Ok, maybe that title wasn’t the best way to express that particular thought… But anyhow, the interlude between the striking down of the first net neutrality regulatory regime and the rise of Title II is now apparently over. As widely expected, the FCC has in fact approved new, stronger rules it hopes will stand up to judicial scrutiny.
And that scrutiny is coming, make no mistake. I’m sure the lawsuits that will challenge it have already been planned out in minute detail. But that story will take a few years to materialize, just like the last one did. And this time the likely result is not quite so obvious.
In the meantime, fast lanes and blocking of applications and types of traffic and all that are now strict no-nos. Even mobile operators will probably have to tow the line this time. The devil will be in the details though, and we haven’t seen those yet. Another detail we’re all waiting to see is whether the world of peering and transit will be affected, or if the new rules stick strictly to the last mile.
The various activists and corporate spokesmen have already hit the ground running. Any individual responses out there? How does it feel to be a utility this fine February afternoon?
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Categories: Government Regulations · Internet Traffic
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We have more to fear from the telecom oligopolists than we do the government.
Then you, sir, are not paying attention.
I like VZ’s statement. I’ve come to the conclusion that the key to reading company press releases is to find the platitudes and assume the the opposite.
For example,
“The FCC’s move is especially regrettable because it is wholly unnecessary.”
“What has been and will remain constant before, during and after the existence of any regulations is Verizon’s commitment to an open Internet that provides consumers with competitive broadband choices…” REALLY? What competitive choices do I have?
The FCC attempted to lay out rules to follow, but Vz flipped’em the bird. SCOTUS determined that without the FCC invoking Title II, the FCC could not make rules that had to be followed. So, Vz gets exactly what they asked for.
Regulation is the result of companies behaving badly.
I agree with your sentiment JS. Telecoms need to be more nuanced in their approach to additional regulation. If a telecom’s primary response is to throw up a brick wall against any push for new regulation then they should not expect to have much of a say in nudging that reglation towards an area that is more agreeable to both parties. In this case, the industry seemed to stonewall all attempts at “middle ground” solutions and so the final regulations are likley to not tilted in their favor at all.
Bt, you hit an important point….”MIDDLE GROUND”: typically when one participant holds monopoly power, is when we tend to find lack of compromise from the dominant participant.
Funny how with google fiber showing up, the entrenched players are all of sudden willing to upgrade their customers in an attempt to keep them from going to GF.
By the way, do Vz, ATT, or Comcast compete against each other in any Residential Broadband Markets????
In most all markets, DSL and cable compete against each other… 80%+?
I don’t really consider dsl broadband, and the new definition requires at least 25mb on the dl. so can you requote your percentage estimate with that criteria?
That’s your opinion and you are certainly welcome to it, but I will not propagate ignorant prejudice.
It’s not just my opinion, it is the new definition according to the FCC: http://arstechnica.com/business/2015/01/fcc-chair-broadband-must-be-25mbps-and-isps-are-failing-to-deliver/
In my opinion, i happen to agree with the fcc definition of broadband, as it seems fairly practical today.
But i’m guessing when i asked you to re-quote your estimation of competition among those 3 companies using real broadband speeds, the number is pretty close to 0% competition amongst the 3 of them…..which is the point.
Apparently we can only nest so many times.
I am well aware of what the FCC has done. That action has so little meaning, it isn’t worth raising. It doesn’t apply to any of their broadband construction or competitive measures. It’s a meaningless statement.
ADSL2+ is more than capable of competing with cable and is done so in many areas around here. Don’t let your hate for a couple companies taint a technical discussion.
JS – who acted badly? If i understand the issue, Netflix runs 1000-to-1 (or worse) outbound/inbound traffic ratios due to video streaming.
They like to buy cheapest possible bandwidth (e.g., Cogent). They flood the peers and imbalance traffic. Running outside of 1.2-to-1 or similar is not called “peering”, it is called “transit” and companies charge for it. VZ, Comcast, et al have invested billions and are not obligated to give away free transit. Level(3) helped but still too much “free traffic” for the cableco’s so they want to charge or rate limit. i think regulated banks, airlines, rail operators et al do the same thing.
The secret process and absurdly over-bredth of this “rule” (LOL) will be its undoing. That whole “due process” thing is a drag but Rule of Law has worked out well on the whole for USa, the most productive nation in history.
Transit is providing a customer with full routes. Peering is providing a customer to routes only originating from your ASN.
Paid peering and settlement-free peering is one thing, calling settlement-free peering “free transit” sounds rather conflicting.
Traffic ratios define an organization’s own peering policy. It doesn’t define peering.
ok, no dispute there.
where is the part which suggests a “solution” to this “problem” requires regulating the entire internet (let alone in a secret process).
you just made the case against your case.
because netflix does not want to buy transit (routes) from required last mile providers, it expects those providers to take the traffic from peers (like cogent). except that these “peers” are not, and don’t have available capacity to send balanced traffic of this sort. where is the part where this = a federal regulatory issue?
Huh? Please, should I get the crying towel for Vz or Comcast? They invested billions because their residential customers are paying them to receive the data bandwidth they paid for, “regardless of the source”. They are effectively unhappy because the want to double dip and cut out competition.
If you are in the business, you know turning up a couple of extra interconnect trunks isn’t that expensive, you also know the cost to carry bandwidth is decreasing exponentially, and the local providers don’t want to pass the exponentially decreasing cost benefits on to consumers…..And that is the real reason we now have title II regulation on the internet services!
You clearly have no idea how the Internet works. Go back to Reddit or Slashdot… the banes of Internet uselessness.
Was there a counter point to your comment? If I missed it, please share your wisdom.
If two networks don’t agree to be peers, then they are not. Some other commercial arrangement must be made. It’s as simple as that.
yes
But if the grounds for not peering is to degrade a product that competes with the ISPs own video product, that’s inherently anti-competitive and bad for the market.
Peering with Netflix is mutually beneficial for the ISP and Netflix. The only companies that raise a stink are the ones that also sell video. Look at Centurylink, Windstream, Frontier. When was the last time they published propaganda pieces claiming that Netflix was using up all their bandwidth (not the consumers who paid for it)?
Until however many days, weeks, months, etc. pass for the actual release of the rules, few will likely to be doing anything.
Favorite PR so far on this issue: http://ow.ly/JIJa0
My trade association’s PR: http://bit.ly/1MYhBRx
Many telecoms have acted poorly, but there is absolutely NO EXCUSE for 332 pages of new regulations that nobody was allowed to review before they were voted on. The FCC is not an imperial body, unaccountable to congress or anyone else – although clearly Wheeler thinks he is by snubbing a request to appear before Congress. This cloak-and-dagger approach is absurd, and if the entire Title 2 scheme falls (which it should), it will be in part because of the way Wheeler and the FCC acted – essentially as a mouthpiece of the Obama Administration – in regards to the process.
Wake up, people. The scope of what the FCC has now asserted they are authorized to control is far beyond what was intended when the agency was created. This has become true of far too many commissions, agencies and departments in the Federal government. I recommend “Is Administrative Law Unlawful” by Philip Hamburger. We have become so used to the massive scale of the federal government (particularly the power now concentrated under the executive branch departments and agencies), we barely realize that what we live with today wouldn’t be tolerated by any reasonable standard of limited, enumerated powers, judicial restraint and the concept of co-equal branches of government even 50 or 60 years ago, much less 100 or 200+ years ago.
The application of Title II was completely avoidable. The FCC put up rules requiring them to not block traffic to the customers who already paid to receive it and to not discriminate on the traffic their customers receive (based on where it originates). Two incredibly “reasonable” directives. If this was an intolerable request to them, then we really need TII regulation.
I know it seems a lifetime ago, but just imagine what the landscape would look like if AT&T had won their battle to discriminate against MCI. Without the regulation that brought about FAIR competition, the world would be a much less innovative place. So while you may be appalled at the 332 pages…….Tuff!
And btw, a bit heavy on the evil govt stuff.
Except AT&T vs. MCI is nothing at all like what’s going on in N2\T2.
“Reasonable” by what authority to regulate that activity?
“And btw, a bit heavy on the evil govt stuff.”
I never said evil; I intimated oversized, over-involved and operating with little to no constraints.
Further, your responses (“Tuff!”) essentially prove one of my points.
—–
“I am writing regarding your proposal to move forward aggressively with modifications to existing media ownership rules…. I believe both the proposed timeline and process are irresponsible. … 30 days of public review of a specific proposed change is insufficient to assess the effect that change would have on the media marketplace or the rationale on which any such proposal is based. … Although such a proposal may pass the muster of a federal court, Congress and the public have the right to review any specific proposal and decide whether or not it constitutes sound policy. And the Commission has the responsibility to defend any new proposal in public discourse and debate.”
– (then Senator) Barack Obama in a letter to FCC Chairman Kevin Martin regarding proposed changes to media ownership rules [Obama even went on to co-sponsor legislation to block the proposed rule changes. Martin eventually acquiesced and published the changes for public review before a vote]
It’s a rather practical fact the FCC has been authorized by congress to regulate communications. If you want to debate the chapter/verse/page/paragraph of constitutional law, it’s out of scope for me.
i redirect your comment of over sized govt back to my original point, that is the fcc did not want to invoke t2….it became necessary to tame monopoly powers behaving badly. I also think the legal team on the monopoly side totally underestimated to public outrage of being capable to get the fcc to invoke t2, especially with one of their own at the helm.
and so what was your point on the media ownership quotes?
Thanks JS. Please clarify – (1) what was the “bad” behavior and (2) even if bad, why regulation ?
yahoo (sells baba for 5% of market value) has made lots of bad decisions. same with american express (drops costco!). McDonalds added salads!
should we regulate them ??
really? you’re asking what was the bad behavior? read the links from the other response. what would your solution be to resolve the predatory antitrust practices, if not regulation….asking nicely didn’t seem to work.
Your Y,McD, amx, examples are of poor decisions, not willful anti-trust type of actions….so false equivalence.
Remember: antitrust laws were enacted to regulate the conduct of business corporations, generally to promote fair competition with three prevention objectives:
1) To restrict the formation of cartels and prohibit other collusive practices regarded as being in restraint of trade. 2) To restrict the mergers and acquisitions of organizations which could substantially lessen competition. 3) Toy prohibit the creation of a monopoly and the abuse of monopoly power.
Their crime was valuing their network at more than naught?
typically, abuses of monopoly power tend to be like that of a cartel and more along the lines of extortion. the old saying goes, power tends to corrupt……are you ok with companies exerting monopoly powers and bypassing fair competition?
It’s a practical fact that congress authorized the FCC to regulate communications – not the Executive branch or White House. Wheeler’s original proposal was fundamentally different and much less draconian than the application of Title 2 that was ultimately voted on and passed. It’s unprecedented for the FCC to carry water for the current President as obviously as the majority of commissioners have done in this instance.
There was relatively little “public outrage” regarding what has been framed as the Net Neutrality issue prior to November of last year when Obama ran his clearly uninformed mouth about it (he even referred to the wrong Title II in his speech, referencing the Telecom Act of 1996 rather than the Communications Act of 1934). No, I don’t put any more stock in 4 million public comments about what little most of them know about “Net Neutrality” any more than I would put stock in 4 million Americans (less than 1.3%) liking a Kim Kardashian post on Instagram. I would agree that it seemed the FCC didn’t want to propose to invoke T2 at all – but they didn’t reverse position because of Verizon, Comcast and other predominantly last-mile providers acting badly – they took up the T2 torch when Obama told them to do it.
The point of my quote was that Obama (the Senator) was all about FCC transparency. As president, not so much.
This reclassification to T2 isn’t any more likely to survive a court challenge than the last two attempts were, but that’s not the point. The point is the recklessness of the regulators and the improper influence of the administration.
Your position that we now have to have the FCC and feds step in because a few large monopoly or duopoly players couldn’t play nice conflicts with your other statements about preferring competition to regulation. Do you really believe “we tried competition first” and it didn’t work because the big boys killed every attempt, being so “unregulated”? Any chance the price of entry to compete from a wireline perspective (e.g. trenching fiber to every doorstep coupled with the regulatory burdens imposed by every utility commission and municipality in the prospective service area) is the largest obstacle? And that the FCC keeps the possibility of disruptive last mile providers shaking up the market with 4G wireless delivery low by dictating a spectrum auction system that effectively prevents all but the deepest of pockets from acquiring enough RF real estate to go to market?
This is the first issue in more than 20 years the fcc has come down on the side of the consumer. And i think if we are being practical, the commissioners are sort of expected to take some lead from the guy who appointed them, being candid, the issue is a big one, so the level of involvement shouldn’t really be a surprise.
Considering wheeler is a former cable co lobbyist, you can’t really be surprised obama had to be blatant about his expectations?
I’m sure we’ll see the court challenges, but seeing how scotus told the fcc last year to do it, i’m guessing it will hold.
The very reason we have antitrust laws is to regulate business behavior so we can have fair competition that doesn’t restrict trade.
As for the price of entry on the wireline, let’s face the fact that most lecs have for the past 20 years or more been the benefactors of regulated inflated line charges that was supposed to pay for them to run fiber to the homes. they took the money, but never built the fiber (with a few exceptions as necessary)….will consumers see a refund?
So, after all this, how did you propose the antitrust behaviors, should have been handled without t2 regulation? very curious to your thought.
The last mile market is specifically designed to serve asymmetrical traffic because that’s how home consumers use bandwidth, but transit, peering, service provider interconnect, data center and enterprise connectivity is almost exclusively symmetric (the carrier peering connections referenced in the Level 3 blog posts are typically 10Gig or 100Gig Ethernet ports – that’s bi-directional 100Gig).
I would agree about monopoly powers, but who granted the ILECs and MSOs exclusive franchises to begin with? As it happens, I also agree the incumbents have largely been milking the regulated services market for the last 20 years to the detriment of the consumer – to varying degrees. My comment about the cost of entry (particularly wireline) was in reference to the cost for a challenger or competitive carrier to enter a market dominated by an ILEC/MSO duopoly.
Another issue that the general public and the vast majority of the bureaucrats and politicians are incapable of understanding is that “paid prioritization” is a beneficial and desirable capability in a data network under many circumstances. It’s called QoS (quality of service) and it’s essential in enterprise networks – particularly MPLS. Now with the advent of LTE, there is potential for all kinds of differentiated services over wireless – if it is allowed to be offered to customers. Restricting this kind of differentiation may not be what many had in mind when they parrot the “Internet fast lane” mantra, but it could very well be impacted nonetheless.
Further, although nobody can say with certainty, it appears the FCC rules may open the door to the FCC dictating to your wireless provider how they can sell internet access. Does this mean no more metered wireless data plans? If not, why not? Don’t think for a second that prices and service levels won’t stagnate – just as they have done with legacy telecom services – if that comes to pass. If you like your 7Mbit DSL from your monolithic Telco provider – a service that has not become either cheaper OR better in nearly 10 years – you’ll love what Title 2 will do to wireless service.
Antitrust behaviors? What’s your opinion of the antitrust behaviors of FedEx and UPS? Because to me, this iteration of “Net Neutrality” is equivalent to telling a common carrier shipping company that they can only charge by weight, not volume…
jc, to your point, the consumer has paid for the lec-isp to maintain appropriate peering capacity with other tier1 backbones to ensure they can receive the traffic requested, which is essential to using the internet. If the lec-isp refuses to maintain that interconnect at a level appropriate to a reasonable experience, because they want content providers to buy access from them directly…..well that’s where the problem is.
you agree about about monopoly behavior, but then causally dismiss because you infer they were granted that exclusivity to do so by franchise agreements.
The lecs where given inflated dial tone rates to build fiber to the home and compete with cable, took the cash and never built….so let’s keep that factored in the conversation when we talk about competition and cost to build. It’s been paid for but never delivered!
If the network is built well, there is very few applications would still require QoS. Based on current Monopoly behavior of taking money for service and not delivering, I’m sure we could agree it’s a highly probably scenario that what we would wind up with for those who don’t pay for QoS – is an extremely oversubscribed and crappy service for the “rest of us”
If you want to get into wireless, i think we need a new thread, because that’s a whole other topic unto itself. 5g is where it gets real interesting though.
“all kinds of differentiated services” sounds like “lec-code” for charging me more for things that would be free if there were competition on access to the home(for example, caller id in the old days). so, nice try.
You answered my previous question with a question, how bout an response? Could u be more specific on the ups/fedx behaviors….not as familiar. but your example of comparing net neutrality to telling shippers how to charge seems off the mark…..i think it would be more analogous to say lec-isp put a toll road in front of the consumer in order to get to the interstate – then the lec-isp told ups/fedx they have to buy their toll road access from the lec-isp if they want access to the consumer’s exit, even though ups/fedx bought their access to the interstate from another toll vendor. so, if ups/fedx didn’t pay buy toll road access directly to lec-isp, then the lec-isp would not let ups/fedx use the “only” toll road exit to the consumer.
I am still waiting for someone, anyone, to succinctly describe the “net neutrality” problem. Variously described here as a peering or transit or universal access or other issue. If i am not mistaken, the purpose of (world changing) MPLS is precisely to treat packets differently so email, VOIP, videos, etc can share one, standards based network.
Easy to complain to BuzzFeed and MSNBC with vague, no-tech theories. But this board is populated by those that build and run the internet. Discussion requires knowledge and logic.
The best “complaint” we have heard on this site is something like: residential customers chose vendor A and disagree with its technical decision making so instead of switching providers, we should regulate all industries near (and far) from vendor A.
I will say it again… this is the single biggest f*** up in history of SV. Please someone show me that i am wrong, and that SV has lobbied or allowed something more threatening to their overall disruptive model. They just “opted in” to CLEC-land. While arguing against regulating auto dealers (tesla), regulated procurement (rockets), shared rides (uber, lyft), hotel building codes (airbnb, vrbo), etc.
How Google, FB, Tesla, Apple, MSFT (seattle), et al allowed this to happen is staggering. i think this is the first ever industry that volunteered to be regulated?
Next shoe to drop is no financing for at risk companies. regulation freezes status quo. i think i read that the secret law also impacts wireless.
Amen.
Ok, if you sincerely want to understand the neutrality debate, I will attempt to help you. I would redirect you to read the following posts, which describes some of the most articulate positions and reasoning around the net neutrality debate I have read so far.
http://blog.level3.com/open-internet/verizons-accidental-mea-culpa/
http://blog.level3.com/open-internet/not-neutrality/
http://blog.level3.com/open-internet/heads-isps-win-tails-you-lose/
http://blog.level3.com/open-internet/observations-internet-middleman/
I, personally, am a competition fan…..and hold the opinion that competition was going to be stifled due to monopoly powers being left unregulated, although we did try the unregulated route first.
your argument for regulating the internet is that level3 has 6 saturated ports? maybe they should buy routes or trade for settlement free peering more effectively ?
i guess it was a big enough issue that Netflix was forced to buy service from a lec isp instead of using the the competitive market place to make that decision. But hey, if you are happy with a few dominate players dictating market terms instead of fairly competing for business, then we can agree we have different ideas.
Settlement-free peering wasn’t really designed for such asymmetric traffic flows, and that’s the crux of the peering issue. I don’t know if there is a perfect solution, but I trust the (uninhibited) market to ultimately figure it out. Netflix, as a content provider, being forced to buy more transit capacity in the absence of having the market position to compel another last-mile provider to add strategic peering to carry their traffic is a risk of their business model at this point in the evolution of the internet. Suggesting the FCC needs to invoke Title 2 to fix those disputes is not dissimilar to suggesting the DOT should force UPS to add more drivers and trucks because they can’t handle all of Amazon’s shipments at peak seasons.
the entire lec-isp market was designed specifically to support asymmetrical traffic because everyone knows the consumer is going to download more then they send. beyond that is just a lawyer argument to charge more.
the consumer already pays to receive that traffic. if the lec-isp doesn’t want to deliver it for the fee already charged, they should get out of the business and let someone else do it….in fact that’s why we see google fiber popping up and municipal broadband taking hold.
there is a perfect solution, it’s called “working it out” before the regulators get invovled. but when you wield monopoly powers, there’s much less reason compromise, would you agreee?
It’s clear the fcc will use forbearance to avoid most t2 regulations, but putting some teeth in the open and fair treatment of data category which is all most folks want out of all this.
this is very well said. thank you for the clarity
considering a 10g internet connection is about 25% the price it was 5 years ago. My residential internet price hasn’t been reduced. Why hasn’t the consumer seen any of the price reduction like the business market has seen? ok, don’t want to reduce price, than at least increase the service, provide QoS at no cost or quadruple speeds proactively? oh, that’s right you don’t have to do anything when you hold monopoly power.
Has your speed increased?
I don’t know whether or not T2 was avoidable, but I do know that, at best, we have an ISP duopoly in this country in virtually every major market. And a duopoly needs to be regulated.
Bottom line, had the FCC and DOJ done its job properly in the first place, they would have never ever permitted ma bell to put itself back together again outside of T2 in the first place. They would have rejected the countless horizontal mergers over the last 20 years that got us right here. Ground zero was Bell Atlantic/NYNEX. That single merger opened the floodgates that led to SBC/Americtech, SBC/PacBell, etc.
VZ (formely Bell Atlantic, NYNEX, GTE, AllTel, etc.), ATT (formerly SBC, BLS, Ameritech, etc.), Comcast (TCI, Media One, Adelphia, etc.), etc. now control the last mile. Effective duopolies in every market were facilitated by the DOJ and the FCC who chose to permit inorganically created duopolies rather than foster organic competition.
From where I sit Eyeball Owning Network Operators (EONOs) should consider themselves lucky they were given a free pass for the last 10 years.
We can also discuss how the above-referenced decisions ultimately led to further FCC decisions that killed the CLEC/DLEC business models.
cl, you hit some really important points. how the fcc ever let humpty back together again is mind boggling. but then considering the telecom act 96 was written by billy tausin – R-TX & regular passenger on the sbc private jet, it’s pretty evident what the intent really was….allow competition in LD by lec, without real competition in local…….ld business disappears.
The eono’s could have kept the regulations out, if they didn’t insist on conducting anti trust behaviors.
I will change gears a bit from my previous post and repeat what I’ve said for 3 years on this site about this issue. Cost causation principles should rule.
If VZ, CMCSA, ATT and other duopolists don’t want me (and others like me) as a customer b/c I (we) consume too much data, raise my rates. After all, I am the cost causer, not Netflix, YouTube, ESPN, Bloomberg, etc.
There’s absolutely no reason to charge the content community for data I want and data I requested.
There is no need for cross-subsidization — i.e., collecting money from the content community to keep my consumer rates down. The cross-subsidy model only serves to keep new entrants out of the market which is what the duopolists care most about. In short, they want to have their cake and eat it too. The duopolists achieve this feast by replicating in the data world what they created in the voice world — switched access.
Love it – but we have an entire generation of people now coming up who think the Internet is “free”… and thus, some idiot commentary by John Oliver, which millenials and socialists of all ilks believe is news, puts us over the finish line of yet another botched government overreach. The boogieman who has the audacity to charge me money for something – as long as they get whats coming to them, I am sure it will be fine… right?
You do realize that this isn’t how the Internet traditionally worked. Usually both sides pay.
You do realize a switched packet access structure akin to the switched voice access structure is very different from a transit structure.
Essentially, if unchecked and permitted the carrier terminating content to a consumer in a packet flow can impose monopoly rents on the content provider.
The danger is even more insidious if the terminating provider also produces or profits more from someone else’s content. For example, Comcast’s ownership of CNBC as opposed to Bloomberg could force BBG to pay fees that would result in users choosing CNBC over BBG.
mhammett, maybe if you toned down the condescension a bit and made your points a little more clearly minus the vitriol, we’d understand what you’re trying to say.
I wouldn’t think I’d have to explain in a forum of telecom operators how the Internet works. Traditionally Bob’s web hosting pays Level 3 and Jim’s ISP pays XO. Level 3 and XO exchange traffic for free as they have determined each other to be peers based on network size, traffic minimums and traffic ratios. If anyone that doesn’t meet the above requirements, then if peering does happen, great. Otherwise, it’s atypical.
In Comcast’s case, they just cut out that extra guy in the middle. Both sides pay them. Both sides paid before, just now it’s a better quality service.
So, in your opinion the originating and terminating voice access charge regime was logical?
It made sense to you that IXCs paid carriers more to hand off a call to NYNEX in NYC to deliver the call the to the upper west side than it did to transport that call from Ottumwa Iowa?
How many access bills have you deconstructed into their component parts? How many rate elements do you think there are to an access bill? I highly recommend you take a close look at one before you get on this forum and compare a switched access structure to transit.
When you permit eyeball owning network operators (EONOs) to assess an access charge on content you will open the floodgates to mediation, massive disputes, accounting challenges, imputation rules, etc.
I couldn’t care less about voice. Ask me how much I care about wooden wheeled carriages and you’ll get a similar response. We’re not discussing voice, we’re discussing Internet.
What has happened has been paid peering, which is completely normal for the Internet. Nothing more.
Accounting challenges? You have 20x 10GigE ports to my network. $X please.
No, we’re not discussing voice, we’re discussing an telecommunications usage access structure. And the template for a telecom usage access structure is voice.
If you’re not familiar with CABs, SECAB, or other access billing & mediation systems, you should become so.
It’s nice that you want to simplify the problem as you do, but reality will look substantially different.
I have no need to look at any of those things. I provide Internet service, not phone service.
cc, well said again on this point
cc, another thing to consider regarding the comparison between the old switched voice network and the switched data packet network is that the voice networks where highly inefficient. The levels of capacity and efficiency that is being achieved with the data networks today is extraordinary. And nearly none of that benefit has been passed onto the consumer, in most places.
this is another reason to keep away from a metered structure.
but these eono’s are getting grotesque profits on wireless data and want to bring that to the wired market.
cc, most people don’t even understand the concept of monopoly rents, how it’s achieved, and the negative impact it has on innovation
disagree a bit on this one……we’re all only using what we have paid for. if you can increase capacity 10x over 5 yrs, there is no reason to raise rates….in fact the bandwidth should have been dramatically increased and rates lowered on consume side, just like business side!
from the wall street journal. Can someone drop by to tell us the joke again about this being a principled, well thought position?
——–
Which brings us to the pusillanimous Tom Wheeler. We don’t use the adjective lightly.
Let’s be absolutely clear about something. The Federal Communications Commission chief did not go to President Obama and say, “We at the FCC have studied the issue and concluded that utility regulation is necessary to assure net neutrality.”
Nothing like this happened. Mr. Wheeler was still trying to head off utility regulation when Mr. Obama, after election day, suddenly announced his support for what previously had been an extreme regulatory agenda. In one of many ludicrous ironies, Mr. Wheeler had just successfully romanced a core of the Obama political coalition—including the Rev. Jesse Jackson —to oppose utility regulation of the Internet. In a little-noticed, bizarro-world circumstance, the NAACP, the National Urban League, Rev. Jackson’s Rainbow/PUSH and several other civil-rights groups are still rhetorically committed to fighting the White House on Title II.
Conspiracy theorists will have to put aside any idea that utility treatment was the secret objective of Mr. Obama and Mr. Wheeler from the get-go. Mr. Wheeler was blindsided too. It appears that Mr. Obama simply decided, after Democrats’ defeat in the midterm elections, that he would spend the last two years of his presidency catering to left-wing groups. If this had been a plan from the start, he and Mr. Wheeler never would have arranged events so as to portray the FCC chief as the White House’s quivering lap dog. Mr. Wheeler didn’t just flip-flop on utility regulation. He collapsed like a bag of air.
The FCC chief has been lying strenuously about all this for weeks, and perhaps may yet be rewarded with an ambassadorship or some other plum. But the original “Progressives” had higher aspirations when they created the idea of the independent regulatory agency. The FCC’s rule-making process is supposed to be deliberative and strictly defined by law (which is why its net-neut order will now be eminently appealable). It simply is not true that any FCC chairman in Mr. Wheeler’s position would have yielded to a policy diktat from the White House. An FCC chief with true “progressive” spine would have made it his top priority to protect his agency from improper political manipulation.
As I say in the earlier post, everything about this is wrong, including the packaging in the label of “net neutrality.”
Not surprising insight, if you have been watching from somewhere other than the pages of Reddit and Gawker.
In spite of JS’s and other’s bleating about “bad behavior forcing the FCC to impose Title 2”, this is, without serious contention, a solution looking for a problem…
Here is the first half of that article – worthwhile reading as well:
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“Generations of high-school students have chuckled over the line, in Henry George’s 19th century book “Progress and Poverty,” that “If a man build a ship we make him pay for his temerity, as though he had done an injury to the state; if a railroad be opened, down comes the tax-collector upon it, as though it were a public nuisance.”
That’s the cable industry, which invested to create the nation’s high-speed broadband platform and now is being punished for it. Cable invested when, for regulatory reasons, the phone companies wouldn’t. Now the Obama administration says we need strict regulation because there’s not enough competition for the fast broadband option that only a lightly regulated cable industry was willing to build.
To dispense with one justifying myth, utility regulation is being imposed under a false flag, to solve a net-neut problem that, as even the FCC has acknowledged, has long since vanished from the marketplace. This week James Dolan of Cablevision announced falling TV numbers and told investors, “Connectivity has surpassed video as the primary product for a company like ours.” By “connectivity,” he means giving Web customers access to whatever they want.
Here’s another truth: Most of the big tech names like Google , Apple, Facebook and Microsoft have kept quiet as net neutrality morphed into a Title II utility-regulation agenda because they didn’t want to be attacked by left-wing groups, and because they trusted Tom Wheeler and Mr. Obama not to screw up an Internet that was working well. They’ve been blindsided, if not cheated, by the Obama administration. Only Netflix among the biggies went a different way for its own peculiar and dishonorable reasons, somehow inveigling the FCC into treating interconnection and peering as a net-neutrality issue, which it previously wasn’t.”
I should have clarified that it’s not just bad behavior, but actually anti trust type of behavior why there is t2 on the lec-isp.
Actually, most corporations understand how the big 3 (ccst,vz ,t) were attempting to force anti competitive behavior into the market and were for t2.
The eyeball owning network operators have been handsomely rewarded for their investment for a very long time – and will continue to be so….all the rest of us want is for competition to keep prices and service in check instead of having our pockets gauge from anti competitive forces.
anon, you address the politics, but not the cause of the ruling. what’s your take on anti trust behavior?
While the issue of last mile providers being a bottleneck to the consumer, I dare say that the sole reason that such drastic action was taken… is Netflix. They’re the ones with such dramatic asymmetric traffic passing down through peering points to the last mile provider, and they and Google seem to be the only “players” happy about this T2 mess. As such, it seems to me that this was a Netflix and Google/YouTube problem that somehow became an “all of us” problem…
Regarding the duopoly being an inhibitor to competition – horse hockey. The existing duopoly between the ILEC and the MSO was enough for the MSO to start offering triple play services, and then the ILECs mostly followed by offering their own. And that advancement still was not enough to keep new entrants like Google Fiber and others from going into markets and laying 100% new plant to provide telecom services to residential customers.
These actions did not happen in a vacuum nor due to the federal governmental reaching into the telecom space; it was the unregulated free market that brought better services to more people through the desires of companies to make more money. Simple and plain as day as that. If anything, new regulations will cause at least a pause in most companies plans for services, if for no other reason than to examine how this regulatory regime will effect such a large, living organism such as the Internet.
Most people will applaud this move because they don’t know any better and just think that they’ll get better services because of it. But when almost the ENTIRE telecom industry, ILEC, CLEC, and MSO alike, are against this, we’re no longer about the taking down of a monopoly or duopoly, we’re just talking about bad policy.
Sorry for the grammatical mistakes in my above comment 🙂
no, it was the anti trust behavior inflicted upon netflix and the consumer. Netflix was effectively forced to buy connectivity from the ebono (aka-shakedown), or their traffic wouldn’t make it to consumer. The consumer who already paid the ebono to receive this traffic from netflix….and they weren’t getting it.
ILEC and cable co’s rarely compete hard, and in the few area’s they do, there’s a lot more price/service competition to drive prices down and services up for the consumer.
There are only 3 companies i know of really against the t2 reg, ccst, vz,t. rest were pretty happy about it.
if there was no anti trust behavior – then there would have been no t2…that simple
just some questions for all of the proponents of the T2 regulation – (1)since it appears from the reading above that you are concerned about the cost to NFLX (or others) for providing content to subscribers via provider networks, do you also rail against the owners of the content charging those prices for the content itself? (2)didn’t a whole lot of the problems with the provider networks arise FROM a/the regulated environment? (3)what level of capex spending from provider networks would be deemed sufficient to address the problem(s) this attempts to solve?
(4)if this leads to metered billing (like I get from my electric and gas utilities) is that a satisfactory solution? (5)should Google Basic internet offering be considered “predatory pricing” and be subject to FTC regulation?
I am curious more than argumentative ……
Let me start by saying I don’t know that T2 is good or bad. I will say that I firmly believe that duopolists need to be regulated, especially when they’re vertically integrated. For example, when an ISP or Eyeball Owning Network Operator (EONO) owns content and content delivery they have a huge incentive to degrade or raise the cost of their competitors’ content.
Lest we forget ma bell was vertically integrated as well. Users had to “lease” their phones through them. You couldn’t even attach a harmless piece of plastic to a phone without ma bell’s approval. Do a Google search on the hush-a-phone case.
A vertically integrated EONO where one part of the supply chain (distribution) is monopoly or duopoly owned can wreak havoc on the competitors in the part that is not monopoly or duopoly controlled (content).
My position has always been that eyeball owning network operators (EONOs) should collect their money from the cost causers, i.e., end users. The end users asked for the content. The content is not being pushed out (by content providers) so much as pulled in (by the content users).
As for metered billing, as I’ve said before on these pages, I don’t think the EONOs want that, even though some have talked about it. Metered billing will incentivze new investment, make no mistake about it.
The last thing Incumbent EONOs (I-EONOs) want is Google or Apple or some consortium including them investing to build a competing network.
One only need look at AT&T’s reaction to Google’s presence in Kansas City to know that I-EONOs don’t want new entrants in their market.
(No, I don’t think, nor do I see how, a new competitive EONO entrant like Google can be accused of predatory pricing.)
I think your question #2 is the one that will get the most attention. But it’s a matter of selective memory. The ILECs were regulated b/c of their abuse of power tied to hush-a-phone, carterfone and MCI’s simple two-way radio service.
I highly recommend Larry Kahaner’s 1987 book, On the Line: How MII Took on At&T-And Won!
really good points. it always come back to using t2 regs to curb anti trust type behaviors. keeping competition in the game is good for everyone except those who feel entitled to use lack of competition and market power to collect every increasing rents.
isn’t ironic how some competition all of a sudden spurs incentives and service upgrades! and the point here is a true monopolist hates competition because it dilutes profits due to competitive forces.
mhammett, that you don’t think understanding telecom history is relevant because phone service and internet service are different really demonstrates your naivete, not your sophistication.
Although you may not think that history is relevant, I assure you Incumbent Eyeball Owning Network Operators do.
Here’s a little snack on some of that history that shows how quickly we lose our inner-captialist when we become a duopolist. Take a look at page 16 of Comcast’s reply comments on bill & keep (B&K) back in the FCC’s local competition proceeding when Comcast fully supported B&K.
http://apps.fcc.gov/ecfs/document/view?id=1624120001
I don’t care how the incumbents understand things as I don’t operate one. I operate a competitor to them.
Mhammett, if you’re to lazy to read Comcast’s reply comments, specifically page 16 (of the PDF) or page 14 (of their comments), I’ll help you:
“The ILECs’ chronic recital of the alleged constitutional infirmities of bill and keep should not deter the Commission from requiring such arrangements. Given the mutuality of benefit from interconnection and the near-zero additional costs of providing transport and termination, arguments that bill and keep is an uncompensated taking can easily be dismissed — as they have been by the Supreme Court.”
My my, how time, money & power have a funny way of softening our positions.
cc, how quick peeps forget. great flashback.