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5/19/2014
02:23 PM
Rob Preston
Rob Preston
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FCC Net Neutrality Flap: Fast Lanes Don't Scare Me

Only the status quo will keep the Internet 'open,' net neutrality advocates insist. But a refined approach may ignite more network investment.

I got an earful from readers last Friday on an Editor's Note I wrote for our "InformationWeek In Review" newsletter. In that 400-word overview of InformationWeek's coverage of net neutrality happenings over the previous week or two, I chimed in on both sides of the issue: Should the FCC relax net neutrality rules or not?

Apparently this issue isn't to be debated: Net neutrality must stand, un-amended... was the consensus from the handful of readers who emailed me on the subject. But I don't see things so cut and dried.

As you've probably already read or heard, more than 100 Internet bigwigs -- Google, Facebook, Amazon, and Twitter among them -- laid into FCC chairman Tom Wheeler's plan to give network providers more freedom to charge customers extra for faster data delivery over their slices of the Internet. The fear, as my colleague Tom Claburn wrote, is that this so-called paid prioritization "will turn the Internet into a protection racket." That is, dominant providers such as Verizon, Comcast, and AT&T would require heavy Internet users such as Google and Netflix to pay extra for "fast lanes" for their traffic -- or suffer the consequences. In the meantime, the reasoning goes, shallow-pocketed commercial Internet users would be put at a competitive disadvantage.

[Overregulation is a pervasive problem for businesses. See Death By A Million Regulations.]

But isn't paid prioritization already an established commercial practice across industries? For example, the US Postal Service charges customers more to deliver packages overnight than it does for two- or three-day service. The airlines charge customers more for classes of service that usher them through check-in, security, and boarding faster. Internet and cellular providers already charge consumers more for faster data speeds. Are such premium-priced services "unfair" to customers who can't afford them or choose not to take advantage of them?

That's only a problem if the supplier degrades baseline service as it improves its premium services -- and there's no reason to assume that will happen on the Internet, now that the FCC has stipulated that it won't allow such network degradation. The FCC still has the authority to police the carriers so that they don't make the slow lane slower. If you don't trust the FCC to keep that promise, then why would you expect it to be any more committed to upholding net neutrality?

The telecom operators already provide priority delivery of certain business customers' Internet traffic through VPN and QoS services. Enhancing that model -- letting them offer gold-standard security for financial transactions, for instance, or guaranteed connectivity for healthcare monitoring -- isn't the end of the Internet as we know it. It's a business opportunity for the carriers. Yes, it stands to make them more money. But it also gives them more incentive to invest in their networks.

Electronic Superhighway by Nam June Paik. (Source: Libjbr)
Electronic Superhighway by Nam June Paik.
(Source: Libjbr)

Tom Claburn refers to an article published in Vox last Monday that claims that broadband industry figures misrepresent network investment as rising when it actually has been falling, a sure sign, critics say, that the dominant network operators are getting fatter and happier and more dominant. But one could look at a falloff in public network investment from another perspective: Perhaps one reason carriers are spending less on upgrades and more capacity is because net neutrality rules have limited their upside. Why plow more money into Internet capacity when you're not allowed to fully profit from it via premium services?

Supporters of the FCC's relaxation of net neutrality rules, including George Foote, a partner with law firm Dorsey & Whitney who has worked with the agency, think there's less here than meets the eye. "The final rules will require a strong baseline level of service," Foote said in a statement. He added: "As for the so-called fast lane, all that does is open the door to better or different service for a fee. The FCC commissioners made it clear that existing law and the threat of heavier regulation should give pause to monopolists."

I'm not arguing that the big carriers are saints. Far from it. They're in business to expand their profits and please their shareholders, just like any publicly held company, and they have abused their market positions in the past. But we have antitrust laws and myriad other regulations to keep anticompetitive behavior in check. If you don't think the antitrust authorities are up to that task, why do you think the FCC regulators are up to it under the framework of net neutrality?

The FCC has decided that it's prudent to move ahead slowly, voting three to two on Thursday to open its controversial proposal to public comment. Good. Let's hear all sides. Meantime, what do you think about the FCC's move to relax net neutrality rules? Hopefully, we can have a civil conversation on this issue in the comments section below.

Our InformationWeek Elite 100 issue -- our 26th ranking of technology innovators -- shines a spotlight on businesses that are succeeding because of their digital strategies. We take a close at look at the top five companies in this year's ranking and the eight winners of our Business Innovation awards, and offer 20 great ideas that you can use in your company. We also provide a ranked list of our Elite 100 innovators. Read our InformationWeek Elite 100 issue today.

Rob Preston currently serves as VP and editor in chief of InformationWeek, where he oversees the editorial content and direction of its various website, digital magazine, Webcast, live and virtual event, and other products. Rob has 25 years of experience in high-tech ... View Full Bio

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Nahla77
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Nahla77,
User Rank: Apprentice
7/13/2014 | 1:45:47 AM
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dan.euritt
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dan.euritt,
User Rank: Apprentice
5/25/2014 | 1:23:49 AM
Re: Postal Service
Comparing net neutrality to post office rates doesn't work, because the post office only increases the price for people who actually want to pay for, and receive, faster delivery.

Unlike the post office, companies like Netflix don't have tiered pricing structures that are based on CDN speeds; customers all pay the same prices, regardless of who they get their Internet service from.

Netflix isn't about to pay for faster delivery pipes out of their own pocket, they'll just raise the monthly fee that all customers pay. That means that if I don't use Comcast as an internet provider, I'm paying Netflix for faster pipes that I'm not using.

Why should I pay Netflix to give better streaming service to Comcast customers? That's like asking me to pay the post office for your overnight delivery letter.

The only way that this can be fixed is by instituting laws that protect the customer. Claiming that the FCC is going to keep things fair because people are complaining is like saying that there is no need to have laws against theft, because victim complaints are enough to guarantee that thieves will go to jail.
AmmarNaeem
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AmmarNaeem,
User Rank: Apprentice
5/23/2014 | 6:01:47 AM
Re: Postal Service
The FCC is a commissioned body that creates rules on how various industries (such as telecom) operate.

An ISP provides internet services to users via cable or wireless connections. A content provider is anyone who has a website that delivers content to internet users.

Net neutrality is when an ISP treats all content on the internet neutrally, and does not prioritize one over the other.

Not sure why everybody is hyped up about Net Neutrality and how it affects you? Here is a rundown of the good, the bad and the ugly about Net Neutrality.

Source: The Truth about Net Neutrality & How it affects YOU
stevew928
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stevew928,
User Rank: Ninja
5/23/2014 | 3:55:42 AM
Re: Postal Service
OK, so lets take a look at what you said.... re: "The content providers aren't the customers of the network operators unless they choose to be. No one is forcing the content providers to pay up."

Like with a gun to the head? I suppose not, but that kind of misses the point. When Guido comes down to your deli, you can opt out of paying the 'protection fee' but you might end up with broken knees too. You end up with one content provider able to pay, and another not able to pay. What do you think might be the outcome of that?

re: "The CEO of Comcast has said he's not interested, because, he says, setting up these arrangements would be too complicated." I could have sworn Netflix paid Comcast for some fast lanes already... maybe it was their evil twin Domcast?

re: "The network operators want more freedom to create fast lanes because they want to make money from them." Duh! What's in question here is whether that's a good thing or a bad thing, whether you've enough foresight to see the outcomes, and if you've enough critical thinking skills to see through their propaganda.

re: "The FCC, which was the overseer of net neutrality, has said it will ensure that baseline service is preserved." You mean the non-existent net-neutrality they oversaw? You mean the same FCC that doesn't have the guts to reclassify the Internet? The same FCC that will allow for 'commercially reasonable' traffic management? The same FCC who is going to guarantee a 'baseline' performance. Critical thinking skills here dude! Did you possibly buy that whole thing about Eich being forced out because Mozilla supports 'diversity.' Hey, I've got a bridge for sale... no really... ;)

re: "If carriers look to slow down the traffic of certain content providers or competitors, the FCC is sill there to make sure that doesn't happen." And, of course we trust them because of their previously excellent track record, and lack of government corruption from lobbying. Yup.

re: "Should it happen anyway under the FCC's watch, there's the hue and cry of the public to also keep the carriers in check." Because the government listens to the people. ;) Do you want me to dig up that study released a few days back about the USA government essentially being an oligarchy?

re: "No one is saying the operators can do as they please." Oh, of course not, they'll have to pay the right people some money for that to happen.... Um, earth to Rob, they've already been doing that for decades!
micjustin33
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micjustin33,
User Rank: Strategist
5/22/2014 | 7:12:36 AM
Re: Postal Service
I really need to read up on the whole Net Neutrality deal.  So far I've seen people's understanding range from cost neutrality, traffic neutrality, to alien invasions.  If it is traffic neutrality then wouldn't that pave the way to dropping QOS?  If it is cost neutrality then I have no idea what people are comparing it to.

This Short youtube Video also giving a concept of Net Neutrality and What should we do to save them..

Youtube Video:  What is Net Neutrality
RobPreston
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RobPreston,
User Rank: Author
5/21/2014 | 1:10:30 PM
Re: Postal Service
Come on, stevew98. You question my critical thinking? I can't even follow your argument. You "wonder why they are fighting so hard to keep the regulation in a state of allowing them to do so"? What does that even mean? The network operators want more freedom to create fast lanes because they want to make money from them. Plain and simple. No one is being duped here. It's quite transparent. Regulation of those operators still exists. The FCC, which was the overseer of net neutrality, has said it will ensure that baseline service is preserved. If carriers look to slow down the traffic of certain content providers or competitors, the FCC is sill there to make sure that doesn't happen. Should it happen anyway under the FCC's watch, there's the hue and cry of the public to also keep the carriers in check. No one is saying the operators can do as they please.
moarsauce123
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moarsauce123,
User Rank: Ninja
5/21/2014 | 7:33:56 AM
Re: Postal Service
The Postal Service may foolishly discount junk mail, but this discussion isn't so much about content, but about speed of delivery and in that case the Postal Service delivers a standard letter as fast as junk mail AND that at a guaranteed speed!!! That is the sole point of debate here because ISPs could do absolutely nothing as far as network investment goes, but sell 'fast lanes' that are not faster than what we have today, but in order to justify it slow everything else down intentionally. ISPs and network giants will not create fast lanes. What they will do is create slow lanes and then jack up the price for what we have today already.

The problem with Wheeler's big business friendly proposal is that there are no protections for current service levels. That aside, is the status quo broken? Would there be a discussion if instead of two or three big players generating half of the traffic a few dozen would do so?

How about entry to market? If big bubbas like Google or Netflix can pay to basically keep any competition out how does that jive with open markets and level playing fields?

Lastly, why do consumers, ISPs, and content providers in Europe not have this 'problem'? How come that you can get Gigabit fiber in Romania for 15$ a month? Or the same for not that much more in Germany, but tremendously less than slowpoke service in the US? The reason is that the formerly government owned telcos were forced to sell their services to anyone and charge each the same price. Service providers know what their access fee will be and can model their business based on that. Also, entry to market is much easier. As far as the telcos goes, the more providers the better because they each have to pay and the more bandwidth available the more providers can join in. The telco itself can offer services as well, but preferring its own service over others is not only illegal, it is strictly controlled.

The US Internet/Phone/TV market is totally destroyed because we have very few players and they do everything from content creation, to major networking, and the last mile. That needs to be broken up. Either you create content, you run major networks, or you do the last mile, but only one of these things. This is how the US electricity market was set up and it includes strict controls for at least one provider. The local and regional power companies are no longer allowed to generate electricity, the major distribution network is run independently, and producers can access both and sell their service to consumers. It is an effective scheme and it does not allow for cutting one short while benefiting the other. The result is that electricity in the US is fairly cheap.

Whatever it will be, any provider and consumer has to be charged the same price for the same service and that service has to come with guaranteed quality. That is not too much to ask, especially not when companies like AT&T can easily pony up 50 billion to buy another company. Yet we are left to believe they cannot invest just one billion into making its networks better???

Speaking of which...satelite TV market in the US is broken as well. Look at Europe, the content providers (TV stations) pay the bill and consumers only need to pay for the equipment. Over 600 TV channels and thousands of radio channels for basically free in top quality via the Astra / Eutelsat systems...wow, THAT is service...not that cheapo DirecTV dish that stops working when a bird flies by.

 
Charlie Babcock
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Charlie Babcock,
User Rank: Author
5/20/2014 | 7:42:55 PM
We have the tools...
We have independent Internet monitoring services with different areas of focus. Compuware and Cedexis are capable of measuring ongoing performance of particular sites; AppNeta can measure performance of individual Internet network segments. AppDynamics and New Relic can measure specific app performance over the Web. With such tools, the FCC should be able to monitor that there's no deterioration of general traffic lanes as fast lanes get implemented.
stevew928
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stevew928,
User Rank: Ninja
5/20/2014 | 1:51:49 PM
Re: Network 'Providers' are Unnecessary
It's actually worse than that. It's more like, you pay $1000/month to drive on the freeway, which is a lot of money, but hey, you need to travel. And, quite possibly, you have to commute to work and buy groceries as well. You wish you could find a route that was a bit cheaper and with less potholes, but HighwayCo owns all the roads, and has little incentive to fix the potholes. Cost analysis has shown that it only costs HighwayCo about $5-$10 to let you drive on their roads, but they constantly complain that if you want better roads, they need more money to invest.

Then a new thing starts to happen. HighwayCo decides it might be a good idea if they could get the cities you travel to to chip in on the roads, so they can afford to improve them. Chicago and LA have some money, and while they don't really want to pay HighwayCo, they need to get people to their cities to work and buy things. So, they start paying HighwayCo extra to fix some potholes on those routes. Fort Bend and Modesto, on the other hand, can't really afford to pay HighwayCo, so the roads keep deteriorating.

The HTC (Highway Travel Commission) has been getting pressure to reclassify highways to be handled more like utilities, as they realize everyone needs them including the drivers and the cities, but there is a lot of monetary pressure to just tweak the rules a bit and hopefully fool the people into believeing that a tiered solution that leaves HighwayCo with no competion is the best solution. So, to try and placate the people, they make a rule that it's OK for HighwayCo to continue to improve routes to Chicago and LA, so long as they provide a 'reasonable' service to Fort Bend and Modesto as well. Pot holes really aren't all that unreasonable though, as people can always buy 4x4s. They might fix a really bad one here and there. And, they won't ever really widen those roads, and probably won't mow the ditches. And, they do put some money into improving the roads to Chicago and LA, even though it's a tiny percentage, it looks like progress (especially compared to Fort Bend and Modesto).

But HighwayCo doesn't just do roads. They are trying to start their own city, HighwayTown. They have realized that they can make even more money if they control both the highways and the destination. They keep raising the prices to fix and improve the roads, while they make a spectacular road to HighwayTown.

This trend continues, as the road to HighwayTown starts to make the roads to Chicago and LA seem poor. And, hardly anyone goes to Fort Bend and Modesto anymore as it's pretty risky and you take damage to your vehicle. But, hey, the roads are still there, as promised. They did fix a huge pothole that caused a 20 car pile-up outside Modesto a few weeks back, good-ol' HighwayCo.... always taking care of their customers.

The next year, DrEvil came to power in the country to establish his EvilKindgom. LA went along with the plan, but Chicago was quite opposed to DrEvil's plan. DrEvil had a solution though. He gave HighwayCo a tax incentive far greater than Chicago was paying to keep their medium level roads. HighwayCo stopped improving the roads to Chicago, so they drifted towards the state of the roads of Modesto and South Bend. Fortunately the HTC had that little line in place that they *had* to provide a minimal level of roads... so Chicago at least knew people *could* get there if they absolutely needed to. Pshew! But most people went to HighwayTown and some even still went to LA. Chicago also became a ghost-town over time, and had little influence on DrEvil's plans any longer.
stevew928
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stevew928,
User Rank: Ninja
5/20/2014 | 1:13:03 PM
Re: Really?
I think many are fooled by the term free-market. Free doesn't mean 'anything goes.' Free means free from forces which unbalance the system. You need properly regulation to acheive that, given human nature.
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