Was The FCC Comcast Investigation A Farce? > Have you ever heard of the free market?

Have you ever heard of the free market?

You're confused about Network Neutrality. Since the world does not need another Network Neutrality definition, I'll propose this way to think about it:

Network Neutrality is the name given to a set of guiding principles designed to continue the Internet's interoperable, non-discriminatory, end-to-end processing tradition. The Internet (the routing and forwarding network) was originally neutral because it generally lacked any information or capability that would make it otherwise, and since "more speed" was the demand, improved hardware capabilities over time was usually spent delivering more speed (not more functionality like DPI).

In recent years, network operators and network hardware manufacturers have been focusing less on speed improvements and more on services. As one might expect with any new and powerful technology, some of these uses are genuinely useful while others tend to be quite questionable. The secret deployment of this technology, whether useful or questionable, is also highly questionable.

In short, today's Network Neutrality efforts seem focused on maintaining the free, open, and level playing field that the Internet originally created.

Tiered access and bandwidth caps have nothing to do with Network Neutrality. People have always paid to access the network, and people have paid more to access it faster.

That doesn't mean people shouldn't object to bandwidth caps -- it means that the reason to disagree is something other than Network Neutrality. (Such as, I don't like caps because they stifle high-bandwidth application innovation, or I don't like TV companies imposing Internet caps because it is an anti-competitive act.)
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Robb Topolski -= funchords.com =- Hillsboro, Oregon
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reply to JimF

reply to JimF
If they need to raise the price so be. A lot of people have become dependent on their high speed connections that I bet very few would be willing to give them up and go back to dial up. Personally I would support a price increase instead of these damn caps that everyone wants to implement straight out of 1994.

Jim, that attitude works in a free market, but we don't have a free market in broadband. So we have to be careful. When AOL went to flat-rate, it created explosive growth. Do we want to reverse that?

The Cable TV Companies already have a flat-rate product that they'd prefer you used -- their TV service. They know that raising the price on Internet bills will drive eyeballs away from the computer back to their service.

Now they control prices on both Cable TV and Internet and there is currently insufficient competition to check-and-balance that power.

Is this happening now? What do you think?

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Robb Topolski -= funchords.com =- Hillsboro, Oregon
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reply to JimF
The problem with this thinking is that in a truly free market, there are sellers and buyers, and the buyers get to see the price ahead of time and either agree to buy from that seller, decide to buy from another seller (which may offer lower prices or better quality), or decide to do without.

However, in the world of communications pricing, this whole model gets badly twisted. In many cases the number of "sellers" of a service is limited to just a few or even only one, so there isn't robust competition (and often this is the result of government policies, if not outright government fiat). And there may be serious social and financial penalties for deciding to do without.

But the worst thing about metered billing is that the customer doesn't have access to the meter. The customer isn't even allowed to see the meter. In the vast majority of cases, the customer has no way of knowing whether the meter is accurate, nor will it be readily apparent if there is excess usage taking place (for example, if a trojan horse program manages to install itself somewhere on the customer's home network, and then proceeds to spam the entire known Internet). And whereas now an ISP might notify a customer that there is excessive usage taking place, I have no doubt that large corporations will be more inclined to just let it occur and then send the customer a huge, unexpected bill if metered usage is in effect. One might even wonder if companies would ever be tempted to install software on a customer's computer (at installation) that would cause usage to increase.

There is a way that the Internet could be engineered to avoid the issue, if metered billing were really a necessity. The satellite providers already do it - you pay a flat monthly rate that never changes, but as your usage increases your download speed goes down for a time. Download a few huge files, and you might get throttled back to near dial-up speed for the rest of the day. So you cannot ever get a surprise high bill, but you might have to suffer with slow service for a time. Thing is, I'm sure the phone companies in particular WANT to be able to tack on extra charges to your bill - this has been their business model for decades, sell cheap basic service but nickel and dime you to death (even to the point of charging several dollars a month for "custom calling" features that cost them nothing to provide, or at most a few pennies a month).

However, one then should ask whether there is really a capacity shortage. Unlike the old days where you had to physically add copper circuits to expand capacity between cities, in many cases the capacity of fiber circuits can be expanded simply by adding more modern equipment at the endpoints (and any repeaters). You can use the entire visible light spectrum (and probably infrared and ultraviolet also) over a fiber, and each wavelength you add expands the capacity of the fiber. So my thought is that if the phone companies try to sell metered billing as a necessary evil, one could legitimately ask why they don't simply add capacity to deal with the increased volume.

Finally, I know there are people who say that everyone should pay for exactly what they use. This was the same argument used to get metered billing on telephone service in some areas of the country. That argument only works IF there really is a capacity shortage that cannot easily be remedied, and IF the customers can actually see AND control their usage in real time. But there are drawbacks to that way of thinking, also. It's like saying "I should only have to pay for the roads I drive on", totally forgetting that if no other roads existed except the ones you use, most of the goods and services you need would never get to you. So it is with the Internet - if people have to pay for every byte they send and receive, people will be much less inclined to contribute, especially any large files. Of course, the large corporations will be happy to pay the freight to upload large files if they can get you to pay for them, but then the Internet that we know today will cease to exist (and I'm sure there are greedy people who would salivate at that prospect).

The free market only works when there are no barriers to competition, and when sellers and buyers hold approximately equal bargaining power. The reason today's marketplace has gone in the toilet is that large corporations (including large phone and cable companies) have managed to shift the balance of bargaining power so that the buyer has almost none. For the first decade of its existence, the commercial Internet has been mostly exempt from that, but in the last few years the "scheming little spiders" at the phone and cable companies have done everything they can to shift the balance away from their customers and toward themselves.

They would just start charging you to call in. That's what a "free market" with no competition would get you.
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