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FCC Tells Us Their Neutrality Rules Prevent Pay-Per App
But ISPs Will Simply Argue They're Pricing Creatively...
by Karl Bode 04:44PM Tuesday May 03 2011
Last December we noted that deep packet inspection (DPI) hardware vendors were trying to sell wireless carriers on the idea of billing consumers not only for more consumption (which they already do) but an additional surcharge if they wanted to use various apps and services, from Skype to Facebook. Last week we noted that Dutch wireless ISP KPN appears set to make this pricing vision a reality, charging extra fees if users want access to specific apps, like mobile IM or VoIP clients. It's a clear violation of net neutrality, in that it involves using carrier power to constrict consumer access to competing services. KPN however, insists it's simply creative pricing.

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We noted at the time that given the FCC had largely exempted wireless networks here in the States from their new neutrality rules, there isn't much preventing this kind of "creative" pricing from arriving here in the States. Responding to our report, the FCC wrote us to insist they believe that their rules do, in fact, protect consumers from this kind of pricing.

"Our rules do prohibit this kind of behavior," the FCC's Mark Wigfield tells Broadband Reports. "See paragraph 99, which pertains to mobile, and prohbits blocking applications that compete with the providers primary service offering -- voice and video telephony -- and you can make a strong case that text also competes with voice and so blocking SMS applications would be barred," he says. The pertinent bit from the FCC's order (pdf):
quote:
A person engaged in the provision of mobile broadband Internet access service, insofar as such person is so engaged, shall not block consumers from accessing lawful websites, subject to reasonable network management; nor shall such person block applications that compete with the provider’s voice or video telephony services, subject to reasonable network management.
"Also, paragraph 67 prohibts charging a fee in order to block," says Wigfield:
quote:
67. Some concerns have been expressed that broadband providers may seek to charge edge providers simply for delivering traffic to or carrying traffic from the broadband provider’s end-user customers. To the extent that a content, application, or service provider could avoid being blocked only by paying a fee, charging such a fee would not be permissible under these rules.
Except carriers eager to differentiate tiers by blocking specific apps will argue they're not really blocking apps -- they're simply engaged in "creative" pricing tailored to specific consumer needs. In fact that's essentially what upstart wireless carrier MetroPCS did with their recent LTE pricing, which involves charging a higher rate if the user wants access to specific apps like YouTube or the full Internet. Despite consumer advocates noting this appeared to run contrary to the idea of open devices and platforms, the FCC didn't so much as make a peep concerning MetroPCS's new pricing.

As such -- assuming the FCC's rules withstand legal challenge -- it seems like it wouldn't be hard for an ISP to discriminate by app, just so long as they do so cleverly.

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Duramax08
To The Moon
Premium
join:2008-08-03
San Antonio, TX

Ah yes

those 0's and 1's coming from facebook really cost alot. I can see a reason for decent usage caps but this? Really? Dumbass ideas like this really makes me facepalm.
brianiscool

join:2000-08-16
Miami, FL
kudos:1

Re: Ah yes

How would they keep track if you go through a proxy or a VPN?

DarkLogix
Texan and Proud
Premium
join:2008-10-23
Baytown, TX
kudos:3

Re: Ah yes

they would charge you for the right to use a VPN

and block proxies
swiftymc

join:2004-02-15
Mansfield Center, CT

ok?

What I dont get it how it could even be conceivably possible to charge for someone elese content...thats just blatant piracy

FFH5
Premium
join:2002-03-03
Tavistock NJ
kudos:5

1 recommendation

MetroPCS pkgs were feature phone & smartphone

I don't think they discriminated based on provider of the service but on what features the phones supported. A lower fee feature phone and a full featured smartphone with complete access to the internet. The lower cost plan and phone went thru a proxy server and did not have full internet access. The full featured smartphone needed full internet access to run the apps.

And that is why the FCC didn't stop them. You could call that "their being clever", but it was based on something other than who the provider of the service was.
--
Record your speedtest.net results in DSLReports SpeedWave
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hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: MetroPCS pkgs were feature phone & smartphone

Also still keeping in mind the FCC still has no control over the Internet in general- let alone weather it's cellular or not.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

1 recommendation

YEARS AGO

Cellular providers charged extra and nobody bitched. They took the money from your voice plan. That can be done again. Who says that you deserve access to the apps and Internet on your phone? The cell phone companies will just revert to their own ways of charging your voice plan. Kill the unlimited voice and be done with it. Texting was extra also at 25cents+ per message or 150 messages for $15. Remember people bitch too much and get what you want- LIMITED.

TamaraB
Question The Current Paradigm
Premium
join:2000-11-08
Da Bronx
Reviews:
·Optimum Online
·Clearwire Wireless

Why is this tolerated?

If ANY ISP were to charge for having a specific application on your PC, people would be outraged, and rightly so.

Let's see: A premium for running firefox, or accessing google, how about a premium for installing a USENET news reader, or an RSS reader.... the shit would hit the fan!

Why is it different for smaller computers (IE smart-phones and tablets)? Don't we buy them too? Are they not our property to do with as we like?

Would anyone pay their ISP for the privilege of installing an application on their laptop? See how absurd this is? If you buy a piece of computer gear, no one has the right to tell you how to use your property. Yes? Or am I simply being obtuse?

Bob
--
"Remember, remember the fifth of November.
Gunpowder, Treason and Plot.
I see no reason why Gunpowder Treason
Should ever be forgot."

"People should not be afraid of their governments. Governments should be afraid of their people"

hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: Why is this tolerated?

its tolerated due to the Cell phone companies ARE NOT Internet Service providers. No where does it state they are but yet people on here keep claiming they are. Just because they give you the option to access the internet on THEIR network does not give you the right to use it totally free and unlimited. They paid to build that network and also paid for their right to use the spectrum that is NOT a pubic resource- yet a Gov't money maker- thanks to Clear Channel Communications.

And its NOT about running the app its about downloading it. And like i said- they used to charge extra to be on the internet and texting- they took everything out of your voice minute bucket or just flat out charged you 25cents+ to send a text or what ever they felt like it. When you try and group a bunch of companies together that are NOT ISPs you'll find them together butting back and you'll get what comes to you. a high ass bill and limited services. Keep in mind- their network; their right to take anything away. Next they need to put in their contracts that if you bitch about them and their "illegal practices" and spread shit that isn't true about them; they can shut your service off. The same as Sprint-Nextel actually has in their's that if they treat their shitty CSRs the way they treat you get shut your service off and charge you the ETF.

TamaraB
Question The Current Paradigm
Premium
join:2000-11-08
Da Bronx
Reviews:
·Optimum Online
·Clearwire Wireless

Re: Why is this tolerated?

said by hottboiinnc:

its tolerated due to the Cell phone companies ARE NOT Internet Service providers. No where does it state they are but ......

That's not an honest assessment. They all advertise wonderful Internet access. From social networks, to streaming Internet media, to search, to web browsing, and yes, even to tethering your PC to the Internet. It's at the heart of how they sell these smart devices. They ceased being a phone company when they migrated to the web. They provide web access, therefor, they are ISPs.

If you run data on a Verizon phone, you are running on Verizon's data network, the SAME network and backbone your PC uses. The same for AT&T. How can you say these companies are not ISPs?

said by hottboiinnc:

Just because they give you the option to access the internet .....

It's hardly an option. It's at the very core of what they are peddling. In fact, it's getting close to a time where you can't get a phone without network access, and a DATA plan.

said by hottboiinnc:

THEIR network does not give you the right to use it totally free and unlimited.

Who said anything about free? As far as "unlimited access" is concerned, that's what's at the core of net neutrality. YES, you should be free to use it as you please, without any restrictions at all, within the law. Why not? What business is it if theirs where I go and what I do with the device I paid for and with the bandwidth I buy?

said by hottboiinnc:

They paid to build that network and also paid for their right to use the spectrum that is NOT a pubic resource ...

Yes, and they are very well compensated for the use of that network. BTW, it IS a PUBLIC RESOURCE. Unlike cable and copper last-mile (for that's all we are talking about here; last-mile access to the same Internet) the airwaves are in the public domain, they belong to all of us, and licensees have a responsibility to serve the PUBLIC which owns them.

You would be horrified if a car company charged you by the passenger right? Or charged you if you changed the tires. It's your car. As long as you pay for the gas and tolls, you can do whatever you want with it within the law. The same is true for your PC, whether it's big or small, whether it connects via copper, or wireless.

Bob
--
"Remember, remember the fifth of November.
Gunpowder, Treason and Plot.
I see no reason why Gunpowder Treason
Should ever be forgot."

"People should not be afraid of their governments. Governments should be afraid of their people"

hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: Why is this tolerated?

And Yes it is an honest assessment; Internet have been available on phones for YEARS now but was billed extra. They now just put it into a plan. They advertise that the internet is AVAILABLE does NOT state that their an Internet provider like ATT, VZ Landline or any other actual company that has an Internet service. You MUST have a voice plan for the data to even function unless you have a BlackBerry Data only option from T-Mobile.

If you think they stopped being a phone company when they started giving the option to access the Internet; Then Comcast, TWC, ATT, VZW, VZ, and every other company that offers the Internet is NOW NO LONGER under the FCC control for the services the FCC does have the power to control. What a smart move eh? Especially since the Gov't can NOT in ANY WAY regulate the Internet. NO POWER!.

Just because it uses the same backbone does NOT make them an Internet Provider; They're giving you ACCESS to the Internet that is NOT required. They can pull it and they can change their prices as they see fit. The FCC has no power over this.

You can get a phone without data access. Ever hear of Tracfone? They offer them. You can get old phones that have been sold for YEARS they don't offer the Internet. Except a portal the company runs. The portals are free to use actually.

You do realize that Net Neutrality rules are NOT enforceable right? Congress has NEVER given the FCC power to draft these let alone enforce them. They're nothing but a document that should be used for toilet paper. Valuable tax dollars spent on something that will never happen. And NO you should not be able to use it as you please. You DID NOT build that network; you only LEASE that network. The same as you would a house or an apartment. You LEASE it and the OWNER tells you what you can and can NOT due.

The public does NOT own the airwaves. Companies only pay because companies like Clear Channel got gready and decided to have Congress create the FCC when they tried to kill off pirate radio stations. That's the only reason the FCC was created and then the pay to use of the general air. The Gov't did NOT control what happens in the air prior to the FCC. So you can thank Clear Channel for making the sky pay to use. And limiting your choices as well in the process.

A car analogy does not apply since it works the same as public transportation. I already pay taxes to pay for the buses and the trains- but yet have to pay to ride them. So that's moot.

And again- PC does NOT compare to the Cellular network NOR the Internet.

flash2099

@verizon.net
They are not ISPs?

I have an IP address on my smart phone (or on my laptop when I use a 3g modem) like i do when i connect from home or the office. Just because the data link layer is different doesn't make wireless special.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: Why is this tolerated?

Not an Internet provider. That phone requires and IP address regardless to talk to the towers. Nextel has been doing that for YEARS but using internal addresses. Where've you been? And they don't advertise their an ISP except that the option to use the Internet is there. They can easily shut the service off and the phone would world. But If you want to pull their an ISP; the FCC has no control over them then. So you want them to be a phone company or an Internet Service Provider? you can classify them as both.

Maybe we should let the courts decide????

flash2099

@verizon.net

Re: Why is this tolerated?

Are you making this up as you go?

It is called NAT, and the IP is allocated via DHCP, just like it is done at my home or office. The tower doesn't even **know** the IP address (the IP address is known by the SGSN in the core network). It just provides transport for the data link layer.

I brought up the IP address as older blackberries didn't even have an IP address (you only received internet access via BIS/BES/WAP gateway etc.). When you bought a blackberry you bought into a managed service. You weren't getting internet access.

This is not the case now. I have an IP. The operators are marketing internet access. I can happily call socket/open/read/write to communicate to servers on the internet (BTW, I am a mobile app developer + 15 years in telecoms).

What you appear to be advocating, because the network operators "own" the network, they should have the right to listen into what we send, figure out whether it has value (i.e. they are not "getting a piece"), then either randomly break the data connection or try to extort money from one side or the other.

I don't know how you think that could fly. And you can't leave it up to the market since if one does it, all will do it, as extortion is far more profitable.
clickie8

join:2005-05-22
Monroe, MI

Materially Adverse Change

...so if it happens, I will cancel all the smartphones in my family and bid them a fond farewell sans penalties. Over to pre-paid and the carriers can kiss my butt.

There is a point when the functionality and convenience of having the internet in your pocket isn't worth the backside chaffing. I'm sure I won't be alone on this.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

1 recommendation

Re: Materially Adverse Change

lol. prepaid? you do realize who owns the prepaid companies and who controls the MVNOs right? The actual network owners control and own the network still so you're at their same mercy. They're NOT required to share that network nor are they required to make it affordable. Nothing is stopping them from shutting down EVERY MVNO/Reseller that does prepaid. Look at Sprint-Nextel they're buying their MVNO's up so they can keep the $$$$ all for themselves and not lease out their network. VZW will be the next one to start that and you can kiss prepaid good bye at what it is now.

And go up and read my post about how they are NOT required to give you Internet on your phone; and how it was NEVER an option before. And how everything was charged at high prices to your bill or came out of your bucket of minutes. Want that again? Keep up what you want and you shall receive just that. Remember what happened to Comcast? People (especially on here) wanted a hard cap- Comcast gave one and people didn't like and and then CC told the public TOO BAD take it or kiss off. People took it and lived with it. And the same will happen with this.

anon6

@comcast.net

the real problem

is that companies want to charge people for everything on the internet, consumers pay high prices just to connect to the internet, now companies want to get even more money by charging us for what we use on the internet. by allowing this to happen programs that were once free, won't be free anymore, you will be paying just for the privilege of using said programs.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: the real problem

You do realize that the Cell phone companies do NOT sell access to the Internet. Actually NO ISP sells access to the Internet. If you read their terms of service they LEASE access to THEIR private network. Accessing the Internet is a bonus. They can at any time take it away and or charge you extra to access it. No where does it state that they must give you access to it and the FCC has NO control.

flash2099

@verizon.net

Re: the real problem

You are making this up as you go again.

I checked my ISP TOS. They explicitly define that what they sell is "Internet Access". Nowhere does it say they are leasing access to their private network. Try again.