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| 5/17 |
| 2008/11/29-12/4 [Computer/Networking] UID:52128 Activity:moderate |
11/28 So you know, I am going to see if the collective motd.wisdom has
anything to add to my own research. I would think that given my
political leanings in most areas, I would be a big fan of "net
neutrality" but I am not, at least not so far. What is wrong with
someone like AT&T charging more for premium internet service? Don't
they do that already? Is there something I am missing here? -ausman
\_ My understanding of net neutrality is to not prefer one packet type
over another. Paying more for higher service seems reasonable, but
(say) dropping VOIP packets so Skype doesn't compete with AT&T phone
service seems a bit sub-optimal.
\_ Right, premium services are fine. The worry is abuse of
monopoly power -- that's why net neutrality is focused on
last-mile providers (which often have significant monopoly
power), rather than backbone providers (which have less).
A backbone provider could never get away with blocking VOIP,
because their customers would just switch to a different
provider; but your local phone company might be able to, if
they control the only point of access to your house. Given
sufficient monopoly power, ISPs might even be able to engage
in more blatant extortion, by (say) threatening to block
their customers' access to your website unless you pay them.
\_ Actually that was how net neutrality got to be such a big
deal. One of the backbone ceos, I forget which, basically
started hinting that he'd like to make it so unless google
started paying protection money they were going to get
lower priority packets.
\_ Any source for this? I know Google has waived a red flag,
claiming to be worried about this, but I have not seen
anything from a backbone provider. The current powers on
the Internet like things just fine the way they are, and
have an obvious interest in stifling innovation. -ausman
\_ I thought it was from the Comcast CEO, but it seems the
original quote was from AT&T CEO Ed Whitacre circa Nov 05
"Why should [Yahoo, Google] be allowed to use my pipes?"
http://preview.tinyurl.com/9svdw
http://preview.tinyurl.com/6ooh2u
\_ Thanks for the pointers. I was not aware of this.
\_ Thanks for the pointers. I was not aware of this. -a
\- transmission to ausman: i havent thought about this deeply but
my inclination is NET NEUTRALITY is a form of PRICE DISCRIMINATION
which leads to CONSUMER SURPLUS being shifted to the firm.
for background, a very, very good book is JTIROLE: IO. I dont
have the inclination to type on this more, but you can google
around ... it looks like there are some others who buy this
approach. --psb
\- i thought about a little more in the background, and other issue
is these narrow arguments in terms of efficiency may ignore some
distributional consequences ... same as say congestion pricing,
efficient pricing for publicly owned parking etc. --psb
\_ There's more to it than you are seeing. It's not just about your ISP
charging you for different tiers of service. They already do that
now. It's about the ISP then turning aruond and trying to charge
various services for delivering content to you. If they don't pay
up you get crappy performance to those sites/services. It is all
about the ISP trying to double-dip on the income stream. It also
very much kills the 'openness' of the internet. Would you still
want service from an ISP that only granted you access to the sites
that ponied up their non-neutrality fees? What if you had no choice
in ISP any more?
\_ Why would you get any crappier service to those sites than you
already do now? If I didn't like my ISPs traffic shaping policies,
I would just switch ISPs, right, just like I can do now? This
could potentially be a problem where there is a monopoly on last
mile service, but that is getting rarer and rarer, with cable
and satellite available. I might want to pay extra for things
like HD quality streaming video, which I can't do now. Why
is that a problem? I just don't see this as killing anything,
other than perhaps some big Internet companies profit margins,
hence their scare tactic lobbying campaign. -ausman
already do now? If I didn't like my ISPs traffic shaping
policies, I would just switch ISPs, right, just like I can do
now? This could potentially be a problem where there is a
monopoly on last mile service, but that is getting rarer and
rarer, with cable and satellite available. I might want to pay
extra for things like HD quality streaming video, which I can't
do now. Why is that a problem? I just don't see this as killing
anything, other than perhaps some big Internet companies profit
margins, hence their scare tactic lobbying campaign. -ausman
\_ again, you're looking at it frmo the standpoint that
a) you have choice in ISP's, many don't.
b) you have a pipe to an unfettered internet, which is what
we have now with neutrality. With non-neutrality, you'll
see degraded (or nonexistant) services to places on the
internet who don't pay up. And the only way to find out
your ISP's qos to a given site would be to go there. Good
luck shopping around other ISP's to see who's got the best
performance to your favorite sites.
c) its not going to hurt the big internet companies much,
they take some minor hit to their bottom line and pass
on the costs. Its the small and up-and-coming companies
that will get hurt, as this 'pay to play no the ISP's nets'
tax will just add to their barrier to entry. Taking away
neutrality would be a step in a return to the balkanized
network days of compu$erve.
network days of compu$erve and prodigy.
\_ Except you have it exactly backwards, in that currently
network owners can do as they like and the only
pressure on them is their customers. Proponents of
"Net Neutrality" want to pass laws that freeze the
status quo in legislature. If blocking small up and
coming sites were a problem, wouldn't ISPs be doing
that all ready? Do you really want Congress determining
which packets and protocols should be used on the
Internet, instead of the IETF?
\_ Um no they can't. Right now they do 'best effort'
to everywhere, with no discrimination against
sites who haven't ponied up good-performance
extortion fees. No we dont want congress
determining which packets/protocols should be used
-- they dont do that now. That is the status quo
we want preserved. When comcast tried to disrupt
bittorrent traffic, and the FCC started
investigating, they backed down.
\_ Why can't they? People set up spam filters,
firewalls, etc all the time, why couldn't an
ISP do the same? There is no law against it,
though the NN folks seem to want there to be
one. Am I right about this? Link to the FCC/
Comcast situation please? Using the FCC to
stop technological change doesn't exactly
strengthen your case, btw.
one. Am I right about this? The FCC/Comcast
case is currently pending on appeal, btw. |
| 5/17 |
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| preview.tinyurl.com/9svdw -> www.businessweek.com/@@n34h*IUQu7KtOwgA/magazine/content/05_45/b3958092.htm Back to Main Story At SBC, It's All About "Scale and Scope" CEO Edward Whitacre talks about the AT&T Wireless acquisition and how he's moving to keep abreast of cable competitors SBC Telecommunications' financial performance of late hasn't been much to write home about. No -- it's terrible," says CEO Edward Whitacre, who adds, "but it's a lot better than losing." He has always been primarily concerned with spurring the company to further growth, creating "scale and scope," as he likes to say, and generating market value. Roger O Crockett in Chicago to talk about how his company stacks up against the competition. Edited excerpts of theirr conversation follow: Given that we've entered a new era in telecom where the Internet rules, how would you describe your strategy now? The assets that probably can't be duplicated except maybe by the cable companies. So I would think Verizon is going to be a big competitor. I think the cable companies will be the biggest competitor across the footprint. We're clearly going to be fierce competitors in the big enterprise space. I suspect we'll compete in the small- and medium-business space, and for the consumer too. As Voice over IP gets bigger, they will have the capability to come into our so-called geographical footprint, and we'll have the same capability to go into theirs. Do you have a timeline for when that competition will heat up? Over the next four or five years, I would think it will pick up a lot. Some analysts believe that the new SBC won't be able to fully utilize AT&T to win business in the south as long as SBC is in its joint venture with BellSouth. BellSouth and SBC have a fiduciary duty to make that business do as well as we can. In order for Cingular to do good, it's going to want to utilize everything that it can. One of the things it's going to utilize is this relationship with AT&T. Won't BellSouth be concerned about losing some of its business customers to you, its wireless-venture partner, once your merger with AT&T is approved? BellSouth already competes against us in the enterprise space. And sure, we'll go and compete for some of their enterprise customers, and we'll sure use Cingular Wireless in doing it. I just don't think it's the deal everybody is making it out to be. It sure would be nice, but it doesn't have much chance of happening because of market power, size, etc. I don't think the regulators would let that happen, in my judgment. I wouldn't say we haven't done that in the past, but I'm not going to do it now. I've certainly thought about it a few times, and I'm sure Bell South has thought about it too. 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. 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! The cable companies have an agreement with the cities: They pay a percentage of their revenue for a franchise right to broadcast TV. We have a franchise in every city we operate in based on providing telephone service. Now, all of a sudden, without any additional payment, the cable companies are putting telephone communication down their pipes and we're putting TV signals. If you want us to get a franchise agreement for TV, then let's make the cable companies get a franchise for telephony. If cable can put telephone down their existing franchise I should be able to put TV down my franchise. Then there won't be any competition -- there will be a cable-TV monopoly. Our big competition in the future is with the cable companies. Verizon's going to be a player, and certainly I want to compete. And I want our shareowners to do better than anyone else. It's not a good industry for stock holders because of all the uncertainty. We're doing pretty good on the data side, on the Internet side, on the broadband-pipe side, on the wireless side. |
| preview.tinyurl.com/6ooh2u -> www.freedom-to-tinker.com/blog/felten/net-neutrality-and-competition interview: Q: How concerned are you about Internet upstarts like Google, MSN, Vonage, and others? 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. This is a pretty dumb thing for him to say, for several reasons. First, it shows amazing disrespect for his home broadband customers, who are paying $40 or so every month to use SBC's pipes. If I were an SBC broadband customer, I'd be dying to ask Mr Whitacre exactly what my monthly payment is buying, if it isn't buying access to Google, Yahoo, Vonage, and any other $%&^* Internet service I want to use. Didn't SBC's advertising say I was buying access to the Internet? Second, if somebody is going to pay somebody in this situation, it's not clear who should be doing the paying. There is some set of customers who want to use SBC broadband service to access Google. Sure, SBC would like its customers to have free access to Google, Yahoo, and Vonage. But as Mr Whitacre would put it, the Internet can't be free in that sense, because Google, Yahoo, and Vonage have made an investment and for SBC or anybody to expect to use those services for free is nuts! My point is not that SBC should necessarily pay, but that there is no rule of nature saying that one layer of the protocol stack should pay another layer. If SBC gets paid by Google, it's because SBC faces less competition and hence has more market power. observes, Mr Whitacre speaks with "the voice of someone who doesn't think he has any competitors." At this point, economists will object that it's sometimes efficient to let ISPs levy these kinds of charges, and so requiring net neutrality from SBC may lead to an inefficient outcome. I appreciate this point, and will be writing more about it in the future. For now, though, notice that Mr Whitacre isn't speaking the language of efficiency. There's a whiff here of the CEO-tournament syndrome that infected the media world in the 1990s, as documented in Ken Auletta's "mogul" stories. Can Mr Whitacre make the CEOs of Google, Yahoo, and Vonage genuflect to him? If there are to be side payments, will they reflect business calculation, or just ego? It's one thing to argue that a policy can lead to efficient results. It's another thing entirely to show that itwill lead to efficient results, in the hands of real human beings. It would seem that if everyone had the capability to connect to everyone else without using telecom lines or cable fiber, and the only infrastructure was provided by the airwaves that are owned by the general public, we'd change things to suit the public interest in a big way. Aside from the logistics of outfitting every computer with wireless capability, what other obstacles stand in the way of such a revolution? reply Comment by Randy Zagar on October 31st, 2005 at 8:48 am. Whitacre's comments about Google trying to use SBC's "pipes" for free is about as credible as Turner Broadcasting CEO Jamie Kellner's comments back on 2002 that skipping commercials by going to the bathroom constituted theft and violated the consumer's "contract" with the broadcaster... Whitacre should be more concerned that deep inspection of their customers' legitimate use of telecommunications service could cause them to lose their common-carrier status. Common carriers aren't supposed to monitor and filter based on the content of their customers' communications. It's unclear to me what the interviewer was asking when referring to 'internet upstarts'... does he mean broadband ISPs run by/associated with those companies? He's got to know that turning off his customers' access to any part of the net is shooting the company in the head. They don't have to reach everyone or provide lots of bandwidth, they just need to do it well enough to remove the pricing power of wanna-be feudal lords like Whitacre who see their paying customers as serfs to be exploited. Anything less is likely to lead to a world where the big guys divvy up the pot and they little guys, the people with the passion and the innovative ideas, can't get in. p=918Second, if somebody is going to pay somebody in this situation, it's not clear who should be doing the paying. There is some set of customers who want to use SBC broadband service to access Google. reply Comment by Valdez on October 31st, 2005 at 12:13 pm. one of them would strike a deal with SBC to be the ONLY service available to SBC customers... Imagine Google and Yahoo users having the rug ripped out from under them, then force fed into MSN as an only option. While some of us see the injustice and would go elsewhere... my mom wouldn't know nor care, she'd sign up for SBC, see the fresh icon installed on her desktop labeled "email" or "search" or what have you and click away in blissful ignorance. The "my mom"'s of the world vastly outnumber the idealists... Randy Zagar correctly points out in the comments to Ed's post that common carriers are legally prohibited from monitoring the content of the traffic that flows through their pipes, which means that they cannot legally discriminate among content the user requests. So how could they do what CEO Ed Whitacre is suggesting? I'm not a legal scholar nor am I up-to-date on possible recent developments, but I am quite sure this law is still in effect. I could go cable, if I dont mind dumping money into Adelphia. Yet I am told that I live in a market where I have choices. We need to get on Congress and the FCC so that Whitacre can be educated out of the way, consumers can get access to the high quality of service that many in the rest of the world enjoy and we can get rid of the monopoly to internet access that consumers currently enjoy. It's not just the supposedly ignorant customers who would be deterred from switching if their last-mile carrier started (even more overt) content-based controls on connections. There are the people who've signed longterm contracts, the people whose apartment buildings ditto, the ones who live in an area where other broadband options don't exist or are prohibitively expensive. Then there are the people who would have to figure out how to tell every one of their present, former and potential future correspondents that the email address they've established over the years is about to go away, with no forwarding. But the bottom line is that for huge swathes of people finding an alternate broadband source simply isn't going to be worth the cost. Update: Ed Felton has two posts on network neutrality that are worth reading - here and here. I think he is right that most reasonable net neutrality advocates would not object to pricing based on bandwidth consumption, which is a reasonable way to deal with congestion. reply Comment by Paul McKee on November 2nd, 2005 at 12:42 pm. Q: How concerned are you about telephone upstarts like Domino's, Papa John's, Ticketmaster, and others? A: How do you think theyEUR(TM)re going to get to customers? Now what they would like to do is use my phone lines free, but I ainEUR(TM)t going to let them do that because we have spent this capital and we have to have a return on it. So thereEUR(TM)s going to have to be some mechanism for these people who use these phone lines to pay for the portion theyEUR(TM)re using. are service providers that customers pay to reach over his "pipes", the exception being Vonage, which is a competitor. Whitacre is treating this as though it were the AT&T or MCI proposals to royalty-free access to SBC infrastructure. It is the same reply, which proves that he doesn't understand the difference in methodology between the two sets of opponents. Vonage customers need some form of internet service, running over someone's infrastructure, just as AT&T and MCI need telephone access over someone's infrastructure. The difference is that telephone access is simply a matter of having a pair hooked up end to end. Internet access is a protocol layer over the physical connection, and then Vonage service runs atop that protocol stack. Vonage is t... |