Well I apologize if I’m starting to sound like a broken record by asking this question yet again, but what would be wrong with metered pricing for broadband pipes? I have asked that question several times before, most recently in my post earlier this week on wi-fi piggybacking. I pose it again today in light of another article about a handful of customers apparently having their broadband connection cut-off because of excessive downloading.
According to a front-page article in today’s
Washington Post entitled “Shutting Down Big Downloaders“:
As Internet service providers try to keep up with the demand for increasingly sophisticated online entertainment such as high-definition movies, streaming TV shows and interactive games, such caps could become more common, some analysts said. It’s unclear how many customers have lost Internet service because of overuse. So far, only Comcast customers have reported being affected. Comcast said only a small fraction of its customers use enough bandwidth to warrant pulling the plug on their service.
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The Times of London recently reported that a London man had been arrested “on suspicion of illegally logging on to a wireless (Wi-Fi) broadband connection.”
Two officers saw the 39-year-old man sitting on a garden wall outside a home in Chiswick, West London. When questioned he admitted using the homeowner’s unsecured broadband connection from his position on the wall. He was arrested and the case was passed to the Metropolitan Police Computer Crime Unit. He was bailed to return in October and faces a fine or a jail term of six months, or both.
Detective Constable Mark Roberts gave warning that anyone caught illegally “hitching” or “piggy-backing” on to another’s wireless broadband connection could face arrest. “This arrest should act as a warning to anyone who thinks it is acceptable to illegally use other people’s broadband connections,” he said. “To do so potentially breaches the Computer Misuse Act and the Communications Act, so computer users need to be aware that this is unlawful and police will investigate any violation we become aware of.”
[The
Wall Street Journal’s excellent business technology blogger Ben Worthen wrote about the case here and there are some really excellent comments following that story that you should check out.]
Our own Tim Lee has written about this issue here before in an essay entitled “In Defense of Piggybacking.” In that piece, which he later turned into a New York Times editorial, Tim argued that:
“…there’s absolutely nothing wrong with connecting to an unprotected network. True, it’s rude to saturate someone else’s pipe with massive downloads. But for casual Internet use—web browsing, email, or instant messaging—the bandwidth used is trivial. While it might seem weird or creepy to people not very familiar with the practice, once they become more familiar with it, I think people will realize how harmless it is.”
While I don’t believe anyone should be arrested for wireless piggybacking, I’m not sure I agree entirely with Tim’s view of things either since there may be some real harms that come to both users and service providers from uninhibited piggybacking / wireless squatting. Let me explain.
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Recently I’ve noticed an interesting tension in libertarian theory. As I’ve mentioned before, I just completed work on a new paper on eminent domain abuse in Missouri that will be published by the Show-Me Institute next month. The basic conclusion of my paper is that eminent domain should only be allowed for public use—that the government should have the power to take someone’s property (with compensation) to build a road or a courthouse, but not to build a Wal-Mart or a shopping mall. One of the interesting wrinkles to this issue is what to do about public utilities: railroads, power lines, oil and gas pipelines, phone and cable services, etc. Like roads, these facilities are subject to serious holdout problems. And since the mid-19th century, the courts have held that takings for the construction of such infrastructure is a public use, provided that the railroad (or later other service) acted as a common carrier. As I understand it, for precisely this reason railroads were subject to certain common carrier requirements under the common law before the creation of the ICC.
That’s the tack we libertarians tend to take today. For example, here in Missouri I played a small role in drafting this proposed amendment to the Missouri constitution, which reads, in part, “property may be taken for transportation or utility facilities or transmission systems used by a railroad, regulated utility or rural electric cooperative.” When Adam wrote his magnum opus on the installation of FiOS in his neighborhood, he mentioned that Verizon came along and ripped up his yard not once but twice. He didn’t say for sure, but it sounds like they did it without getting his permission first. These comments suggest that the law gives Verizon permission to tear up peoples yards and even install new cabinet cases on their property without their permission. And I got the impression (Adam correct me if I’m wrong) that he wasn’t overly troubled by this invasion of his property rights.
But that brings me to my question: what does the “regulated” in “regulated public utility” mean? If in the ideal libertarian world telecom firms wouldn’t be subject to any regulations at all, how would we distinguish between those that are allowed to rip up Adam’s yard and those that are not? Should anyone who declares himself a public utility have the power to rip up anyone else’s yard? Or should no one be allowed to rip up Adam’s yard without permission?
Conversely, if some regulations
are justified by the public use limitations, which regulations are they, and how do we distinguish good regulations from bad ones?
Over at Huffington Post, Timothy Karr claims that “One attendee — a member of the Darwin-challenged Discovery Institute — sought to argue that the Internet be completely free of regulation” during the question and answers following Google Chairman and CEO Eric Schmidt’s address to the Progress & Freedom Foundation’s Aspen Summit. That would be me. Actually, I make no such argument. There is a place for antitrust enforcement (provided it aims to protect competition, not competitors) and consumer protection. I draw the line at economic regulation, or competition policy, which tries to ensure that everyone who can afford to hire a lobbyist profits and no one who can afford to hire a lobbyist fails in the marketplace.
http://www.youtube.com/v/_9uy1o6-azI
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Charter and I have this game we play. About once a year, they raise the rate for my broadband connection to something ridiculous like $53.99/month. I then call them up, pretend I want to cancel, and they offer me a “special offer” that allows me to pay something more reasonable, like $29.99/month, “for a limited time” or in exchange for a 1-year contract.
Last time I did this, the process was relatively quick and painless. After some hemming and hawing, the customer service representative took my information over the phone and that was that. This year, however, Charter has figured out that there’s this thing called “the Internet.” So when I called up my friendly Charter customer service representative, she informed me that I would need to sign up for a special offer through the website. Great! I thought. I picked the package I wanted, entered my information, clicked “Order,” and up popped a small window labeled “Charter Live Chat.” (“One more step!” it said, rather optimistically)
Charter doesn’t appear to have jumped on the Web 2.0 bandwagon, as the chat window worked by means of a frame that refreshed every few seconds, creating an annoying flicker. It was also extremely slow–after I typed a message, it would take more than a minute for the lady at the other end to respond. And she didn’t appear to have any of the contact information I’d just entered. In fact, after about 10 minutes of sitting around waiting for her to get back to me, she informed me that she was unable to access my account, and I’d have to call to get the account changed.
I’m at a loss to explain what Charter is trying to accomplish with this whole Internet-based ordering process. It doesn’t seem like it would cut down on labor costs much. And it’s certainly not any faster or more convenient for the customer. Maybe they’re hoping that if they make the process as cumbersome as possible, I’ll give up and pay their inflated prices without a fuss?
A TLF reader points me to this interesting story of a network neutrality violation in reverse:
Recently, several people have been writing about ESPN360: a website that attempts to block subscribers arriving from an ISP who is not a subscriber. Essentially, they are trying to replicate the cable subscription model (get your ISP to pony up money so that you can see this stuff) only on the web.
It would be hard to overstate just how foolish (and wrongheaded) this is. But the entire escapade makes some very important points in the debate about net neutrality. That debate was never about some mythically “neutral” network, but was rather about the ever-shifting balance of power between content and eyeballs. Content providers (Google, Yahoo, BBC, and evidently ESPN) believe that users want their content more than their content wants the users. And so, a new battle is begun. Who has move leverage: the pretty pictures or the glassy eyeballs?
Now, I’d be willing to bet money that ESPN’s scheme will fail. ESPN’s ability to charge money for its old cable channel was largely driven by the paucity of cable sports channels on the market, which in turn was driven by the high costs of producing and delivering the channel. Technological change is undermining that situation in two ways: by driving down the costs of producing and distributing video content, and by making it possible for users to reach a lot of news sources that they weren’t able to reach in the old days. That will put substantial downward pressure on the prices ESPN is able to charge for access to its content, and may make it infeasible for ESPN to charge at all.
Still, it does raise an important point: the standoff between content companies and residential broadband ISPs is in many ways a symmetrical one. An Internet connection isn’t very useful without access to content, and a website isn’t very useful if users can’t reach it. So in a negotiation between, say, Google and AT&T, each side has some leverage. It’s not immediately obvious why AT&T would be able to charge Google for access to its customers, rather than Google charging AT&T for access to its search engine. And it’s perfectly plausible that the most stable equilibrium is the one we’ve got now, in which neither residential ISPs or website operators pay the other for access to their networks or content.
More bad press for the muni wi-fi movement. It seems like each week brings another story of how things haven’t quite turned out as planned. This week, it’s Business Week with a story about “Why Wi-Fi Networks Are Floundering.” In the piece, author Olga Kharif argues that:
The static crackling around municipal wireless networks is getting worse. San Francisco Wi-Fi, perhaps the highest-profile project among the hundreds announced over the past few years, is in limbo. Milwaukee is delaying its plan to offer citywide wireless Internet access. The network build-out in Philadelphia, the trailblazer among major cities embracing wireless as a vital new form of municipal infrastructure, is progressing slower than expected.
These potholes in the nation’s wireless rollout of civic ambition—criticized by many as an improper use of tax dollars—are hardly the exception. For the road is getting bumpier for cities and the companies they have partnered with in a bid to blanket their streets with high-speed Internet access at little or no cost to users.
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Net neutrality regulation has often been described as a “solution without a problem.” While supporters produce hypothetical concerns like little chocolate doughnuts, real-life examples of abuse have been virtually impossible to find. That probably explains the excitement in the pro-regulation camp over an incident last week involving the unlikely combination of AT&T and Pearl Jam.
It all started one week ago Sunday, during the annual Lollapalooza music festival in Chicago. Pearl Jam was singing the ancient hit “Another Brick in the Wall,” updating it to include some not-so-complimentary verses about George Bush. So far so good. But, as it turns out, some of the Bush references were bleeped out of the webcast of the event being shown on AT&T’s “Blue Room” website (attblueroom.com).
The incident has been seized on by pro-regulation advocates as their long-sought “smoking gun” on the need for neutrality rules. “Over the weekend, AT&T gave us a glimpse of their plans for the Web when they censored a Pearl Jam performance that didn’t meet their standard of “Internet freedom,” reported SavetheInternet.com. “See what the Internet would look like without Net Neutrality,” advertised Free Press.
Pearl Jam itself declared itself a political victim, issuing a statement stating that: “What happened to us this weekend was about something much bigger than the censorship of a rock band.”
Actually, the incident was about something much smaller than that.
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Do you mean to tell me that muni wi-fi networks will actually cost money? I’m shocked, shocked, I tell you. Where’s the free lunch we were promised?!
[see
San Jose Mercury News story below]
Municipal WiFi: A not-so-free lunch
by Sarah Jane Tribble
Mercury News
08/06/2007
It’s been more than a year since Silicon Valley’s Joint Venture Wireless Project first announced plans to build a regional wireless network, giving millions of local residents free access to the Internet. But that network won’t be so free after all, and the area’s millions of local residents may not really use it.
While initially the project was lauded as a way to give the masses affordable Internet, key organizers have gently shifted the focus of the network from serving residents, for free, to giving businesses and city governments wireless access, for a price. …
But the increasing focus on dollars and cents reflects a trend nationwide: As cities strive to provide wireless Internet service, they’re realizing it can’t truly be free.
[Read the rest here.]
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