Smalltalk Tidbits, Industry Rants

With the price of oil already slowing down the economy, the last thing we need is rising Internet costs.

Who knows? Maybe this will be the straw that makes Congress overwhelmingly pass a Net Neutrality act. If they divorce pipe owners from service providers, or at least force them to open up access on an equal basis, a lot of the idiotic moves that the phone and cable companies are doing will stop. I'm talking about blocking P2P or choking off downloads after a few minutes or suddenly cutting a subscriber off after they hit some unpublicized usage limit. Or the dreaded dribble curve (speed starts out fast, but after 30 minutes or so begins to slowly decline until it is almost unusable after about 2 - 3 hours). Or blocking packets from VOIP competitors like Skype, so that subscribers will buy up into the everything package.

If metered Internet usage becomes common again, a number of businesses that depend upon net-based marketing and distribution will be hurt.  No doubt the cable & phone companies would simply offer "partnerships" that would make traffic to/from a certain domain exempt from the meter.

All of our plans over here in Oz are of that type.  And the few "all you can eat" plans still have limits on them along the lines of you cannot go 20% above the average download of the other users.

It sucks but the momentum is with the ISP's so it continues 

Comment by Troy Brumley

What is the cost of an incremental bit up or down a line? If it approaches zero, as I suspect, we can hope for some few upstarts who make more off of volume (google, amazon) to possibly create competing ISPs that offer flat rate plans. I don't object to having different plans by speed and rough averages of capacity, but metering is stupid and I suspect a lot of people will flee to some other choice if one is offered.

Comment by Terry

Seems to me that metering would better reflect a market than flat rate because it is a better indicator of usage. Imagine what our electric production would look like if everyone paid a flat electric rate.

In the short term, the introduction of metering would cause turmoil but eventually facilities would be developed that would reduce bandwidth requirements and peoples usage patterns would change so they would avoid sites and activities that cost them too much. Additionally, I think it would change the manner in which web advertising is done because people would start avoiding sites that cause their meters to rise to push out the adverts.

Comment by Troy Brumley

Terry, I used to take the "information superhighway" analogy pretty literally but the metaphor breaks down quickly. I think the market will accept paying for a connection, but fiber doesn't break down like roads do from traffic, and so I don't think it will accept paying a metered fee. This provides the opportunity for someone who doesn't charge a fee to become the provider of choice.

Back when we were all on dial-up, there was much competition. If your ISP did not meet your needs, you could easily switch to one of many alternatives.

A few years ago, there was a decision that cable and DSL connections were not subject to rules requiring the wire owner to offer similar terms to competing service providers that use their pipes. Consequently, in many communities, there may be only one or two providers of "high speed" access. If that provider decides to meter its service, customers may not have much choice. If it becomes politically expedient, the government will eliminate this special provision, which will once again bring needed competition to the market. Otherwise, maybe we'll replace browsing the Web with family Scrabble sessions.

In other words, if TW cable is the only high speed provider in an area, people will not be able to vote with their feet. This will affect everyone from teens using iTunes, to college students using BitTorrent to download FreeBSD installation CDs, to day traders using stock trading sites, to political junkies listening to online NPR streams, to people such as myself that view their TV online (one show, Numb3rs), to chronic YouTube viewers. Secondarily, it will affect eBay, Google, and even mom and pop e-tailers, perhaps enough to reshape an economy grown dependent upon online commerce. As we have seen over the past year, even our political system is starting to depend upon the Net.

I do agree with Terry that it could finally help kill distracting "rich content" advertising (maybe we'll all browse using the Lynx text-mode browser and skip the huge graphics files and scripts). But hey, if companies want to spend money on ads that viewers actively ignore or block (or avoid by choosing other sites), maybe they deserve that.

I do anticipate that the next administration will probably be more consumer oriented than the present one has been, so there is likely to be some pressure to at least modify this scheme next year.

Comment by Troy Brumley

A couple of points in response to W^L+, with no particular conclusion being implied by me. I'm just exploring the ideas and looking to see what others might come back with.

Metered usage fees do provide something new for Congress to generate tax revenue from. A counterpoint to that would be the class warfare rhetoric noting that only the rich will have good Internet access and making the US a target for OLPC deployment as we slip further down the strength of information flow metrics versus the rest of the world.

Several municipalities and some non profits (Lilypad in Cincinnati) are looking to make wireless internet service more cheaply available in an effort to be "e" friendly.

Companies such as Google, Amazon, and now Apple are building businesses around the cheap and easy internet model. They have an interest in keeping barriers low. Lobbying efforts seem likely, and I still think it's possible for one or more of these companies to compete with metered usage, especially wireless. Does Apple even offer anything but the mini without wireless access?

Wardriving will make a comeback as people try to leach off other people's connections, and the consumer will expect the providers to find solutions to the problem so they don't get billed incorrectly. Litigation costs will go up.

I'd like to see such zero-price / low-price Wi-Fi access spreading to most towns and cities. Unfortunately, whenever it seems that such a plan will be successful in an area with a substantial population, the local wire owners and service providers feel (rightly) threatened. They raise the specter of using the taxes they pay to compete with their businesses (again, a real issue that needs to be considered). They usually succeed in blocking the service. Hopefully these issues can be worked through.

Probably the most likely to pass solution is to have Wi-Fi throughout the city, but free access only to those below a certain income, with others having to pay a fee or use their access credentials from a local ISP. However, in an area without competition, a muni wireless network would be a valuable brake on the behavior of the incumbent provider.

Google was a partner with Earthlink in a failed attempt to bring muni wireless to San Francisco. This makes it less likely that they will be willing to roll out such a network to much of the nation.

I still think that Net Neutrality would help solve some of the issues.