“Internet isolationism is bad for business”

don-corleone.jpgDan Kaminsky has a good essay on internet isolationism, which is his name for the opposite of net neutrality. It starts:

Oh, sure, there’s UPS and DHL and the US Postal Service. But imagine if they were all proposing that, because people make money based on the contents of packages other people shipped, that they should see some of that money. Imagine they implied that, if you or your company did not pay a reception fee… well, things might happen. Packages might get lost, you see.

Read “Internet Isolationism is bad for business.”

Me, I’m fond of noting when business tactics can be compared to the mafia. Anyway, it’s a good essay, and worth realizing that the opposite of neutrality isn’t opinion, it’s isolationism and an end to innovation on the internet.

7 thoughts on ““Internet isolationism is bad for business”

  1. Very good article pointing out how silly the content discrimination is. I wish he had made even clearer for his audience the distinction between charging for package volume and package contents…a lot of folks seem to think net neutrality doesn’t allow for different classes of service but clearly it does: ISPs will continue to charge for bandwidth based on usage.
    Net discrimination based on content is a bad idea (unless you run a private network), but this is primarily a cautionary tale as opposed to a real threat to the internet. That said it is certainly worth educating the public about the absurdities and perils of content discrimination.
    A free (free as in freedom) internet emerged from a free society (which will hopefully stay that way…) driven by a fundamental need: communication. I am certain that market demand combined with healthy competition will work around and ultimately punish any service providers engaging in network discrimination.
    I expand on this at length here: http://www.infreemation.net/2006/06/04/the-internet-wants-to-be-free/

  2. The spirit is good but the analogy is weak. In the physical world the shippers typically pay all of the cost, pay it to one provider, and **pay it based on volume and weight**. In the digital world, both shippers and consumers pay, they typically pay different providers, and only shippers pay based on bandwidth. So, a better analogy is:
    Company A wants to ship honking big package to Consumer. Company A pays FedEx based on weight, but FedEx must hand off the honking big package to UPS for delivery to the customer. UPS is paid by the package, and bases its rates on letters. UPS takes one look at the honking big package, thinks about it’s 39 cent rate, and says “no way, if you want to put that honking big package in my system, you have to pay for a honking big package”.
    The problem is simply that consumer rates are not based on bandwidth. If consumers want to use VoIP and get digital video/music/movies etc, consumers should pay for it.
    Where does the term “net neutrality” come from, anyway? It’s one of those good-sounding but horendously misleading terms that politicians think up around election time. Neutrality doesn’t exist when everyone pays the same, neutrality exists when everyone pays their fair share for the service they receive.
    Neutrality means that if Customer A uses ten times the resources than customer B, Customer A pays ten times the cost. That’s neutrality. That’s equity. Anything else is just a subsidy from one to the other.
    Our nation, as a whole, is too used to the subsidies that exist simply to favor one political power over another. “My country tis of thee, sweet land of subsidy” — when will it end?

  3. I disagree with the UPS/DHL, USPS analogy, however I will state that I work with Hands Off the Internet in opposing net neutrality regulations. The analogy of mail delivery is an appropriate one however, nobody will have thier package lost, misplaced, slowed,etc. Instead, you can pay more for rush overnight or for standard. Either way the package gets to its destination. Also, you pay more for a package that weighs more (comparable to a packet that uses more bandwidth).
    The term discrimination is misleading. While it is discrimination, ie recognizing the difference between packets and prioritizing based necessity, nobody is being neglected or degraded. VOIP, video, and eventually tv packets will have higher priority to ensure uniterrupted service and higher quality.
    In addition, the net neutrality debate reminds ms of the open access deabte of the ’90s. As Deborah Lathen is president of Lathen Consulting, LLC and former chief of the Cable Services Bureau at the FCC points out in this article.
    The claims that small ISPs would be forced out and innovation would die never happened. This is a similar case.
    http://www.broadcastingcable.com/article/CA6347085.html

  4. The problem is simply that consumer rates are not based on bandwidth. If consumers want to use VoIP and get digital video/music/movies etc, consumers should pay for it.
    I don’t think that’s true. My ISP gives me a certain amount of bandwidth. If I want a fatter pipe, I have to pay a higher monthly rate. If that isn’t a ‘rate based on bandwith,’ what is? Besides, the debate isn’t over what consumers should pay, it’s over what content providers should pay.
    Neutrality doesn’t exist when everyone pays the same, neutrality exists when everyone pays their fair share for the service they receive.
    That’s the spin being pushed by the network carriers. But it’s not about that at all, because people already pay based on the bandwidth they need.
    Where this is really going is the question of whether carriers can favor one content provider’s packets over another’s. Let’s say AT&T wants to protect their phone service. Can they drop VoIP packets from Skype? If they have a deal with Microsoft, can they slow down downloads from Apple iTunes? That’s what this debate is about. It’s about whether service providers can create content monopolies or whether they have to act as common carriers.
    If this kind of content discrimination is allowed, the Internet is going to start looking less like a peer-to-peer model, with multiple content providers, and more like cable TV, where there are only a few large providers of content and everyone else is only allowed to be a consumer. This would obviously be highly detrimental to small websites and start-ups.

  5. David, I’m glad that you are paying based on bandwidth. My ISP simply cuts off anyone that uses too much.
    The newer uses of the Internet do consume more resourses than the old text-based HTML pages I played with in the 90s. Someone has to pay for those resources. I agree with you that the consumer should pay. I disagree with the carriers, who want the content providers to pay.
    Where we may disagree is on how to bring that about. I think that legislation and regulation is a poor substitute for competition. I’d much rather see multiple carriers (e.g. DSL, cable, etc) battling for the consumer dollar than to see only one provider that is regulated.
    If many players are pursuing the same consumer dollar, the consumer has a much better chance of getting what they want. If the regulator decides what consumers get, the consumer’s primary instrument of power — the dollar — is worthless. In it’s place comes political power. And politics can be 0wned by the corporations. And regulators can destroy industries (just look at general aviation as an example).
    What we need here is less legislation and regulation, not more.

  6. Squirrel – in principal, more competition would allow us to avoid the issue. But that assumes we are starting from a level playing field. We aren’t – the current duopoly has used state-mandated monopoly profits to establish their infrastructure and access to right-of-way. The telcos have already been handed $200 _BILLION_ in tax cuts and other incentives to build the kind of infrastructure they say this new kind of internet will cost. I pay for a specific bandwidth and a specific maximum monthly usage with a specific surcharge fee. Any ISP that doesn’t currently work that way is stupid and must on no account be believed when speaking of any possible fiscal realty.

  7. Besides, because of the huge cost of building out a network, there’s unlikely to ever be real competition in broadband, just like there’s unlikely to ever be real competition among cable TV providers or electrical utilities. Natural monopolies need to be regulated. The California energy crisis is an example of what happens when they aren’t.

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