Save the internet?

[Da Lone-Warrior]

http://www.talkingpointsmemo.com/archives/008289.php

Apparently, there is a bill going through the legislature that would turn over control of the internet to phone companies or big corporations.

I think this deserves wider discussion, at the least....

dlw

[NeilUnreal]

This reminds me of the film The President's Analyst. Life imitating art.

-Neil

[Carpedm9587]

http://www.talkingpointsmemo.com/archives/008289.php

Apparently, there is a bill going through the legislature that would turn over control of the internet to phone companies or big corporations.

I think this deserves wider discussion, at the least....

dlw

The bill doesn't turn control of the Internet over to the phone companies. The Internet is a worldwide phenomenon that spans multiple countries and access to it is provided by multiple providers, including cable companies and small data outfits. No one company can own the Internet, or control it, at least not as things are now. It is true that the major telco carriers around the world supply most of the backbone, however.

Think of the Internet as having three major pieces: the backbones, the connections between the backbones, and the access. When a carrier sells Internet access to a company or user, they get paid for the access (the on-ramp to the highway). How much they get paid is usually a function of how much bandwidth the user gets (e.g., how wide the on-ramp is). If they charge enough for the on-ramps, they get enough money to build the backbone and get some cash left over for profit. The system is self regulating. If response time to a website drops, the company buys more bandwidth, and the carrier gets more money, so they can continue to upgrade their backbone proportionately.

But what happens when a user getting service from one carrier wants to access a company website served by another carrier? They are going to have to cross the links between the carriers. And if the two carriers are not directly connected, they might have to cross the backbone of a completely different carrier (e.g., cross at least two inter-carrier links). That third carrier isn't getting any money directly from either customer. Essentially the carriers are arguing that they should have the right to insert rules that limit how much of their backbone bandwidth is used by any particular customer, and mostly they want to be able to do that for customers of OTHER carriers.

The argument is actually a reasonable one (IMO) on the face of it. But the implications are profound. It could set the stage for some incredible "bandwidth wars," create a context in which unfair business practices would be simple. Let's say Company X is a customer of a small carrier Z and small carrier Z is connected to major carrier Y. By restricting the flow of traffic to Company X, Big Carrier Y can make Company X very unhappy with Small Carrier Z. Small carrier Z is either going to have connect to another Major Carrier, or Company X is going to change carriers. Major Carrier Y can put Small Carrier Z out of business pretty quickly. And with the reduction in the number of major carriers, this possibility becomes more significant.

Of course, what could happen is that new major carriers emerge that DON'T engage in this practice, but networks take time to build.

Anyway - that's the deal.

Michel

[Da Lone-Warrior]

okay, I think you need to condense and dumb down that explanation a little bit and maybe improve upon your notation some.

It sounds like major carriers are currently being asked to be charitable and now they're going to be given more ability to influence smaller carriers.

This makes it sound like the internet is going to be more profit-driven in the future, which makes sense for why the bill is doing well in the US gov't.

dlw

[Em7add11]

Internet service in the U.S. is in the disco era right now.

We're going to be seriously embarrassed by all this in 5-10 years.

[$cirisme]

The bill doesn't turn control of the Internet over to the phone companies. The Internet is a worldwide phenomenon that spans multiple countries and access to it is provided by multiple providers, including cable companies and small data outfits. No one company can own the Internet, or control it, at least not as things are now. It is true that the major telco carriers around the world supply most of the backbone, however.

Think of the Internet as having three major pieces: the backbones, the connections between the backbones, and the access. When a carrier sells Internet access to a company or user, they get paid for the access (the on-ramp to the highway). How much they get paid is usually a function of how much bandwidth the user gets (e.g., how wide the on-ramp is). If they charge enough for the on-ramps, they get enough money to build the backbone and get some cash left over for profit. The system is self regulating. If response time to a website drops, the company buys more bandwidth, and the carrier gets more money, so they can continue to upgrade their backbone proportionately.

But what happens when a user getting service from one carrier wants to access a company website served by another carrier? They are going to have to cross the links between the carriers. And if the two carriers are not directly connected, they might have to cross the backbone of a completely different carrier (e.g., cross at least two inter-carrier links). That third carrier isn't getting any money directly from either customer. Essentially the carriers are arguing that they should have the right to insert rules that limit how much of their backbone bandwidth is used by any particular customer, and mostly they want to be able to do that for customers of OTHER carriers.

The argument is actually a reasonable one (IMO) on the face of it. But the implications are profound. It could set the stage for some incredible "bandwidth wars," create a context in which unfair business practices would be simple. Let's say Company X is a customer of a small carrier Z and small carrier Z is connected to major carrier Y. By restricting the flow of traffic to Company X, Big Carrier Y can make Company X very unhappy with Small Carrier Z. Small carrier Z is either going to have connect to another Major Carrier, or Company X is going to change carriers. Major Carrier Y can put Small Carrier Z out of business pretty quickly. And with the reduction in the number of major carriers, this possibility becomes more significant.

Of course, what could happen is that new major carriers emerge that DON'T engage in this practice, but networks take time to build.

Anyway - that's the deal.

Michel

Carp,

I think you misunderstand the proposal, which is understandable since there is some considerable effort to get this pushed out there. Your analysis is quite generous and unfair.

Here's what the SBC CEO said wrt to the issue:

How concerned are you about Internet upstarts like Google (GOOG ), MSN, Vonage, and others?
How do you think they're going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?

The Internet can't be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! (YHOO ) or Vonage or anybody to expect to use these pipes [for] free is nuts!

Ars Technica: 10/31/05

This has nothing, directly, to do with intermediate carriers. (who, btw, are not being charitable. These are created using peering agreements which has mutual benefit)

The argument the CEO is making is that Google gets a free ride on their pipes. That they should be entitled to make money from Google for having their data travel across their network. Of course, he neglects to mention the fact that there is no free ride involved, there are customers out there who pay for x amount of bandwidth. Charging Google extra is just greed to make money on both ends.

But, hang on, it gets even worse, because it's not like Google gets a magical hose in all their datacenters where they get free bandwidth. They're customers of ISP's* themselves, so other ISP's want to charge for bandwidth over 3 times coming and going. This is patently silly.

(* - Google is actually their own ISP most likely. But they still pay based on their own peering agreements.)

If I pay to have x amount of service, I should receive x amount of service. Why should service I paid for be intentionally throttled back because another company didn't want to pay twice?

And this isn't about Google. This is about Vonage. This is why the telcos are the most vocal about it, they see this as a chance to destroy a major threat to their traditional business. If Vonage decides to pay twice for services they already pay for then the telcos make even more money and Vonage loses some of it's competitive edge. (mainly the inexpense of service)

If they don't pay, the telco monopolies get to shut it down by throttling bandwidth their customers rightfully pay for, and they keep their monopoly status.

There is nothing reasonable about this at all. If the telcos don't like their peering agreements, then renegotiate. They gain something (whether it be technical infrastructure or money) by contractual agreement in every example you gave.
For them to lie and say they don't is absurd.

It also isn't an issue of being worried that their networks will be flooded with traffic if another route goes down. Peering agreements are accompanied with SLA's (Service Level Agreements) which state precisely how much bandwidth is available under what terms and what level of availability is permitted. If either side violates the SLA, there can be fines or a termination of the peering agreement.

Everything they've argued they already have. They just want to gouge us all over again.

Further reading:

AT&T Sees Benefits to Tiered Internet
SBC: ain't no way VoIP uses mah pipes!
Mark Cuban asks for tiered internet

[$cirisme]

It sounds like major carriers are currently being asked to be charitable and now they're going to be given more ability to influence smaller carriers.

Incorrect. Carriers are connected through peers, governed by contracts.

Peering means that two networks will connect together and share resources.

The terms of peering varies. Money can be exchanged proportionate to how much bandwidth is exchanged. Sometimes, especially in two equally sized networks, no money is exchanged. But it's not a charity, they do this because they can provide each other with better access to other networks.

For example, say lots of customers on network A want to connect to network B and vice versa. If they choose to peer freely, both companies benefit because they can:

• Get a direct connection. If they had to go through another peer to get to each other and this peer charged money, they would lose that cost.
• More customer happiness on both ends: folks on both A & B can connect to each other faster and better.
• More network capacity
• etc

The big telcos are all Tier 1 peers. That means they connect to everybody, and everybody pays them money for the privilege. The only exception might be when they peer for free with equally large companies. (for instance, AOL and AT&T might peer together for free because they're both equal size.)

To say that they aren't already making money on both ends of the connection, first at the peering point then at the customer's house... is absurd.

Check out Wikipedia's article on peering for more info on How Peering Works.

[Nicholas]

Ars Technica: 10/31/05

This has nothing, directly, to do with intermediate carriers. (who, btw, are not being charitable. These are created using peering agreements which has mutual benefit)

The argument the CEO is making is that Google gets a free ride on their pipes. That they should be entitled to make money from Google for having their data travel across their network. Of course, he neglects to mention the fact that there is no free ride involved, there are customers out there who pay for x amount of bandwidth. Charging Google extra is just greed to make money on both ends.

But, hang on, it gets even worse, because it's not like Google gets a magical hose in all their datacenters where they get free bandwidth. They're customers of ISP's* themselves, so other ISP's want to charge for bandwidth over 3 times coming and going. This is patently silly.

(* - Google is actually their own ISP most likely. But they still pay based on their own peering agreements.)

If I pay to have x amount of service, I should receive x amount of service. Why should service I paid for be intentionally throttled back because another company didn't want to pay twice?

And this isn't about Google. This is about Vonage. This is why the telcos are the most vocal about it, they see this as a chance to destroy a major threat to their traditional business. If Vonage decides to pay twice for services they already pay for then the telcos make even more money and Vonage loses some of it's competitive edge. (mainly the inexpense of service)

If they don't pay, the telco monopolies get to shut it down by throttling bandwidth their customers rightfully pay for, and they keep their monopoly status.

There is nothing reasonable about this at all. If the telcos don't like their peering agreements, then renegotiate. They gain something (whether it be technical infrastructure or money) by contractual agreement in every example you gave.
For them to lie and say they don't is absurd.

It also isn't an issue of being worried that their networks will be flooded with traffic if another route goes down. Peering agreements are accompanied with SLA's (Service Level Agreements) which state precisely how much bandwidth is available under what terms and what level of availability is permitted. If either side violates the SLA, there can be fines or a termination of the peering agreement.

Everything they've argued they already have. They just want to gouge us all over again.

Further reading:

AT&T Sees Benefits to Tiered Internet
SBC: ain't no way VoIP uses mah pipes!
Mark Cuban asks for tiered internet

Aren't there are also worries that this could lead to some traffic to some sites being given priority over others? If my understanding is correct, this would lead to much slower time when visiting websites not seen as priorities.

[Meh_Gerbil]

I suppose the internet was just too good to be true.
They've got to mess it up somehow.

[$cirisme]

Aren't there are also worries that this could lead to some traffic to some sites being given priority over others? If my understanding is correct, this would lead to much slower time when visiting websites not seen as priorities.

Yes, that's why they're doing it. See my comments on Vonage.

[Zeluvia]

Yes, that's why they're doing it. See my comments on Vonage.

See when they started marketing phone service on the internet is when this went bad...

You could already use a voice to voice connection via teamspeak or skype to talk free anywhere in the world, and now they want to charge me 30.00 a month to talk to free to Canada and Mexico.

Why didn't AT&T stay dead? = p

[Da Lone-Warrior]

Incorrect. Carriers are connected through peers, governed by contracts.

Peering means that two networks will connect together and share resources.

The terms of peering varies. Money can be exchanged proportionate to how much bandwidth is exchanged. Sometimes, especially in two equally sized networks, no money is exchanged. But it's not a charity, they do this because they can provide each other with better access to other networks.

For example, say lots of customers on network A want to connect to network B and vice versa. If they choose to peer freely, both companies benefit because they can:

• Get a direct connection. If they had to go through another peer to get to each other and this peer charged money, they would lose that cost.
• More customer happiness on both ends: folks on both A & B can connect to each other faster and better.
• More network capacity
• etc

The big telcos are all Tier 1 peers. That means they connect to everybody, and everybody pays them money for the privilege. The only exception might be when they peer for free with equally large companies. (for instance, AOL and AT&T might peer together for free because they're both equal size.)

To say that they aren't already making money on both ends of the connection, first at the peering point then at the customer's house... is absurd.

Check out Wikipedia's article on peering for more info on How Peering Works.

Thanks. I'd recommend trimming it down to a slogan and getting it spread throughout the internet...

dlw

[Carpedm9587]

Carp,

I think you misunderstand the proposal, which is understandable since there is some considerable effort to get this pushed out there. Your analysis is quite generous and unfair.

Here's what the SBC CEO said wrt to the issue:



Ars Technica: 10/31/05

This has nothing, directly, to do with intermediate carriers. (who, btw, are not being charitable. These are created using peering agreements which has mutual benefit)

The argument the CEO is making is that Google gets a free ride on their pipes. That they should be entitled to make money from Google for having their data travel across their network. Of course, he neglects to mention the fact that there is no free ride involved, there are customers out there who pay for x amount of bandwidth. Charging Google extra is just greed to make money on both ends.

But, hang on, it gets even worse, because it's not like Google gets a magical hose in all their datacenters where they get free bandwidth. They're customers of ISP's* themselves, so other ISP's want to charge for bandwidth over 3 times coming and going. This is patently silly.

(* - Google is actually their own ISP most likely. But they still pay based on their own peering agreements.)

If I pay to have x amount of service, I should receive x amount of service. Why should service I paid for be intentionally throttled back because another company didn't want to pay twice?

And this isn't about Google. This is about Vonage. This is why the telcos are the most vocal about it, they see this as a chance to destroy a major threat to their traditional business. If Vonage decides to pay twice for services they already pay for then the telcos make even more money and Vonage loses some of it's competitive edge. (mainly the inexpense of service)

If they don't pay, the telco monopolies get to shut it down by throttling bandwidth their customers rightfully pay for, and they keep their monopoly status.

There is nothing reasonable about this at all. If the telcos don't like their peering agreements, then renegotiate. They gain something (whether it be technical infrastructure or money) by contractual agreement in every example you gave.
For them to lie and say they don't is absurd.

It also isn't an issue of being worried that their networks will be flooded with traffic if another route goes down. Peering agreements are accompanied with SLA's (Service Level Agreements) which state precisely how much bandwidth is available under what terms and what level of availability is permitted. If either side violates the SLA, there can be fines or a termination of the peering agreement.

Everything they've argued they already have. They just want to gouge us all over again.

Further reading:

AT&T Sees Benefits to Tiered Internet
SBC: ain't no way VoIP uses mah pipes!
Mark Cuban asks for tiered internet

This analysis isn't inconsistent with what I said, $cir. Perhaps I made my explanation too convoluted, as Love suggested.

Consider traditional phone service. When I get a phone line from Carrier A, I get the highway AND the service. Carrier A wraps all of that up in one price and extracts their pound of flesh from me. When I use Skype, however, I buy my line/highway from Carrier A and I get my service from Skype. Carrier A is only getting money for my access line (the highway) and not getting anything from Skype (unless Skype is directly their customer and buying the access for their service from Carrier A). They can't get another pound of flesh from me because all I bought was the line. So they want to get the pound of flesh from the service provider by making it possible to give preferential treatment in their network for Companies that pay them for use of the highway (hence the double-dipping you referenced). They probably wouldn't do that for service providers buying highway from them, so their target is really service providers connect to the Internet via another carrier.

On the face of it, that's not an unreasonable request, but it runs completely counter to the spirit of the Internet, and it creates a doorway for some very unsavory business practices, especially given the consolidation of Carriers that has happened in the past couple of years.

What I failed to say clearly is that I think those side-effects of the pending legislation make it a very bad idea. It's good/reasonable for the Carriers, but bad for the Internet as a whole.

It does not, however, "turn control of the Internet over to the Carriers." That's a misrepresentation of the bill and some pretty serious hype. It is an attempt by the Carriers to force the Internet into their traditional business models, rather than adjust their business models to the reality of the Internet. And you are correct that it is a means by which they can "stem the tide" which is rapidly sapping them of their traditional high-revenue voice/telephone customers.

Hopefully, that is a bit clearer.

Michel

[$cirisme]

This analysis isn't inconsistent with what I said, $cir. Perhaps I made my explanation too convoluted, as Love suggested.

If you say so.

On the face of it, that's not an unreasonable request

I don't see how. They're being paid for every bit of data they're transfering already. Just because traditional phone service has been obsoleted doesn't mean that the telcos get to abuse their monopoly and force competitors to pay twice as much for services they already pay for.

Not to mention consumers. If I pay for x amount of service from the telco (who are monopolies and my only particular choice for a media) then I should receive x amount of service, their obsolete business models be damned.

For example, if a phone company offered long distance and owned the lines, should they be allowed to degrade the service of a competing long-distance carrier? "Sorry, you pay for our phone service, but since you're not a customer of our long distance service, we'll arbitrarily and intentionally lower the quality of your service." How could this be considered reasonable?

Some states even banned local providers from providing long distance for this very reason.

If they want to be an ISP, then just provide the service I pay for dagnabbit.

I think what happened is that all the companies started hyping all this high speed internet, then Vonage came along and all the carriers had this "OH CRAP!" moment when they realized what they did. They chose to enter the high speed internet business. That business is by default monopolistic (it's not practical to have 20+ lines in the ground to each home for each company). Monopolies need to be regulated to ensure they do not abuse their position, not openly encouraged to do so. Because of their monopolies, telcos should not be allowed to force an artificial and arbitrary disadvantage on their competitors.

(I know you don't seem to support it, I just want to hammer the point home.)

but it runs completely counter to the spirit of the Internet

Not to mention the free market, the economy, and consumers in general.

it creates a doorway for some very unsavory business practices, especially given the consolidation of Carriers that has happened in the past couple of years.

Which is precisely why a tiered internet should be opposed.

It does not, however, "turn control of the Internet over to the Carriers." That's a misrepresentation of the bill and some pretty serious hype.

It may be hype, but I don't think it's so far off.

If carriers are given the option to degrade service for any arbitrary reason, then who's to say they couldn't arbitrarily decide to completely 'degrade' an unfavorable site into non-existence?

This gives them that level of power. That certainly gives them quite a bit of leverage online.

[guacamole]

Considering the changes that the telecom industry is going through (loss of their traditional profit generation to cell phones, rise of internet communications) then it seems like perhaps a monopoly is warranted. Well, not any monopoly, a national monopoly. Perhaps it's time for step to nationalization of telecom infrastructures to guarantee equal access.

fwiw
guaca.