6
How net neutrality might affect your Internet use
Cables plugged into modem
To view this content, Javascript must be enabled and Adobe Flash Player must be installed.
CORRECTION: The original version of this article incorrectly described Internet providers' access to the Internet. Providers pay fees to gain access. The text has been corrected.
TEXT OF STORY
Kai Ryssdal: Tomorrow's going to be a very big day for telecommunications geeks. It could also be a big day for the rest of us and for how we use the Internet.
The Federal Communications Commission is scheduled to vote on what you might fairly call the rules of the road for the web. The board could stop Internet providers from blocking some sites or shifting them to slower connections. But it could also mean paying more to stream your favorite TV show online.
From New York, Marketplace's Janet Babin reports.
Janet Babin: The FCC will likely decide that the online space stays a meritocracy: a place where small Internet websites are just as fast and accessible as the bigger established ones.
Tim Wu's a professor at Columbia Law School.
Tim Wu: So the best sites win. YouTube is successful because people like it, rather than, Google made a good deal with Verizon or AT&T or something.
Some high-speed Internet providers want to block or slow information online, or charge websites for a "fast lane" so consumers would get to the websites more quickly. That worries new Internet startups, and the companies that invest in them.
John Borthwick is CEO of Betaworks. The company was an early financial backer of the Internet sites Twitter and Groupon.
John Borthwick: It hurts innovation in general, and I think that a tremendous amount of innovation we've seen on the Internet is driven by the presumption that the platform is free and open for people to build on.
Right now most consumers pay fees to access the Internet, but it's free to website providers. Those providers fear that could change. Like a lot of federal regulations, the Internet traffic debate has devolved into a political push and pull. A few key Republican senators have promised to block any FCC action.
Communications attorney Robert Rini says some Republican lawmakers think the rules are unnecessary.
Robert Rini: The strange part about Washington D.C., sometimes, is that people get worked up about things that are just theoretical. Largely, there is no problem to solve at this moment.
But some Republicans do advocate that Internet service providers should be able to manage traffic over their networks as they see fit. And that may include upping charges for accessing some websites. Reuters reported today that the FCC may allow that. Whatever happens, judicial challenges to the FCC rules are expected.
In New York, I'm Janet Babin for Marketplace.
Erik is correct; It is flat out wrong to say that website providers do not pay for internet access.
Specifically, for the smaller providers, they may be hosting their site on a computer at their home[1] or office, and they'd pay for a connection there. As they get larger, they tend to move to a hosted solution, where part of the cost is going towards the internet connection; some hosting providers give a data transfer cap and have rates for bandwidth over that, some say it's "unlimited", or unmetered, but you're at least limited by the size of their connection. Another option is to host it "in the cloud", and by "in the cloud", people usually mean on Amazon's hosting infrastructure. Amazon's pricing is in the neighborhood of about $0.10/GB of data transfer (but you get some amount of transfer free, and pricing depends on volume).
At the larger level (Google, Yahoo, Microsoft, etc), the story gets more complex, but these companies are certainly paying for internet access too.
So, the issue is not weather website providers should have to pay for internet access, they already are. The issue is weather they should have to (directly) pay the ISP of their users as well.
I believe the answer to that is clearly, no. As a customer of an ISP, you're paying for best-effort exchange of packets with all other internet networks; so if you can't contact another network unless they've also paid your ISP, they're no longer providing internet service.
On the other hand, I think it is perfectly reasonable that a content provider may want to have a more direct connection to an ISP's network (or any other network), and I don't think it's unreasonable for an ISP to charge for this direct connection. Such a direct connection (usually called peering) could have benefits such as lower latency to end users, less congestion or packet loss than other traffic routes, and in many cases traffic on these connections is less expensive than on an general purpose connection (usually called transit). Content Delivery Networks (the most well know is Akamai, incidentally used by Marketplace), make a business out of charging their customers for better delivery of files by hosting the data in or near ISP networks, and paying the ISP for direct access. This is what the Comcast vs Level3 dispute is about; Level3 doesn't want to pay Comcast for better access to Comcast network, dispite Level3's increase in CDN traffic (from a Netflix contract), and industry standards for payment for this type of access.
I also disagree about the need to regulate away metered internet connections. It has always been an option on business level iternet connections to pay a flat fee based on the size of the connection (and have usage only limited by the size of the connection[3]), or a fee for the connection based on the size and metered usage. I think both options have their place, as there are benefits to having a much larger connection than you need on average, so that you can send large bursts of traffic intermittently. Do I think you should pay an arm and a leg to use your residential connection to the fullest? No, but that doesn't necessarily mean that someone with a tiny amount of usage should pay the same as a power user. That said, bandwidth is not that expensive, so it may not make that much sense for residential isps to put in the effort to charge differently based on usage. My ISP[4] doesn't even differentiate based on connection speed on its ADSL2 service, they just give you the fastest connection the ADSL2 equipment and your line will support.
The real elephant in the room in the Net Neutrallity debate is that ten to fifteen years ago, when dial-up was king, there were many choices in ISPs, so if your ISP stopped routing traffic to where you wanted to go, or did it in a non-optimal way, you could easily switch; but today most people have one, two, or maybe three reasonable choices for internet service, their cable company, their telephone company, and in some cases a regional ISP leasing facilities from either the cable company or the telephone company, so the major ISPs have a lot of power.
[1] Some residential internet services have terms of service that restrict the use of servers.
[2] http://aws.amazon.com/ec2/pricing/
[3] also limited by the size of all connections on the way to/from the destination/source, of course.
[4] Sonic.net, A regional ISP in California, also the ISP chosen to run Google's fiber to the home trial in Palo Alto, their ADSL2 pricing is here http://www.sonic.net/solutions/home/internet/fusion/
Reporter error, lie, or ignore, your choice. This is the part of the statement,
"but it's free to website providers"
Untrue, Net Neutrality is making everyone pay the same. IE, you pay for what you use. If the RBOCs want to complain, stop doing all-you-can-eat marketing.
Janet Babin made a flatly false statement in this story:
"Right now most consumers pay fees to access the Internet, but it's free to website providers."
ALL websites pay for bandwidth, either directly if they run their own hardware, or through their "hosting provider" as part of the total cost of those computers, the power, the HVAC, the support staff, etc. Bandwidth is most certainly included in the price websites pay.
Doubt me? Ask Amazon, Google, Yahoo!, Apple, Microsoft, or any other web site about their bandwidth costs - you'll get an earful.
The Big Deal is here how bandwidth is priced: by the bit-pipe-size, or by measured usage?
Right now, pretty much everyone in the first world pays for bandwidth by the size of the bit-pipe to the Internet. This is what makes the Internet the fantastic innovation engine that it is: predictable bandwidth costs (with a cap: you can't push bits faster than your bit-pipe is designed to). You don't have to go to the company CFO, or to your Internet Service Provider and ask, "mother, may I?" when you want to deploy a new network application - you know the bandwidth costs won't change.
The telecomms providers hate this situation for a combination of reasons:
1. they're reduced to a commodity business with very thin profit margins: move bits from A to B at a fixed price.
2. they're not getting a percentage of the value being transmitted over "their" bit-pipes; they'd rather be like Visa & MasterCard and take a percentage of the value of each transaction; charging for bandwidth by measured usage approximates that.
This is why Net Neutrality is so important: it is about keeping the Internet costs sufficiently predictable so that innovation is not stifled, and fostering more competitive Internet bandwidth provision from the Telecomms companies by preventing them from collecting economic rents from the services carried on "their" networks.
Wired Magazine carried another clearly stated case for Net Neutrality:
http://www.wired.com/epicenter/2010/06/you-dont-want-isps-to-innovate/
