Net Neutrality - The second internet war

Started by Ryex, July 13, 2017, 12:45:05 am

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July 13, 2017, 12:45:05 am Last Edit: July 13, 2017, 12:49:22 am by Ryex
Today is the second internet protest on Net Neutrality. In an "Internet-Wide Day of Action to Save Net Neutrality" Many companies and organizations have joined together to spread the word. I feel now is a great time to address the argument for an against. (from my point of view at least)

For those of you who don't know.The 45th President of the United States of America, Donald Trump hired Ajit V. Pai, an ex Verison CEO, as the chairmen of the FCC (Federal Communications Commission). The FCC only recently  (under President Obama) reclassified ISPs (Internet Service Providers) under Title II of the Federal Communication Act of 1934. Making ISPs classified as common carriers, akin to phone services providers. This allowed them to draft, vote on, and pass enforceable rules about "Net Neutrality" which is the principle that all traffic on the internet (and thus the data therein) must be treated equally. That means that it must all be routed to its destination as quickly as possible in the order in which it is received. with no priority given based on where it is coming from or where it is going or what data it contains.

The main argument against Net Neutrality is this:

The ISPs (especially in America do the size of landmass they have to cover with cables) make a significant investment in building out their network; connecting all those cities and all the buildings takes quite a bit a cable. And the routing nodes require expensive hardware and the power to run them. To makes things simple. being the first ISP to cover an area is an expensive bit of overhead the kind of expense you take out multi-million dollar loans to cover hoping that you'll make back the money and more with the service you provide. Now consider the fact that traffic hits it's peak in the evening when most people got off work. Take into account the prevalence of streaming media as a form of entertainment and you can see that during the evening in a given area bandwidth usage will skyrocket.

The FCC actually did a study of ISPs and how well they were providing their advertised speeds [1]. They provide this nice graph of what speeds they were able to provide and what they advertise vs time of day.

Spoiler: ShowHide

Notice that nice dip in provided speeds around 20:00-22:00 ?

perhaps this will put that into perspective. a chart on how the bandwidth usage on the internet over the course of a day [2]

Spoiler: ShowHide

According to that graph, Netflix accounts for half or more of all streaming traffic at a given time and (if the graph is true to scale, hard to tell without numbers) then Netflix could be close to a quarter (25%) of all traffic at peak.

The Argument is that Net Neutrality rules prevent the ISP from collecting a fee from high bandwidth users like Netflix to help recoup the cost of building a network that can push that much data at once. After all during those peak times that have to slow down other users to let all that traffic through.

Here's the problem: By selling internet access ISPs state that they are allowing you to access, not just their leg of the network but the entire internet and all connected networks. and with that access transfer data, usually at speeds up to some limit and sometimes there is a clause about total data transferred and what that means for your access. There may even be clauses about access at certain times of the day. They make this contract with all their customers. by doing so they burden themselves with a legal obligation to build a network that can service all those contracts at once. The problem of users using their access at the full speed they're are allotted in their individual contract and consuming a non-insignificant portion of the network's available bandwidth thus forcing the ISP to shape traffic to ensure nothing gets dropped is the ISPs' not the customer or the service the customer is accessing. Let's not forget that the business is already paying for access to the network to make their services available, They are also paying quite a bit for that access because they need much higher bandwidth than a consumer and that's fair. But what the ISPs are arguing with the above that the business should not only have to pay their local ISP for internet access they also need to pay the ISPs of all their consumers to ensure their traffic gets there in a timely manner. If the ISP CAN't provide that bandwidth to all their customers at once then they have oversold the capacity of their network. While Oversail isn't strictly criminal fraud [3], it does have the potential for civil consequences.

Those graphs above might seem to say Netflix is taking up an unfair percentage of the available bandwidth but that's not the case. The truth is that a large percentage of the ISPs' customers have made the choice to stream Netflix. if it wasn't Netflix it would be something else, that bandwidth is already spoken for. Netflix is just an easy target to leverage your customers against if there is no Net Neutrality protection in place.

The situation I just described would be akin to having to ship goods by truck via routes where every single road was a toll road with different rules and a different fee structure.The price of moving, a given good could change from road to road simply because they could charge more simply based on agreements that particular road had made with you and your competitors. It could change because of your carrying tangerines instead of oranges despite the fact that it's coming from the same place and the total weight of the load is the same. That kind of situation would make it nigh impossible for even a well establish bussiness with lots of money to navigate. when the route the data take to your customer changes how much and who you have to pay suddenly you have to optimize your pricing and content delivery to individual areas. A new or small business with limited capital means wouldn't have a chance. and perhaps that's the point. The increased costs the business have to pay wouldn't stop there too. the business would have to raise the price of their services or add more ads to reflect the higher cost of doing businesses. Passing the cost on the consumers, only for the money to end up in the ISPs' pockets. So even if the ISPs only charged businesses they would still be charging consumers more for the same access they already had. That is double dipping.

The other argument against Net Neutrality is that it's an overreach of government. an unneeded regulation, the free market will solve the problem for us if that's what consumers demand.

but there are multiple problems with that too. Remember that building out a network is expensive. As such ISPs intentionally DON'T directly compete with each other. they have agreements to only cover areas their competitors don't. For most places, there is only one option for internet service. and even if there is a few "local" ISP's the usually buy access from the only ISP who built infrastructure to their area. IF there is no choice then the market isn't free and consumers can't "vote" for an alternative with their wallets because there is no other option.

That the idea that regulating the Internet would stifle innovation is ludicrous on its face. Regulation, even if it was not "Net Neutrality" which is arguably the opposite of red tape, would be consistent and "regular" by definition. by its very nature a lot more manageable than the complex, potentially volatile, fee structure for data, that would exist between all the competing ISPs

And the argument that "there's no problem now, why do we need a new regulation?" is also untrue. Comcast infamously strongarmed Netflix [4] into paying it a fee to keep access to Comcast customers. And then had to do the same with Verizon because they had paid Comcast already  [5].

In case it's not clear. Net Neutrality is a crucial requirement to both keep the Internet as a level playing field and to keep consumer prices of internet access and service from being inflated.

OS, if you're a US citizen and you haven't already, go and leave a comment on this FCC proceeding. And Tell them why net neutrality is important to you.

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Alright, here we go. :D

About the infrastructure...

I do understand that argument and it's a valid one until you take a step back and look at the situation from a different perspective. In Europe much smaller ISPs have manage to rack up Internet speeds to such high levels, that the EU recently passed a new regulation (or will pass very soon) that Internet speeds by ISPs have to offer a package that has at least 100Mb/s. Don't take my literal word on this though, I don't know the details and may have mistyped something. Still, if so many small companies across dozens of EU countries can handle this, it's absurd to think that the massive ones in the US cannot.

I will add my point about stifling innovation here, because it makes sense within the context of my arguments. I actually agree with you there. I don't think that abandoning net neutrality will stifle innovation. It will, however, stifle the future increase in Internet speed. Why? Simple. If ISPs are already billing customers and content providers left and right, why bother increasing speeds if you can increase fees and nobody can do shit about it? And if they wanted to increase speeds either way, they wouldn't be lobbying against net neutrality in the first place. So they are obviously just trying to extort more money from wherever they can.

Just an additional note: Overselling is bad IMO if you do it with too much. But a drop in 10%-20% of speed during rush hour is acceptable IMO. Again, this is just my opinion and some people might disagree.

About the free market and government regulations...

A completely free market is not a good thing either. Each time we didn't regulate stuff, things spiraled out of control. Every. Single. Time. A free market's natural progression is towards monopoly. Sure, sometimes we end up with a few big players, but just as often (if not even more often) we end up with one big player. That being said, regulations are a double-edged sword. They can prevent big companies from abusing their influence just as much as they can drive small companies out of business. e.g. If the government passes a law to increase the minimum wage, some small companies won't be able to afford this and have to close down while the bigger ones will have to fire people and automate more things (which isn't necessarily a bad thing, but that's for another discussion). That's why I think that net neutrality is the best solution, because it provides an equal ground for everyone and no one can be privileged.

IMO regulations should prevent unfair advantages and try to provide an equal opportunity for everyone while keeping a balanced free market where a higher quality service can thrive and drive competition out of business. It may sound harsh, but it's better for all of us in the long run.

Other arguments

Abandoning net neutrality could be a good thing in the long run, but the problem is that ISPs are catering the entire thing to what suits them instead of to what is best for customers. They don't want any regulations or anything. They just want more power and control over information to be able to make more money off of it. If there were better regulations (read: ANY ACTUAL regulations), this could actually help the companies while still treating customers and content providers fairly. The problem here is that at some point these regulations would have to be removed or at least loosened to allow a better free market yet again. And since we're going in circles at this point, I think that just keeping net neutrality and simply declaring it as a public good is the better option in the end.

All this being said, I do believe that we still need some extra regulations for companies while keeping net neutrality intact. As you already mentioned, there were cases with Comcast strongarming Netflix, etc.

Thanks for stimulating my gray matter on this matter again. ^_^
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