Category Archives: cable

an argument for net neutrality

Ten years after the initial signing of the Telecommunications Act of 1996, Congress is considering amending it. The original intention of the legislation was to increase competition by deregulating the telecommunication industry. The effects were gigantic, with a main result being that Regional Baby Operating Companies (RBOCs or Baby Bells) formed after the break up of the Ma Bell in 1984, merged into a handful of companies. Verzion nee Bell Atlantic, GTE, and NYNEX. SBC nee Southwestern Bell, PacTel, and Ameritech. Only now, these handful of companies operate with limited regulation.
On Tuesday, Congress heard arguments on the future of pricing broadband access. The question at hand is net neutrality, which is the idea that data transfer should have a single price, regardless of the provider, type or content of media being downloaded or uploaded. Variable pricing would have an effect on Internet companies as that use broadband networks for distributing their services as well as individuals. Cable companies and telecos such as Verizon, Comcast, Bell South, and AT&T are now planing to roll out tiered pricing. Under these new schemes, fees would be higher access to high-speed networks or certain services as downloading movies. Another intention is to charge different rates for downloading email, video, or games.
The key difference between opponents and proponents of net neutrality is their definition of innovation, and who benefits from that innovation. The broadband providers argue that other companies benefit from using their data pipes. They claim that by not being able to profit more from their networks, their incentive to innovate, that is, upgrade their systems, will decrease. While on the other side, firms as Vonage and Google argue the opposite, that uniform access spurs innovation, in terms of novel uses for the network. These kinds of innovations (video on demand) provide useful new services for the public, and in turn increase demand for the broadband providers.
byron.jpgFirst, it is crucial to point that all users are paying for access now. Sen. Byron Dorgan of North Dakota noted:

”It is not a free lunch for any one of these content providers. Those lines and that access is being paid for by the consumer.”

Broadband providers argue that tiered pricing (whether for services or bandwidth) will increase innovation. This argument is deeply flawed. Tier-pricing will not guarntee new and useful services for users, but it will guarantee short term financial gains for the providers. These companies did not invent the Internet nor did they invent the markets for these services. Innovative users (both customers and start-ups) discovered creative ways to use the network. The market for broadband (and the subsequent network) exists because people outgrew the bandwidth capacity of dial-up, as more companies and people posted multimedia on the web. Innovation of this sort creates new demands for bandwidth and increases the customer base and revenue for the broadband providers. New innovative uses generally demand more bandwidth, as seen in p2p, video google, flickr, video ipods, and massively multiplayer online role playing games.
Use of the internet and the WWW did not explode for the mainstream consumer until ISPs as AOL moved to a flat fee pricing structure for their dial-up access. Before this period, most of the innovation of use came from the university, not only researchers, but students who had unlimited access. For these students, they ostensibly paid a flat fee what was embedded in their tuition. The low barrier of access in the early 1990s was essential in the creation of a culture of use that established the current market for Internet services that these broadband providers currently hope to restructure in price.
eric.jpgProf. Eric Von Hippel of MIT’s Sloan School of Management, author of the book, Democratizing Innovation, has done extensive research on innovation. He has found that users innovation a great deal, and much of it is underreported by the industries that capitalize on these improvements to their technology. An user innovator tends to have one great innovation. Therefore, a fundamental requirement for user innovation is offering access to the largest possible audience. In this context, everyone can benefit from net neutrality.
Tiered-pricing proponents argue that charging customers with limited download needs the same rates is unfair. This idea does not consider that the under-utilizers benefit overall from the innovations created by the over-utilizers. In a way, the under-utitlizers subsidize research for services they may use in the future. For example, the p2p community has created proven models and markets of sharing (professional or amateur) movies before the broadband providers (who also strive to become content providers.)
Maintaining democratic access will only fuel innovation, which will create new uses and users. New users translates into growing revenue for the broadband services. These new demands will also create an economic incentive to upgrade and maintain broadband providers’ networks. The key questions that Congress needs to ask itself, is who had been doing the most innovation in the last twenty years and what supported that innovation?

the net as we know it

There’s a good article in Business Week describing the threat posed by unregulated phone and cable companies to the freedom and neutrality of the internet. The net we know now favors top-down and bottom-up publishing equally. Yahoo! or The New York Times may have more technical resources at their disposal than your average blogger, but in the pipes that run in and out of your home connecting you to the net, they are equals.
That could change, however. Unless government gets pro-active on the behalf of ordinary users, broadband providers will be free to privilege certain kinds of use and certain kinds of users, creating the conditions for a broadcast-oriented web and charging higher premiums for more independently creative uses of bandwidth.
Here’s how it might work:
So the network operators figure they can charge at the source of the traffic — and they’re turning to technology for help. Sandvine and other companies, including Cisco Systems, are making tools that can identify whether users are sending video, e-mail, or phone calls. This gear could give network operators the ability to speed up or slow down certain uses.
That capability could be used to help Internet surfers. BellSouth, for one, wants to guarantee that an Internet-TV viewer doesn’t experience annoying millisecond delays during the Super Bowl because his teenage daughter is downloading music files in another room.
But express lanes for certain bits could give network providers a chance to shunt other services into the slow lane, unless they pay up. A phone company could tell Google or another independent Web service that it must pay extra to ensure speedy, reliable service.

One commenter suggests a rather unsavory scheme:
The best solution is to have ISPs change monthly billing to mirror cell phone bills: X amount of monthly bandwidth any overage customer would be charged accordingly. File sharing could become legit, as monies from our monthly bills could be funneled to the apprioprate copyright holder (big media to regular Joe making music in his room) and the network operators will be making more dough on their investment. With the Skypes of the world I can’t see this not happenning!
broadband ad blocks text.jpg
It seems appropriate that when I initially tried to read this article, a glitchy web ad was blocking part of the text — an ad for broadband access no less. Bastards.

insidious tactic #348: charge for web speed

An article in yesterday’s Washington Post — “Executive Wants to Charge for Web Speed” — brings us back to the question of pipes and the future of the internet. fiber optic.jpg The chief technology officer for Bell South says telecoms and cable companies ought to be allowed to offer priority deals to individual sites, charging them extra for faster connections. The Post:

Several big technology firms and public interest groups say that approach would enshrine Internet access providers as online toll booths, favoring certain content and shutting out small companies trying to compete with their offerings.

Among these “big technology firms” are Google, Yahoo!, Amazon and eBay, all of whom have pressed the FCC for strong “network neutrality” provisions in the latest round of updates to the 1996 Telecommunications Act. These would forbid discrimination by internet providers against certain kinds of content and services (i.e. the little guys). BellSouth claims to support the provisions, though the statements of its tech officer suggest otherwise.
Turning speed into a bargaining chip will undoubtedly privilege the richer, more powerful companies and stifle competition — hardly a net-neutral scenario. They claim it’s no different from an airline offering business class — it doesn’t prevent folks from riding coach and reaching their destination. But we all know how cramped and awful coach is. The truth is that the service providers discriminate against everyone on the web. We’re all just freeloaders leeching off their pipes. The only thing that separates Google from the lady blogging about her cat is how much money they can potentially pay for pipe rental. That’s where the “priorities” come in.
Moreover, the web is on its way to merging with cable television, and this, in turn, will increase the demand for faster connections that can handle heavy traffic. So “priority” status with the broadband providers will come at an ever increasing premium. That’s their ideal business model, allowing them to charge the highest tolls for the use of their infrastructure. That’s why the telecos and cablecos want to ensure, through speed-baiting and other screw-tightening tactics, that the net transforms from a messy democratic commons into a streamlined broadcast medium. Alternative media, video blogging, local video artists? These will not be “priorities” in the new internet. Maximum profit for pipe-holders will mean minimum diversity and a one-way web for us.
In a Business Week interview last month, SBC Telecommunications CEO Edward Whitacre expressed what seemed almost like a lust for revenge. Asked, “How concerned are you about Internet upstarts like Google, MSN, Vonage, and others?” he replied:

How do you think they’re going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it. So there’s going to have to be some mechanism for these people who use these pipes to pay for the portion they’re using. Why should they be allowed to use my pipes?
The Internet can’t be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes [for] free is nuts!

This makes me worry that discussions about “network neutrality” overlook a more fundamental problem: lack of competition. “That’s the voice of someone who doesn’t think he has any competitors,” says Susan Crawford, a cyberlaw and intellectual property professor at Cardozo Law School who blogs eloquently on these issues. She believes the strategy to promote network neutrality will ultimately fail because it accepts a status quo in which a handful of broadband monopolies dominate the market. “We need to find higher ground,” she says.

I think the real fight should be over rights of way and platform competition. There’s a clear lack of competition in the last mile — that’s where choice has to exist, and it doesn’t now. Even the FCC’s own figures reveal that cable modem and DSL providers are responsible for 98% of broadband access in the U.S., and two doesn’t make a pool. If the FCC is getting in the way of cross-platform competition, we need to fix that. In a sense, we need to look down — at the relationship between the provider and the customer — rather than up at the relationship between the provider and the bits it agrees to carry or block…
…Competition in the market for pipes has to be the issue to focus on, not the neutrality of those pipes once they have been installed. We’ll always lose when our argument sounds like asking a regulator to shape the business model of particular companies.

The broadband monopolies have their priorities figured out. Do we?
image: “explosion” (reminded me of fiber optic cable) by The Baboon, via Flickr

flushing the net down the tubes

Grand theories about upheavals on the internet horizon are in ready supply. Singularities are near. Explosions can be expected in the next six to eight months. Or the whole thing might just get “flushed” down the tubes. This last scenario is described at length in a recent essay in Linux Journal by Doc Searls, which predicts the imminent hijacking of the net by phone and cable companies who will turn it into a top-down, one-way broadcast medium. In other words, the net’s utopian moment, the “read/write” web, may be about to end. Reading Searls’ piece, I couldn’t help thinking about the story of radio and a wonderful essay Brecht wrote on the subject in 1932:

Here is a positive suggestion: change this apparatus over from distribution to communication. The radio would be the finest possible communication apparatus in public life, a vast network of pipes. That is to say, it would be if it knew how to receive as well as to transmit, how to let the listener speak as well as hear, how to bring him into a relationship instead of isolating him. On this principle the radio should step out of the supply business and organize its listeners as suppliers….turning the audience not only into pupils but into teachers.

Unless you’re the military, law enforcement, or a short-wave hobbyist, two-way radio never happened. On the mainstream commercial front, radio has always been about broadcast: a one-way funnel. The big FM tower to the many receivers, “prettifying public life,” as Brecht puts it. Radio as an agitation? As an invitation to a debate, rousing families from the dinner table into a critical encounter with their world? Well, that would have been neat.
Now there’s the internet, a two-way, every-which-way medium — a stage of stages — that would have positively staggered a provocateur like Brecht. But although the net may be a virtual place, it’s built on some pretty actual stuff. Copper wire, fiber optic cable, trunks, routers, packets — “the vast network of pipes.” The pipes are owned by the phone and cable companies — the broadband providers — and these guys expect a big return (far bigger than they’re getting now) on the billions they’ve invested in laying down the plumbing. Searls:

The choke points are in the pipes, the permission is coming from the lawmakers and regulators, and the choking will be done….The carriers are going to lobby for the laws and regulations they need, and they’re going to do the deals they need to do. The new system will be theirs, not ours….The new carrier-based Net will work in the same asymmetrical few-to-many, top-down pyramidal way made familiar by TV, radio, newspapers, books, magazines and other Industrial Age media now being sucked into Information Age pipes. Movement still will go from producers to consumers, just like it always did.

If Brecht were around today I’m sure he would have already written (or blogged) to this effect, no doubt reciting the sad fate of radio as a cautionary tale. Watch the pipes, he would say. If companies talk about “broad” as in “broadband,” make sure they’re talking about both ends of the pipe. The way broadband works today, the pipe running into your house dwarfs the one running out. That means more download and less upload, and it’s paving the way for a content delivery platform every bit as powerful as cable on an infinitely broader band. Data storage, domain hosting — anything you put up there — will be increasingly costly, though there will likely remain plenty of chat space and web mail provided for free, anything that allows consumers to fire their enthusiasm for commodities through the synapse chain.
rad30cathedral10.jpg If the net goes the way of radio, that will be the difference (allow me to indulge in a little dystopia). Imagine a classic Philco cathedral radio but with a few little funnel-ended hoses extending from the side that connect you to other listeners. “Tune into this frequency!” “You gotta hear this!” You whisper recommendations through the tube. It’s sending a link. Viral marketing. Yes, the net will remain two-way to the extent that it helps fuel the market. Web browsers, like the old Philco, would essentially be receivers, enabling participation only to the extent that it encouraged others to receive.
You might even get your blog hosted for free if you promote products — a sports shoe with gelatinous heels or a music video that allows you to undress the dancing girls with your mouse. Throw in some political rants in between to blow off some steam, no problem. That’s entrepreneurial consumerism. Make a living out of your appetites and your ability to make them infectious. Hip recommenders can build a cosy little livelihood out of their endorsements. But any non-consumer activity will be more like amateur short-wave radio: a mildly eccentric (and expensive) hobby (and they’ll even make a saccharine movie about a guy communing with his dead firefighter dad through a ghost blog).
Searls sees it as above all a war of language and metaphor. The phone and cable companies will dominate as long as the internet is understood fundamentally as a network of pipes, a kind of information transport system. This places the carriers at the top of the hierarchy — the highway authority setting the rules of the road and collecting the tolls. So far the carriers have managed, through various regulatory wrangling and court rulings, to ensure that the “transport metaphor” has prevailed.
But obviously the net is much more than the sum of its pipes. It’s a public square. It’s a community center. It’s a market. And it’s the biggest publishing system the world has ever known. Searls wants to promote “place metaphors” like these. Sure, unless you’re a lobbyist for Verizon or SBC, you probably already think of it this way. But in the end it’s the lobbyists that will make all the difference. Unless, that is, an enlightened citizens’ lobby begins making some noise. So a broad, broad as in broadband, public conversation should be in order. Far broader than what goes on in the usual progressive online feedback loops — the Linux and open source communities, the creative commies, and the techno-hip blogosphere, that I’m sure are already in agreement about this.
Google also seems to have an eye on the pipes, reportedly having bought thousands of miles of “dark fiber” — pipe that has been laid but is not yet in use. Some predict a nationwide “Googlenet.” But this can of worms is best saved for another post.

convergence sighting: the multi-channel tv screen

tv mosaic.jpg
Several new “interactive television” services are soon to arrive that offer “mosaic” views of multiple channels, drawing TV ever nearer to full adoption of the browser, windows, and aggregator paradigms of the web (more in WSJ). It seems that once television is sufficiently like the web, it will simply be the web, or one province thereof.