Guest post by There is a falling out between governments & ISPs on the one hand and consumer groups and companies like YouTube and Netflix on the other. Lately more punitive measures affecting these companies and consumers have emerged that include increased throttling, greater per-usage billing and lower internet caps. The internet as whole is struggling to find a self-sustaining business model that supports the rising speed and bandwidth requirements of consumers and online media purveyors. The conflict boils down to who should pay and to what degree they should pay.
The Vancouver Sun reports on difficulties Netflix is facing in Canada. “Web-streaming movie giant Netflix is concerned about bandwidth caps and punitive overage fees charged by Internet service providers in Canada,” the Vancouver Sun reports, “These practices were reinforced by regulators this week and threaten to constrict the U.S. company’s fast-growing business here.”
Many other countries are affected by this dilemma. A consumer portal in Norway states: “The Norwegian Consumer Council strongly reacts to Telenor’s plans for charging content providers such as YouTube, VG and NRK for video content. This is in clear violation of the intentions of the network neutrality guidelines, says NCC’s Thomas Nortvedt.”
Ars Technica reported on the problems ISPs are facing. “Poor Internet providers. They have to carry all that horrible, horrible traffic from Netflix and YouTube, and they just can’t afford it anymore. Unless they start charging end users 21 percent more for Internet access, or unless they’re allowed to bill Internet companies at 3.7 cents per GB, the Internet could ‘become unusable at peak times’ due to congestion.”
Deutsche Telekom, France Telecom, Telecom Italia, and Telefónica, Europe’s four largest ISPs, commissioned a study from consultancy firm A.T. Kearney. Called “A Viable Future Model for the Internet”, it comes down to giving more money to ISPs.
“The basic argument is simple and well-known,” Ars explains, “The ISPs claim that they just can’t afford all the investment they’ve been making, and that’s it totally unfair that companies like Netflix get to make nice business on their pipes without paying their fair share.”
Note from Thom: so, uh, where’s that 65 EUR/month going to that I pay for a combined internet/landline/digital cable HDTV? I have the fastest consumer-oriented internet connection available, and I pay good money for that. Why not use that to improve your network?
Edit: damnit, why can’t we edit the thread title when we screw it up? See new thread below.
Edited 2011-02-01 23:17 UTC
The federal government is stepping in to look at what the CTRC is doing. They will be giving a binding recommendation before March 1. Either the CRTC decision will be struck down, or sent back for review.
For once, an online petition (www.stopthemeter.ca / openmedia.ca) was successful.
http://www.cbc.ca/technology/story/2011/02/01/internet-usage-based-…
Maybe if they weren’t squandering their profits on C-level salaries, and trying so hard to not spend money on upgrades, and didn’t oversell/oversubscribe their existing networks, they wouldn’t have this issue.
Maybe if they stopped increasing the throughput on their consumer connections (10 Mbps, 25 Mbps, 50 Mbps, 100 Mbps, etc), they wouldn’t have this issue. Yes, there are situations where a 50 Mbps home Internet connection is useful, but does it need to be offered to everyone?
Maybe if they stopped looking at their customers like neverending piggy banks, and changed their accounting rules so that “rate of increase in profits” is no longer the bottomline (how is $1 billion in profit bad? when last year was $1.1 billion, meaning negative growth in profit — HELLO!?! you still made $1 billion in profit!!) they would find they had a lot more money to spend on their infrastructure.
The only “issue” here is the one that the major ISPs have created for themselves. Unfortunately, it looks like a problem that they have no desire to actually fix.
No, of course, the ISPs are going to turn around and say they don’t need any more money, that what they have is fine…
The problem in Canada is that the owners of the ‘last mile’ for the majority of homes are also in the traditional media business.
Both Bell and Rogers sell digital video (aka: on demand) over their wires yet it does not count towards my bandwidth cap. These new, lower, caps is their response to competitors like Netflix.
Edited 2011-02-02 03:23 UTC
And now that the telcos have been racing to scoop up all of the media companies, this is exactly how the CRTC should solve the problem with one simple ruling: force the telcos to enforce bandwidth caps indiscriminately. No more turning off the meter for their own content and services. If I have to choose between RoD or Netflix, I should do so knowing it is cutting into my bandwidth allocation either way.
Then we’ll see how quickly the telcos reassess bandwidth caps and artifical constraints.
The people at Ars explained it nicely.
It is already paid. I paid my end point, Netflix/google paid theirs. The routers and wires in between are already paid.
What this boils down to is the fact that ISPs want to double-dip AKA GREED.
Actually, what it boils down to is that ISPs oversold their infrastructure in the race-to-the-bottom.
By offering higher speed promises in order to be competitive, knowing that they could not sustain those speeds if all of their customers utilized their total promised bandwidth all at once – they took a risk that they figured they could squirm out of later by using loopholes in their contracts, or negotiating 1-year locked in rates.
They essentially sold “bandwidth futures”, and now that they bear the onus of actually supplying the bandwidth they promised, they are finding that they cannot afford to.
So, instead of admitting failure, and biting the bullet, they’re taking the route of defining new rules which will “raise” the funds they need to actually make good on their promise.
I agree with you on most points, but it’s not that ISPs can’t afford to make improvements, they don’t *want* to make improvements, since it would cut into their gigantic profit margins. So instead of investing, they whinge and complain about overuse and pursue usage based billing like we’re seeing in Canada(coming soon to countries south of Canada), so that they can give less, charge more and pronounce record profits to their shareholders.
Ok, I’ll concede that the larger ISPs are… and they are ultimately the reason that the smaller resellers fail.
FWIW, I pay for an AT&T DSL circuit through a reseller that offers rock-solid support and service (significantly better than my neighbors who bought directly from AT&T). I currently pay slightly more than AT&T’s rate, while my introductory rate was lower for the first year. I believe this slight premium is worth it the better service and support I receive.
To reinforce this; Bell, Rogers and Telus all make over a billion dollars in *profit* in around nine months. They’ve been posting record numbers every quarter even throughout the recession.
They haven’t been able to show any congestion on their networks, and the third-party ISPs they’re screwing over with this CRTC decision are only running at 5Mbits/sec. We can’t possibly be overloading their networks, they just want to boost their profits even more.
Being able to dictate what services can be sold and what prices to their competitors must make them so very, very happy.
I totally agree with the whole comment, just wanting to point out that not admitting failure but instead demanding somebody else foots the bill is quite en vogue right now.
Especially when the service you provide is somehow crucial for the world to keep turning.
I already wonder when the ISPs will call on to the governments to bail them out.
Yes, funny how government interference and regulation is always bad…until companies makes bad decisions and shoot themselves in the foot. Then suddenly regulations and government interference is FTW.
I think we make them unable to advertise on “maximum” and only able to advertise on “average”. Make competition work for us. Competition on theoretical maximums is like asking for them to cheat. All companies are about making money, not providing a service. Those that aren’t become so or die. So we must align what makes money and what provides a service. Make them compete with numbers that closer match the real world.
The common practice is (was) advertising unlimited net access at low prices, with an infrastructure that clearly cannot provide for the amount of the users ISPs have. They assumed no more than a set amount of people (usually around 10%) would use Internet at the same time during peak periods.
Now things have changed, and we no longer only download e-mails, or mp3’s, but we have access to unlimited HD streaming libraries. Netflix by itself is known to utilize 20% of NA Internet at peak times.
Thus ISPs need more money to keep up with the demand (10%, or whatever it was, is no longer true). They’ll either charge more to customers, and be less competitive, or charge the media providers, which will in turn come back to customers.
Or invest in new/cheaper/more reliable technologies, which will probably take many years to install.
Any choice is bad for them. I honestly do not know which is the best direction.
Uh.. Except if their competition has some magic wand that they don´t have access to, their competition is in the same boat. That said, if in competition to provide service-to-consumer, increased charges will (hopefully) be kept to a minimum. When charging ´web entities´ like Netflix, there really isn´t nearly as much competition to counter against the urge to grab alot of cash.
This is really a case of rich kids being jealous of RICHer kids, in this case succesful content providers like Netflix, Google/YouTube, etc, vs. ´the tube guys´ (ISPs). Just like Apple´s iTunes, where Big Content got pissed when iTunes started selling ALOT, BigISP don´t like it when they compare their peni… profit growth to ´content destinations´ (ignoring these are the major reason consumers WANT their ´tube´ product in the first place, to access media at the speed you paid for).
Some ISPs were ´dumb´* and sold long term fixed rate deals to consumers… Still, they´re not obligated to CONTINUE selling those (and don´t), so CAN raise their prices to afford infrastructure upgrades if needed. Tiered pricing, possibly with DL/UL thresholds, is a rational scenario, and should be fine as long as ISPs don´t try and break their (non-threshold) contracts.
* ´Dumb´ with the caveat that without these ´good deals´, the huge growth in high speed internet use would not have happened as quickly… which enabled the rise of internet content providers, which further drives demand for high speed internet usage. But Big Tubes wants to pretend people want high speed internet just for shits and giggles, rather than to freely connect to content all over the world (at the speeds they paid for).
What´s scary is the potential for further vertical consolidations, as seen in NBC/Comcast merger (this is in America, land of scary examples for rest of world). Declining profit margins in competitive environment mean (para) monopolies are the way to go for your well-programmed capitalist robots.
Yes, what you say (raising the prices) is “the right thing”, however the first one to do it will probably lose a lot in the market, until others follow.
This is similar to what happened to AT&T. They had 3G network for older smartphones, which only did e-mail or basic web. When they brought iPhone with unlimited data contracts, people actually started using their network, effectively bringing it to a crawl in populated areas. Now they limited their allowances (2GB), and people are waiting to jump to Verizon to get unlimited data again.
It’s a lose-lost situation.
Considering the *HUGE* net profits the ISPs are posting each quarter, I find it *very* hard to believe the “oh, we’re so hard done by, how will we ever pay for this upgrade?” line.
That’s the crux of the issue: they don’t want to spend money on infrastructure upgrades. If they had been doing that on a regular basis the past 5 years, there would be no problem right now (well, other than their *HUGE* quarterly profits would only be large).
Yeah, but Netflix does pay their fair share to their ISP. And Netflix’ ISP has an agreement with these ISPs to carry each other’s traffic through their networks.
Am I the only one who sees this as pretty normal?
having worked in networking, I’ve had to deal with the realities of network equipment, dropped packets, peering…
1. Ban usage charges. We should not have usage charges. Companies can already control the usage of users by throttling users. So ban usage charges.
2. Allow throttling. Maybe you get the first X GB throttle free. After which point the ISP can throttle you down. Companies can experiment on various models here. I should note here… this is user throttling… not throttling based on service type.
3. Separate services (voip, iptv…) from the ISPs and enhance co-location. So say Netflix can co-locate some servers with your ISP reducing unnecessary hops/traffic/peering issues when transmitting costly video.
This will cause ISPs to compete based on the quality of their network. The better managed the network, the more people they will attract. The ISPs will have to pay for their network equipment. Well users will pay in the end… but it keeps the money in the right direction. If one doesn’t upgrade, they will have a poorer network and users will leave it.
Why, in economic terms, should you ban usage charges? I understand why you may not like them. But what is the rationale for banning them? It is really not at all clear why someone who downloads 10s of movies in a month should pay the same as someone who downloads a few emails. Why someone who listens non-stop to the radio over the net should pay the same as someone who only uses email.
The proposal to ban usage charges is what? As a matter of law or telecoms regulation?
Why don’t we ban usage charging for beer. That way people who only have one a couple of times a week would subsidize those who really, really enjoy their drinking?
You’re my pick for president.
In ‘economic terms’, it is very difficult to price data to have an accurate cost. It’s certainly not a cost per GB. I could go into more detail here… but basically… it’s very difficult to price it. It would be some overly complex formula with time of day usage, destination of the packet (peering), current congestion, infrastructure pricing… All to create what is an artificial price. There is really no cost to data once the infrastructure is in place… with the exception of transit charges.
But more importantly, it is too tempting for a natural monopoly like an ISP to abuse it’s power to get overuse charges from users beyond what it actually costs.
Also ISPs can abuse their power to prevent competition for voip, video services… as many ISPs are involved in many markets. This is what happened in Canada. Netflix sets up… suddenly Rogers, Bell… decide to start charging for usage above 25 GB… basically making Netflix not usable.
Lastly, I don’t believe the regulators should play numbers games or deal in details when regulating. They should make big blanket regulations and enforce them. That’s my own political view of regulations.
And I don’t want government regulators having to go into pricing details and trying to figure out if ISPs are abusing their monopoly or pricing correctly for data…
Given that an ISP can throttle traffic… just do a big blanket regulations and ban usage charges and avoid the whole mess.
It’s simple. They all have the network equipment to do it.
It certainly is a cost per GB!
When the ISP is using oversubscription, and almost everyone does, then each of their customers can use the full network speed, one at a time. But they cannot all use it, all of the time.
Oversubscription is a completely legitimate way to set up the network. It lets each customer enjoy the high speed connection as long as they don’t use it for long periods of time.
This setup directly translates into a cost per usage. The user who uses large amounts of bandwidth is taking it away from the other users. To support all users using full bandwidth would require additional build-out of routers, fiber, etc.
The real cost of a 20 Mb Internet connection used 24/7 is much, much higher than $30/month, so anyone paying for cable, be glad you’re oversubscribed.
Oversubscription is legitimate. It’s the only way to run a network. But that has nothing to do with pricing of per GB.
If I use 1 GB in offpeak times, it’s not taxing the infrastructure.
You’re also forgetting issues of peering and transit where the destination of a packet matters.
Any price the ISPs come up with WILL be artificial just for the sake of pricing it.
Ultimately, they all building their infrastructure for some maximum use. All that matters is they control congestion as too many users try and use that capacity. That is far better controlled via lowering each user’s speed when that happens than having an artificial price.
About the best you can do is take
Maximum bandwidth / number of users = bandwidth/user/second
Maximum monthly use / user = bandwidth/user/second*seconds/month
That’s about the best you could do.
But even then, the ISP will throttle when congestion happen and it doesn’t take into transit charges.
What you’re missing is that ISPs are not simply providing a cable from their server to your home.
They have to pay for their own internet bandwidth which is sold by the byte.
The internet is not a cabal of ISPs hording unlimited bandwidth. There is a lot of private and public infrastructure that they do not own.
The entire system really is a giant byte market.
So, what your saying is that it’s perfectly legitimate to sell the same hammer to two customers and tell them to simply not both build at the same time while each is paying you the full price of the hammer? After all, the store only ordered one hammer with the last stock shipment so it seems perfectly reasonable that they should double-sell that single unit.
See, I didn’t sign up for a time-share. I pay for a monthly amount of data transfer with a specified rate of transfer. The ISP over-subscribing the network to the point of one user’s traffic affecting other users while promising each user a dedicated feed.. doesn’t that amount to fraud?
no it is not fraud.
You did sign up for a timeshare.
If you didn’t want a timeshare, you can get a dedicated connection…. just be prepared to pay up the wazoo.
Your right.. if I didn’t want a time-share then I shouldn’t have bought one.. and that’s exactly what I did. When I signed up.. it was not represented as a time-share.. it was represented as an amount of throughput without schedule of permitted usage times.
Mind you, they play similar games with the rest of the services though. “you’ll pay this amount per month for this serves.. oh.. plus this fee.. plus this fee.. plus that fee.. plus this fee..” If the subscription is “monthly fee plus monthly rental of cable modem” then it should say so up front rather than after the fact in the billing details.
An ADSL connection is a dedicated point-to-point connection, between your house and the ISP. If they don’t want you to use it full tilt, then they should not sell it as a full-tilt connection.
Yeah you did get a time-share.
If you wanted a dedicated use line with guarantees then you should have bought business class.
For example, me. I cannot get any consumer level broadband where I live. So I’m paying for a $300/month T1. It’s worth it because I don’t want to move.
I never get hassled about using more than 250 GB/month, the speed and ping rates are always good even at prime time.
I can literally use it at 100% up and down for months on end without complaints from my ISP. Because I’m paying for it.
True.. and you are quite clearly paying business class rates for business class service. 300/month is not in everyone’s budget but for that much, they sure as hell better get stuffed about bugging you over usage. My closest example is a business in an area with crappy connectivity. They pay through the nose for the privaledge of substandard connectivity; it’s never come close to it’s promised specs (not that there is a choice of providers in that area).
But my complain remains. When I signed up, I was given a promise of throughput; this much data at this rate. The vendor, having sold me the service, being inconvenience by my using the service sold.. again, I’m looking at my ISP and wondering where my monthly fees go.
I mean, if it’s a time-share then fine; sell it that way in the first place. Don’t tell the customer they have one speed then deliver a much lower speed or complain when they make use of the resources you told them they had.
Hi,
Back when I first got internet access, the web was at least partially sane – a lot more content was “static”, and a lot more content was cached in proxy servers. In this case an ISP could provide high speed connections from the proxy cache to the clients and the ISP could use the bandwidth provided by their upstream supplier much more efficiently. For example, an ISP that pays $1 per MiB to get data from upstream into their proxy cache could maybe charge $0.1 per MiB to get data from the proxy cache to the clients, on the basis that enough clients would download the same content to recover costs (and make profit).
As time passed things got more stupid – streaming content and idiotic web-monkeys abusing dynamic web pages for little reason (instead of trying their best to make sure their content could be cached). They’ve mostly made proxy caches futile, and probably caused “upstream” bandwidth requirements across the entire internet infrastructure to increase be several orders of magnitude for no sane reason.
It doesn’t help that the low level protocols (e.g. HTTP, FTP) were very badly designed to be begin with. For example, the client could/should be able to say “I’ve got version 0x12345678 of file http://www.example.com/foo/bar.html” and get a response that is either “that’s the most recent version” or “here’s the new version”. Instead, FTP has always been virtually impossible to effectively cache, and HTTP has used stupid crap like expiry times (but only for the HTML pages, and not for pictures/images, CSS, etc).
Basically what I’m saying is that the entire web needs to be redesigned, including everything from the low level protocols up to the content itself; and should be treated as a hierarchical tree of caches and not “dumb” pipes between content providers and end users.
The pricing model should reflect this. Bandwidth charges should depend on how often the content changes (regardless of whether the ISP or backbone actually has the most recent version cached or not); where content that can’t be cached (e.g. VoIP) attracts a relatively high bandwidth change and things that almost never change are almost free.
– Brendan
Shuttleworth, word.
Do not for even one second think that download caps and high excess charges will go to pay to improve the network. Australia practically never knew a time without download caps and exorbitant excess charges, and our internet connectivity is among the poorest in the western world (if you happen to live outside the CBD of Sydney). Our mobile network coverage is terrible if you happen to use anyone other than the formerly state-run monopoly Telstra.
Companies are realising they can’t deliver on speeds they promise, so they’re raising the download limits. Most fixed line carriers now offer at a 1TB plan, because they’re afraid to use the word “unlimited” (it falls into some funny consumer law grounds here, because there’s usually a few caveats in the contracts). I have an ADSL2+ connection, which implies a maximum speed of 20Mbps. At best I get 4Mbps, under prime conditions, our contract says you can usually expect between 5 and 8Mbps, so not only can I not get the technical maximum, but I get less than the promised speed.
In the case of Australia I can see the costs for ISPs certainly being higher. I would think that most Australian users are accessing content outside the country, and all of that bandwidth has to go through undersea cables to various other countries. Undersea cables are horridly expensive to install and maintain and that cost has to go somewhere.
Not that I’m saying what Telstra is charging is right or that they are upgrading their networks (I’ve heard a large number of complaints about them from various people & businesses), but I would expect the cost of delivery to be significantly higher than someone like myself in the states.
Apple should use its cash reserves and built its own network separate from ATT and Verizon. That way Jobs will have full control over all parts of the media. From content production for his large share of Disney, to distribution via iTunes, and delivery via this network.
I wish I could mod your comment as “WTF ?”
When the incremental cost of obtaining a good which has utility is zero, demand is unbounded.
Because incremental bandwidth use is free to the user, the user has no incentive to limit use of it in any way. The business model of the providers of services over these incrementally free links will be to buy connectivity as cheaply as possible, and monetize the services they provide, relying on the fact that for the end user, the bandwidth is free. Monetization may come in the form of advertising, or in the exploitation of personal information supplied by service users.
Because generally people perceive high bandwidth services as being more valuable than low, there is a tendency of the net to migrate to them over time. We have increasingly graphic rich services now, even when the additional graphics and bandwidth adds little to the value, because every little helps, and it costs nothing to add it.
The exact same thing would happen if eating at restaurants was as often as you wanted and whatever you wanted for a flat rate monthly fee, and restaurant owners paid a flat rate for all they could pick up at supermarkets. In no time at all you would have everyone flocking to restaurants. All kinds of events would take place there, and people would be talking about the restaurant generation. A small number of people would eat nowhere else, and would hold large noisy parties every day of the week.
However, in the end, the supermarkets would have to start charging by what the restaurants bought, the food producers would charge the supermarkets that way.
And the ‘restaurant generation’ would be furious that their fun actually had to be paid for.
More like the Prozac Generation. Basic ignorance of markets and economics.
except… in the case of the internet, it is actually possible to fully control usage.
The classic case is that of a road. Suppose we have a free road… then naturally you get lots of users… and eventually congestion and traffic. So we end up with people trying to impose costs like tolls, congestion charges…
The internet seems like that, but it’s not.
You have the enviable position of being able to fully control the traffic.
You can slow down heavy users.
You can create lots of virtual lanes of traffic (maybe a gold tier that gets throttled less than the silver tier)…
With respect to the internet, it makes much more sense to throttle usage than have tolls, congestion charges, usage fees….
while I am sure Netflix and Youtube usage is responsible for our increasing Bandwidth needs, bittorrent and other illegal download means represent a massive part of the internet traffic.
to make things fair, ISPs should apply internet caps on users of bittorrent & co and let legitimate use unlimited…
But I guess the first ISP to do this would be badly mediatised (and I’m sure we would quickly see a very passionate article on this website) and face the risk of losing their customers to other ISPs.
That’s the problem with piracy: No one wants to pay for it, yet the majority has to face the consequences in one way or another.
Nice theory, but the problem is that there is no simple way to determine th legality of data transmitted through a certain protocol.
Bittorrent is just another technology to distribute data and used in numerous legitimate scenarios, e.g. download of ISO images, World of Warcraft updates, etc.
Heck, the Humble Indie Bundle games became also available via bittorrent download due to demand from its customers.
BitTorrent is perfectly legitimate but if that’s what you want you should also cap http(s) and ftp since they can all be used for nefarious purposes.
A lot of MMORPG games make use of bittorrent services, for downloading patchs, like World of Warcraft for example… that game a few people play.
Typically, they will have high-quality multi-user voice chat while they spend and vast amounts of online time, from early morning, to late night and including peak time.
When there is typically 1 or 2 people in a household using 32kb audio streams for voice chat and 2-3kb/s for game and all the forums/wiki WoW sites they use it can become quite a heavy legitimate use.
How about instead, we try and get rid of the insane amount of Bot/Zombie machines that are used to DDOS and flood networks every day.
”
bittorrent and other illegal download means
”
Is there something illegal about protocols used for the transfer of generic data? You do realize there are a whole lot of legal uses for “bittorrent and other illegal download means” right? Not everything transfered through he bittorent protocol is license infringing content.
Regarding BitTorrent, possibly there could be a
White-List of trackers that was serving legitimate content, such as Linux distros and other …
Whitelisted portals that was not throttled,
atleast as far as possible.
…strongly don’t like that idea, it’s very anti-freedom(!).
must remember a lot of ‘infringing’ trackers have non-copyrighted material too.
I know it’s a technically highly difficult thing to do but it copyright holders wish (as is their right) to ask infringing material be taken down and/or to seek damages, they really ought to do it on a case by case, torrent by torrent basis, otherwise it’s no more ‘fair’ than for instance me torrent-downloading exorbitant music production softwares.(However, while wrong from a current legal perspective, what i’ve done i’ve done for ‘training purposes’ …and if I’m happy that can get productive enough in the future for it to have a real value to me, and providing i can afford it, I will make a point of purchasing legit full retail versions then). Don’t see the problem (from a personal moral perspective)!
To be perfectly honest this just shows how the current model is broken. Private companies given monopolies over a public resource (right of way) is just bad. The public resource should be owned by the public (government controlled) and then the higher layers allowed free and equal access by private business. This would minimize the government control to the necessary portions and allow free competition at the higher layers. The speed of infrastructure improvement would be tuned by the amount of overcharge on service maintenance (which should be a regulated amount). For example:
government (state or local) wire access company provides:
All cabling access to residential housing (fiber/coax/twisted pair). They are forbidden from entering other markets/ providing other functionality.
Higher level services (phone/internet/TV) would be offered by ISPs. These should be mostly private but there should also be 1 government offering. It is important to keep this government ISP separate from the wire provider to decrease the chance that it is given preferential treatment over private ISPs. These ISPs would connect to this network at specified connection centers (defined geographically and likely would become good points for peering between higher level ISPs as well).
Then there would be true competition. The government ISP would have more regulation such as abiding to net neutrality and other restrictions that private ones would not have. In this system the private ones could then work whatever business model they wish as long as they can get the customers. I’m betting that in this model any temptation for charging back to providers like netflix, you tube, etc would quickly vanish as displeased customers would jump ship for other ISP choices. Net neutrality is really only an issue now due to the current government granted monopolies (at least in the US and Canada). Government granted private monopolies are optimized to maximize profits of corporations not deliver maximum service to subscribers. To be honest I can see no advantage to government granted private monopolies over government run services. IMO: the government run services should handle the monopolized portion and be clearly contained to do just that. Higher level services that may compete with private companies should be handled in a separate government entity possibly with a different scope (ie. monopoly controlling entity is local and higher level entity is state run).
I’m sure this is clearly understood by policy makers but unlikely to be implemented due to the current ISPs (comcast, AT&T, Bells, etc) imminent decrease in profitability as a result. In essence they’d need to compete for customers instead of just having them locked in. BTW: this model IMO should govern pretty much all utilities (gas, water, data communication, electricity) until a better model is shown.
I think you pretty much just described the way things used to work in France.
Gaz, electricity, phone, and internet used to all be managed by government-owned companies, with some private companies buying these in bulk and re-selling them for a lower price, in an MVNO-like way.
On the other hand, we’re currently dropping this model and making everything private, so I wonder if it has much of a future…
It wasn’t that way when I visited France several years ago. They used a model very similar to the old utility companies of the U.S. (a single company provides the end service delivery). France telecom used to provide end user services like internet access and the minitel service and there were very few private ISP choices (if any). My experience there was from around year 2000 so I’m assuming this is the “old way” that you’re talking about.
I’ve lived in Germany, Luxembourg, Poland, USA and Canada and experienced the Telecom infrastructures in most European countries (due to a Europe-wide project I was working on for ASTRA). None of the countries I’m aware of used the system I originally proposed. The closest was a monolithic company that provided end user services but would also sell wire access to other ISPs. Most of these were publicly-owned or partially publicly-owned companies, as is the case in the US, most of Europe, Canada. This system is considerably different in that the wire provider is in direct competition with higher layer service providers so has an interest in shifting cost from it’s higher layer services to the lower layer ones to be more competitive. They are also known to use a variety of tricks to provide inferior service to the competing private ISPs (long install times, bungled installs, etc). This is the primary reason 2 separate government agencies (one a wire provider and one an ISP) are necessary. The goal is to make all ISPs look the same to the wire provider.
I’m not aware of any country that currently implements the system I’ve described, That doesn’t mean there aren’t any.
There have been a few “competitors” to France Telecom in the landline phone market, if I remember well, though they have eventually went bankrupt. Basically, France Telecom was in charge of maintaining most of the phone infrastructure, and those just bought communication minutes in bulk from FT in order to re-sell them at a more aggressive price.
In the ISP market the situation is less clear, but there are currently several well-known private ISPs around. Examples are Free, Numericable, and Neuf/SFR. FT have an ISP division, Orange (formerly Wanadoo), though.
I think I start to understand what you’re talking about. Do you mean that infrastructure providers should not be allowed to provide higher-level services *at all*, even if they let other higher-level services make their way too ?
Edited 2011-02-02 17:57 UTC
Exactly. If you provide the wire services that is all you get to provide. This hopefully stops the government agency from leveraging their monopoly position (such as wire provider) when providing higher-layer services (ISP/Phone/TV) since they are forbidden from providing them at all.
In that case I agree that your idea makes a lot of sense. Lots of issues which we’ve had around here in the telecom market recently could have been addressed with such a separation.
Then of course, for this to work, there should also be some way of ensuring that infrastructure providers and higher-level service providers don’t have secret agreements, while being officially separate companies.
Edited 2011-02-02 18:09 UTC
Agreed. The problem of personal kickbacks exists though whether the company running the wire is private or government. This system doesn’t solve that problem, that has to be handled through internal company measures (oversight, contract review, etc). Oversight and anti-trust measures will still need to be in place, however, you remove the inherent leveraging of the monopoly while retaining as much competition as possible.
I guess Telenor in Norway, basically was the same way as France Telecom ..
And they still own the copper 🙁
Their shareholders were lucky there when it was “privatized”.. Stolen from the people of Norway Id rather say. Atleast the copper that we had paid for all those years was snatched, the “lastmile” ..
It should have been independently managed. In Norway all phone centrals are owned by Telenor still, but other ISPs can rent fibre capacity into them and put their own DSLAM in to provide their own services. Or buy a bulk wholesale product from Telenor and use Telenor systems.
Cable is only available via whatever provider that is at hand in the area .. Canal Digital(Telenor) has most of the market. “Get” is another.
Fibre is being rolled out in many areas now as well.
Will be interesting if people start to saturate those lines ..
And of course there is the Mobile Broadband (Mobile Snailband .. ) That is metered by the Megabyte !!! With heavy caps, like 500 MB a month or 1 GByte a month , the biggest Ive seen is 10 GB … Ridiculous ..
3,5G at 1,5 mbit downspeed max, really.. LTE “4G” being rolled out in Oslo. And there is ICE, using the old NMT450 mobile network ,CDMA rev B.
Blah boring details 🙂
Edited 2011-02-03 04:43 UTC
We should pay.
The news has already shown us quite clearly that both governments and private companies absolutely cannot be trusted to run a transparent network.
Internet connectivity should be run by a non-profit organisation paid for by each person who connects.
As it is non-profit, it should be charged at what it actually costs to send the data. i.e. 1 penny a GB, with a minimum monthly spend (say £10) in order to cover the administrative side.
I’m sure many here in France wouldn’t agree to that as it would mean losing some advantages. In France, what Thom pays 65€ for generally costs 29.9€ and I pay 45€ for a dsl+landline+tv+mobile subscription with unlimited data.
And what’s the speed of that connection? I have 120 MB down/10MB up (together with digital cable TV+HDTV and a landline-over-cable) – I doubt you can get something like that for 45€ in France.
Yes, it’s probably not available. Most 29.9 subscriptions are DSL2+, which makes the speeds around 20Mbps for downloads. I have no idea what fiber connections cost.
Back this side of the pond, we’ll be looking at >200$ for 20MBs for 80 MB a month plus wired phone, mobile and internet. Already dropped the TV subscription in trying to crop the bill.
Oh how I miss the days when 54.6 KBs was blisteringly fast with truly unlimited usage. Ye’olden days Yahoo and Hotmail where still new and Geopages hadn’t even been a successful squirt in the dark yet.
I don’t think there’s an equivalent around here. Fiber internet connections are still a very young market in France.
We have something which does 117,2 Mb/s ATM down/6,0 Mb/s ATM up with TV/HDTV and landline-over-cable for 42.90€/month, though. But only for the happy few who have an optical fiber under their street. And they are, really, really few at the moment.
Edited 2011-02-02 17:06 UTC
…about the costs and about how the ISPs cannot afford the traffic.
Without numbers, I don’t believe anyone.
If you dig into the various CRTC filings, meeting minutes, etc. you’ll discover that Bell was completely unable to show any sort of congestion on their network, even during peak hours.
Also, as a public company, they regularly report their MASSIVE profits. Not just income, profit.
They’re looking for a handout, and they’re getting two: big tax cuts for corporations, and free money from their competitors via UBB.
Just figure out how much it costs to bring a fat pipe to my door and I’ll pay for it – but your are not allowed to tinker with my reruns of Reaper. The humanities!
” so, uh, where’s that 65 EUR/month going to that I pay for a combined internet/landline/digital cable HDTV?”
Well, actually it is used to pay for the network you are using. The point is, quite simply, that it is not enough.
Absolute, complete, and utter bull puckey.
I live in the United States.
1) I believe that the wiring should be like roads and that we, through the government should own the wires.
2) Any and ALL companies should have access to that wire (or fiber optic) and we should be able to pick and choose BOTH who we get internet from AND who we get TV from.
3) No exceptions. No contacts with cities. Nothing that would limit who we could choose to pick for each or both.
4) I can see them offering different services based on speed on content like cell phones. What SHOULD happen, with both cell phones these kind of plans, is a REASONABLE cost if you go over. None of this stupid … “STUFF” where someone normally has a $50 a month bill and suddenly they owe $500 or $1,000 for going over.
If you double what your contract usage says, you should pay no more than double that amount, and so on. AND … there should be clear notifications when you get near any limit, AND the cost should be a percentage based on what you go over.
Meaning that it wouldn’t suddenly double if you went over by 3%. The cost should only be 3% more, or 17% more if you went over 17%. And so on.
No exceptions for the providers to do “tricky” stuff.
I want to move to your nirvana. It would be wonderful.
Well, that 65 goes mostly to Disney/ESPN/HBO/etc – all those cable channels that you get. What is left over then pays for employees and hardware.
Now don’t forget that these are the same ISPs that refused to upgrade their services in the past so that each customer got the amount of bandwidth at all times that they were paying for.
So yeah, they overstretched themselves and now there’s a problem b/c the network they built is having problems handling the load that everyone else is expecting it should handle.
But let’s not forget that NetFlix, YouTube, Google, et al have to pay for a pipe too. They don’t get that access for free either.
Honestly, ISPs should be considered ‘Common Carriers’ just like the phone companies are for landlines. (Yeah, Cellphones don’t fall into that unfortunately. They should too.)
“They don’t get that access for free either. ”
The way the internet works in kinda of interesting. It’s not intuitive for a lot of people.
Google doesn’t pay ATT or whoever for internet access.
The internet is an ‘inter network’. It just joins lots of networks. Each network connects to others and they do their own negotiations on how much to charge each other. It really helps to think of Google, ATT, some local ISP, my own home network as all just networks.
So in the simple case. You have ATT and Verizon. They are 2 separate networks. Of course someone on ATT might want to talk to someone on Verizon. So they have an agreement. Since they’re both large carriers, they probably have what’s called peering agreement. Meaning, they basically won’t charge each other anything to talk to each other.
In the more complex case. I can start a mini ISP out of my basement. Now I want to send something to a user on ATT. I would have to get some kind of agreement with ATT. I guarantee you, it won’t be a peering arrangement like they have with Verizon. ATT spent billions on its network. I build my 100 dollar network in my basement. They gain nothing by being connected to me. I gain a whole lot by being connected to their network. So they have what’s called transit charges. Smaller ISPs pay larger ones to use their network.
Now you take a Google. They actually have their own networks. Think of it just like ATT or Verizon, or the one in my basement. But Google is very big. They have clout. ATT/Verizon gain a lot by being connected to Google. It’s in their best interest to peer with Google as all ATT users want to access Google. If ATT peers with Google and say Verizon doesn’t. How do Verizon users connect to Google? Verizon is going to have to pay transit charges… and since everyone uses Google, Verizon will lose lots of money.
As a result, it is in the interest of ISPs to sign peering arrangements with the big server guys (Yahoo, Google…). In short Google does not pay for ‘internet’ connections… it is it’s own ISP… It has its own fiber, routers, network equipment. actually we all are on our own network.
Then of course, the ISPs complain that so much traffic is going to Google/Youtube
It’s quite funny actually how the internet is organized. At this point… Google has a lot more power than the ISPs in this arrangement. They could cancel peering arrangements with ATT and everyone would have to switch to Verizon or ATT raises its costs.
The idea of ATT charging Google/Youtube as some advocate is actually hilarious. I’d love to see them try. It would be an interesting power struggle. As long as one ISP has a peering agreement with Google, the power struggle would be fun
Having worked not far from that side of things – yes they do. Companies get access to the general Internet as well, only instead of necessarily interfacing with AT&T or Verizon, they Interface to one of a number of back-bone providers.
So, your small businesses just do something not that dissimilar from home users. But as the business grows, you branch out, upgrades accounts, and eventually reach a peering status if you grow large enough.
So yes – Google has had to pay for their Internet connections. So did YouTube. At some point, they entered into Peer Agreements – agreements which basically just say “we transfer about the same amount of traffic between our networks every X time period so let’s just call it even”.
Additionally they still have to pay for laying those lines, and making all the connections to maintain their network – again, not free.
Now consider your local ISP. They pay to lay lines to your house, but their connectivity to the backbone is regulated by whoever their backbone provider is – whether its L3 or Sprint or AT&T or whoever. That provider pays to lay lines to the ISP, which if they are smart will have more than one backbone provider.
So, an ISP complaining about Google getting access to their network is absolutely silly since Google is doing the same thing for Internet access that the ISP is – it’s not free, and Google upgrades their networks far faster than the ISP does. Google, et al are not getting a free ride.
No you don’t. You just have to have a network that can communicate with AT&T’s network. If you want faster access to AT&T’s network then you’ll need either a direction connect to their backbone at some fee, or a peering agreement.
Usually the way it works is that some company X gets a connection to ISP/BackboneISP Y. At first they pay for that connection, and continue doing so until they provide enough traffic through other connections (or their own customers) to have enough leverage to negotiate a peering agreement with their ISP/BackboneISP.
No, Google didn’t get peering status from day one. They had to earn it. They still might not have peering status – it all depends on how much traffic they push out versus what they consume, in other words, they can’t just be pulling and sending traffic over the same network, they have to be providing unique traffic to the peer as well to get that peering agreement.
Verizon users get to Google through whatever networks are in between the two.
You do not need a peering agreement with every backbone provider on the planet. You only need enough to get the hops down to make your users happy.
Per your scenario, Verizon may never have a peering agreement with Google. They may be perfectly happy to let their peering agreement with AT&T provide the traffic with Google.
In short you misunderstand how it all works, and how companies get there.
Google may or may not have peering agreements with every ISP – in fact, I can pretty much guarantee that they do not. They don’t need one with every ISP.
The various players in the peering agreements go to the charges every time those agreements come up for renewal – once every couple years. It’s funny to watch them play out as they threaten to charge more for the network connectivity or whatever.
Whether Google/YouTube pays or not doesn’t really matter. The fact is, they have costs to maintaining their network that are at least as large if not significantly larger than the ISPs complaining in the first place. They also have network connectivity fees or peering agreements just like those ISPs too.
So again, it’s no free ride for Google, et al.
I don’t see where we disagree.
Google starts off as a small business and has to pay its own way… just like me out of my basement, but they’re big enough now to be their own ‘network’.
Once you’re big enough for ‘ISPs’ to worry about your traffic, chances are you’re big enough to start peering with.
It’s a common misconception that everyone ‘pays’ a traditional ISP for access to ‘the internet’. I was trying to simplify it by suggesting people think of everything as a network. But yes, you expand on a lot of the details…
Well we are already seeing people cut corners to save money. I swear the people who control us want to see us all fail.
People get rid of cable TV and take on something like Netflix to save money. Then we move to tiered data on the web and suddenly people are tightening the belt on data usage. So then internet shopping sites lose revenue because people want to save data usage to watch streaming services. Option 2 is these people simply pick back up television services and move on to something like dial up (email only and light browsing solution).
Greed is ruining us all! We are all going to drown in the greed of the people who run us, be it the Government, media company, cellphone carrier…
Monkey see monkey do, AT&T did tiered data, why can’t we milk the consumer for money they don’t have and call it “we don’t have the resources”?
CEO and Board are not content with 100 million in profits, they have to make 10 billion in profits, and let the infrastructure rot and blame it on customers so they can make 100 Billion in profits.
This “sort” of capitalism has to stop so others can participate.
Increasingly free _and_ _fair_ markets are being destroyed by the use of artificial scarcity of capital because it is being horded and locked away by a elite few.
If this continues, the internet will turn into a virtualized version of Detroit, rotting and in decay.
Take the billions from the CEO’s and invest them into new technology and research for not just the internet but for all sorts of sciences and technology and we can do away with the old school ideas of everything is a population problem, or a global warming problem.
Proper application of science and technology can easily solve these problems, but not if greed, decades of war stand in the way.
-Hack