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Maybe Youtube makes a deal with T-Mobile to keep videos playing longer (before packets start dropping) in exchange for money. This money might allow T-Mobile to

by redler 10y ago

Maybe Youtube makes a deal with T-Mobile to keep videos playing longer (before packets start dropping) in exchange for money. This money might allow T-Mobile to invest in other parts of its infrastructure. Another possibility: as a major ISP nears network capacity, they can implicitly (or explicitly, depending on law) solicit revenue streams from Youtube and many others for "priority access" to their somewhat- or completely-captive customer base. Eventually, secondary tiers are created to efficiently segment the content market -- a priority plan conveniently sized for every budget. Those who can't or won't pay fall into an ever decreasing performance category as the priority slices are snatched up. The ISP then starts selling premium bundles on the customer side -- Platinum Service will include Youtube, Netflix, Amazon, Apple (and get our bonus in-house streaming service at no extra charge!). Platinum-Plus, for another $14.95 per month plus fees, adds priority streams from your choice of up to three major sports content sources. And Platinum-Pro adds non-degraded VPN so you can work from home. Choice! The ISP is monetizing the fact that they're NOT adding capacity. Eventually they can choose to take the hit to their numbers and make that investment, but they'll do so within the now-normal tiered framework -- offering new capacity and premium deals at the top of the stack, rather than letting the bottom free-ride into better service.

grandalf 10y ago
You are describing a content lock-in dystopia. Yes, this would be anticompetitive (and appropriately addressed by the FTC or DOJ, not the FCC) and it is among the more unlikely scenarios.
- comex 10y ago
  The parent post is a little hyperbolic, but ISPs are certainly willing to artificially limit capacity upgrades as a way to extract tolls from content providers. Remember the spat between Verizon and Level3/Netflix? http://web.archive.org/web/20160405105037/http://blog.level3.com/open-internet/verizons-accidental-mea-culpa/ http://web.archive.org/web/20160405105037/http://blog.level3... Both networks had plenty of capacity internally; the bottleneck was a single router at each interconnect location which Verizon refused to upgrade.
- deleted 10y ago
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- redler 10y ago
  Sure, I'm painting a picture to illustrate the point. But reductio ad absurdum can be a useful way to explore the problem. I don't think there's anything in my scenario that's beyond the pale. We could get there by degrees in an aggressively unfettered market.
  - hueving 10y ago
    >We could get there by degrees in an aggressively unfettered market. Don't you mean the heavily regulated market we have now that prevents new ISPs from easily servicing customers? The entire reason ISPs can behave like this is because customers realistically have no alternatives. Look at how Comcast behaved in markets where Google Fiber showed up. They often increased bandwidth and reduced prices effective immediately to try to keep customers. An 'unfettered market' would be one where an ISP doesn't have to spend years negotiating with city councils just to get the privilege to put fiber in utility tunnels where local cable companies already have it.
    - wtallis 10y ago
      Your "unfettered market" would still leave incumbents with the massive advantages conferred by their natural monopoly; it just lessens the artificial barriers to competition on top of that. Your "unfettered market" would not be a healthy competitive market. Government intervention akin to local loop unbundling would be necessary to create a freely competitive market where one will not naturally develop.
      - hueving 10y ago
        Google Fiber gave up on silicon valley because of the regulatory burden of convincing local governments to let them install fiber. Let that sink in. Google, who has enough cash to pay for nearly half of the entire Comcast company, was not able to rollout fiber to the area because of government regulations. Why do you think they started in Kansas City of all places? It wasn't because they thought that was the strongest market for fiber in the country. It was because they actually convinced the government to let them bring fiber to peoples' homes. >Government intervention akin to local loop unbundling would be necessary to create a freely competitive market where one will not naturally develop. While this would make it even cheaper to get into the market, there is no proof that a market wouldn't develop if the government wasn't already intervening to make it so difficult to build networks.
- kuschku 10y ago
  It's not unlikely — in fact, the mobile carrier I'm using had done this exact thing, as had T-mobile. "We throttle speeds to several streaming services. Pay only 5$ a month to get unlimited Spotify and YouTube"
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by redler 10y ago

grandalf 10y ago

You are describing a content lock-in dystopia. Yes, this would be anticompetitive (and appropriately addressed by the FTC or DOJ, not the FCC) and it is among the more unlikely scenarios.

comex 10y ago
The parent post is a little hyperbolic, but ISPs are certainly willing to artificially limit capacity upgrades as a way to extract tolls from content providers. Remember the spat between Verizon and Level3/Netflix? http://web.archive.org/web/20160405105037/http://blog.level3.com/open-internet/verizons-accidental-mea-culpa/ http://web.archive.org/web/20160405105037/http://blog.level3... Both networks had plenty of capacity internally; the bottleneck was a single router at each interconnect location which Verizon refused to upgrade.
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redler 10y ago
Sure, I'm painting a picture to illustrate the point. But reductio ad absurdum can be a useful way to explore the problem. I don't think there's anything in my scenario that's beyond the pale. We could get there by degrees in an aggressively unfettered market.
- hueving 10y ago
  >We could get there by degrees in an aggressively unfettered market. Don't you mean the heavily regulated market we have now that prevents new ISPs from easily servicing customers? The entire reason ISPs can behave like this is because customers realistically have no alternatives. Look at how Comcast behaved in markets where Google Fiber showed up. They often increased bandwidth and reduced prices effective immediately to try to keep customers. An 'unfettered market' would be one where an ISP doesn't have to spend years negotiating with city councils just to get the privilege to put fiber in utility tunnels where local cable companies already have it.
  - wtallis 10y ago
    Your "unfettered market" would still leave incumbents with the massive advantages conferred by their natural monopoly; it just lessens the artificial barriers to competition on top of that. Your "unfettered market" would not be a healthy competitive market. Government intervention akin to local loop unbundling would be necessary to create a freely competitive market where one will not naturally develop.
    - hueving 10y ago
      Google Fiber gave up on silicon valley because of the regulatory burden of convincing local governments to let them install fiber. Let that sink in. Google, who has enough cash to pay for nearly half of the entire Comcast company, was not able to rollout fiber to the area because of government regulations. Why do you think they started in Kansas City of all places? It wasn't because they thought that was the strongest market for fiber in the country. It was because they actually convinced the government to let them bring fiber to peoples' homes. >Government intervention akin to local loop unbundling would be necessary to create a freely competitive market where one will not naturally develop. While this would make it even cheaper to get into the market, there is no proof that a market wouldn't develop if the government wasn't already intervening to make it so difficult to build networks.
kuschku 10y ago
It's not unlikely — in fact, the mobile carrier I'm using had done this exact thing, as had T-mobile. "We throttle speeds to several streaming services. Pay only 5$ a month to get unlimited Spotify and YouTube"

deleted 10y ago

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