How Comcast Is Trying To Turn The Internet Into The Old, Broken Phone System
from the all-while-avoiding-being-called-a-telelcom dept
Each day, the open internet/net neutrality battle gets a bit more interesting. We just covered Tim Lee’s excellent look at how Comcast and other big telcos were effectively using interconnection disputes to get the same result as violating net neutrality, without technically violating the basic concept of what most people believe is net neutrality. And he’s back with an even more important explanation of how Comcast’s ultimate goal is to effectively make the internet more like the old phone system, post AT&T breakup, in which everyone had to pay to access the end points of the network. Ironically, they’re trying to recreate the internet in the form of the old telephone network, while at the same time doing everything to resist being classified as a telephone network by the FCC.
The short version is that, after AT&T was broken up into the baby bells, and you had some amount of long distance competition, the real bottlenecks were the baby bells who had a terminating monopoly. Anyone who wanted to call someone long distance had to pay the terminating baby bell to reach those people, and since they were monopolies, they drove up the prices quite a bit. This is what happens under a sender-party pays system with monopolies on the last mile/termination points. The internet, on the other hand, was built under a very different system, what’s known as “bill and keep”, where by the end users pay for their own bandwidth, and ISPs are expected to work out the transit and interconnections on their own — often with no money changing hands, thanks to what had been mostly informal (and later more formal) peering agreements.
In short: under the old baby bell model, payment mainly went from the “sender/caller” to the terminating provider for access to that end node. Under the internet model, the end nodes paid for access to “the internet” recognizing that part of the deal was that they were getting equal access to everyone else. The shift that Comcast (and now others) have been making, is to try to take their dominant position to recreate the old system, seeking to charge for access to those end nodes as well (effectively, as we’ve been saying for years, double charging for the internet). That is, they’re seeking to have you both pay for your bandwidth and having internet companies pay again to get to you on the bandwidth you already paid for.
And the only reason they can do this is because they have tremendous market power. Comcast pretends that it’s doing this because of differing traffic ratios between peering partners, but as Lee notes, that’s not right:
But that’s not how the internet works. Consumer-facing ISPs have always received more traffic than they send out. Comcast itself sells “unbalanced” internet service to its customers, with download speeds much faster than upload speeds. That makes it inevitable that ISPs like Comcast will receive more data than they send. But in the bill-and-keep model, ISPs generally pay transit providers for connectivity, regardless of traffic ratios.
The traffic ratio rule Comcast advocated in 2010 was a variation on the sender-pays rule. It will create the same kind of terminating monopoly problem that plagued the long distance telephone market. But that might not seem like a bad thing if you own the monopoly.
Again, what’s really happening is that Comcast is trying to quietly recreate the baby bell system of old, in which it has enough power as a terminating monopoly to charge monopoly rents for “access” in a system that was built off of the idea that no one needs to pay to access another end point, you’re just paying for your own connection to the network.
And the simple fact is that the other large ISPs (including AT&T and Verizon — who understand this deeply, given their own histories) have caught onto what’s happening and are doing the same thing. That’s why the transit players are pointing out that the five biggest US ISPs have all been effectively clogging up the internet in order to effectively hold end internet sites hostage, to get them to pay for access, and to remake the internet’s more open system into something that much more resembles the old telco system with monopoly rents.
And this is also why Comcast is being dreadfully misleading in arguing that its merger with Time Warner Cable won’t impact anything, because the two are not in competitive markets. As Lee notes, Comcast is (purposefully) mis-identifying the market that’s actually important here:
Defenders of the merger have argued that it won’t reduce competition because Comcast and Time Warner don’t serve the same customers. That’s true, but it ignores how the merger would affect the interconnection market. A merged cable giant would have even more leverage to demand monopoly rents from companies across the internet.
A century ago, the Wilson administration decided not to press its antitrust case against AT&T, allowing the firm to continue the acquisition spree that made it a monopoly. In retrospect, that decision looks like a mistake. Wilson’s decision not to intervene in the market led to a telephone monopoly, which in turn led to 70 years of regulation and a messy, 10-year antitrust case.
Obviously, the combination of Comcast and Time Warner would not dominate the internet the way AT&T dominated the telephone industry. But recent events suggest that Comcast is already large enough to threaten competition on the internet. Preventing the company from getting even larger might avoid the need for a lot more regulation in the years ahead.
The interconnection market is where Comcast has tremendous leverage, and Time Warner Cable will only give them much more leverage. And they’re using it to reshape the internet in a very dangerous way, which will make internet connections more expensive, with no direct benefit. On top of that, it will slow down the ability for startups to create new innovations by increasing the cost (potentially massively) to innovate on the network by creating access tolls.
Oh, and the major problem is that the FCC still doesn’t even seem to realize this is the issue, with Tom Wheeler arguing that the interconnection issue isn’t really an issue at all, despite it likely being the issue here. As Lee explains concerning telco regulations around a terminating monopoly system:
Filed Under: bill and keep, interconnection, monopoly powers, net neutrality, sender pays, termination monopoly
Companies: comcast
Comments on “How Comcast Is Trying To Turn The Internet Into The Old, Broken Phone System”
If left to its own without rules a company will do what it takes to maximize their profits. Even if it is done at the expense of their customers. Specially if these customers have nowhere to run.
When a big company says “Trust us, we are doing what the customers want/need!” immediately take it as a complete an utter lie full of bullshit. They are doing what’s good for them. If they need to really care about the customer to increase their profits they will do so wonderfully. If not, well, the customer is screwed.
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This is a pretty good similarity to the way the US Government is operating.
If left to its own without rules a government will do what it takes to maximize their power. Even if it is done at the expense of their people. Specifically if these people have nowhere to run.
And all I hear the government saying is “Trust us, we are doing what the people want/need!”
Re: Re:
“If left to its own without rules”
The problem isn’t that they are being left alone without rules. If that were the case competitors would simply enter the market and provide consumers with competition. The problem is that the rules are rigged to effectively give a small handful of companies a monopoly and the beneficiaries of these govt. established monopolies are unregulated in terms of what they can charge consumers. That’s not free market capitalism. It’s the exact opposite.
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“The problem is that the rules are rigged”
That’s right, because in most cases the rules are written by the same companies that they’re being applied to. It’s one of the big signs that we’re living in a corporatocracy.
I can almost understand Comcast’s evil nature, it’s what many colossal corporations end up doing. What’s infinitely worse is how our government is so completely corrupt that they don’t even try to keep up appearances anymore, they just completely sell out right out in the open and use doublespeak to sell it through the media. My conclusion is that the government has big plans to better control and of course monitor the internet, so they need a company like Comcast to be their front man. I shudder to think what things will be like in just a few years. There’s one simple reason why this is happening, people with money and power wish it and now that the safeguards have been subverted, it’s all too easy.
Mike, don’t pretend that regulators don’t know what’s going on. Given the huge revolving door mess around this it stands to reason the regulators are perfectly aware of what’s going on but they are only acting in their own personal best interests. Don’t be fooled.
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Yeah, at this point the idea that they just so happen to be ignorant of what’s going on… I’m not buying it. They know full well what’s going on, they’re just hoping that if they pretend to be clueless no-one will call them on it and force them to actually do something.
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I agree. They know what is going on. And all of this is happening at a time when America needs innovation more than ever.
Comcast wants it’s customers to pay to access content and the content providers to pay to access it’s customers.
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ISP’s want customers to pay to access content providers and they want content providers to pay to access customers.
This partly explains why consumer Internet connections are asymmetric. To make it more difficult for consumers to host their own websites and to become content providers so that those that want to be content providers pay more.
I don’t know that I’m necessarily against those that require more (upload) bandwidth paying more. Obviously if you want a faster Internet connection you need to pay more. The problem here is the lack of competition in the market. and the merger will give Comcast/Time Warner more leverage to charge content providers more to access their customers.
and the fact that the Time Warner/Comcast merger allegedly won’t affect the consumer side of things (since both companies hardly serve the same area of customers) should show you how rigged the system is. The system is rigged to prevent different companies from competing for (the same) consumers. That’s not free market capitalism. The whole idea behind free market capitalism is that competition makes it work. But we currently live in a market with very little competition due to various regulations.
If we had a reasonable amount of competition then all consumers would have faster download and much faster upload speeds and so they can all be able to deliver and access content (ie: peer to peer) much more efficiently.
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When Comcast and the FCC claim that the merger won’t affect consumers because the two companies hardly compete in the same areas they are basically admitting that the system is rigged to prevent consumers from benefiting from competition. Since the system is already rigged to provide consumers with a cartel (which is equivalent to a monopoly in terms of the prices provided), they claim, they might as well just merge and make their monopolistic position official. Why have all these companies informally act as a single monopoly when we can just skip the formalities altogether and make the lack of competition official. It won’t matter to consumers, they’re already paying monopolistic prices either way. That seems to be the extent of their argument.
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And I guess my question is, how is the above argument being made by supporters of this merger supposed to reassure me that this merger is a good thing.
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Simple, we know who to target to make it go away.
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and if our anti-trust laws meant anything then they would be used to stop this nonsense where companies conspire to avoid competing in the same areas. But no, instead our anti-trust laws get used against Google for doing nothing wrong.
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Why is it obvious that a faster connection immediately means more money?
I mean with technology advances all we are talking about is a hardware upgrade. fixed cost.
Cost per bit of data goes down significantly with technology so mostly they are just paying a fixed upfront cost and reaping the rewards over and over and over as people have already convinced themselves it should cost more.
Re: Re:
Comcast wants it’s customers to pay to access content and the content providers to pay to access it’s customers.
And what you’re saying is that everyone needs to pay twice.
As a customer, I want to pay my ISP to access to the Internet (not to content, but to everything on the Internet and everything I myself can put on the Internet). As long as everyone else pays for their own access to the Internet, all the ISPs have to do is make sure there are enough interconnections that everyone can talk to everyone else.
I want a dumb pipe, because I know better what I want access to than Comcast or Time Warner does. I don’t want my ISP deciding what is more valuable to me, and especially not basing it off who will pay to be able to get to me.
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Here’s a “dumb pipe” for sale for you:
http://best-t1.com/dedicated-t1-broadband-internet-phone-wan
See?!? It’s for sale. You can absolutely buy a “dumb pipe” Internet access line… But I imagine it costs a bit more than your restricted access general consumer Internet connection…
Stop belly aching over a few dollars a month… Altogether general purpose Internet connections don’t cost as much as they could considering the very large geographical areas covered by these mega ISPS or considering the complicated geopolitical landscape that needs to be navigated just to dig a trench to lay that fiber or copper line to your home…
not really true
“Under the internet model, the end nodes paid for access to “the internet” recognizing that part of the deal was that they were getting equal access to everyone else. “
This is just not true. There is no promise of equal access, and it’s an impossible promise to make. The very basics of the internet is a distributed network where some things are further away (and thus slower and harder to reach) and some things are more local and perhaps easier to reach.
We also accept that, like it or not, the internet isn’t an unlimited service, but one we share with millions of people through often crowded connections.
If you are more technically minded, you also understand the concepts of peering and interconnection, and understand that not all service providers connected or peer directly with every other service provider. You understand that not everyone is connected to everyone else with exactly the same size pipe, nor are they all equally busy.
The Vox story is also pretty misleading, as it seems to fail to consider that the 5 major ISPs are the end termination point for a signficant amount of the US traffic. With sudden increases in the last couple of years (especially as a result of sites like Netflix) they are overwhelmed by demand on their network. It should also be noted that heavy bandwidth use from these ISPs could also be a sign of heavy P2P activity, and the graphs seem to show a very high level of “reverse” traffic compared to the other 45. Yup, look at it, 20% outbound traffic, it makes you wonder what is going on.
Blaming the ISPs because bandwidth hog services exist really isn’t fair at all. The real issue is that companies like Level3 want to get paid twice for traffic – once when it gets sent (server side) and again when they let it out the other side (to the ISPs). If there is any double dipping going on, it’s the transit companies that are doing it.
Re: not really true
“There is no promise of equal access, and it’s an impossible promise to make.”
“Equal access” is shorthand for “nobody gets preferred treatment”. That’s a totally possible promise to make and is, in fact, one of the basic, essential parts of the internet.
“With sudden increases in the last couple of years (especially as a result of sites like Netflix) they are overwhelmed by demand on their network. It should also be noted that heavy bandwidth use from these ISPs could also be a sign of heavy P2P activity”
I’m not seeing how that justifies what Comcast (and now Time-Warner) are doing, nor am I seeing why you brought up P2P activity at all.
If they really are overwhelmed by the increase in traffic — and I’m genuinely not convinced that they are — then the solution is to improve their infrastructure. If they don’t actually have the money to do it (ha!), then they need to increase their rates across the board.
The solution is not to sell some kind of preferential treatment. If that becomes the norm, then the result will be a general degradation of the internet through benign neglect, as demonstrated by Comcast doing exactly this in order to extort money from Netflix. In the end, it will mean that people will either suffer from a greatly degraded service or pay even more for what is already an overpriced service.
Re: Re: not really true
“Possible promise to make” — absolutely!!
It’s also possible that a Microsoft EULA could have the phrase “We fully warrant that your data will never be stolen by a remote attacker”…
However, governmental enforcement of such promises do not equate to “lower costs for the end user” nor does it equate to free market priced services…
Why and under what authority should the federal government of the United States dictate under threat of force that an unnecessary [possibly intrastate] communication company’s service should be both priced at whatever some of the consumers demand and provide the same bandwidth for all data passing through the system?
“Net Neutrality” is a political statement – not an economic one — and just like any service that is “equalized” under government supervision — prices will necessarily rise as a result of its implementation…
The real question isn’t whether private citizen run organizations should be forced under duress to provide “net neutral” Internet access — rather it’s whether private utilities where the last mile costs are mostly unrecoverable are in the best interests of the citizens of a free market society… Should these utilities be government run or citizen run? And what would the cost advantage or disadvantage be for the average user as well as the system as a whole… Hiding the real underlying problem under the guise of “net neutrality” and those “evil profit hunger corporations” is not helpful — and is a rather immature/irrational solution…
Re: not really true
they are overwhelmed by demand on their network.
Maybe they should of used all those billions of dollars they got from local governments and their customers to upgrade their networks!
It should also be noted that heavy bandwidth use from these ISPs could also be a sign of heavy P2P activity, and the graphs seem to show a very high level of “reverse” traffic compared to the other 45. Yup, look at it, 20% outbound traffic, it makes you wonder what is going on.
So you’re arguing that outbound traffic is growing? Yet Comcast’s publicly stated reason for charging Level3 is because the traffic disparity is heavily tilted to inbound. Want to rethink that?
Blaming the ISPs because bandwidth hog services exist really isn’t fair at all. The real issue is that companies like Level3 want to get paid twice for traffic – once when it gets sent (server side) and again when they let it out the other side (to the ISPs). If there is any double dipping going on, it’s the transit companies that are doing it.
This is an outright lie. Level3 is getting paid by Netflix for transit service. Level3 is not getting paid by Comcast and doesn’t want or need to be paid by Comcast.
Answer me this question:
Why should Level3 have to pay money to Comcast, when it is Comcast’s customers who are requesting the traffic from Level3? Level3 is only sending the traffic that was requested.
Re: not really true
Level 3 charging twice is a bit different.
You aren’t charged to access Level 3’s network, you’re charged to have Level 3 handle accessing someone else’s network.
Rule of thumb, you don’t charge for others to access your network, only charge for allowing others to access other’s networks through your network.
Comcast is not providing transit. Not to mention, Comcast is not reinvesting the extra money into their network, Level 3 has a long history of maintaining razor thing margins by reinvesting most of their money back into their infrastructure.
Transit inherently has high competition because “room” is not a scare resources for relatively small fiber runs along highways.
On the other hand, “room” is very scarce when trying to access residential private property.
Re: not really true
With sudden increases in the last couple of years (especially as a result of sites like Netflix) they are overwhelmed by demand on their network
They didn’t seem to have any trouble fixing the problem as soon as Netflix paid up.
Re: Re: not really true
of course it fixed it because neyflix is paying for new gateways and connectivity .
Re: Re: Re: not really true
of course it fixed it because neyflix is paying for new gateways and connectivity .
Are you seriously going to claim that Comcast can’t afford to upgrade their networks unless companies like Netflix pay them extra?
Haha. Fuck TCP/IP. What a 35 year old design disaster, that was never improved upon ever. Zero innovation at all despite the all the tech rhetoric.
No way of creating a sensible business model where capital can make the money it loves without crushing everything in sight in a desperate uber flail to find some way of doing it. It usually turns into a crazy when given this kind of situation.
Net neutrality was always a political workaround for inherent design flaws. It was supposed to buy you time to fix it. It did for 35 years. Now your politics isn’t working you are shafted.
Amusingly ironic that it’s the US going to destroy the internet over there first. You had 35 years to fix this but never did due mainly to the IETF acting as a promotional body for TCP/IP.
Oh well. Nice while your politics & ideology lasted.
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So what are the faults you see in TCP/IP that pertain to this?
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The list is huge but here are some ideas for starters..
Nobody gives a shit about peering or bandwidth or anything techies do. They care about outcome. This is what people don’t mind paying for. This is called user experience.
There is simply no sensible way to apportion costs & distribute income in an end-end per connection manner to ensure delivery of a specific requested outcome desired by the user.
How would an app request real time streaming operation vs bursty file transfer? How about sharing a broadcast amongst many connections to save costs?
How would a mission or even life critical app such as tele-medicine ask for 3 redundant differently routed flows all mapped to same connection but is also be willing to pay 3 times for that extra redundancy to ensure safety?
There is simply no way for the differing needs of each application and user to get what they want without big companies fucking with the infrastructure.
Admittedly it was an interesting & useful prototype for it?s day, but I never believed in the 90s we would now still be using it and hoping forever to rely on economically inefficient over provisioning (capitalism will hate that of course), inflexible structure & politics.
Capital will always eat your face off if you don?t create a flexible enough system that allows individualised outcomes. Each customer is different. Wants different things. Willing to pay for different things.
The market doesn?t innovate. It exploits what is readily available in whatever way it can. This is why TCP/IP was never improved/replaced by the market. It could just create weird models like advertising monopolies that steal your data & customers.
Unfortunately the ?neutral? research & standards organisations etc that could have spent the many years doing real research, creating better options to adopt just ended up promoting more of same nonsense. IPv6.. Exactly. More of the same shite. No real consumer benefits.
Where can I read a newspaper online that gets a penny from my bill instead of having to suck surveillance advertising monopoly cock like google while compromising their journalistic principles just to survive?
I just want to pay for what I use, not an internet shaped by silly con valley dick heads that are mostly a liability and don’t care about people. They are just data to them now.
Why shouldn’t locally accessed services be cheaper than further away? That would boost local digital cultures and economies much better. The current design is naturally monopolising, punishes users and services.
Design disaster. So many years of doing nothing about it.
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That’s a nice list of potentially desirable improvements to be sure. But my question was a bit more specific — you were stating that there were technical deficiencies in TCP/IP that net neutrality was a political workaround for. It seems to me that nothing on the list falls into that category.
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There are so many things wrong with that proposed model it isn’t even funny. Direct pay for traffic received? Okay, how are you going to judge it? By data volume? If it were a fixed cost it would be stupidly easy to exploit into insolvency and in ways detrimental to user experience.
Dynamic billing? We had pay by use – it got its ass kicked into oblivion the market by unlimited in both ISP access and email. People /hate/ having indefinite costs. Rightfully so when it is so damn exploitable. Look at call forwarding collect scams.
Look at the popularity of unlimited texting plans over piecemeal. I’m not going to even touch the economic insanity of charging more for texts than calls. It is either pay for the unlimited texts or have texts disabled altogether.
Either way it wouldn’t solve ads at all. Congratulations, not only are there ads but /they now get paid to advertise/ by the ISP or you.
The idea of locally accessed services being cheaper? That would amount to nutso protectionism and would encourage geographically distributed servers to minimize distance costs.That model would encourage needless decentralization with massive overhead. One big building is much cheaper than a ton of smaller ones. Sure local sounds nice until you start getting screwed over by the local businesses due to the lack of competition. There is absolutely no need to add spatial limitations to a communication system. The whole point of having a telecommunication system is to bypass it!
So please stow your antintellectualism, unlike you Silicon Valley actually knows what the hell it is talking about.
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Though TCP/IP should be updated, you can clearly see that it’s not the main issue here. Feel free to read what Level3 has published recently to show that Comcast and other providers are purposefully not upgrading their networks to cause dropped packets and loss of connections in order to hold services hostage and as an example of congested markets to be used for political gain.
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What is more interesting, is as soon as they are paid, their network is upgraded. They have to have the capacity that they are asking the content providers to pay for, before they ask them to pay for it. The the content providers will not pay now for improved capacity in the future as they will probably never see that future.
Baby Bell
Under the old Baby Bell system the party originating the call did indeed have to pay the receiver for the call. If this were to be the model going forward we would not have the problems that we are seeing now.
i.e. Netflix does not originate the “call”. The ISP customer originates the call when it connects to Netflix and requests a stream. Netflix then responds by sending back what the ISP customer requested. Therefor under the “Baby Bell” system the ISPs would be paying Netflix for the traffic because the increased traffic is a direct result of the actions of their (the ISP’s) customers.
Re: Baby Bell
This fact needs to be emphasized. If they double-dipped on the consumers instead of the websites, it would suck but it wouldn’t have a negative impact on network neutrality.
Not so new form of Corporate Tap Dancing
I once worked with someone who told me his father had been one of the 260 some lawyers who worked for ATT during the 10 year antitrust case. He related that his father had told him that ATT never expected to win. Their instructions were delay, delay, and then delay some more. ATT spent the 10 years working out what was to be next. They got what they wanted, knowing that they would lose the case.
I expect more of the same, should the FCC actually get some chutzpah, or maybe that would be better termed integrity.
The last mile is always the point
AT&T had a choice: keep the local companies or keep long-distance. AT&T chose long-distance, because it was a revenue generating machine with no serious competition. I mean, who else is going to run caling from NYC to SF?
In retrospect AT&T chose poorly. The termination points are worth more than any transcontinental cabling or scheme, because you can ship all the bits you want between data centers, but it’s the end users that pay the bills.
So, AT&T embarked on Project Angel, bought a cable provider (guess which one?), and did everythign they could to get back the last-mile. They failed miserably and ironically, were subsumed by one of their mutant offspring.
The last mile is critical infrastructure, I would argue, that should never be under the control of a company. We don’t tolerate multiple electrical, gas, water, or sewer connections in our infrastructure, because it’s rather silly. Why is data any different? I’ll stop you right there — it’s not.
Municipal networks are the answer to this dilemma, and could work if you merely own the last mile, and allow *ANYONE* to offer transport or services to your citizens.
But… look at what the incumbents do to prevent it, and then relate that activity to Comcast.
It’s always about the last mile. Keep that out of a company’s hands, and let them compete on actual value.
-C
It doesn’t seem that they are trying to recreate the post-breakup telco system. The sender pay model was in effect prior to the breakup of AT&T. Because the breakup of AT&T created a bunch of regional monopolies out of one giant monopoly, it would seem that by acquiring Time Warner they seem to be trying to recreate the PRE-breakup telco system where they own the entire cable broadband market.
Ma Comcast.
Yay! Everyone is starting to understand what’s really going on with last-mile residential broadband monopolies. We’re going back in time to the Bell System era, before Bell System was broken up into smaller companies, and classified as Common Carriers under Title II of the Telecommunications Act.
Tom Wheeler will never admit this is what’s really going on, because he’s a bought and paid for lobbyist, pushing last-mile residential broadband monopoly agendas.
We’re going to have to try to go over the top of Tom Wheeler’s head somehow, if we want to save the internet we all love and enjoy.
I have no idea how that’s possible, seeing members of Congress are probably just as much in the lobbyists’ pockets as he is.
At least most Americans are starting to understand what’s going on, and how corrupt the FCC, Congress, and the last-mile cable monopolies really are.
Well...
Why do you hate the invisible hand of the free market?
Re: Well...
If you consider laws passed to prevent competition written by lobbyists and bought politicians, then Adam Smith’s invisible hand wants to punch you in the face.
Re: Well...
The last time I checked, that invisible hand is being chained against a wall by corporations and the government.
That’s not all Comcast is trying to pull. It turns out in order to sell their Time Warner merger to the Feds as not being an anti-competitive or monopolistic grab at all (fingers crossed), they have made a “divestiture” deal with Charter to acquire all of Charters customers in some states (such as my own) in exchange for Charter acquiring minority ownership and management of Time Warner franchises in middle American states (majority owned by Comcast through a spin-off subsidiary “SpinCo”, of course).
This somehow is supposed to make Charter the #2 cable operator in America instead of the Comcast owned subsidiary it appears to me to be.
http://www.deadline.com/2014/04/comcast-and-charter-unveil-system-divestitures-deal/
The global internet?
Apologies if this was already covered in one of the earlier posts, but could someone explain what the ramifications might be to the global internet?
I mean, if the US internet becomes an interconnection monopoly to the extreme, does that imply that the rest of the world will lose access to US content unless each consuming country pays the connection fee? Would people in the US be unable to reasonably access international content unless … I don’t know?
How many non-US sites have enough of a market in the US to justify paying the Comcast tax? In contrast, how many US sites have enough of an international market to be hurt by this, but not enough to justify setting up multiple sites overseas?
Does this present an opportunity for Canada/Mexico to become the primary backbone of US content to the rest of the world, or would the US be able to present enough pressure to stop this happening and force the world to pay the US connection fees?
I mean, obviously some countries would follow the US model, because our own leaders don’t like to go to the effort of having independent thought… but other than that would there be much impact to the rest of the world, or would the “US internet” become like a giant intranet, of merely academic interest to the rest of us?
Re: The global internet?
Residential home broadband monopolies in the US, only effect US consumers, not the US Content hosting companies.
There’s a difference between the US Content hosting networks, and US residential broadband networks.
The difference between them is.
1. US Content hosting networks are competitive, reasonably priced, have plenty of bandwidth, and are well interconnected with other networks.
2. US residential broadband networks (AT&T, Comcast, Verizon) are the complete opposite of US hosting networks. They are NOT competitive, NOT reasonably priced, do NOT have enough bandwidth and are NOT interconnected well with other networks.
So to answer your question, the US residential broadband monopoly doesn’t effect foreign customers at all, because foreign networks run through American Content hosting networks, not though American residential broadband monopolies.
The only people American residential broadband monopolies service, are Americans. Not foreigners.
Totally Incorrect
Within the first few paragraphs the author betrays complete misunderstanding about the free-access Internet problem…
First, it’s always the last mile — and it’s always been the last mile connection that’s the most costly to setup, maintain, and physically provide. The backbone of the Internet is just like the backbone of circuit switched data centers — and at this point is actually the same hardware. However, the last mile is expensive to hook up, and is charged as such. It’s a monopoly due to the expense of the infrastructure and the few number of parties willing to pay the initial costs for the last mile infrastructure.
There is literally no difference between an ISP providing Internet access and a telecom providing telephone service. And it’s the necessary last mile hookup monopoly that determines end user costs and access restrictions. So, nothing will change in the USA on these items until the government takes control over those last mile connections and pays to maintain them — just like the physical road systems. The only way to ensure “equal access” is to remove the system from the capitalist market system… You can’t fault Comcast et al for trying to turn a profit — since that’s what it means to be in business — I’m not saying I like paying more than quadruple what most International Internet users pay, but it’s the free market that prices Internet access in the USA – not the government…
And – it’s useful to remember that while SIP calls can be made for the price of an Internet connection — SIP to land line connections are still priced at a premium due to the last mile connection fees — this is not a double payment system as you indicated — it’s rather payment to operator of the last mile system… I honestly don’t see a problem with payment for the last mile.
Re: Totally Incorrect
Within the first few paragraphs the author betrays complete misunderstanding about the free-access Internet problem…
Everything you said is correct, but I don’t see where it contradicts the article.
Re: Re: Totally Incorrect
The old, broken phone system is the new, broken Internet system… there is no difference — there never was a difference… and “net neutrality” is a misnomer when applied to a free market driven Internet access model, or ANY utility type system driven mostly by last mile costs.
Essentially there is no problem. If you don’t like paying high prices – then the system needs to be removed from the market. However, like the road systems – health insurance systems – corn prices – etc etc… Government run and/or price fixed services and industries tend to cost significantly more as an overall section of GDP than free market priced items… So, while the average consumer will mostly likely pay about $150/month for a full communication package under the current free market [last mile consumer funded] system — the government run system would likely work out to a much higher figure but paid for through taxes on the upper middle class [if it still exists] and the “rich” whomever they may be?? — essentially demanding “net neutrality” is equatable to demanding higher end user costs… again, there is no problem with the current system — rather it’s the illusion of a problem — and the proposed solution of “net neutrality” is also an illusionary solution with no actual benefit to consumers — only higher costs.
Re: Re: Re: Totally Incorrect
So, while the average consumer will mostly likely pay about $150/month for a full communication package under the current free market [last mile consumer funded] system
The problem with your analysis is that there can be no free market system for infrastructure like this – it’s a natural monopoly. We don’t have a choice between a free market for last mile infrastructure and a government monopoly. We (theoretically) have a choice between a corporate monopoly and a government monopoly.
Given that fact, we can then compare countries that have chosen one over the other. I don’t know how much tax revenues are needed for the government owned infrastructure, but I do know that they get much, much better service in all respects for lower consumer costs. It would be interesting to add the average tax burden needed to pay for that to compare it to the US. My guess is countries like South Korea and most of Europe are overall much better off than the US.
Thomas E. Wheeler is the current Chairman of the Federal Communications Commission, appointed by President Obama and confirmed by the U.S. Senate in November, 2013. Prior to working at the FCC, Wheeler worked as a venture capitalist and lobbyist for the cable and wireless industry, with positions including President of the National Cable Television Association (NCTA) and CEO of the Cellular Telecommunications & Internet Association (CTIA).
– Wikipedia
Lobbyist in government. How is this acceptable to both the president and congress? Conflict of interest anyone? Oh that’s right in an oligarchy run by corporations this is just business as usual. Not we the people for the people but corporations holding positions in government representing themselves to their fullest financial gains. Comcast will do whatever they want because they can with the politicians they own.