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Talk of an Internet Fast Lane Is Already Hurting Some Startups

172 points by czottmann 12y ago

eurleif 12y ago
>It will also avoid investing in payment systems or in mobile wallets, which require ultrafast transaction times to make sense. WTF?
- ggchappell 12y ago
  Someone doesn't understand the concept of consistency and transactions in distributed systems. Regardless, I think we can all agree that slow payment processing is a Bad Thing.
  - stormbrew 12y ago
    Interestingly, apparently POS/ATM transactions are not strongly consistent (they are eventually consistent, on CAP they favour AP): http://highscalability.com/blog/2013/5/1/myth-eric-brewer-on-why-banks-are-base-not-acid-availability.html http://highscalability.com/blog/2013/5/1/myth-eric-brewer-on...
  - mantrax5 12y ago
    Who is that someone? Distributed systems don't need any particular speed of interconnect to work. In fact, it's one of the benefits of distributed system designs.
    - ggchappell 12y ago
      Yes, that's what I was trying to say. The "someone" is whoever was quoted in the article; that person does not understand your point. But it remains true that I, as a consumer, want my payments to be processed quickly. So do most other consumers, I imagine. But this has nothing to do with "making sense". I just want it to happen.
- ZachPruckowski 12y ago
  Well if you're talking about stuff that's used at physical checkout counters, you need really fast transactions. Nobody wants to sit there for an extra 20-30 seconds holding up the line. Even if customers can tolerate it, businesses will be much less inclined to support such a feature.
  - eurleif 12y ago
    But since when are ISPs contemplating adding an extra 20-30 seconds of latency to connections?
stedaniels 12y ago
Non-USA internet users should be helping protest this in the USA. If its allowed to happen there, it'll set a precedent for the rest of the world. "Say no to double-dipping!"
- bliker 12y ago
  It is not allowed in EU so there already is a precedent.
- masklinn 12y ago
  The EU parliament passed a net neutrality law last month.
- martiuk 12y ago
  Way ahead of you: http://www.bbc.co.uk/news/technology-26865869 http://www.bbc.co.uk/news/technology-26865869
- sschueller 12y ago
  Another interesting thing which is only now starting to go away for these unlimited plans is cell phone service in the US. In most countries you only pay for outgoing calls (unless you are roaming). In the US you pay for incoming calls as well (your minutes are deducted) and in addition the person calling you is also paying for that call. So there is double dipping going on there as well. At some point I was even paying for incoming SMS.
  - deleted 12y ago
    [deleted]
  - mratzloff 12y ago
    Yep. I pay for every spam text I receive. (Thankfully it's rare.)
- outworlder 12y ago
  Brazil passed a bill which, among other things, includes net neutrality.
mixologic 12y ago
What would the FCC/Comcast do if they didn't have a 900 lb gorilla to go after? What if consumers were using the exact same amount of high bandwidth services, except instead of it being mostly Netflix and Youtube, it were 50 or 100 similar services?
- hrjet 12y ago
  This might be something that is not just beneficial to ISPs. Probably the major content services want it too, because they can strangle upcoming competition at the expense of a few dollars. So the 900lb gorilla might not be actually running away.
  - mratzloff 12y ago
    They're increasing barriers to entry, as they do in every maturing industry.
    - batoure 12y ago
      Netflix doesn't want this to go through, their market saturation is not nearly high enough. 76% of american's have some form of extended television service, cable/satellite. Netflix covers around 10% of US households. They see them selves as being in competition with these other providers. It is in their best interest to keep the cost of providing Netflix as low as possible until their % of households is significantly higher. So when you talk about protectionism you probably need to back out a level. Because remember the big business of the companies pushing the "internet fast lane" is also television. They have layers of conflicting interests in their wish to constrain Netflix.
adamnemecek 12y ago
Every one of these articles should be mentioning the fact that in the 90's, the ISPs got $200 billion dollars to build a fast internet infrastructure that they never delivered. http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_002683.html http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_0026...
- derekjobst 12y ago
  This is an excellent point.
- noxxten 12y ago
  Not only did they not deliver, but they intentionally sabotaged US efforts to stay up to par with other countries. US infrastructure is woefully behind compared to other nations (we're only recently starting to see fiber optics as a serious competitor to DSL). Even still, as old and outdated as US infrastructure is, the idea of a bandwidth limit or speed restrictions are imposed by the ISP, not actually a physical constraint. Sure, there are limits to the loads a node can handle in an area; But with each node typically serving 200 customers, at a conservative $30/mo... That's a $72,000 annual budget upgrade and/or expand THAT SINGLE NODE. A typical ISP will handle hundreds, if not thousands, of nodes depending upon a location. We don't need fast lanes or bandwidth caps on the internet. We need an ISP that isn't ran by greedy tyrants.
  - rayiner 12y ago
    > US infrastructure is woefully behind compared to other nations Reconcile your claim with Akamai's State of the Internet, which shows the U.S. ranked #10 globally, at 10 mbps average connection speed: http://www.akamai.com/dl/akamai/akamai-soti-q413.pdf?WT.mc_id=soti_Q413 http://www.akamai.com/dl/akamai/akamai-soti-q413.pdf?WT.mc_i... (page 23). That number would put at about at #6 in Europe (see page 29), ahead of the U.K., Germany, and France, and not far behind Sweden and Ireland.
    - jotm 12y ago
      One thing to consider is that US households are quite often getting less than the advertised speeds (probably because ISP's don't want to bother installing more repeaters or it's difficult to do so). I.e. you can barely get 10 Mbps on a 20/1 Mbps package. That skews the average speed stats. From my experience, that is not the case in the EU - you pay for 20/1 Mbps, you get those speeds +/- a few Kb. Which is also why many don't want to switch from DSL to fiber where it is available - "why would I need that, my Internet is fast enough".
jcrites 12y ago
> Gillis Cashman, a managing partner at MC Partners in Boston, says it makes sense to charge extra to big content providers like Netflix, whose services at peak hours can sometimes consume more than 30 percent of total Internet traffic. Video is “significantly congesting these networks, and causing real issues for carriers where they have to spend a lot of money upgrading networks, and pushing fiber deeper into their networks,” he says. “There is currently no model for monetizing that required investment.” This argument doesn't make sense to me. The ISP's customers are using the ISP's network by downloading Internet content. The nature of the content should be irrelevant to the discussion. The ISP's customers are purely responsible for that usage, and it is part of - from what I understand - the service they are already paying for. The ISP's network is only "congested" if it is incapable of delivering on the service that was advertised (assuming for the sake of argument, some particular speed of access). Thus, how can Cashman argue that "there is no model for monetizing the required investment?" Isn't that exactly what ISP customers are buying when they pay for access to the Internet through the ISP? The onus should morally be on the ISP to make a good-faith attempt to build sufficient connections to any content that's popular enough to saturate the links providing it. Furthermore, why isn't it naturally the ISP's responsibility to price their access sufficient to cover current usage and expected growth in usage? New use-cases for the Internet are constantly going to appear. It is the ISP's responsibility to provide Internet access with sufficient throughput that it is not congested for any reasons under the ISP's control; and to price their access sufficient for investment to achieve the throughput. "The latest BigMac hamburger caused hungry residents to swarm McDonalds and caused drive-through lines to be congested today in Cloudville. Gillis Cashman, managing partner at McPartners, Inc. says that, despite selling happy meals in record numbers, delays in drive-through lines will continue, since since there is "currently no model for McDonalds to monetize the required investment" to upgrade its drive-throughs.
- bane 12y ago
  And there's clearly some models since I can get 1gb internet in Seoul for like $40/mo and Google apparently has some kind of model a well. This just reeks of an attempt to try and build up support for greed and laziness.
- Fuxy 12y ago
higherpurpose 12y ago
Last I checked Wheeler said "if the ISPs abuse these new rules and put sites on the "slow lanes", I'll bring in the real rules (referring to Title 2 reclassification)". So I wonder what's his reaction when he found out that the ISPs are already abusing the new rules, before the rules to allow fast lanes are even passed: http://arstechnica.com/information-technology/2014/05/level-3-claims-six-isps-dropping-packets-every-day-over-money-disputes/ http://arstechnica.com/information-technology/2014/05/level-... http://knowmore.washingtonpost.com/2014/04/25/this-hilarious-graph-of-netflix-speeds-shows-the-importance-of-net-neutrality/?tid=rssfeed http://knowmore.washingtonpost.com/2014/04/25/this-hilarious...
artellectual 12y ago
seems like someone really wants to destroy the US economy further, with all the NSA spying fiasco, and now this. seems like the US government has an unlimited amount of bullets to fire on its own foot.
deleted 12y ago
[deleted]
derekjobst 12y ago
This is classic price discrimination. As television channel packages become less of a moneymaker for cable companies, they need to find new forms of revenue and methods to segment the market. In separating certain content from other, especially internet data which is all the same to them, the ISPs are able to better maximize prices. Truly a tragedy, and all the more reason net neutrality is vital to the future of internet freedom.
swombat 12y ago
I wish those articles referred to this by its proper name: it's not about creating an internet "fast lane", it's about creating "slow lanes" for people not willing to pay extra for the "normal lane". On the good side, all this will mean in the long run is that the VPN industry will be booming. No bandwidth throttling via VPN, after all.
- jonlucc 12y ago
  So if there were FCC rules that came out saying the ISPs couldn't have slower access than they currently do and they can't completely block access to any legal server, would you be ok with that?
- ColinDabritz 12y ago
  While they can't discriminate between types of traffic on a VPN, they can throttle all VPN traffic, and react to higher VPN bandwidth use. And probably will, if allowed to.
blazespin 12y ago
Harsh reality time: 2 choices. Either Netflix ponies up, or everyone has to pay per GB to their ISPs. I honestly don't think the average consumer wants to be constantly tracking how much BW they're using per website. That might work for a single person cell phone, but doesn't work for a family.
- anilgulecha 12y ago
  each person doesn't have to track their own usage -- ISPs can provide simple access on how much the account has used up. Single source.
- Qantourisc 12y ago
  We have had limited GB in our country with a family for years. It's works, it's as simple as occasionally checking how-much you have left, or just going over the limit (that happens to). You learn how much you can download, and to not waste it. It's a bit like the water bill, you can leave it open all day, but you shouldn't.
- samsolomon 12y ago
  Or you pay up to a limit. I don't have a choice, but to pay for Comcast, and they changed my plan from Unlimited to 300GB/mo.
- thejosh 12y ago
  Apart from countries that do this, such as Australia, your ISP shows how much you have used. Atleast in Australia now you can get quite meaty plans (1TB+ a month) for "cheap".
- nknighthb 12y ago
  That's fine. Since the problem isn't last-mile, but interconnection, the per-GB cost is miniscule. I'll estimate $0.025/GB, but that's way too high, just to avoid getting to the point where one might realistically quibble over the real cost. I could stream 10mbps video 24 hours/day for 30 days and my bill at $0.025/GB will be about $80 for bandwidth, on top of the ~$40 I pay for my existing connection, which we'll just assume we'll let the cable companies continue to gouge me on. If I'm streaming high-quality HD video 24/7, I can live with a $120 Internet bill. I'm not actually doing that, of course. In reality, even I (combined with 4 other family members on the same connection who aren't power users, but do watch some streaming video and otherwise make fairly active use of my connection) rarely use more than ~500GB/month. Even if I used a terabyte every month, it'd be about $25 extra. Meh. In the end, it's not consumers that don't want this. It's the cable companies. They hate the idea, because it puts front and center the fact that they are and should be just a dumb pipe. They don't provide content, they provide a conduit. This is exactly the public perception that they fear.
CalRobert 12y ago
Fortunately, many countries in the EU (Germany, Ireland, France, not so much the UK) are happy to give you permission to build your startup here and fall under EU net neutrality legislation.
NicoJuicy 12y ago
Actually, this gives a great opportunity for startups in Europe because of Net Neutrality and investors in video and high speed delivery. I'd hope that Europe realizes that, but we don't get anything done fast because of the obsessive administration :(
Negitivefrags 12y ago
This entire problem comes down to the fact that internet isn't priced the way other utilities are. You don't pay your water company a fixed rate based on the size of the pipe to your house. You pay based on water actually delivered. You don't pay your electricity company based on the maximum number of amps that can flow down the wire, you pay for the electricity consumed. Internet should be paid in bytes delivered. Then all the incentives will be aligned for all parties. High usage end users pay for more of the network than low usage end users, which they should because they are the ones putting strain on it. The ISPs would then prefer to transport the larger content that users demand because they will be paid more for it. Thus they are also incentivised to create more and better infrastructure to deliver it.
- cones688 12y ago
  I am based in the UK and it is exactly how it is charged for on the consumer side, I can choose how fast I want my delivery to be (1mb/s -> 80mb/s) and also the monthly total consumption (10GB -> 20GB -> 40GB -> "unlimited"). http://www.productsandservices.bt.com/products/broadband/packages/?s_cid=con_FURL_packages http://www.productsandservices.bt.com/products/broadband/pac...
  - TheLoneWolfling 12y ago
    So they are offering an average of 4, 8, or 16 kb/s? Dialup is faster than that!
  - talmand 12y ago
    I don't see how that's much different than the usual here in the US. You're paying monthly for a connection, variable fee based on speed of that connection, and then you have a data cap. I don't see how that's paying based on consumption.
- sschueller 12y ago
  I agree but unlike electricity or water where quality of service is regulated (water quality etc) internet service is not. We would need some sort of regulation to force ISPs to provide a pipe that doesn't suffer random packet loss or connection problems. In addition you would need some way to make ISP upgrade to better pipes or you will be stuck with 56k for ever. I believe all new homes in the US are now equipped with a minimum if a 200A circuit by law which would equate to your internet speed minimum being regulated.
TomGullen 12y ago
All this happened here in the UK as well with iPlayer back in 2008: http://news.bbc.co.uk/1/hi/7336940.stm http://news.bbc.co.uk/1/hi/7336940.stm (Earlier reference in 2007: http://www.out-law.com/page-8384 http://www.out-law.com/page-8384) "Simon Gunter, from ISP Tiscali, said the BBC should contribute to the cost. He said the BBC did not understand the issues involved." Can't find how it was settled, not at all IIRC.
FollowSteph3 12y ago
If you look at the history of the phone, which this is very similar too, initially the phone companies charged you for everything. Long distance call, oh that will cost you. Anything at all that will cost you. Then eventually a player comes in that disrupts the model. What free long distance on weekends and evenings. How is that even possible. Then one day competition takes over, et I mean logic ;) and suddenly the phone prices make sense. Long distance calls are something of the past. I believe ISP are going through the same thing. However since they can't easily start charging by the call what they are trying to do is charge not only the person who is paying to have a phone line but also the caller. Except that now the caller has to pay for their own phone line and a fee to connect to the end line, which is already being paid for by the end customer. Aka the last mile is double dipping in fees cause they can because there is no competition. Just like the long distance calls from before. Amazing how quickly the phone companies went from recovering costs to can make profits from no fee long distance calling when competition finally came...
- danielweber 12y ago
  This comment reflects a deep misunderstanding of the history of the PSTN and its regulatory and deregulatory cycles. Telephone service is also vastly easier to predict and model than Internet usage.
hackuser 12y ago
I know ISPs attract little sympathy and HN readers naturally do sympathize with startups and smaller organizations (as do I), but consider: In open markets a seller charges what the market will bear in order to maximize profit. And of course it benefits society because resources are allocated efficiently, i.e. to those with the greatest demand for them (those willing to pay the most). Why should this market be any different? I'd expect that any business, discovering they had an asset someone would pay for, would charge as much as they could for it. There is nothing dirty or underhanded about it, even if it challenges the status quo we all are accustomed to (or the notion that everything on the Internet is free). And it's not like big ISPs are stomping widows and orphan children -- Netflix, for all its victimhood, can stand up for itself and I'm sure maximizes its profit wherever possible. (It may be different for startups.) I don't want to be absolutist about it, but what I said is a factor. Other factors are that the ISPs benefit from public goods such as local monopolies, and benefit from all the innovation that created the Internet and the services that their customers are paying them for, so they do owe something to maintaining that ecosystem. And the clear solution, as has been said before here, is customers paying for metered bandwidth, and also for latency or other SLAs if they want them (which long has been common for businesses ISPs) -- why should someone who mostly uses email want to pay for the same latency that a Netflix customer or gamer needs?
- deleted 12y ago
  [deleted]
- guizzy 12y ago
  Not only do they benefit from public goods, but it's a market where the barrier to entry is so high that competition cannot happen efficiently. Now before our american libertarian friends come frothing at the mouth, the barriers to entry are absurdly high before any sort of government interference, especially in North America, and with a captive customer base, it's just inherently a bad market to showcase capitalism. So with inefficiencies due to a lack of competition comparable to a government agency AND a profit motive rather than the public service motive that government agencies have, you've got the worst of both worlds. Companies that barely compete to offer good service with the explicit intention of sucking as much of your dollars as they can for a service you can't really go without.
fredgrott 12y ago
seems that some networking startup will solve this as its peer problem with too many video downloads but not enough upload traffic that is the problem with net fairness via speeds,etc is that underlying network ecosystem is not static it will change and with that change comes new problems in being fair with speeds. etc
hackuser 12y ago
Pro tip for those unhappy with their ISPs: You get what you pay for. If you pay for a consumer, price-oriented package, expect price-oriented service in return. There is a reason your office doesn't use consumer Internet, and that a 1.4 Mbps T1 costs $400/month, while low-end 6 Mbps DSL costs $30/month -- 4x bandwidth for <10% of the cost, what a deal! I shouldn't have to say this on Hacker News, but what you pay ISPs for is quality of service and support. If you want that at home, pay for a business-class service. Comcast offers business-class to residences, for example; we've used it many times and the services and support have been excellent.
- smackfu 12y ago
  Is there really a reason that a crummy T1 still costs $400/month? Other than all the existing places that have a 10-year-old T1 where that used to be the fastest option, and the phone company doesn't want to drop prices.
  - angersock 12y ago
    Don't those contracts usually come with certain service and uptime guarantees?
    - deleted 12y ago
      [deleted]
- lern_too_spel 12y ago
  Business class Comcast service does not get higher QoS on its congested links. I've seen Netflix degrade to the lowest bitrate and frequently pause to buffer on a business class connection before Netflix began its payments.
drivingmenuts 12y ago
So, if ISPs are free to charge extra for bandwidth used by premium content providers, are they also free to charge extra based on other factors? In other words, could the Koch Brothers start an ISP that gave a break to conservative information providers and charged extra to competing political views?
- pawn 12y ago
  I don't see why not. Heck, one faction may start paying the ISPs a bribe to throttle its competitors. Businesses with money could do this too. Imagine WM paying Comcast to throttle Amazon traffic or make 1 in 5 page loads fail. That could be where we're headed, if we don't fix this problem now.
barretts 12y ago
This is a terrible article. It's just VCs talking their books. I hate the FCC's slow/fast lane proposal but you can't write about it only from the perspective of those with financial interests in the outcome (especially without making clear the importance of those financial interests).
mantrax5 12y ago
I know this argument doesn't make sense at first blush, but it does at second: 1. People don't like metered Internet (which is odd given we don't mind metered water and metered electricity). 2. ISPs want to keep advertising unmetered Internet. 3. Some % of the customers use a lot more traffic, and most of that is Netflix. 4. The ISP want to charge Netflix, which will in turn pass the costs to their customers, and so these customers who use more traffic will indirectly pay more to the ISPs for their traffic. I wish they'd just lay it out simple like that. At least then we won't have to nitpick their statements for logical inconsistencies. Or... maybe they can just switch to metered Internet. And this whole net neutrality issue will vanish in a puff of smoke.
- talmand 12y ago
  The reason I would disagree with metered Internet is because based on the past behavior of the major ISPs it would result in even worse pricing schemes. I simply do not trust them. To me the only way metered would work is if all these government sanctioned monopolies in communities are lifted so that any company can offer service to any customer. Or, I suppose, the service is a utility governed by representatives of the community.

172 points by czottmann 12y ago

>It will also avoid investing in payment systems or in mobile wallets, which require ultrafast transaction times to make sense. WTF?

ggchappell 12y ago
Someone doesn't understand the concept of consistency and transactions in distributed systems. Regardless, I think we can all agree that slow payment processing is a Bad Thing.
- stormbrew 12y ago
  Interestingly, apparently POS/ATM transactions are not strongly consistent (they are eventually consistent, on CAP they favour AP): http://highscalability.com/blog/2013/5/1/myth-eric-brewer-on-why-banks-are-base-not-acid-availability.html http://highscalability.com/blog/2013/5/1/myth-eric-brewer-on...
- mantrax5 12y ago
  Who is that someone? Distributed systems don't need any particular speed of interconnect to work. In fact, it's one of the benefits of distributed system designs.
  - ggchappell 12y ago
    Yes, that's what I was trying to say. The "someone" is whoever was quoted in the article; that person does not understand your point. But it remains true that I, as a consumer, want my payments to be processed quickly. So do most other consumers, I imagine. But this has nothing to do with "making sense". I just want it to happen.
ZachPruckowski 12y ago
Well if you're talking about stuff that's used at physical checkout counters, you need really fast transactions. Nobody wants to sit there for an extra 20-30 seconds holding up the line. Even if customers can tolerate it, businesses will be much less inclined to support such a feature.
- eurleif 12y ago
  But since when are ISPs contemplating adding an extra 20-30 seconds of latency to connections?

stedaniels 12y ago

Non-USA internet users should be helping protest this in the USA. If its allowed to happen there, it'll set a precedent for the rest of the world. "Say no to double-dipping!"

bliker 12y ago
It is not allowed in EU so there already is a precedent.
masklinn 12y ago
The EU parliament passed a net neutrality law last month.
martiuk 12y ago
Way ahead of you: http://www.bbc.co.uk/news/technology-26865869 http://www.bbc.co.uk/news/technology-26865869
sschueller 12y ago
Another interesting thing which is only now starting to go away for these unlimited plans is cell phone service in the US. In most countries you only pay for outgoing calls (unless you are roaming). In the US you pay for incoming calls as well (your minutes are deducted) and in addition the person calling you is also paying for that call. So there is double dipping going on there as well. At some point I was even paying for incoming SMS.
- deleted 12y ago
  [deleted]
- mratzloff 12y ago
  Yep. I pay for every spam text I receive. (Thankfully it's rare.)
outworlder 12y ago
Brazil passed a bill which, among other things, includes net neutrality.

mixologic 12y ago

What would the FCC/Comcast do if they didn't have a 900 lb gorilla to go after? What if consumers were using the exact same amount of high bandwidth services, except instead of it being mostly Netflix and Youtube, it were 50 or 100 similar services?

hrjet 12y ago
This might be something that is not just beneficial to ISPs. Probably the major content services want it too, because they can strangle upcoming competition at the expense of a few dollars. So the 900lb gorilla might not be actually running away.
- mratzloff 12y ago
  They're increasing barriers to entry, as they do in every maturing industry.
  - batoure 12y ago
    Netflix doesn't want this to go through, their market saturation is not nearly high enough. 76% of american's have some form of extended television service, cable/satellite. Netflix covers around 10% of US households. They see them selves as being in competition with these other providers. It is in their best interest to keep the cost of providing Netflix as low as possible until their % of households is significantly higher. So when you talk about protectionism you probably need to back out a level. Because remember the big business of the companies pushing the "internet fast lane" is also television. They have layers of conflicting interests in their wish to constrain Netflix.

adamnemecek 12y ago

Every one of these articles should be mentioning the fact that in the 90's, the ISPs got $200 billion dollars to build a fast internet infrastructure that they never delivered. http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_002683.html http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_0026...

derekjobst 12y ago
This is an excellent point.
noxxten 12y ago
Not only did they not deliver, but they intentionally sabotaged US efforts to stay up to par with other countries. US infrastructure is woefully behind compared to other nations (we're only recently starting to see fiber optics as a serious competitor to DSL). Even still, as old and outdated as US infrastructure is, the idea of a bandwidth limit or speed restrictions are imposed by the ISP, not actually a physical constraint. Sure, there are limits to the loads a node can handle in an area; But with each node typically serving 200 customers, at a conservative $30/mo... That's a $72,000 annual budget upgrade and/or expand THAT SINGLE NODE. A typical ISP will handle hundreds, if not thousands, of nodes depending upon a location. We don't need fast lanes or bandwidth caps on the internet. We need an ISP that isn't ran by greedy tyrants.
- rayiner 12y ago
  > US infrastructure is woefully behind compared to other nations Reconcile your claim with Akamai's State of the Internet, which shows the U.S. ranked #10 globally, at 10 mbps average connection speed: http://www.akamai.com/dl/akamai/akamai-soti-q413.pdf?WT.mc_id=soti_Q413 http://www.akamai.com/dl/akamai/akamai-soti-q413.pdf?WT.mc_i... (page 23). That number would put at about at #6 in Europe (see page 29), ahead of the U.K., Germany, and France, and not far behind Sweden and Ireland.
  - jotm 12y ago
    One thing to consider is that US households are quite often getting less than the advertised speeds (probably because ISP's don't want to bother installing more repeaters or it's difficult to do so). I.e. you can barely get 10 Mbps on a 20/1 Mbps package. That skews the average speed stats. From my experience, that is not the case in the EU - you pay for 20/1 Mbps, you get those speeds +/- a few Kb. Which is also why many don't want to switch from DSL to fiber where it is available - "why would I need that, my Internet is fast enough".

jcrites 12y ago

> Gillis Cashman, a managing partner at MC Partners in Boston, says it makes sense to charge extra to big content providers like Netflix, whose services at peak hours can sometimes consume more than 30 percent of total Internet traffic. Video is “significantly congesting these networks, and causing real issues for carriers where they have to spend a lot of money upgrading networks, and pushing fiber deeper into their networks,” he says. “There is currently no model for monetizing that required investment.” This argument doesn't make sense to me. The ISP's customers are using the ISP's network by downloading Internet content. The nature of the content should be irrelevant to the discussion. The ISP's customers are purely responsible for that usage, and it is part of - from what I understand - the service they are already paying for. The ISP's network is only "congested" if it is incapable of delivering on the service that was advertised (assuming for the sake of argument, some particular speed of access). Thus, how can Cashman argue that "there is no model for monetizing the required investment?" Isn't that exactly what ISP customers are buying when they pay for access to the Internet through the ISP? The onus should morally be on the ISP to make a good-faith attempt to build sufficient connections to any content that's popular enough to saturate the links providing it. Furthermore, why isn't it naturally the ISP's responsibility to price their access sufficient to cover current usage and expected growth in usage? New use-cases for the Internet are constantly going to appear. It is the ISP's responsibility to provide Internet access with sufficient throughput that it is not congested for any reasons under the ISP's control; and to price their access sufficient for investment to achieve the throughput. "The latest BigMac hamburger caused hungry residents to swarm McDonalds and caused drive-through lines to be congested today in Cloudville. Gillis Cashman, managing partner at McPartners, Inc. says that, despite selling happy meals in record numbers, delays in drive-through lines will continue, since since there is "currently no model for McDonalds to monetize the required investment" to upgrade its drive-throughs.

bane 12y ago
And there's clearly some models since I can get 1gb internet in Seoul for like $40/mo and Google apparently has some kind of model a well. This just reeks of an attempt to try and build up support for greed and laziness.
Fuxy 12y ago

higherpurpose 12y ago

Last I checked Wheeler said "if the ISPs abuse these new rules and put sites on the "slow lanes", I'll bring in the real rules (referring to Title 2 reclassification)". So I wonder what's his reaction when he found out that the ISPs are already abusing the new rules, before the rules to allow fast lanes are even passed: http://arstechnica.com/information-technology/2014/05/level-3-claims-six-isps-dropping-packets-every-day-over-money-disputes/ http://arstechnica.com/information-technology/2014/05/level-... http://knowmore.washingtonpost.com/2014/04/25/this-hilarious-graph-of-netflix-speeds-shows-the-importance-of-net-neutrality/?tid=rssfeed http://knowmore.washingtonpost.com/2014/04/25/this-hilarious...

artellectual 12y ago

seems like someone really wants to destroy the US economy further, with all the NSA spying fiasco, and now this. seems like the US government has an unlimited amount of bullets to fire on its own foot.

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derekjobst 12y ago

This is classic price discrimination. As television channel packages become less of a moneymaker for cable companies, they need to find new forms of revenue and methods to segment the market. In separating certain content from other, especially internet data which is all the same to them, the ISPs are able to better maximize prices. Truly a tragedy, and all the more reason net neutrality is vital to the future of internet freedom.

swombat 12y ago

I wish those articles referred to this by its proper name: it's not about creating an internet "fast lane", it's about creating "slow lanes" for people not willing to pay extra for the "normal lane". On the good side, all this will mean in the long run is that the VPN industry will be booming. No bandwidth throttling via VPN, after all.

jonlucc 12y ago
So if there were FCC rules that came out saying the ISPs couldn't have slower access than they currently do and they can't completely block access to any legal server, would you be ok with that?
ColinDabritz 12y ago
While they can't discriminate between types of traffic on a VPN, they can throttle all VPN traffic, and react to higher VPN bandwidth use. And probably will, if allowed to.

blazespin 12y ago

Harsh reality time: 2 choices. Either Netflix ponies up, or everyone has to pay per GB to their ISPs. I honestly don't think the average consumer wants to be constantly tracking how much BW they're using per website. That might work for a single person cell phone, but doesn't work for a family.

anilgulecha 12y ago
each person doesn't have to track their own usage -- ISPs can provide simple access on how much the account has used up. Single source.
Qantourisc 12y ago
We have had limited GB in our country with a family for years. It's works, it's as simple as occasionally checking how-much you have left, or just going over the limit (that happens to). You learn how much you can download, and to not waste it. It's a bit like the water bill, you can leave it open all day, but you shouldn't.
samsolomon 12y ago
Or you pay up to a limit. I don't have a choice, but to pay for Comcast, and they changed my plan from Unlimited to 300GB/mo.
thejosh 12y ago
Apart from countries that do this, such as Australia, your ISP shows how much you have used. Atleast in Australia now you can get quite meaty plans (1TB+ a month) for "cheap".
nknighthb 12y ago
That's fine. Since the problem isn't last-mile, but interconnection, the per-GB cost is miniscule. I'll estimate $0.025/GB, but that's way too high, just to avoid getting to the point where one might realistically quibble over the real cost. I could stream 10mbps video 24 hours/day for 30 days and my bill at $0.025/GB will be about $80 for bandwidth, on top of the ~$40 I pay for my existing connection, which we'll just assume we'll let the cable companies continue to gouge me on. If I'm streaming high-quality HD video 24/7, I can live with a $120 Internet bill. I'm not actually doing that, of course. In reality, even I (combined with 4 other family members on the same connection who aren't power users, but do watch some streaming video and otherwise make fairly active use of my connection) rarely use more than ~500GB/month. Even if I used a terabyte every month, it'd be about $25 extra. Meh. In the end, it's not consumers that don't want this. It's the cable companies. They hate the idea, because it puts front and center the fact that they are and should be just a dumb pipe. They don't provide content, they provide a conduit. This is exactly the public perception that they fear.

CalRobert 12y ago

Fortunately, many countries in the EU (Germany, Ireland, France, not so much the UK) are happy to give you permission to build your startup here and fall under EU net neutrality legislation.

NicoJuicy 12y ago

Actually, this gives a great opportunity for startups in Europe because of Net Neutrality and investors in video and high speed delivery. I'd hope that Europe realizes that, but we don't get anything done fast because of the obsessive administration :(

Negitivefrags 12y ago

This entire problem comes down to the fact that internet isn't priced the way other utilities are. You don't pay your water company a fixed rate based on the size of the pipe to your house. You pay based on water actually delivered. You don't pay your electricity company based on the maximum number of amps that can flow down the wire, you pay for the electricity consumed. Internet should be paid in bytes delivered. Then all the incentives will be aligned for all parties. High usage end users pay for more of the network than low usage end users, which they should because they are the ones putting strain on it. The ISPs would then prefer to transport the larger content that users demand because they will be paid more for it. Thus they are also incentivised to create more and better infrastructure to deliver it.

cones688 12y ago
I am based in the UK and it is exactly how it is charged for on the consumer side, I can choose how fast I want my delivery to be (1mb/s -> 80mb/s) and also the monthly total consumption (10GB -> 20GB -> 40GB -> "unlimited"). http://www.productsandservices.bt.com/products/broadband/packages/?s_cid=con_FURL_packages http://www.productsandservices.bt.com/products/broadband/pac...
- TheLoneWolfling 12y ago
  So they are offering an average of 4, 8, or 16 kb/s? Dialup is faster than that!
- talmand 12y ago
  I don't see how that's much different than the usual here in the US. You're paying monthly for a connection, variable fee based on speed of that connection, and then you have a data cap. I don't see how that's paying based on consumption.
sschueller 12y ago
I agree but unlike electricity or water where quality of service is regulated (water quality etc) internet service is not. We would need some sort of regulation to force ISPs to provide a pipe that doesn't suffer random packet loss or connection problems. In addition you would need some way to make ISP upgrade to better pipes or you will be stuck with 56k for ever. I believe all new homes in the US are now equipped with a minimum if a 200A circuit by law which would equate to your internet speed minimum being regulated.

TomGullen 12y ago

All this happened here in the UK as well with iPlayer back in 2008: http://news.bbc.co.uk/1/hi/7336940.stm http://news.bbc.co.uk/1/hi/7336940.stm (Earlier reference in 2007: http://www.out-law.com/page-8384 http://www.out-law.com/page-8384) "Simon Gunter, from ISP Tiscali, said the BBC should contribute to the cost. He said the BBC did not understand the issues involved." Can't find how it was settled, not at all IIRC.

FollowSteph3 12y ago

If you look at the history of the phone, which this is very similar too, initially the phone companies charged you for everything. Long distance call, oh that will cost you. Anything at all that will cost you. Then eventually a player comes in that disrupts the model. What free long distance on weekends and evenings. How is that even possible. Then one day competition takes over, et I mean logic ;) and suddenly the phone prices make sense. Long distance calls are something of the past. I believe ISP are going through the same thing. However since they can't easily start charging by the call what they are trying to do is charge not only the person who is paying to have a phone line but also the caller. Except that now the caller has to pay for their own phone line and a fee to connect to the end line, which is already being paid for by the end customer. Aka the last mile is double dipping in fees cause they can because there is no competition. Just like the long distance calls from before. Amazing how quickly the phone companies went from recovering costs to can make profits from no fee long distance calling when competition finally came...

danielweber 12y ago
This comment reflects a deep misunderstanding of the history of the PSTN and its regulatory and deregulatory cycles. Telephone service is also vastly easier to predict and model than Internet usage.

hackuser 12y ago

I know ISPs attract little sympathy and HN readers naturally do sympathize with startups and smaller organizations (as do I), but consider: In open markets a seller charges what the market will bear in order to maximize profit. And of course it benefits society because resources are allocated efficiently, i.e. to those with the greatest demand for them (those willing to pay the most). Why should this market be any different? I'd expect that any business, discovering they had an asset someone would pay for, would charge as much as they could for it. There is nothing dirty or underhanded about it, even if it challenges the status quo we all are accustomed to (or the notion that everything on the Internet is free). And it's not like big ISPs are stomping widows and orphan children -- Netflix, for all its victimhood, can stand up for itself and I'm sure maximizes its profit wherever possible. (It may be different for startups.) I don't want to be absolutist about it, but what I said is a factor. Other factors are that the ISPs benefit from public goods such as local monopolies, and benefit from all the innovation that created the Internet and the services that their customers are paying them for, so they do owe something to maintaining that ecosystem. And the clear solution, as has been said before here, is customers paying for metered bandwidth, and also for latency or other SLAs if they want them (which long has been common for businesses ISPs) -- why should someone who mostly uses email want to pay for the same latency that a Netflix customer or gamer needs?

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guizzy 12y ago
Not only do they benefit from public goods, but it's a market where the barrier to entry is so high that competition cannot happen efficiently. Now before our american libertarian friends come frothing at the mouth, the barriers to entry are absurdly high before any sort of government interference, especially in North America, and with a captive customer base, it's just inherently a bad market to showcase capitalism. So with inefficiencies due to a lack of competition comparable to a government agency AND a profit motive rather than the public service motive that government agencies have, you've got the worst of both worlds. Companies that barely compete to offer good service with the explicit intention of sucking as much of your dollars as they can for a service you can't really go without.

fredgrott 12y ago

seems that some networking startup will solve this as its peer problem with too many video downloads but not enough upload traffic that is the problem with net fairness via speeds,etc is that underlying network ecosystem is not static it will change and with that change comes new problems in being fair with speeds. etc

hackuser 12y ago

Pro tip for those unhappy with their ISPs: You get what you pay for. If you pay for a consumer, price-oriented package, expect price-oriented service in return. There is a reason your office doesn't use consumer Internet, and that a 1.4 Mbps T1 costs $400/month, while low-end 6 Mbps DSL costs $30/month -- 4x bandwidth for <10% of the cost, what a deal! I shouldn't have to say this on Hacker News, but what you pay ISPs for is quality of service and support. If you want that at home, pay for a business-class service. Comcast offers business-class to residences, for example; we've used it many times and the services and support have been excellent.

smackfu 12y ago
Is there really a reason that a crummy T1 still costs $400/month? Other than all the existing places that have a 10-year-old T1 where that used to be the fastest option, and the phone company doesn't want to drop prices.
- angersock 12y ago
  Don't those contracts usually come with certain service and uptime guarantees?
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lern_too_spel 12y ago
Business class Comcast service does not get higher QoS on its congested links. I've seen Netflix degrade to the lowest bitrate and frequently pause to buffer on a business class connection before Netflix began its payments.

drivingmenuts 12y ago

So, if ISPs are free to charge extra for bandwidth used by premium content providers, are they also free to charge extra based on other factors? In other words, could the Koch Brothers start an ISP that gave a break to conservative information providers and charged extra to competing political views?

pawn 12y ago
I don't see why not. Heck, one faction may start paying the ISPs a bribe to throttle its competitors. Businesses with money could do this too. Imagine WM paying Comcast to throttle Amazon traffic or make 1 in 5 page loads fail. That could be where we're headed, if we don't fix this problem now.

barretts 12y ago

This is a terrible article. It's just VCs talking their books. I hate the FCC's slow/fast lane proposal but you can't write about it only from the perspective of those with financial interests in the outcome (especially without making clear the importance of those financial interests).

mantrax5 12y ago

I know this argument doesn't make sense at first blush, but it does at second: 1. People don't like metered Internet (which is odd given we don't mind metered water and metered electricity). 2. ISPs want to keep advertising unmetered Internet. 3. Some % of the customers use a lot more traffic, and most of that is Netflix. 4. The ISP want to charge Netflix, which will in turn pass the costs to their customers, and so these customers who use more traffic will indirectly pay more to the ISPs for their traffic. I wish they'd just lay it out simple like that. At least then we won't have to nitpick their statements for logical inconsistencies. Or... maybe they can just switch to metered Internet. And this whole net neutrality issue will vanish in a puff of smoke.

talmand 12y ago
The reason I would disagree with metered Internet is because based on the past behavior of the major ISPs it would result in even worse pricing schemes. I simply do not trust them. To me the only way metered would work is if all these government sanctioned monopolies in communities are lifted so that any company can offer service to any customer. Or, I suppose, the service is a utility governed by representatives of the community.