Geeky Conspiracy Theories

by on November 16, 2005 · 43 comments

Donna Wentworth links to a very long article about how telecom companies are going to destroy the open Internet we now enjoy and replace it with a proprietary network that only allows officially-approved traffic.

The theory is that the telcos want to be able to charge us premium prices for various telecom services like phone calls and video. But they can’t do that on the current Internet, where you get unlimited data access for a flat fee. So, the theory goes, the telcos would dearly like to replace the open, end-to-end Internet with a proprietary network that only allows approved content to be exchanged.

I think the author of the article is wrong. Indeed, with all due respect to the people pushing so-called “network neutrality” regulations (whose arguments I find persuasive on a lot of other issues), I think it’s rather silly. The Internet is a massive, chaotic, fiercely competitive ecosystem. No one carrier owns more than a tiny fraction of its capacity. No one company controls more than a tiny fraction of its content. In short, no one company is ever going to control the Internet.

But can’t telcos phase in restrictions piecemeal, gradually tightening users’s access to services that compete with their own until the open Internet is de facto transformed into a closed system?


To see how unlikely this scenario is, consider a co-worker I had when I was a systems administrator at a major state University. He was on the campus network security team, and as part of his job, he tried to limit the use of peer-to-peer applications. (the administration’s primary concern was waste of bandwidth, not piracy) I shared an office with the guy, and so I can say from personal experience that the effort drove him absolutely crazy. The users of peer-to-peer applications found innumerable ways to evade the controls, leading to an arms race that the administration always lost. Eventually, he gave up on blocking the applications and contented himself with rate-limiting them so that they didn’t waste excessive bandwidth.

Now, this is a relatively small network of maybe 50,000 computers. Its users were a captive audience–most of the abusers were in the dorms, where they had no alternatives for broadband service. The challenge faced by Comcast, if it decided to block certain applications for its millions of users, would be much greater. A company of that size can never do anything in secret. Whenever they put into place a new filtering mechanism, thousands of Comcast customers would immediately begin studying it to figure out the best workaround. So would the companies whose content was blocked. More likely than not, within a matter of hours somebody would post the work-around and it would spread among the application’s users.

Moreover, Comcast has at least one competitor in every single market. Every time Comcast pulled such a stunt, some of their customers would doubtless get fed up and switch to a competing carrier. And if such filtering became widespread, there would quickly spring up a cottage industry of evasion tools. I won’t bore you with the technical details, but there are plenty of ways to camoflage Internet traffic to evade firewall restrictions. If there were millions of customers who wanted a way to get to content their ISP wouldn’t let them access, that would be an enormous market.

But what if Comcast, instead of blocking particular services, simply blocked all content not specifically approved by the company? They could certainly do that, and it would effectively prevent users from accessing unauthorized content. But it would also be economic suicide on Comcast’s part. There are dozens and dozens of specialized applications that various users access for legitimate reasons–games, VPN networks, porn streams, instant messaging, etc. There is no way that Comcast could individually approve and inspect every such application. A permission-based Internet would be unacceptably crippled to millions and millions of customers. No company is going to succeed with millions and millions of angry customers.

And even if every broadband provider enacted such restrictions simultaneously to prevent users from fleeing, (something that would be extraordinarily difficult to coordinate and probably a violation of antitrust laws) it’s unlikely that would be the end of the story. The Internet backbone isn’t just used by consumer broadband users. It’s also used by universities, major corporate customers, governments, users in other countries, etc. It’s exceedingly unlikely that they would go along with transforming the Internet into a closed, proprietary infotainment network owned by the Baby Bells and the cable industry. And as long as a critical mass of the Internet remained open, there would be a powerful demand for home access to that Internet. Comcast and Verizon might cut off access, but someone–perhaps an independent WiMax or satellite provider– would find a way to bring it to them (and would get filthy rich doing so). And there are so many neat services on the Internet not controlled by the broadband industry that the closed Internet would face an exodus of customers the moment they had a choice.

There’s only one institution in the world that could destroy the open Internet, and that’s the U.S. government. There are too many players with too many distinct interests for any group of private companies to fundamentally transform the ‘net by fiat. But the government might be able to. That’s why I consider so-called “net neutrality” legislation so dangerous. Not because I think it’s a bad goal–to the contrary, I understand it’s vital to the way the Internet works. Rather, I’m concerned because it would give the federal government increased authority over the Internet’s architecture. Even if that power isn’t misused right away, once it’s in the hands of the government, there’s always a threat that Big Telecom could use that authority at some point down the road to create a network cartel.

What I found most interesting about the pro-network-neutrality folks’ arguments is that they seem unable to cite any credible attempts by telcos to close the Internet. Nor have I seen any detailed explanation of how such an effort would work, aside from vague predictions that they’d lobby for federal legislation. But if their plans can only succeed with federal legislation, shouldn’t we be trying to keep Congress as far as possible from regulating the Internet? And if it can be done without any new legislation, I’d like to see someone explain how.

When it comes to copyright, people like Larry Lessig write movingly of the dangers of allowing government regulation to strangle the organic process of cultural creation. They understand that open, free, competitive processes will almost always lose in Washington because the content industry is so much better organized and has so much more money to spend influencing policy.

It’s always jarring to see that when it comes to Internet regulation, the sides are reversed. There, the Lessigs of the world are clamoring for greater government control over the network, seemingly oblivious to the danger that once decisions over network architecture are made by regulatory hearing or lawsuit, the bad guys are likely to get the upper hand. The commons movement is absolutely right that lobbyists and lawyers should keep their hands off our culture. By the same token, we need to insist that they keep their hands off the Internet.

  • http://www.tallent.us/ Richard Tallent

    Dude, you are just so wrong. Head in the sand, Pollyanna wrong. My response:

    http://www.tallent.us/blog/CommentView.aspx?guid=d6f3bc71-8248-4ee2-b5e5-797208c2cd5a

  • http://www.tallent.us/ Richard Tallent

    Dude, you are just so wrong. Head in the sand, Pollyanna wrong. My response:

    http://www.tallent.us/blog/CommentView.aspx?gui

  • Krilli

    “Comcast has at least one competitor in every single market. Every time Comcast pulled [...] a stunt, some of their customers would doubtless get fed up and switch to a competing carrier.”

    Customers can switch to other carriers as long as running a more open service is legal.

    Could Comcast make a trillion dollar by purchasing laws to ban the less limited access of their competition? I believe so. If they do too, they *will* purchase such laws.

  • Krilli

    “Comcast has at least one competitor in every single market. Every time Comcast pulled [...] a stunt, some of their customers would doubtless get fed up and switch to a competing carrier.”

    Customers can switch to other carriers as long as running a more open service is legal.

    Could Comcast make a trillion dollar by purchasing laws to ban the less limited access of their competition? I believe so. If they do too, they *will* purchase such laws.

  • http://www.binarybits.org/ Tim

    Krilli: That’s true! Which is why we need to keep Congress and the FCC as far away legislating Internet architecture as possible. Once the FCC starts issuing “net neutrality” regs, there’s no way to be sure that in the future the same rulemaking process couldn’t be abused by broadband companies.

  • http://www.binarybits.org/ Tim

    Krilli: That’s true! Which is why we need to keep Congress and the FCC as far away legislating Internet architecture as possible. Once the FCC starts issuing “net neutrality” regs, there’s no way to be sure that in the future the same rulemaking process couldn’t be abused by broadband companies.

  • http://www.binarybits.org/ Tim

    Krilli: That’s true! Which is why we need to keep Congress and the FCC as far away legislating Internet architecture as possible. Once the FCC starts issuing “net neutrality” regs, there’s no way to be sure that in the future the same rulemaking process couldn’t be abused by broadband companies.

  • MD

    I guess a good “canary in the coal mine” test of this would be Skype and its imitators. Here is a service (long distance talk) that is a cash cow around the world. With Skype connecting to the POTS system (Plain Old Telephone Service) it is no longer part of the geek club. When open-source variant come on-line, PC-to-PC conections can be encrypted.

    If ever an application created a perfect storm of telco and government hatred, this application will do it. (I’ve already seen FUD in the technical press about how “Skype is unsecure/evil for your corporation…”)

  • MD

    I guess a good “canary in the coal mine” test of this would be Skype and its imitators. Here is a service (long distance talk) that is a cash cow around the world. With Skype connecting to the POTS system (Plain Old Telephone Service) it is no longer part of the geek club. When open-source variant come on-line, PC-to-PC conections can be encrypted.

    If ever an application created a perfect storm of telco and government hatred, this application will do it. (I’ve already seen FUD in the technical press about how “Skype is unsecure/evil for your corporation…”)

  • MD

    I guess a good “canary in the coal mine” test of this would be Skype and its imitators. Here is a service (long distance talk) that is a cash cow around the world. With Skype connecting to the POTS system (Plain Old Telephone Service) it is no longer part of the geek club. When open-source variant come on-line, PC-to-PC conections can be encrypted.

    If ever an application created a perfect storm of telco and government hatred, this application will do it. (I’ve already seen FUD in the technical press about how “Skype is unsecure/evil for your corporation…”)

  • Mark Murphy

    Moreover, Comcast has at least one competitor in every single market.

    Ah, yes, because a local duopoly is just so much better than a local monopoly. Any so-called “free” market with structual barriers to entry (e.g., rights-of-way) will tend towards monopoly or oligopoly.

    Every time Comcast pulled such a stunt, some of their customers would doubtless get fed up and switch to a competing carrier.

    Only if there exists a competing carrier that is a true substitute and has not themselves “pulled such a stunt”. With a monopoly or oligopoly, eventually all competitors will pull stunts.

    And even if every broadband provider enacted such restrictions simultaneously to prevent users from fleeing, (something that would be extraordinarily difficult to coordinate and probably a violation of antitrust laws)…

    Antitrust laws, in recent years, have been applied almost exclusively to individual firms. I can’t remember the last American cartel that was busted up. Look at it this way: how was it that all the gas stations near you managed to raise prices in concert to similar levels post-Katrina? Random chance? And there’s a lot more gas stations near you than broadband providers.

    It’s also used by universities, major corporate customers, governments, users in other countries, etc.

    Businesses and governments routinely put limits on personal Internet access from the office. Users in other countries may not experience problems, but Doc Searls’ article was aiming at an American audience.

    Comcast and Verizon might cut off access, but someone�¢â?¬â?perhaps an independent WiMax or satellite provider�¢â?¬â? would find a way to bring it to them (and would get filthy rich doing so).

    One can only hope.

    Rather, I’m concerned because it would give the federal government increased authority over the Internet’s architecture.

    The federal government is the only means we have of addressing monopolies and oligopolies. Without federal government intervention, we’d have one phone company (AT&T) and no Internet. Believe me, I like government meddling as little as you probably do, but sometimes it’s necessary. For example, somebody putting a muzzle on the FCC and re-enabling real local broadband competition (e.g., re-opening up local copper for competing DSL providers) can only be done by the federal government.

    And if it can be done without any new legislation, I’d like to see someone explain how.

    1. Eliminate competition, via lobbying the FCC (SBC, Verizon, etc. don’t need to allow other DSL carriers anymore) and suing municipal broadband efforts, so any given local market has 1-2 broadband providers with no prospects of change.
    2. Start blocking whatever they want, like VOIP (already being blocked/degraded by some ISPs).

    once decisions over network architecture are made by regulatory hearing or lawsuit, the bad guys are likely to get the upper hand.

    And this is where you haven’t been paying attention — this is already happening. All “the Lessigs of the world” are trying to do is re-balance the playing field. I mean, maybe you have a few billion $$$ in a trust fund to lobby the FCC with, but I don’t, so I need “the Lessigs of the world” to help provide lobbying.

  • Mark Murphy

    Moreover, Comcast has at least one competitor in every single market.

    Ah, yes, because a local duopoly is just so much better than a local monopoly. Any so-called “free” market with structual barriers to entry (e.g., rights-of-way) will tend towards monopoly or oligopoly.

    Every time Comcast pulled such a stunt, some of their customers would doubtless get fed up and switch to a competing carrier.

    Only if there exists a competing carrier that is a true substitute and has not themselves “pulled such a stunt”. With a monopoly or oligopoly, eventually all competitors will pull stunts.

    And even if every broadband provider enacted such restrictions simultaneously to prevent users from fleeing, (something that would be extraordinarily difficult to coordinate and probably a violation of antitrust laws)…

    Antitrust laws, in recent years, have been applied almost exclusively to individual firms. I can’t remember the last American cartel that was busted up. Look at it this way: how was it that all the gas stations near you managed to raise prices in concert to similar levels post-Katrina? Random chance? And there’s a lot more gas stations near you than broadband providers.

    It’s also used by universities, major corporate customers, governments, users in other countries, etc.

    Businesses and governments routinely put limits on personal Internet access from the office. Users in other countries may not experience problems, but Doc Searls’ article was aiming at an American audience.

    Comcast and Verizon might cut off access, but someone�¢â?¬â?perhaps an independent WiMax or satellite provider�¢â?¬â? would find a way to bring it to them (and would get filthy rich doing so).

    One can only hope.

    Rather, I’m concerned because it would give the federal government increased authority over the Internet’s architecture.

    The federal government is the only means we have of addressing monopolies and oligopolies. Without federal government intervention, we’d have one phone company (AT&T;) and no Internet. Believe me, I like government meddling as little as you probably do, but sometimes it’s necessary. For example, somebody putting a muzzle on the FCC and re-enabling real local broadband competition (e.g., re-opening up local copper for competing DSL providers) can only be done by the federal government.

    And if it can be done without any new legislation, I’d like to see someone explain how.

    <ol>
    <li>Eliminate competition, via lobbying the FCC (SBC, Verizon, etc. don’t need to allow other DSL carriers anymore) and suing municipal broadband efforts, so any given local market has 1-2 broadband providers with no prospects of change.</li>
    <li>Start blocking whatever they want, like VOIP (already being blocked/degraded by some ISPs).</li>
    </ol>

    once decisions over network architecture are made by regulatory hearing or lawsuit, the bad guys are likely to get the upper hand.

    And this is where you haven’t been paying attention — this is already happening. All “the Lessigs of the world” are trying to do is re-balance the playing field. I mean, maybe you have a few billion $$$ in a trust fund to lobby the FCC with, but I don’t, so I need “the Lessigs of the world” to help provide lobbying.

  • Mark Murphy

    Moreover, Comcast has at least one competitor in every single market.

    Ah, yes, because a local duopoly is just so much better than a local monopoly. Any so-called “free” market with structual barriers to entry (e.g., rights-of-way) will tend towards monopoly or oligopoly.

    Every time Comcast pulled such a stunt, some of their customers would doubtless get fed up and switch to a competing carrier.

    Only if there exists a competing carrier that is a true substitute and has not themselves “pulled such a stunt”. With a monopoly or oligopoly, eventually all competitors will pull stunts.

    And even if every broadband provider enacted such restrictions simultaneously to prevent users from fleeing, (something that would be extraordinarily difficult to coordinate and probably a violation of antitrust laws)…

    Antitrust laws, in recent years, have been applied almost exclusively to individual firms. I can’t remember the last American cartel that was busted up. Look at it this way: how was it that all the gas stations near you managed to raise prices in concert to similar levels post-Katrina? Random chance? And there’s a lot more gas stations near you than broadband providers.

    It’s also used by universities, major corporate customers, governments, users in other countries, etc.

    Businesses and governments routinely put limits on personal Internet access from the office. Users in other countries may not experience problems, but Doc Searls’ article was aiming at an American audience.

    Comcast and Verizon might cut off access, but someone�¢â?¬â?perhaps an independent WiMax or satellite provider�¢â?¬â? would find a way to bring it to them (and would get filthy rich doing so).

    One can only hope.

    Rather, I’m concerned because it would give the federal government increased authority over the Internet’s architecture.

    The federal government is the only means we have of addressing monopolies and oligopolies. Without federal government intervention, we’d have one phone company (AT&T;) and no Internet. Believe me, I like government meddling as little as you probably do, but sometimes it’s necessary. For example, somebody putting a muzzle on the FCC and re-enabling real local broadband competition (e.g., re-opening up local copper for competing DSL providers) can only be done by the federal government.

    And if it can be done without any new legislation, I’d like to see someone explain how.

    <ol>
    <li>Eliminate competition, via lobbying the FCC (SBC, Verizon, etc. don’t need to allow other DSL carriers anymore) and suing municipal broadband efforts, so any given local market has 1-2 broadband providers with no prospects of change.</li>
    <li>Start blocking whatever they want, like VOIP (already being blocked/degraded by some ISPs).</li>
    </ol>

    once decisions over network architecture are made by regulatory hearing or lawsuit, the bad guys are likely to get the upper hand.

    And this is where you haven’t been paying attention — this is already happening. All “the Lessigs of the world” are trying to do is re-balance the playing field. I mean, maybe you have a few billion $$$ in a trust fund to lobby the FCC with, but I don’t, so I need “the Lessigs of the world” to help provide lobbying.

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