we have things like the FCC (which, if you've read up on this, you might have noticed mentioned) exist. So no, they are not a private fiefdom of private companies. Nice try, though.

When a company increases its prices, the profit potential attracts new competitors into the market. The end result is that supply increases.

Again, a company's profit is not the sole measure of an industry with a substantial interest in the public good or welfare. Investors are not lawmakers.

What do you think AT&T will do if it can't enjoy growth in its current business? It will divest and move on. Generally, capacity doesn't grow without investment.

I could count the number of nights I've been worrying about SBC/AT&T's bottom line on no hands. If AT&T can't figure out how to make a decent profit without pillaging the framework of the Internet, let them go out of business. They don't need this, they just want it. Not a solid enough reason.

Your opinion reflects a short-sighted populist mentality that doesn't look at actual market dynamics... just more drink-the-Kool-aid group think from Internet-"savvy" members of the media.

My opinion comes from a decade of seasoned experience in the field of e-commerce, working with more than a few Fortune 500 companies. I'm quite familiar with how the current framework has and hasn't worked in terms of market dynamics. The loss of net neutrality slides the Internet back into old school methods and restrictions it doesn't want, doesn't need and shouldn't endure.

But hey, what do I know. Go ask Microsoft, Google and Intel. Maybe they're just Kool-aid drinking hippies or something.

Somehow, though, I doubt it.

Thanks for stopping by, though.

Brett said...

Well, you are missing the point about investors and AT&T succeeding or failing. Those are secondary to the issue of investment. Society benefits when investment dollars are drawn to the telecommunication industry. I really don't care whether the investors make money or not, but I want to see investment dollars put into the technologies.

Furthermore, the very fact that the Internet as a commercial industry arose within about the past ten years shows that it doesn't matter how much experience you have with it. The industry isn't old enough to go making bold, doom 'n' gloom predictions. And when the stakes are still up in the air, government regulation is the last thing we need.

If AT&T and others charged tiered service, it would most likely speed the development of high-speed cellular, broadband over power lines, satellite broadband, etc. Because profit potential draws new competitors which ultimately lowers prices again.

On a final note, Google and Microsoft are biased because it hits their pocketbook if AT&T exercises its right to charge as it sees fit for its services. So, the fact that they're for net neutrality doesn't win any extra points for your argument. Microsoft, Google, and Intel are no less greedy than AT&T. They just happen to be on the popular side of the argument this time.

Josh said...

Society benefits when investment dollars are drawn to the telecommunication industry.

Society benefits a hell of a lot more from a net neutral Internet, and that's the point you're missing. Telecoms will still have plenty of investment without it. The cost doesn't justify the reward, except to the investors themselves.

Furthermore, the very fact that the Internet as a commercial industry arose within about the past ten years shows that it doesn't matter how much experience you have with it.

That statement just shows how little experience you have with it.

If AT&T and others charged tiered service, it would most likely speed the development of high-speed cellular, broadband over power lines, satellite broadband, etc.

Speed the development? Please. All of the techs you mention couldn't even begin hit a mature demographic even if they had a completely gratituitous innovation boon - which is highly unlikely as a result of this anyway.

On a final note, Google and Microsoft are biased because it hits their pocketbook if AT&T exercises its right to charge as it sees fit for its services

First of all, AT&T has no inherent right unless legislation allows it. AT&T didn't invent the internet and it doesn't have any right to govern it.

And sure, Google and Microsoft are biased. So is AT&T. The point is that there are lot more Google, Microsofts and Skypes than telecoms. Market diversity is the last thing the telecoms want, unless they have the ability to control who runs in the fast lane.

The problem with your argument is that you can't form a cohesive example of where society would severely benefit, whereas the examples to the contrary are legion.

Which would be why this currently the "popular" view among people who actually work with the net.

Brett said...

First of all, AT&T has no inherent right unless legislation allows it.

This is obviously incorrect, since AT&T has stated it wishes to do this and no one is accusing it of doing something illegal. On the contrary, members of Congress are working to create legislation outlawing it. Why would they try to outlaw something that you claim isn't legal to do anyway?

AT&T didn't invent the internet and it doesn't have any right to govern it.

AT&T doesn't want to govern anything except its own assets (at least in this case). AT&T's Assets != Internet. To claim otherwise is just being hyperbolic--which is exactly my point. Vocal critics are preaching doom & gloom, but they have failed to demonstrate that net neutrality provisions are "what's best for society." Why rush to judgment?

The problem with your argument is that you can't form a cohesive example of where society would severely benefit, whereas the examples to the contrary are legion.

I don't need to. The government should have a compelling, demonstrable reason for regulating anyone's assets--including corporations. The courts have ruled repeatedly the corporations have constitutional rights,too. The reasons you have provided for enforcing net neutrality are speculative.

It's premature to assume that AT&T exercising its property rights is bad for society. Property rights are a good thing until proven otherwise.

Which would be why this currently the "popular" view among people who actually work with the net.

Now you're hitting on the biggest bias of them all. The same group that was worried into a panic over outsourcing is now worried into a panic over the need to legislate "net neutrality." Remember all the pressure for Congress to act to stifle outsourcing trends? And yet, now experts are predicting IT shortages in the US again.

This brings me back to my main contention. There's no need to rush into legislation. I can understand the argument for regulating utilities since there's usually a sole provider in a given geographic region, but that's not the case here. The industry is in an embryonic stage, so Congress should be especially hesitant to intervene in new developments.

Josh said...

This is obviously incorrect, since AT&T has stated it wishes to do this and no one is accusing it of doing something illegal.

I never said it was illegal, I said they didn't have the authority to supercede the public good. Simply pounding "but it's their assets" on the table is near-sighted and niave.

AT&T doesn't want to govern anything except its own assets (at least in this case).

Again, niave. Very niave. If two companies wished to enter similar market space, the telecoms want to be able to mandate who gets better service. They'd be allowed to enter contracts to make one a priority and not the other. Clearly, it extends past their assets.

Your arguement is akin to me parking my car lengthwise on a four way highway and merely saying, "but it's my car".

I don't need to. The government should have a compelling, demonstrable reason for regulating anyone's assets--including corporations.

They do, quite obvious ones in fact, you're just convenient dismissing them all as "doom and gloom".

This brings me back to my main contention. There's no need to rush into legislation. I can understand the argument for regulating utilities since there's usually a sole provider in a given geographic region, but that's not the case here. The industry is in an embryonic stage, so Congress should be especially hesitant to intervene in new developments.

The industry isn't in an embryonic stage and this isn't a "rush" to legislation, it would be legislation to ward off harm to a public assets. It's Congress's job.

Honestly, your view of e-commerce is quaint and almost childish, not to mention extremely inaccurate and shallow. These days many businesses make a substantial portion of their profit from e-commerce versus brick and mortar stores ... and not companies like Google or Microsoft but companies like Speigel or Eddie Bauer or Target.

To say it's "embryonic" and too early to tell if it requires this kind of protection, yadda yadda, is a bit like saying maybe we should still wait to see if that whole UPS thing will work out.

Brett said...

Hehe, okay you win. We need to pass legislation now or the Internet will be destroyed. :O

Obviously, there's no way I would get you to recant from a public blog post, but I have enjoyed the dialogue. I just wanted to voice dissent for posterity sake. And unless you delete my posts, I've achieved that. :)

By the way, I'm a regular reader who enjoys your blog.