Screw you, FCC

[UVACoug]

Can someone smarter than me (most all of the board) explain to me what is wrong with these "bright-line" rules:



Or with these items:

It prevents market forces from allocating limited bandwidth in the most efficient way. If Netflix is willing and able to pay more than someone else to ensure that their product works, why should the government step in to save them from having to bear the true burden they place on the system? I'm not sure I see the social, or economic, utility in that. Bandwidth is a finite resource, for now. I have no faith that the government knows how to allocate that resource any better than the market can.

[Clark Addison]

It prevents market forces from allocating limited bandwidth in the most efficient way. If Netflix is willing and able to pay more than someone else to ensure that their product works, why should the government step in to save them from having to bear the true burden they place on the system? I'm not sure I see the social, or economic, utility in that. Bandwidth is a finite resource, for now. I have no faith that the government knows how to allocate that resource any better than the market can.

I don't either, so it is a good thing they are not trying. They are just saying no traffic should be prioritized.

I think there is some validity to the slippery slope argument, but I have no problem with what has been done to this point.

Also, I think it is interesting to see who is opposed to this, and who is in favor of this. Companies like Comcast, of course, are very much opposed. However, my impression is that the vast majority of tech leaders, the people who are actually innovating out there, are in favor of this. Most of them do not seem to fear that this will stifle innovation, and in fact believe the opposite, that when a company like Netflix can buy their way into bandwidth advantages, it will decrease the innovation of companies who do not have those same resources.

[Uncle Ted]

I don't either, so it is a good thing they are not trying. They are just saying no traffic should be prioritized.

I think there is some validity to the slippery slope argument, but I have no problem with what has been done to this point.

Also, I think it is interesting to see who is opposed to this, and who is in favor of this. Companies like Comcast, of course, are very much opposed. However, my impression is that the vast majority of tech leaders, the people who are actually innovating out there, are in favor of this. Most of them do not seem to fear that this will stifle innovation, and in fact believe the opposite, that when a company like Netflix can buy their way into bandwidth advantages, it will decrease the innovation of companies who do not have those same resources.

Yes, "fast lanes" will still exist in the form of direct interconnect agreements and data caps. In the case of netflix, however, it seems that companies like comcast forced them to buy the direct interconnects... (see the figure below)

The inside story of how Netflix came to pay Comcast for internet traffic

Netflix hand-delivered 256 pages (pdf) to the US government this week arguing that Comcast shouldn’t be allowed to acquire Time Warner Cable. “The proposed merger puts at risk the end-to-end principle that has characterized the internet and been a key driver in the creation of the most important communication platform in history,” Netflix’s lawyers wrote.


The streaming video company’s filing provides much more detail about its negotiations with Comcast earlier this year that led it to pay for more direct access to Comcast’s internet customers. “In Netflix’s experience, there are four ISPs that have the market power to engage in degradation strategies to harm OVDs,” Netflix wrote, referring to internet service providers (ISPs) intentionally slowing down traffic from online video distributors (OVDs). “Two of those four propose to merge in this transaction.”

[...]

Netflix Agrees to Pay Comcast an Access Fee for Direct Interconnection.


Despite purchasing transit on all available routes into Comcast’s network that did not require direct or indirect payment of an access fee to Comcast, the viewing quality of Netflix’s service reached near-VHS quality levels. Faced with such severe degradation of its streaming video service, Netflix began to negotiate for paid access to connect with Comcast. Netflix and Comcast eventually reached a paid agreement. Within a week of that agreement, viewing quality for Netflix streaming video on Comcast’s network shot back up to HD-quality levels. The following graph, comparing viewing quality on Comcast’s network with that of Cablevision (an Open Connect partner) demonstrates the rapid, massive improvement:

Figure 5: Video Quality






Comcast was the first large terminating access network to successfully implement a “congest transit pipes” peering strategy to extract direct payment from Netflix, but it is not the only one to do so. Since agreeing to pay Comcast, Netflix also has agreed to pay TWC, AT&T and Verlzon for interconnection. [Redacted section.] Netflix is not the only edge provider to encounter Comcast’s peering strategy. In a 2011 filing with the Commission, Voxel, a hosting company relying on Tata for interconnection with Comcast’s network, noted that “[w]here broadband ISPS typically ensure that links connecting their customers to outside networks are relatively free from congestion, Comcast appears to be taking the opposite approach: maintaining highly-congested links between its network and external ISP.” The letter concludes that Comcast, through its “interconnection relations,” had “deployed an ecosystem in which hosting companies such as Voxel are effectively forced to pay Comcast to serve its broadband subscribers.” In that ecosystem, “it is simply not possible for competing external providers to deliver gaming, or streaming video services to Comcast’s broadband subscribers” without directly or indirectly paying Comcast.

http://qz.com/256586/the-inside-stor...ernet-traffic/

So if anyone is decreasing innovation it looks like it is those who are control of the "last mile" of customers who have limited choices of internet providers.

[pellegrino]

It prevents market forces from allocating limited bandwidth in the most efficient way. If Netflix is willing and able to pay more than someone else to ensure that their product works, why should the government step in to save them from having to bear the true burden they place on the system? I'm not sure I see the social, or economic, utility in that. Bandwidth is a finite resource, for now. I have no faith that the government knows how to allocate that resource any better than the market can.

You're right, the government has no idea how to allocate water or electricity efficiently, so we should assume that the same for any other utility.

[UVACoug]

You're right, the government has no idea how to allocate water or electricity efficiently, so we should assume that the same for any other utility.

Water and electricity utility services are natural monopolies. There is no such thing as a competitive market for those services, which is why regulation is necessary. That is not true with broadband internet. There are at least 4 service providers where I live that provide high speed internet, and none of them are Google. That doesn't happen with natural monopolies. The fixed costs of setting up a network are high, but not prohibitive. Certainly everyone would like there to be more competition than currently exists. But we don't regulate every high-fixed cost company, and we shouldn't. There is no reason to interfere in the way the FCC is interfering except politics.

And prohibiting allocation IS allocation ... in the most inefficient way possible. Let the market work.

[Uncle Ted]

Water and electricity utility services are natural monopolies. There is no such thing as a competitive market for those services, which is why regulation is necessary. That is not true with broadband internet. There are at least 4 service providers where I live that provide high speed internet, and none of them are Google. That doesn't happen with natural monopolies. The fixed costs of setting up a network are high, but not prohibitive. Certainly everyone would like there to be more competition than currently exists. But we don't regulate every high-fixed cost company, and we shouldn't. There is no reason to interfere in the way the FCC is interfering except politics.

And prohibiting allocation IS allocation ... in the most inefficient way possible. Let the market work.

I would guess that most urban customers have two or maybe even three internet service provider choices where they live. Typically the city allows one cable TV provider and one phone service provider right-away. So the customer usually has the choice between shared internet over the cable (that claim to have speeds up to 100Mbps when the neighbor kids are not playing online games and streaming netflix) or copper DSL (getting 18Mbps over multiple pairs but maybe less if they are watching IPTV/Uverse). A third choice may be wireless. Cities are not going to let just any company dig up peoples' yards or give them access to the utility poles.

A lot of customers are wising up to over priced cable/SatTV, putting up OTA antennas and streaming the few channels they actually care about. The average american consumes well over 30 gigabytes of data per day (2009 study so it may even be more than that now) so with netflix, dish's new sling service, etc. the cable companies may still get their money out of the consumers in the form of data cap overage fees. There are really not that many choices in the typical situation.

Edit: I just checked and I can buy electricity from at least 20 different companies and over 260 different plans. I sleep better at night knowing that I get my electricity from a company that mostly generates is power from all that Texas wind. I wished I could get my internet from a company other than one that wants to sell me cable TV full of mostly shopping channels.

[Moliere]

I have one broadband internet option in my area (Comcast). I don't consider DSL to be high speed internet.

[Uncle Ted]

I have one broadband internet option in my area (Comcast). I don't consider DSL to be high speed internet.

Yes, and under the new FCC definition of broadband they don't consider DSL to be high speed internet either.