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On Comcast and Net Neutrality: Shouting Fire in a Theater

The Comcast traffic shaping case has stirred up passionate debate. Net neutrality proponents are calling for Comcast’s head on a platter. The common argument is that Comcast’s policy may stifle innovation and competition. If a service provider is allowed to exercise unregulated discretion in how it treats subscriber traffic, it is a slippery slope toward anti-competitive practices. Net neutrality says keep your hands off.

Some are preaching net neutrality as if it were an inalienable human right like freedom of speech. It is sometimes spoken of with almost religious fervor, as if you must agree with every aspect without question or compromise. No cafeteria net neutralists allowed!

There’s no doubt that net neutrality is important concept. It is the very freedom and openness of the Internet that have allowed it to grow and prosper. But such an idealistic view is a bit naive. We are talking about commercial services created by businesses and sold to consumers for a profit. This isn’t a Government program fully subsidized for the greater good of mankind or the advancement of science. When the Internet was such a project, the general public did not benefit. The expectation of a free ride all the time is just not realistic.

The problem I see in mainstream news sources like the Washington Post is that they present only the philosophical or legal perspectives while ignoring the business or technical viewpoints, save for perhaps a short blurb to the effect of “Comcast defended its actions by saying…” Where is there an intelligent discussion on the economic model for broadband services? When are the technical constraints of cable modem technology presented? Where are quotes from experts on these matters?

Technical publications haven’t been much better. I was happy to see an article in this week’s Network World by Thomas Nolle, which adds perspective and sanity to the debate.

One thing that is absent from the conversation is the fact that every ISP has some sort of security policy that permits them, at least temporarily and regardless of what laws exist, to thwart other abuse such as spam and DOS attacks by blackholing routes, filtering traffic, shutting down customer links or using any other means to mitigate the issue. Otherwise, their entire subscriber base and in some cases the entire Internet community may suffer the consequences. ISPs use tools to sample, inspect and act on traffic flows that violate security policies. But at the moment this doesn’t seem to be generating headlines.

My feeling is that because of support on the Hill and because of the bias that will result from the somewhat incomplete press coverage, enough pressure will build to force Comcast to at least relax its traffic shaping policy if not do away with it completely. This could have some harsh consequences that go beyond degraded service quality.

Broadband providers may be forced to switch to per-MB usage-based services. Think hard before you say that is a good idea. Think back to when your dial-up Internet access was metered, or think about your cell phone minutes or any other metered utility you have. Unless you are a low end Internet user or are currently paying high fees for service, chances are it will work against you. It will at least be in the back of your mind all month long just before you click on that ESPN video clip that right now you take for granted.

Worse yet, when you worry about the stifling of competition and innovation, think about how usage-based service might do just that. Here are just a few examples.

Vonage VoIP is considered an innovator and a competitor to legacy voice. Service is provided at a reasonable flat rate. To maintain call quality, Vonage uses a G.711 CODEC, which generates about an 80Kbps data stream per call. If broadband service becomes usage-based, suddenly that stream translates directly to per-minute charges. Actually, per-second charges when you think about it (Kbps). You don’t have to worry about your broadband provider blocking this service now. They will want your minutes. They are now a toll both collecting a tax on your voice traffic, which is conveniently rounded to the nearest second! Suddenly your nice flat rate phone bill is metered.

Skype allows for voice and video conferencing. From what I understand, a single Skype video call at the default settings will generate about a 384Kbps stream, almost five times an uncompressed VoIP call. This also translates to a per-second usage-based service that your broadband provider collects on.

I use both Vonage and Skype. If broadband service goes to a usage-based model, it is likely that I would have to seriously curb my voice and video-conferencing time or even change voice providers. What would my choices be for phone service? Verizon, the legacy LEC, or Comcast, the legacy cable company. Now, how is that for stifling the competition and innovation of Vonage and Skype and reverting back to incumbents?

What about spam? To the everyday Internet subscriber, spam is an annoyance—a big annoyance for sure—but one that can be rectified by hitting the delete key or using a spam filter. If you are using POP to download your mail like I am, spam will literally start costing you money for every MB.

What about a virus that makes use of your Internet connection unbeknownst to you? Just like that seemingly harmless leaky faucet you can’t seem to get around to fix, it adds up and at the end of the month you are left with a surprise bill.

If usage-based service becomes the norm, I predict that in a few years you will see similar angry press, maybe some attention on the Hill and maybe even some sort of lawsuit over spam or virus-inflated broadband bills, with irate subscribers saying how their “broadband provider should have stopped this in the first place!”

What about data backup services like Carbonite? Carbonite is a service that synchronizes your computer’s files through the Internet to an offsite storage facility for a reasonable fee. Suddenly their unnoticeable background traffic becomes another leaky faucet that you may have to shut off. What about the innovative and competitive rights of such a service?

File sharing? If music industry lawsuits haven’t scared you, how quickly will you stop your (or your kids’) illegal file sharing activities once you see what the bill for it amounts to? Usage-based service will curb file sharing and stifle the legitimate use of file sharing applications.

OK, just one more example, but it’s a big one.

How about the huge trend towards social and business networking and online business-automation applications? The pros, cons and factors pushing this trend are the subject of another article, but it suffices to say that flat-rate Internet access helps to foster their adoption. Businesses are starting to move towards applications like Salesforce.com because of the flexibility it provides to the user community and for what it offloads in development and support from their IT shop. But this may be tolerable only while staff is expensing their flat $40/month home broadband bill and their hotel Internet charges. What happens if your staff starts delivering broadband receipts that range into hundreds of dollars a month per employee?

In the end, it all boils down to quality of service, features, pricing and the free market sorting out who offers the best value. If you are not happy with your service provider, you can choose to cancel service and go with someone else. If your alternatives are limited or non-existent, it is still your choice to cancel service as a form of protest. If enough subscribers do the same, it may ultimately force the provider to lower prices or improve service by changing its policies or upgrading its infrastructure if possible. In the end it is best to let the free market decide. That is when the public’s voice is truly heard.

Again, net neutrality is an important concept. It does share some characteristics with freedom of speech, not just in the literal sense of allowing the free flow of information, but also in that it is important enough to warrant prudence and erring on the side of caution. But like freedom of speech it is not absolute. Freedom of speech is subject to practical, common sense limitations, the most oft-cited Oliver Wendell Holmes “shouting fire in a crowded movie theater” example. The clear and present danger that limits net neutrality may not be panic or bodily harm. Well, at least not until you get your broadband bill!

Don’t yell fire until you are sure the theater is burning.

By Dan Campbell, President, Millennia Systems, Inc.

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Steve Gibbard  –  Feb 28, 2008 8:03 PM

The scary high-bandwidth applications cited here are actually fairly low-bandwidth compared to what Comcast and the other residential access providers are worried about.  The 384Kb/s Skype video conferencing streams in this piece’s worst case scenario pale in comparison to the 2Mb/viewable second iTunes videos, which pale in comparison to the HDTV videos we’ll start seeing soon.

I’m rather skeptical of the idea that metered billing would vastly increase the fees paid by typical Internet users.  Given that those fees are currently set by market pressure rather than regulation, it seems unlikely that users would suddenly be willing to pay more due to metering.  If we look at cases where metered versus unmetered phone services are going up against each other, the prices for unmetered service appear to have a considerable amount of use built in.

What I would expect metered use to do is to discourage the biggest users of bandwidth—not those looking at websites or making VOIP calls, or even doing low-bandwidth video conferencing, but those watching DVD or HDTV-quality video, or serving that video content to other users.  These are precisely the users Comcast is targeting via technical rather than economic means now.  Giving users a choice of whether to pay for that sort of bandwidth, rather than outright preventing them from using it, seems like a good thing to me.

It should also be noted that there are more and less resource-intensive ways to deal with high bandwidth applications like streaming TV over the Internet.  Using services that cache data locally is much nicer to the network than using services that pull each copy over from somewhere far away, but in a “distance is dead” unmetered access world, it’s rather difficult to align the incentives of the end users with the incentives of the network operators.  To use another analogy from the original posting, metered billing for water doesn’t generally discourage anyone from drinking a glass of water, but it does encourage people to fix leaky faucets.

Dan Campbell  –  Feb 28, 2008 8:50 PM

All good points, but metered services do discourage even relatively mild usage patterns.  With gas prices as they are, I’m quicker to put on a sweater than to crank up the heat even just a few degrees.  Water is relatively cheap, but if it weren’t then people would think twice about washing their cars, watering their lawns or filling their hot tubs, all normally reasonable acts.

One thing I’ve sensed all through the Comcast saga is that many people are unhappy with the cost of broadband, specifically that of Comcast.  I find this strange.  Unless Comcast’s pricing varies widely, which I am unaware of, their pricing is reasonable, along the lines of $40/month.  If people are finding that to be too much, maybe they should consider whether or not they should even have Internet access.  It is much more expensive (and lower quality) in underserved regions of the world.  I have Comcast’s triple play which is like $99/month.  Even if I attribute a heavier portion of that, say $40, for the broadband portion, that is remarkably cheap when you consider that you are getting about a T1 of bandwidth (sometimes more) to your home.  I think most folks outside the industry don’t realize that to get a conventional dedicated T1 - if you even could actually get one to your home at all - would cost you in the hundreds of dollars per month going up as you get further from whatever ISP you want to land at.  If $40 is too much, what should it be?  Free?  $10 per month?  $20?  We all want things to be as cheap as possible but you have to be reasonable.  I think some of the expectations out there are ridiculous.  If seems like everyone just wants something for free (see illegal music and video downloading, which ironically enough is the root of the issue we are discussing.)

What is funny too is that I recently switched from Verizon DSL to Comcast Cable when I moved houses.  Verizon DSL pricing was along the same $40 line, but they added in the phone line charge which they assumed you already had.  You couldn’t get out of it, even if you were using Vonage and your cell phone like I was.  I got the lowest price per-call service since I was never going to use it, but it still was like $20/month after all the fees and taxes you pay (that you don’t pay with Vonage), so the overall broadband bill was like $60.  And, although I thought Verizon DSL was fine, I found that Comcast service is faster.  So I’m now getting better service for a lower price.  Yet Comcast is getting all this heat.  But look out Comcast if Verizon FiOS makes it to my neighborhood!

But yes, if metered service appears, there is a very good chance someone’s bill will go above $40 even with what seemed like relatively mild use, just like SMS and cell phone minutes can drive your bill up in a hurry from reasonable to awful if you aren’t careful.

Matthew Elvey  –  Mar 3, 2008 10:31 AM

Campbell, your post seems to have a fair bit of misinformation.  Here’s one example quickly verifiable.  You say DSL is $40 + 20 / month.  Umm… AT&T is selling dsl for $10/month (not including 20/month or so for the phone line).  Even ignoring that unadvertised $10/month deal, googling “verizon dsl” brings up 3 ads for $13/month Verizon DSL…  So your information was way off.

Unfortunately, we don’t know what Comcast is selling us for the $4x/month - because they have been shown to consistently lie about it to their customers who ask.

But let’s get back to “the business or technical viewpoints” you say are being ignored.  They aren’t.  The business and technical data has been well explained; it indicates Comcast’s head on a platter is quite appropriate. 
If comcast is suffering under BitTorrent usage and using that as the excuse for impersonating me, then why did it just claim to have increased bandwidth throughout the bay area?  And why does it offer phenomenally high upstream bandwidth to commercial customers over the same physical plant that it simultaneously claims is horribly congested?  Seems like the business dog is wagging the technical tail, that is, asking the technical folks to spout a bunch of insupportable hogwash to support the business goals of degrading the basic service so they can charge more for a premium version.

It’s certainly technically possible to throttle or meter upstream bandwidth only, if that’s the critical issue, as some have claimed (with limited evidence).

Voice phone calls carried over Internet connections are so cheap that even a 1000% markup, the raw bandwidth used for calls made 24/7 would not make them expensive enough to warrant metering, even if carrier (i.e. ultra-high) quality Internet connections are used.

The big players, when claiming that 2 broadband Internet providers is enough to provide robust competition, claimed that broadband is a simple commodity, and used that argument successfully to corner the market.  But once they had established the oligarchy, they changed their tune and now change the product so that while they’re still locking out the competition, they are offering multiple products, and degrading the less expensive ones to push prices and customers to high monopoly rents.  If that’s not a reason to call the authorities, I don’t know what is.

Dan Campbell  –  Mar 4, 2008 12:40 PM

I am not sure how I misinformed anyone about AT&T’s DSL pricing since I make no mention of it anywhere.  (But I do find it amusing that the word “monopoly” is mentioned in the same post where AT&T is used as an example of a service provider that operates fairly, given their history.)  I don’t know what special deals AT&T is advertising in certain areas but a quick look at their website shows three tiers of DSL service from $20 - $35, presumably plus the phone line which would push the total price to at least $40-$55.

Also, I never generalized DSL service pricing.  I was referring to Verizon DSL with which I have direct experience as a customer from 2004-2007, where my bill with the cheapest phone line I could get was around $55, more than the $40 or so I now pay to Comcast.  But if you take a harder look at the rates you saw advertised, you will see that their $13/month pricing is promotional for 6 months after which it goes up to $18.  That doesn’t include the phone line, which will run push the total cost to around $40/month.  It is also a limited service that is throttled to 768Kbps / 128Kbps.  So you are basically paying the same as I pay for Comcast but for a lower end service.  It’s good that Verizon offer a more economical package, but I personally would never buy that one because of the 128K upstream limitation.  They also offer a 3Mbps / 768Kbps “Power Plan” priced at $30/month, again plus the phone line.  So I don’t think I misinformed anyone or negated the point I was making.

On the same note, I do not understand why Comcast’s practice is considered to be monopolistic while there is no outcry when a legacy LEC advertises broadband service at one price (with “voice service required” buried in the fine print), then forces you to buy the phone line, which about doubles the cost.  A layperson not aware of how DSL worked would question what one service had to do with the other, especially if they used alternatives for voice service.

Anyway, all of that pricing info is beside the point because they are all reasonable prices to pay for high speed bandwidth to your home.

Let’s not kid ourselves what we are talking about here.  The root of the issue, at least for the time being, is the illegal file sharing of copyrighted material and an ISP’s attempt (that is more common than just Comcast) to thwart such abuse.  Sure, they are also motivated by protecting their investment and postponing infrastructure upgrades.  They are in business to make a profit, else why do it?  But they are also interested in avoiding churn and protecting their subscriber base, the majority of which do not participate in illegal file sharing.  Without illegal file sharing that applications like BitTorrent promote, Comcast is not on the hotseat and we are not even having this discussion.

I realize there are bigger issues at stake, as I said in my article, that unregulated discretion could lead to a service provider applying such policies more liberally and in a truly anti-competitive manner.  So it is worth having this discussion now before we slip down that slope.  But let’s not try to disguise the current issue exclusively in legal or philosophical arguments about the openness of the Internet.  They sound way too much like when you see people hiding behind the first amendment or gun laws when common sense and general decency should tell them that compromise is in order.  For right now, this is not about watching streaming video (I know, because I sometimes watch Netflix on demand over Comcast with no issues).  It is not about VoIP, Skype, email, web browsing or any other routine application used by the masses.  And it is certainly not about the “legitimate” use of BitTorrent.  It is about applications that are largely used in the process of committing federal crimes and a technique that helps to mitigate the issue so that the rest of the paying subscriber community is not adversely affected by it.

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