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I've posted this comment before in another thread: I oppose net neutrality regulation. In principle, I don't think there's anything wrong with an ISP prioritiz

by 19guid 9y ago

I've posted this comment before in another thread: I oppose net neutrality regulation. In principle, I don't think there's anything wrong with an ISP prioritizing certain kinds of traffic over others, so long as it does not have an anti-competitive effect. For example, I don't see how Netflix paying Comcast to zero-rate Netflix traffic is fundamentally different from Amazon contracting with mail carriers to subsidize the cost of shipping for Amazon purchases, or even -- to use an example another commenter made -- an appliance manufacturer contracting with electrical utilities to subsidize the cost of electricity used by their appliances. So long as Comcast makes its zero-rating program available to all content providers -- including their own -- on reasonable and non-discriminatory terms, I don't think there are any competition issues. I've heard people argue that zero-rating makes it harder for smaller content providers to compete, since they won't have the resources to subsidize their customers' traffic. As I said in another comment, that's just the nature of business. Being big affords you certain advantages, like economies of scale. This makes it easier to compete on price. Smaller companies have to compete in other ways. In my view, the real problem with the telecom industry in the United States is a lack of competition [0], a problem caused at least in part by municipal [1] and state [2] governments. With more competition, net neutrality would be a non-issue. Consumers would just stop using ISPs that unfairly discriminate between traffic. [0] http://www.nationalreview.com/article/410353/net-neutrality-already-obsolete-michael-hendrix http://www.nationalreview.com/article/410353/net-neutrality-... [1] https://www.wired.com/2013/07/we-need-to-stop-focusing-on-just-cable-companies-and-blame-local-government-for-dismal-broadband-competition/ https://www.wired.com/2013/07/we-need-to-stop-focusing-on-ju... [2] http://broadbandnow.com/report/municipal-broadband-roadblocks-by-state/ http://broadbandnow.com/report/municipal-broadband-roadblock...

linkregister 9y ago
The reason why I and some other HN commenters (and L3 Communications) find this argument bizarre is because of the concept of transit traffic charges being applied to the last mile, which previously was not an industry practice. Comcast's customers are requesting the data; if Comcast were a second tier backbone, or an AS between two others, then it would make sense to charge for traffic, as it doesn't benefit. But the traffic going to Comcast is there to benefit its subscribers, without which, Comcast doesn't make enough money. The most bizarre thing is that if the customers were to upload the same amount of data back to the sites, then they wouldn't be charged, as the data was symmetrical! Why would an ISP be able to charge other AS's for sending traffic to its own customers? If there were even a single competitor in that region, this dynamic would change completely.
- 19guid 9y ago
  I think it makes sense because retail ISPs operate in a two-sided market. Comcast provides access to Internet services, which customers want and are willing to pay for. Similarly, Comcast provides access to customers, which the Internet companies who provide those services (and associated CDNs and transit providers) want and are willing to pay for. I don't think there's anything especially wrong with this business model. It's similar to how a newspaper charges both readers and advertisers for access. The disadvantage is that you have to keep both parties happy. Incidentally, if customers uploaded the same amount of data as the Internet services, Comcast wouldn't get transit fees but it would get additional revenue from the customers, so I think things would balance out.
  - neuterlize2 9y ago
    > I think it makes sense because retail ISPs operate in a two-sided market. Comcast provides access to Internet services, which customers want and are willing to pay for. Yes, but this is where your analysis breaks down: it's not a free market. The customers are a captive market. > Similarly, Comcast provides access to customers, which the Internet companies who provide those services (and associated CDNs and transit providers) want and are willing to pay for. The Internet companies are only willing to pay because they have no other alternatives. They only pay because Comcast has a monopoly and thus acts as a gatekeeper, and then only because Comcast has such a large market share that refusing Comcast would deprive them of a significant part of the market. Calling this "voluntary" participation in a two sided market is absurd. Blackmail is what it is. When anybody else than Comcast tries this, they are laughed at and told to piss off. > I don't think there's anything especially wrong with this business model. There's plenty wrong. The subscribers have already paid full price and now Comcast wants more, this time from the Internet companies, without which Comcast would have nothing to sell. > It's similar to how a newspaper charges both readers and advertisers for access. This is just a bad analogy, again. Newspaper readers aren't paying full price for the newspaper, and they are not paying for getting access to the adverts. > Incidentally, if customers uploaded the same amount of data as the Internet services, Comcast wouldn't get transit fees but it would get additional revenue from the customers, so I think things would balance out. This just plain incorrect. Comcast wouldn't get a penny more from it's subscribers. Internet access is inherently asymmetrical. Were subscribers to use their upstream more, it would not result in any more revenues.
neuterlize2 9y ago
> In principle, I don't think there's anything wrong with an ISP prioritizing certain kinds of traffic over others, so long as it does not have an anti-competitive effect. Can't have that if there is no competitive ISP you can change to, if you don't like this NN violating ISP. > For example, I don't see how Netflix paying Comcast to zero-rate Netflix traffic is fundamentally different from Amazon contracting with mail carriers to subsidize the cost of shipping for Amazon purchases This analogy breaks down immediately, because Comcast is already getting Netflix traffic for free. There is no toll that needs to be subsidized, no charge that needs to be zero rated. Comcast is just blackmailing Netflix for protection money. > or even -- to use an example another commenter made -- an appliance manufacturer contracting with electrical utilities to subsidize the cost of electricity used by their appliances. Another bad analogy. There is no "cost of electricity" equivalent incurred by Comcast. The Netflix bits are free to Comcast. > So long as Comcast makes its zero-rating program available to all content providers -- including their own -- on reasonable and non-discriminatory terms, I don't think there are any competition issues. You do realize that this effectively sets up Comcast as the gatekeeper to the Internet? Do you really want Comcast to be able to decide what's on your Interwebz? That's even before we get into the fact that requiring to contract with Comcast before you can offer any online service is a barrier to entry and a competitive barrier. The whole idea is absurd. This way lies the Balkanization of the Internet and Internet fiefdoms. We already tried something similar and it was a shitshow. Remember how insane and difficult it was to offer premium and value add SMS services back in the days, when you had to cut deals with every single cell phone company before you could offer your service? > I've heard people argue that zero-rating makes it harder for smaller content providers to compete, since they won't have the resources to subsidize their customers' traffic. As I said in another comment, that's just the nature of business. Being big affords you certain advantages, like economies of scale. This makes it easier to compete on price. Smaller companies have to compete in other ways. So that's your solution? Screw the small guys? Lets institutionalize a protection racket, so that only big players can offer service because they can afford to grease the right palms. > In my view, the real problem with the telecom industry in the United States is a lack of competition [0], a problem caused at least in part by municipal [1] and state [2] governments. With more competition, net neutrality would be a non-issue. Consumers would just stop using ISPs that unfairly discriminate between traffic. Now you are on the right track. However none of this helps with the immediate problems. Most people have a monopoly provider. You can't change providers if there are no options. Even if we start now, there won't be another option for years. Meanwhile monopoly providers will use their monopoly to extract monopoly rents, both from customers and online services, best they can. We should not give them permission to gouge more by repealing NN. As to your list of problems, you forgot to add the FCC killing line sharing due to the Brand X case. If we had that, then we could theoretically have had competition even over a monopoly last mile infrastructure.
kelnos 9y ago
> ... so long as it does not have an anti-competitive effect. Soooo... you're in favor of net neutrality regulation, then.
arca_vorago 9y ago
Everything you talk about is contrary to the current reality, and it boggles the mind the mental gymnastics you are putting yourself through to get there. ISPs should be dumb pipes, the end.
- kirRoyale 9y ago
  so you think the government should be allowed to regulate it?
  - codezero 9y ago
    I think the obvious answer is yes. With conditions that are agreed apon by voters. Voters are not a factor in this legislation outside the fact that it is being executed on party lines.
mikeash 9y ago
I think your mail analogy falls apart because mail carriers are end-to-end, while ISPs are part of a much larger heterogeneous network. If Amazon can get a special deal from FedUps to deliver a package from their warehouse to my door, that's reasonable since it's just a standard business deal exchanging services for money. The international postal network is a bit more analogous. Let's say you order something from Widget Industrie in France. They pay La Poste to send it to your door in the US. La Poste transfers it to USPS, and pays USPS part of the postage to handle their end of it. Now imagine that USPS leaves your package on the warehouse floor for three weeks because Widget Industrie didn't sign up for their "expedited service" plan. Widget Industrie has never even talked to USPS, maybe doesn't even know that USPS exists. Of course, international mail is regulated and has had "mail neutrality" since the 19th century, so you don't have to worry about that. If some company wants to provide specialized data services so that Netflix can send data through their service to customers, that's fine with me. But that's not "the internet." These companies should decide whether they want to provide "internet access" or just specialized paid data access. Back to the mail analogy, FedEx and UPS have much more flexibility in terms of how they operate than USPS does, but as a consequence they don't get to participate in the international mail system. And indeed, this already happens. Many ISPs provide phone and TV services separate from "internet" services. Nobody is complaining that Netflix can't get into your cable TV package, even though it's all just digital bits on the wire these days. But they don't call it "internet service." When they call a service that, there are certain expectations. I agree that a lack of competition is the major problem here. If any given ISP customer had a dozen services to choose from, this would all go away. But that's a vastly more difficult problem. Saying we shouldn't worry about net neutrality because the real solution is competition is like saying we shouldn't worry about social security because the real problem is aging. Yes, if we solved aging we wouldn't need social security, but that's not a realistic approach.

by 19guid 9y ago

linkregister 9y ago

The reason why I and some other HN commenters (and L3 Communications) find this argument bizarre is because of the concept of transit traffic charges being applied to the last mile, which previously was not an industry practice. Comcast's customers are requesting the data; if Comcast were a second tier backbone, or an AS between two others, then it would make sense to charge for traffic, as it doesn't benefit. But the traffic going to Comcast is there to benefit its subscribers, without which, Comcast doesn't make enough money. The most bizarre thing is that if the customers were to upload the same amount of data back to the sites, then they wouldn't be charged, as the data was symmetrical! Why would an ISP be able to charge other AS's for sending traffic to its own customers? If there were even a single competitor in that region, this dynamic would change completely.

19guid 9y ago
I think it makes sense because retail ISPs operate in a two-sided market. Comcast provides access to Internet services, which customers want and are willing to pay for. Similarly, Comcast provides access to customers, which the Internet companies who provide those services (and associated CDNs and transit providers) want and are willing to pay for. I don't think there's anything especially wrong with this business model. It's similar to how a newspaper charges both readers and advertisers for access. The disadvantage is that you have to keep both parties happy. Incidentally, if customers uploaded the same amount of data as the Internet services, Comcast wouldn't get transit fees but it would get additional revenue from the customers, so I think things would balance out.
- neuterlize2 9y ago
  > I think it makes sense because retail ISPs operate in a two-sided market. Comcast provides access to Internet services, which customers want and are willing to pay for. Yes, but this is where your analysis breaks down: it's not a free market. The customers are a captive market. > Similarly, Comcast provides access to customers, which the Internet companies who provide those services (and associated CDNs and transit providers) want and are willing to pay for. The Internet companies are only willing to pay because they have no other alternatives. They only pay because Comcast has a monopoly and thus acts as a gatekeeper, and then only because Comcast has such a large market share that refusing Comcast would deprive them of a significant part of the market. Calling this "voluntary" participation in a two sided market is absurd. Blackmail is what it is. When anybody else than Comcast tries this, they are laughed at and told to piss off. > I don't think there's anything especially wrong with this business model. There's plenty wrong. The subscribers have already paid full price and now Comcast wants more, this time from the Internet companies, without which Comcast would have nothing to sell. > It's similar to how a newspaper charges both readers and advertisers for access. This is just a bad analogy, again. Newspaper readers aren't paying full price for the newspaper, and they are not paying for getting access to the adverts. > Incidentally, if customers uploaded the same amount of data as the Internet services, Comcast wouldn't get transit fees but it would get additional revenue from the customers, so I think things would balance out. This just plain incorrect. Comcast wouldn't get a penny more from it's subscribers. Internet access is inherently asymmetrical. Were subscribers to use their upstream more, it would not result in any more revenues.

neuterlize2 9y ago

> In principle, I don't think there's anything wrong with an ISP prioritizing certain kinds of traffic over others, so long as it does not have an anti-competitive effect. Can't have that if there is no competitive ISP you can change to, if you don't like this NN violating ISP. > For example, I don't see how Netflix paying Comcast to zero-rate Netflix traffic is fundamentally different from Amazon contracting with mail carriers to subsidize the cost of shipping for Amazon purchases This analogy breaks down immediately, because Comcast is already getting Netflix traffic for free. There is no toll that needs to be subsidized, no charge that needs to be zero rated. Comcast is just blackmailing Netflix for protection money. > or even -- to use an example another commenter made -- an appliance manufacturer contracting with electrical utilities to subsidize the cost of electricity used by their appliances. Another bad analogy. There is no "cost of electricity" equivalent incurred by Comcast. The Netflix bits are free to Comcast. > So long as Comcast makes its zero-rating program available to all content providers -- including their own -- on reasonable and non-discriminatory terms, I don't think there are any competition issues. You do realize that this effectively sets up Comcast as the gatekeeper to the Internet? Do you really want Comcast to be able to decide what's on your Interwebz? That's even before we get into the fact that requiring to contract with Comcast before you can offer any online service is a barrier to entry and a competitive barrier. The whole idea is absurd. This way lies the Balkanization of the Internet and Internet fiefdoms. We already tried something similar and it was a shitshow. Remember how insane and difficult it was to offer premium and value add SMS services back in the days, when you had to cut deals with every single cell phone company before you could offer your service? > I've heard people argue that zero-rating makes it harder for smaller content providers to compete, since they won't have the resources to subsidize their customers' traffic. As I said in another comment, that's just the nature of business. Being big affords you certain advantages, like economies of scale. This makes it easier to compete on price. Smaller companies have to compete in other ways. So that's your solution? Screw the small guys? Lets institutionalize a protection racket, so that only big players can offer service because they can afford to grease the right palms. > In my view, the real problem with the telecom industry in the United States is a lack of competition [0], a problem caused at least in part by municipal [1] and state [2] governments. With more competition, net neutrality would be a non-issue. Consumers would just stop using ISPs that unfairly discriminate between traffic. Now you are on the right track. However none of this helps with the immediate problems. Most people have a monopoly provider. You can't change providers if there are no options. Even if we start now, there won't be another option for years. Meanwhile monopoly providers will use their monopoly to extract monopoly rents, both from customers and online services, best they can. We should not give them permission to gouge more by repealing NN. As to your list of problems, you forgot to add the FCC killing line sharing due to the Brand X case. If we had that, then we could theoretically have had competition even over a monopoly last mile infrastructure.

kelnos 9y ago

> ... so long as it does not have an anti-competitive effect. Soooo... you're in favor of net neutrality regulation, then.

arca_vorago 9y ago

Everything you talk about is contrary to the current reality, and it boggles the mind the mental gymnastics you are putting yourself through to get there. ISPs should be dumb pipes, the end.

kirRoyale 9y ago
so you think the government should be allowed to regulate it?
- codezero 9y ago
  I think the obvious answer is yes. With conditions that are agreed apon by voters. Voters are not a factor in this legislation outside the fact that it is being executed on party lines.

mikeash 9y ago

I think your mail analogy falls apart because mail carriers are end-to-end, while ISPs are part of a much larger heterogeneous network. If Amazon can get a special deal from FedUps to deliver a package from their warehouse to my door, that's reasonable since it's just a standard business deal exchanging services for money. The international postal network is a bit more analogous. Let's say you order something from Widget Industrie in France. They pay La Poste to send it to your door in the US. La Poste transfers it to USPS, and pays USPS part of the postage to handle their end of it. Now imagine that USPS leaves your package on the warehouse floor for three weeks because Widget Industrie didn't sign up for their "expedited service" plan. Widget Industrie has never even talked to USPS, maybe doesn't even know that USPS exists. Of course, international mail is regulated and has had "mail neutrality" since the 19th century, so you don't have to worry about that. If some company wants to provide specialized data services so that Netflix can send data through their service to customers, that's fine with me. But that's not "the internet." These companies should decide whether they want to provide "internet access" or just specialized paid data access. Back to the mail analogy, FedEx and UPS have much more flexibility in terms of how they operate than USPS does, but as a consequence they don't get to participate in the international mail system. And indeed, this already happens. Many ISPs provide phone and TV services separate from "internet" services. Nobody is complaining that Netflix can't get into your cable TV package, even though it's all just digital bits on the wire these days. But they don't call it "internet service." When they call a service that, there are certain expectations. I agree that a lack of competition is the major problem here. If any given ISP customer had a dozen services to choose from, this would all go away. But that's a vastly more difficult problem. Saying we shouldn't worry about net neutrality because the real solution is competition is like saying we shouldn't worry about social security because the real problem is aging. Yes, if we solved aging we wouldn't need social security, but that's not a realistic approach.