Stacey Higginbotham at GigaOm conducted a great interview with Verizon CTO Dick Lynch, in which he endorsed broadband metering:
We believe that you have to be allowed to have a level of service that is not on a public Internet. What you’re suggesting is different kind of IP service that’s not delivered over the public Internet and that needs to be part of the option set in the argument.
http://blip.tv/play/AYGjswkC
Such metering,
if
allowed by Washington, might lessen the need for some of the network management practices that so incense net neutrality fanatics. So I’d really like to see Verizon and other ISPs explore using a “Ramsey two-part tariff,” as Adam has suggested again and again:
A two-part tariff (or price) would involve a flat fee for service up to a certain level and then a per-unit / metered fee over a certain level.
I don’t know where the demarcation should be in terms of where the flat rate ends and the metering begins; that’s for market experimentation to sort out. But the clear advantage of this solution is that it preserves flat-rate, all-you-can-eat pricing for casual to moderate bandwidth users and only resorts to less popular metering pricing strategies when the usage is “excessive,” however that is defined.
ISPs would have an incentive to set the demarcation to a point where, roughly, the vast majority of users would never have to worry about their usage, but the small percentage of bandwidth hogs would have a real disincentive to cut back on bandwidth use—thus avoiding the “Tragedy of the Commons,” which is really the “Tragedy of the Unmetered Commons,” as I noted a year ago.
In a past life — that is, from roughly 1994-2004 — I spent an enormous amount of time countering the proponents of “open access” regulation for communications and high-tech networks. My work in that field culminated in the publication of a 2003 book with my old Cato colleague Wayne Crews entitled, What’s Yours is Mine: Open Access & the Rise of Infrastructure Socialism. We aimed to counter the efforts of bureaucrats and central planners to command technology companies and industry sectors to share networks, facilities, or specific technologies with rivals in the name of “competition.” Simply stated, sharing is not competing, and
competition in the creation of networks is just as important as competition in the goods, services, and information that move across those networks. Moreover, there are property right considerations that come into play when governments seek to commandeer networks or take over network management decisions.
But let’s just stick to the economic issue here regarding the incentives created by the network-sharing mentality of the “forced access” movement and the fiction associated with the belief that network sharing can create competition. My old PFF colleague Randy May, who currently serves as President of the Free State Foundation, continues to cover developments in this field far closer than I do, and has always done much better work on the subject than me. Recently, Randy addressed some new fictions put forth by the radical Leftist activity group, the (Un-)Free Press who are, once again, spinning a revisionist history of telecom and media policy. Specifically, Free Press has recently suggested that in the late 1990s we lived in a veritable communications nirvana, with thousands of Internet Service Providers and/or “competitive exchange carriers” hotly “competing” for our business. Here’s how Randy May addresses this:
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Today I was invited to the Federal Communications Commission (FCC) to testify at one of the agency’s Broadband Working Group workshops. This particular workshop was on “Broadband Consumer Context,” which focused on “a range of challenges and opportunities as the internet becomes a focal point for commercial transactions, social networking, and a host of activities pertaining to information gathering and exchange.”
I was asked to address the issue of whether there is a relationship between online safety concerns and broadband uptake. In my testimony, I noted that, in my 15 years of research in this area, I have never unearthed any substantive empirical evidence suggesting a correlation between parental concerns about online activity and overall household broadband uptake. I have seen occasional anecdotal news stories discussing the concerns some parents have had about their kids online that led them to reject online connectivity, but these stories have been exceedingly rare (and I haven’t seen any in recent memory).
I also argued that I did not think it at all surprising that such anecdotes are harder to find, or that empirical evidence on this front seems non-existent. I argued that there were four logical explanations for why parental concerns about online safety haven’t “moved the broadband needle” much in the negative direction:
- Not every home has children present
- Parents use a variety of household media rules to control media & Internet usage
- A vibrant marketplace of parental control technologies exists
- Likely that most parents believe that the benefits of broadband outweigh the potential downsides
For all the details on each of those, read my entire testimony or check out the presentation embedded below that I made to the FCC today. Continue reading →
In response to my essay last night about this new Free Press campaign to layer price controls on the Internet by banning metered prices via Rep. Massa’s new bill (the “Broadband Internet Fairness Act“), George Ou and Richard Bennett reminded me of some of the contradictory statements that the (Un)Free Press crew have made on this issue. Indeed, if you look back at what Free Press and their chairman have said about the matter over just the past 18 months, they seem to be whistling two very different tunes.
For example, George Ou reminded me of what Free Press had to say in its November 2007 filing in the FCC’s Comcast-Bit Torrent proceeding:
“More importantly, if Comcast is concerned that the collective set of users running P2P applications are affecting quality of service for other users on a cable loop… they could also charge by usage.” (p. 29)
[…]
“Indeed, in many nations, network providers do meter, and bill their customers on the basis of amount used. So the transaction costs of doing so must not be prohibitively high. Indeed, a network provider can apparently meter cheaply because, in most networks, users’ traffic to and from the Internet passes through a single gateway, the network access server.” (p. 31)
And Richard Bennett reminded me of what Tim Wu, chairman of the Free Press, had to say about metering to the Washington Post just one year ago:
“I don’t quite see [metering] as an outrage, and in fact is probably the fairest system going — though of course the psychology of knowing that you’re paying for bandwidth may change behavior.”
So, what gives? Will the real Free Press please stand up? Does the Free Press believe in pricing freedom or price controls for the Internet?
Our readers may be interested in this excellent WSJ article, Too Risky for Venture Capitalists: Why proposals for a government bailout were roundly rejected. We should all take heart in the the fact that the venture capital community itself resoundingly opposed the notion of accepting a massive infusion of taxpayer money, especially Tom Friedman’s suggestion:
“You want to spend $20 billion of taxpayer money creating jobs?” Mr. Friedman wrote. “Fine. Call up the top 20 venture capital firms in America” and invest the money with them.
But I see three more reasons why those interested in technology policy should pay attention to this encouraging episode.
First, the groundswell of opposition seems to have been driven largely by the Internet, both as a vehicle for disseminating the bailout proposals and for voicing opposition to them:
Venture capitalists certainly agree that innovators and start-up companies, not bailed-out GMs or Chryslers, will create the new jobs. They rightly brag that almost 20% of U.S. gross domestic product is generated by companies built by venture capital, such as Intel, Apple and Google. Still, they almost universally panned the notion of taxpayer support. Their real-time rejection is an excellent example of how social media — here, the venture community dissecting a proposal online — can now quickly take down bad ideas.
Second, it should almost go without saying that venture capital is the fountainhead of innovation, especially the disruptive innovation that is constantly pushing the envelope of technology policy. A healthy VC sector is the bedrock of a dynamic, free and innovative economy. The VCs realize that this requires, more than anything else, avoiding the market distortions caused by government funding: Continue reading →
This is the third in a series of articles about Internet technologies. The first article was about web cookies. The second article explained the network neutrality debate. This article explains network management systems. The goal of this series is to provide a solid technical foundation for the policy debates that new technologies often trigger. No prior knowledge of the technologies involved is assumed.
There has been lots of talk on blogs recently about Cox Communications’ network management trial. Some see this as another nail in Network Neutrality’s coffin, while many users are just hoping for anything that will make their network connection faster.
As I explained previously, the Network Neutrality debate is best understood as a debate about how to best manage traffic on the Internet.
Those who advocate for network neutrality are actually advocating for legislation that would set strict rules for how ISPs manage traffic. They essentially want to re-classify ISPs as common carriers. Those on the other side of the debate believe that the government is unable to set rules for something that changes as rapidly as the Internet. They want ISPs to have complete freedom to experiment with different business models and believe that anything that approaches real discrimination will be swiftly dealt with by market forces.
But what both sides seem to ignore is that traffic must be managed. Even if every connection and router on the Internet is built to carry ten times the expected capacity, there will be occasional outages. It is foolish to believe that routers will never become overburdened–they already do. Current routers already have a system for prioritizing packets when they get overburdened; they just drop all packets received after their buffers are full. This system is fair, but it’s not optimized.
The network neutrality debate needs to shift to a debate on what should be prioritized and how. One way packets can be prioritized is by the type of data they’re carrying. Applications that require low latency would be prioritized and those that don’t require low latency would not be prioritized.
The Entertainment Consumers Association (ECA) is a group that does some good things to mobilize gamers to fight misguided regulation of video games. I greatly appreciate their tireless efforts to fight stereotypes and myths about games and gamers, and to specifically counter the hysteria about video games that we sometimes see in the press, and definitely see in political circles on a regular basis. They’re a great ally in the fight for freedom of speech and artistic expression in this field.
That’s why I was so sorry to see the ECA launch a new campaign that encourages gamers to petition their congressional leaders and encourage them to regulate the high-tech economy more and waste more taxpayer dollars on inefficient universal service programs and subsidies:
Net Neutrality and Universal Broadband are not only great for America; they allow us to play the games we want at high speeds! … ECA believes that Universal Broadband and Net Neutrality are vital for the development of the national infrastructure, and believes that this bill is an important opportunity to let Congress know that you agree.
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The Isle of Man may soon implement a “blanket license” whereby Manx broadband users could download as much music as they like in exchange for paying a “fee” (also known as a “tax,” since this would be non-optional) to their ISP that would supposedly be as low as $1.38/month. The Manx proposal sounds a lot like how SoundExchange administers a blanket license in the U.S. for web-casting of copyrighted music:
the money collected by the Internet providers would be sent to a special agency that would distribute the proceeds to the copyright owners, including the record labels and music publishers. They would receive payments based on how often their music was downloaded or streamed over the Internet, as they now do in many countries when it is performed live or on the radio.
As Adam Thierer has noted, Larry Lessig has endorsed at least a voluntary version of this idea, but Adam has raised a number of tough questions: Continue reading →
Some sensible thinking here about broadband pork stimulus plans from Saul Hansell of the New York Times. In his piece on the NYT Bits blog this week, “Does Broadband Need a Stimulus?” he argues that people should stop grumbling about the “relatively small sum” of $6 billion that the new administration has proposed for wiring rural areas and urban centers. Hansell argues:
This also seems to be a rather sound policy choice because, as I look at it, the noise about a broadband gap is hooey. With new cable modem technology becoming available, 19 out of 20 American homes eventually will be able to have Internet service that is faster than any available now anywhere in the world. And that’s without one new cable being laid.
That fact hasn’t prevented a lot of folks involved in telecommunications policy from calling for a lot of money to be spent on backhoes and cable riggers. For example, the Communications Workers of America and the Telecommunications Industry Association called for $25 billion in subsidies to network providers as well as tax breaks. The Free Press, a group that advocates for media diversity, recommended spending $44 billion, with an emphasis on subsidizing companies to compete with existing cable and phone companies.
Running a new fiber-optic cable to every American home may well increase competition in broadband providers, but it isn’t needed to deliver high-speed Internet service. Current cable modems use just one of the more than 100 channels on a typical cable system and can often offer speeds of 16 megabits per second or more. The next generation of modems, using a technology called Docsis 3, allows several of those video channels to be combined to offer what ultimately can be Internet service as fast as 1 gigabit per second — 10 times faster than is offered in Japan, which generally is regarded as having the fastest broadband infrastructure.
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Before commenting on Lawrence Lessig’s latest call to abolish the Federal Communications Commission (he issued a similar call for the FCC’s abolition earlier this year, which I commented on here), let’s recall what Tim Lee posted yesterday about “Real Regulators“:
Too many advocates of regulation seem to have never considered the possibility that the FCC bureaucrats in charge of making these decisions at any point in time might be lazy, incompetent, technically confused, or biased in favor of industry incumbents. That’s often what “real regulators” are like, and it’s important that when policy makers are crafting regulatory scheme, they assume that some of the people administering the law will have these kinds of flaws, rather than imagining that the rules they write will be applied by infallible philosopher-kings.
Ironically, Prof. Lessig — who typically defends many forms of high-tech regulation like Net neutrality and online content labeling — is essentially agreeing with Tim’s critique of bureaucracy. But Lessig seems to ignore the underlying logic of Tim’s critique and instead imagines that we need only reinvent bureaucracy in order to save it. But I’m getting ahead of myself. First, let’s hear what Lessig proposes.
In a
Newsweek column this week entitled “Reboot the FCC,” Lessig argues that the FCC is beyond saving because, instead of protecting innovation, the agency has succumb to an “almost irresistible urge to protect the most powerful instead.” Consequently, he continues:
The solution here is not tinkering. You can’t fix DNA. You have to bury it. President Obama should get Congress to shut down the FCC and similar vestigial regulators, which put stability and special interests above the public good. In their place, Congress should create something we could call the Innovation Environment Protection Agency (iEPA), charged with a simple founding mission: “minimal intervention to maximize innovation.” The iEPA’s core purpose would be to protect innovation from its two historical enemies–excessive government favors, and excessive private monopoly power.
As was the case with his earlier call to “blow up the FCC,” I am tickled to hear Lessig call for shutting down an agency that many of us have been fighting against for the last few decades. (Here’s a 1995 blueprint for abolishing the FCC that I contributed to, and here’s PFF’s recent “DACA” project to comprehensively reform and downsize the agency.)
But is Lessig really calling for the same sort of sweeping regulatory reform and downsizing that others have been calling for? And has he identified the real source of the problem that he hopes to correct? I don’t think so. There are 3 basic problems with the argument Lessig is putting forward in his essay. I will address each in turn.
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The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.