Approaching The Zettabyte Era > Great, More Ammo For The Cap Arguments

reply to pabster

Re: Great, More Ammo For The Cap Arguments

My thoughts on this whole issue are basically a response to an article I read in PC magazine: »discuss.pcmag.com/forums/1004401···ost.aspx

The big telecoms such as AT&T, Verizon, and now even Comcast and TWC want to distinguish between types of packets. The PR cover story is that they merely wish to distinguish high priority packets (such as video or phone) from low priority (email - if it arrives a second later we customers really don't care). However, they told their shareholders that they want to distinguish between, for example, Google's packets and Yahoo's packets, and charge them different rates. The legal power to charge different rates is the legal power to destroy or help a business, and that is the heart of the net neutrality issue.

It is the difference in rates that is the problem, not really the rates themselves. Don’t get me wrong, none of us want to pay higher rates. But the real problems start when a company is charged higher rates just to put them at a disadvantage or out of business.

Example: Netflix has streaming movies now, and if you have a Netflix account there is no additional charge per month, just a $99 converter box to plug in between your Ethernet and your TV. Comcast has streaming movies too, at $4 per movie. If you watch more than four movies per month, which would you rather have, the Comcast account or the $17 per month Netflix account?

Now consider what happens if Comcast tells Netflix “we won’t carry your movies unless you pay us the equivalent of $20 per user per month.” Comcast, Verizon and AT&T have proposed to Congress to be allowed to do exactly that, and this is why net neutrality legislation is so important.

Or imagine a scenario where Google wants to promote YouTube, so it approaches AT&T and proposes a grand scheme: AT&T will charge Yahoo $1 for every video that Yahoo downloads. Google will pay AT&T for any lost Yahoo revenue over what AT&T currently gets from Yahoo plus a premium. Yahoo’s video business will disappear, Google wins. And once Yahoo loses, Google can simply raise its prices to more than cover any additional outlay. Or perhaps it would be the other way around, and Yahoo schemes with AT&T to win.

The result is that the incumbent telecoms become kingmakers. They will decide which businesses succeed. Big players like Google, Amazon and MSFT will play Machiavelli games in backroom deals. Little companies don’t have a chance.

This isn’t a result of my fertile imagination. These very scenarios have played out before: Imagine the year is 1900. I run a steel company, and you run a railroad. I sell steel for, say $50 per ton and you carry it on your railroad to various places for a metered rate of $3 per ton. I have two major competitors. I come to you and tell you that I will give you $10 per ton if you agree not to carry steel for the other two. You know that number will give you far more profit for far less effort, so you say yes. You're happy. My two competitors cannot move steel from Pittsburg to Kansas any other way (what, by horse and wagon?) so they go out of business, or a least their business is limited to local purchasers or those on water routes.

What happens next is that I raise my price of steel from $50 per ton to $75 per ton. What choice do the consumers have? I make huge profits. I'm happy. You make huge profits. You’re happy. The consumers and my competitors aren't happy, but who gives a flying f*** about them?

This is the history of the railroad business in the late 1800s. This scenario played out again in the 1920s in trucking. Congress stepped at both times and mandated that any shipping company must charge the same amount for all customers, based only on size of goods or weight. These laws are still with us today.

Shipping internet packets isn't conceptually different from shipping freight. Rather than size and weight we now have megabytes and bandwidth speed. The U.S. has had 100 years of history and success with "net neutrality" so far. The major telecommunications carriers want to go back to the days of the robber barons, where they can make or break companies with backroom deals.

I am amazed that there even is a debate in Congress about this. The only people who don't want net neutrality are telecom execs, their employees and shareholders. For the other 299 million of us the issue is a no-brainer.

So, metering itself won’t make the net neutrality issues go away. The net neutrality debate is about whether everyone gets to pay the same rates.

reply to fAcEtIOUs
Or they can take the money the've been taking from us each year for the last 10 years and actually build some real infrastructure. Just because user's are now actually starting to use the internet like it's been advertised to be used doesn't give them an excuse for caps.

reply to jjeffeory
That post needs like 10,000 Thumbs up.

reply to fAcEtIOUs
Why are those the only two choices.

The cost of bandwidth on a unit basis is coming down which is why the data services divisions of companies like AT&T are seeing INCREASES in margins despite these increases in traffic and despite not having caps.

These providers needing to cap is a myth.

reply to jjeffeory
Excellent summation using real-world historical examples to prove the point. This should be required reading for everyone piping up about the net-neutrality issue!

reply to KrK

reply to fAcEtIOUs
Bring on the cost. I'll pay my share if you (and everyone else) pays theirs. I'm fine with that.

reply to fAcEtIOUs
At the present rate of greed, I'd say both caps will come on AND costs will go up despite no substantive proof to justify either option aside from giving execs and investors huge windfalls. Of course the fact that these scenarios won't be playing out as frequently outside the U.S. will also be conveniently ignored.

Keep toeing that corporate line. . .
--
Wishes: When you wish upon a falling star, your dreams can come true. Unless it's really a meteorite hurtling to the Earth which will destroy all life. Then you're pretty much hosed no matter what you wish for. Unless it's death by meteor. --despair.com

reply to pabster
I have no problem with paying according to usage. That's how most everything else is priced, so why not?

I expect to pay more if I'm consuming 500GB per month than if I only use 5GB.

reply to Dogfather

reply to fAcEtIOUs
I keep seeing this magical "95%" being thrown around like it will apply until the end of time. It won't and so far as I know it's little more than a number some TWC exec pulled out of his ass to justify their ridiculously low cap testing. As I've said before, in 5-7 years, it won't be 95% based on current traffic stats. Once more consumers get on-board with emerging broadband technologies (VOD, on-line gaming and downloads, Music/video purchases on-line, and any number of things that will show up) that 95% will be more like 80% or perhaps even lower.

Applying 95% as a number representative of any user that's not a pirate (which is simply villifying anyone who would dare use "large amounts of bandwidth" as defined by an ISP) is inaccurate and misleading. Some advanced app non-pirating users make up that 5% and represent what's coming. TWC and others are just making their moves now to pick up another revenue stream before a small minority becomes a much larger more vocal minority which will get in their way toward even more profit.

So, please stop assuming that 5% is all related to pirating or gross misuse of the network. The math for hitting TWC's 40GB highest-tier cap using DTV's VOD isn't hard to do and does not represent unreasonable network use and it certainly won't seem so for future users.

Having said all of that, I also don't believe higher prices are necessarily justified until these ISPs can demonstrate that their infrastructure is becoming saturated and justifies massive investment to fix it. They seem to be forgetting that while investors may give them the bucks to build, it's their customers who give them a reason to build in the first place.

Are other industrialized nations' telecoms having this much trouble with infrastructure? I can't answer that but I'm sure some in the forum can.
--
Wishes: When you wish upon a falling star, your dreams can come true. Unless it's really a meteorite hurtling to the Earth which will destroy all life. Then you're pretty much hosed no matter what you wish for. Unless it's death by meteor. --despair.com

reply to fAcEtIOUs
I think metered bandwidth will throttle our technological future. I'm also OK with paying for what I use--- **IF** it's what I want to use it on.

I am NOT okay with paying for content I don't want, like ads, spam, portscans, security patches, DRM, Bloatware, and the like. Metering is just a bad idea in general.

Also, the providers **absolutely should not** be able to have their cake and eat it too. Fine, if they want metered bandwidth, so be it, but it better be usage based, not "$49.95 a month PLUS $1.00 per gig over 40"... if you use 4GB a month, your bill should be .... about $1.00 for the month.

Use almost nothing? Pay almost nothing. It's only fair.

(yeah, I know it will never happen...)

reply to pabster

reply to fAcEtIOUs

reply to knightmb

reply to fAcEtIOUs