AT&T: Time Sensitive Services Not Priority in Broadband Expansion
AT&T’s FCC comments from the Broadband Expansion Comment period are up. You can read them here.
In short, they believe that expansion into underserved and unserved communities should be about core Internet services.? The toys of the Internet, like gaming and streaming media, will have to take a back burner for the foreseeable future.
You can find our full post on the issue at gamelobbyist.net.
-nick
Net Neutrality For All, Part 4
You can read Part 1 of this article here.
You can read Part 2 of this article here.
You can read Part 3 of this article here.
Lessons from Previous Rural Expansion Programs
The project will most likely be modeled after the Department of Agricultures Rural Utilities Service Broadband Grant and Loan Program (RUS). This was a program designed to extend broadband services into rural areas of the country. The program was a one stop shopping solution to the broadband needs of any rural area, and was met with little or at least questionable success. An audit of the program reported that, ?During the 4 years the Rural Utilities Service (RUS) has administered Federal loans and grants for extending broadband service to rural America, the programs? focus has shifted away from those rural communities that would not, without Government assistance, have access to broadband technologies. This change in the programs? emphasis has occurred for two reasons. First, in its loan program, RUS has not satisfactorily implemented statutory requirements for serving rural instead of suburban areas, nor does it have a system that can guarantee that communities without preexisting service receive priority. Second, RUS? inconsistent administration of the programs has resulted in irregularities in approving and servicing grants and loans. Of the $895 million in loans and grants funded, we reviewed $599.1 million (67 percent) and questioned the use of over $340.4 million?almost 57 percent of the approved funds reviewed.?[31]
What occurred with the RUS rural broadband program was that there were no clear cut well defined statements of what a rural community was, what the requirements were for installation of services, and consistent adhering to the grant and loan requirements they had defined. This resulted in the program having, ??issued over $103.4 million in loans to 64 communities near large cities, including $45.6 million in loans to 19 planned subdivisions near Houston, Texas.?[32]
RUS was also funding competing service providers without adhering to program policy that stated that underserved or areas with no service were priority to receive funding. The audit also addresses the fact that the Office of the Inspector General is concerned about the ethicality of supporting competing service providers, stating, ?Furthermore, we question whether the Government should be providing loans to competing rural providers when many small communities might be hard pressed to support even a single company. In these circumstances, RUS may be setting its own loans up to fail by encouraging competitive service; it may also be creating an uneven playing field for preexisting providers operating without Government assistance.?
If the Obama administration?s desire is to extend broadband into rural areas, and this is their model, we have a problem. The taxpayer would be just as easily served to throw their wallet out the window as they are driving down the street. At least they would know where their money went in that case. This model needs serious work and accountability. And the ethicality argument is a very good one. Should the government reimburse service providers that go out of business in low volume user areas because the government chose to subsidize a competitor to come into their area and offer service? There is no scenario in which this should occur.
Recommendations Moving Forward
Broadband should be instituted in communities without a strings attached approach. The appropriate move would be to deregulate broadband industries making it easier and more cost efficient for them to expand into rural areas. If the only way the administration will promote broadband expansion is through public funding, operated via a set of rules and regulations determining how that network can be built and how it can be managed, then that is simply not in the best interest of the consumer, and that promotion should be discontinued.
Competition and community need should be the driving force behind expansion of services; giving the free markets a chance to appropriately solve any problem areas and the needs of rural communities. Ultimately, with passage of the American Recovery and Reinvestment Act, public funding is unfortunately assured. But there is still an opportunity to recommend a change in burdensome regulation and neutrality requirements during the creation of the National Broadband plan and implementation. With great emphasis it is recommended that there be reconsideration on forcing the implementation of FCC net neutrality requirements so that the impeding of technology and innovation that may interfere with wealth creation is avoided. Strict refinement of policies used in RUS with defined terminology of what is considered a rural area and plainly distinguish what is an unserved or underserved area. Additionally, ethics policies need to be both put in place and enforced in regards to awarding grants to companies that would use funds to move into areas already served by a service provider, or subsidizing one company over another in underserved areas where two providers may exist and one is seeking to expand services. It cannot be stressed enough that government should not be picking winners and losers; maybe even more so when it comes to technological solutions and innovation.
-nick
A full copy of this article including complete citations can be found here.
Net Neutrality For All, Part 3
You can read Part 1 of this article here.
You can read Part 2 of this article here.
Gateway Neutrality
Within the American Recovery and Reinvestment Act of 2009 exists Title VI SEC. 6001(j).[26] This describes the non-discrimination and interconnection mandate which must be followed to obtain stimulus funds as a grantee, part of which is the adherence to the FCC Policy Statement on Broadband.[27] This FCC policy statement is a point-by-point description of the commission?s definition of net neutrality.? While there are no specific details regarding the rigidity with which these policies would be enforced, traffic shaping is generally considered a violation of net neutrality principle.? The result of which is that network operators will not be able to alter packet transfer to best suit the needs of their customer base.? An example of this is the recent announcement by Cox Cable to introduce a new traffic management system.[28] Neutrality proponents disagree with this type of active management because it does not treat each and every packet equally.? This is the common nature of the Internet.? As Richard Bennett, a network architect who has testified before the FCC, describes it, ?In its essence, the Internet is a resource contention system that should, in most cases, resolve competing demands for bandwidth in favor of customer perception and experience. When I testified at the FCC?s first hearing on network management practices last February, I spent half my time on this point and all other witnesses agreed with me: applications have diverse needs, and the network should do its best to meet all of them. That?s what we expect from a ?multi-purpose network?, after all.?[29] At some point in the neutrality debate, the lines of argument were confused, and neutrality in packet transfer became equivalent to protecting the end user and providing them the best experience.? In actuality, an ISP that can manage traffic in real time as they monitor their own network provides the best experience for the consumer.? Imagine if fire trucks and ambulances were regulated to obey the same traffic laws that standard commuters are forced to obey?? Obviously in those cases we are dealing with emergency situations, but the principle still applies.? A network manager can see traffic conditions in real time, and can prioritize those time sensitive packets like an ambulance through street traffic allowing the application to work correctly and seamlessly on the end users side.? Innovative techniques and technologies like these will be limited or disallowed under imposed net neutrality regulation that will be enforced in broadband stimulus legislation.? Furthermore, networks built with government funding could find themselves at the will of government censorship creating First Amendment violations.
Additionally this implementation could ease the enforcement of neutrality rules on other public or private networks acting as a ?gateway drug?.? This would be similar to the voluntary neutrality regulation passed in Norway recently.[30] At some point, when the voluntary policy has obtained enough big market player signatures, passage of enforced, involuntary regulation will quickly follow.
The Keynesian Assumption
At the root of the Obama stimulus, even in regards to broadband, the plan is still Keynesian.? The government will still be taking in taxes to pay for what it believes will stimulate the economy.? They will be dictating what areas networks should be built in, pre-determining that they will be successful promoters of economic stimulus and wealth creation, and ultimately determining the technological and innovation side future of the Internet in part or in whole.? When looking at the data, and the growing market saturation of broadband usage, it appears that the majority of those who desire broadband services and have access to them have joined.? ISP?s know this and recognize the consumer desire for those services.? They will, without a shadow of a doubt, extend their services into rural areas that show a need for broadband access when the market is suitable to expand into those areas.
To be concluded…
Part 4
-nick
Net Neutrality For All, Part 2
You can read Part 1 of this article here.
Technology & Implementation at the Local Level
The Broadband Technology Opportunities Program, which is the official title of the broadband stimulus, does call for the maximum use of the infrastructure,[11] which could suggest lower speed connections. However, Obama is a supporter of fiber optic technology.[12] This will inevitably be the primary technology that his administration pushes for when details are hammered out in the months following stimulus passage.[13] Regulating a specific technology is not appropriate for the future of the Internet. One solution to network infrastructure will be stifling for innovation and the use of many available technologies that exist in the market place to extend and improve broadband availability. Additionally, networks that would be required to be open access would regulate the type of network that could be built, and determine its usefulness. And regulating network design may well hinder that networks ability to truly be innovative and useful in decades to come.
Christopher Yoo, legal professor at The University of Pennsylvania points out that, ?Consumer demand for more time-sensitive applications, such as Internet telephony and streaming media, may be providing much of the impetus away from standardization. Forbidding network owners to introduce routers that can assign different priority levels to packets based on the nature of the application would have the effect of precluding consumers from enjoying the benefits of certain types of applications. The current ubiquity of TCP/IP makes it seem like an appropriate default rule and appears to justify placing the burden on those who would deviate from it. A moment?s reflection makes clear how adherence to the Internet?s nonproprietary structure may actually impede innovation?.[14]
With Obama already being billed as the ?Science and Technology President? and claiming to ?restore science to its rightful place,?[15] in his inauguration speech, it would seem impeding innovation with regulations that may become a burden under future network technologies would be counter to his goals of progress in those areas. Additionally, settling for one design as a national broadband standard will prove cost inefficient. The optimal expedition of future network expansion and improvement needs to include many differing technologies based on what is needed at the local level. Preferably, competition between last-mile providers would create the best options for the consumer. Local market competition along with a survey of the needs of that community, extended area, or region should determine what broadband technologies are best. But in any case, an examination of available technologies and what suits each community is the most optimal route with a consideration of many options including cable DOCSIS 3.0 technology, WiMax, Fiber Optic, Hybrid-Fiber, new innovations with Satellite and Satellite-Hybrid networks.
The expansion of broadband Internet use in the United States produced innumerous innovations.[16] Nearing the end of 2007, broadband Internet usage had captured some 78% of the of all Internet connectivity in the nation.[17] And by mid-2008 was expected to reach 90%.[18] Leonard Waverman, the dean of the Haskayne School of Business at the University of Calgary and developer of the ?Broadband Scorecard? has stated that America leads the world in using broadband technologies in the workplace for economical means. Alluding to the mythology that Korea?s high-speed connections to the home are the end-all-be-all example of what America should strive for, he said, ?Korea has great broadband to the house, but businesses in Korea don?t use the best networks and don?t have the skills and computing assets they need to take advantage of them.?[19] This is where America shines, and we have been doing this through private sector investment in infrastructure.
Additionally, we are probably nearing a saturation point. Evidence of this was shown in the Pew Internet & American Life Project that reports two-thirds of those without broadband don?t want it.[20] This is most certainly a reality. No matter how much those in the technology community belabor the joys of using broadband, to some, it will always be a useless toy and not a necessity. Many individuals only use Internet at work as a tool for their profession. Some may only check email or use the Internet for very infrequent, light browsing. For these individuals, and countless other examples, the need for broadband is unnecessary, or its additional expense cannot be justified. This is similar to individuals choosing higher octane gasoline. Some buy cars that require a higher octane and they justify the expense, while to others the lowest grade will operate their car just as well, and the added cost of a higher grade is wasteful. The market provides options, and the consumer chooses what works best for them.
Certainly, without question, the Internet?s existence has been a remarkable boon to the US and world economies. Being that broadband Internet has allowed a richer more in-depth experience to be had by the end user, it certainly suggests that the extension of broadband networks in the U.S. could increase the opportunities both start-ups and end users may have. Furthermore, the reach of content providers whose offerings to the consumer requires broadband speeds would be greatly extended. Individuals who may not have had access to a fee based streaming media service for instance, would now have those services at their finger tips, and would be paying back into the economy.
Where the trouble lies in all of this is that someone has to build these rural networks. And this will not be cheap. To work effectively, broadband technologies must remain close to an Internet backbone. Based on this, using Verizon FiOS for example, the costs of running fiber all the way to the home can be extreme. Verizon has spent roughly $18-$20 billion doing so.[21] AT&T has spent considerably less, roughly $6.5 billion using VDSL technology, which is a hybrid-fiber connection using the existing coaxial network in ones home.[22] Additionally, bear in mind that both companies are upgrading their networks in areas with major Internet backbones. President Obama?s broadband stimulus is intended to build networks in a method that will ?maximize use of the supported infrastructure by the public,?[23] which indicates clearly that the objective is to reach more with less instead of less with more. The FCC has defined broadband to be access to the Internet at speeds of at least 768Kbps,[24] and therefore the proposed stimulus for broadband would require the grantee to build a network that would provide as many greater than or equal to 768Kbps connections as possible, rather than a smaller higher bandwidth network. This is honorable in its goal to reach individuals that do not have broadband connectivity in rural areas that may desire it. However, if by the time the network is built it lags behind the rest of network technology, and more money has to be spent to upgrade it, building a more future-proof smaller network and expanding it on an as needed basis may be a better option, and one that could more readily be handled by the private sector. In either case, going back to the original examples, the project will be extremely expensive, because not only will it incur the costs of the area network itself, but will require the extension of a backbone brought to the area. In a report on broadband stimulus by Free Press, it is estimated that installing a Fiber-to-the-Home network for the 6-8 million unserved homes across America will cost roughly $2,000-$5,000 per home, ultimately billing out between $12-$40 billion.[25] Ultimately, the costs will most likely be too high for the government to desire to handle on their own, especially considering that the $7 billion included in the stimulus is actually separated into different areas of provision related to broadband. The use of the USF and other Congressional aid may be sought in the future to provide the additional funds required to build out a future proof network like this. However, the majority of the costs for building these networks will most likely be incurred by the grantee. Yet it will be this grantee that will be forced to adhere to a taxing set of regulations.
To be continued…
-nick
Net Neutrality For All, Part 1
Broadband Expansionism
Ever since the now YouTube famous Google interview of then Senator Barack Obama promoting broadband Internet deployment nation wide,[1] broadband deployment as part of Obama?s overarching $825 billion stimulus package has been a ready topic of conversation in technology circles.? Broadband penetration in the United States is only 25.67% of all Internet connectivity or available to roughly 71 million Americans, ranking the U.S. 19th in the world.[2] Home connections via broadband have risen to 92.4%, creating the argument that the majority of Internet users are engaged in daily activities that require, or at least benefit from, broadband connectivity.[3] Obama has promoted this line of thinking, and believes ?that America should lead the world in broadband penetration and Internet access?.[4] Pushing it even farther, he believes that the Universal Service Fund should be implemented in the expediting of deployment.[5] This line of thinking is more than likely impossible.
Economic Stimulus?
There is no clear winning argument for why America should lead the world in broadband connectivity, first of all.? It is reasoned by Free Press and like minded individuals and organizations that broadband stimulus will be a boon to the American economy and job creation.? This is probably based on a report created by Brookings and MIT scholars that has been circulating recently which claims that ??for every one percentage point increase in broadband penetration in a state, employment is projected to increase by 0.2 to 0.3 percent per year. For the entire U.S. private non-farm economy, this suggests an increase of about 300,000 jobs??[6] What is generally not reported is the continuation of this paragraph, ?assuming the economy is not already at ?full employment? (the national unemployment rate being as low as it can be with a low, stable rate of inflation). At a more disaggregated level, we find that employment in both manufacturing and services industries (especially finance, education and health care) is positively related to broadband penetration.?[7] The point being that the argument can easily be reversed, countering that prosperity and wealth creation stimulate broadband penetration; i.e. Individuals improving their job placement will either have additional wealth to afford a broadband connection increasing broadband penetration in an area, or an increase in an areas social scale drives corporations to expand services into an area that previously was unable to receive that service.? Additionally, the author?s note in a follow-up post on Brookings website that, ?While most communications sector analysts concur that the ability to deliver broadband communications is a critical feature of the modern global communications infrastructure, there is limited recent empirical research on the economic effects of broadband. In particular, much of the available research is now several years old or refers to the benefits of the Internet generally or more broadly of the “digital economy” rather than to the broadband telecommunications infrastructure per se.?[8] This speaks for itself.
Backing Obama?s position and encouraging him to move forward are the 57 member companies and organizations of the Broadband Coalition,[9] many of whom would be involved in building an expanding broadband infrastructure. ?Not to anyone?s surprise being that federal funding would reduce their overall project costs for expanding their broadband networks, which sounds strangely reminiscent of the $200 Billion provided to the telecommunications industry in tax breaks and relief from price controls to build the US a fiber and hybrid-fiber network by the year 2000 that never happened.[10]
Encouraging the expansion of broadband could be beneficial to the country, and there exists the potential to create new jobs and produce a greater commerce revenue stream through that expansion.? But doing so via the spending of federal dollars will only enhance social welfare on the Internet because existing regulations have resulted in too little private investment in broadband. Eliminating government barriers would alleviate any potential benefit from public investment in broadband. Additionally, expansion when subsidized could reduce competition in certain areas.? In grand plans like these, the federal government tends to design their strategy around a one size fits all solution for the entire country.? This isn?t going to work.? Broadband infrastructure will need to be expanded at the state and local level where unique area specific issues can be solved, and the best technology and methods of implementation can be achieved for that specific location.? It would be costly, difficult, and unwise to begin running fiber into the Appalachian Mountains, and WiMax becomes vulnerable to low efficiency when it is set too far away from Internet backbones.
To be continued…
Part 2 can be found here.
-nick
The Personal Democracy Forum Doesn’t Help Conservatives
Monday was a very long day here in New York City. The Personal Democracy Forum Conference busted out of the gate bright and early and never seemed to slow. The conference and its attendees are a cornucopia of ideas and innovation. It certainly feels as if the applications built for and during the Obama campaign have spurred an entire new focus in the political realm. I feel like I’m a fly on the wall of the office that invented grassroots mailers. It certainly seems that we are witnessing the initial stages of a new era in politics.
Six month from now things will be very interesting. The first campaigns since the 2008 presidential race will begin cranking their engines. It will be the first big test as well. Letting all of us evaluate who “got it” after the last go round.
One has to understand that when they attend these sorts of events that there is certainly a goal of objectivity. The reason for attending is to discover the areas in which politics and technology are intersecting. How is technology, or possibly more specifically, the Internet changing politics? Are these changes creating the evaporation of results from the previous models? If so, how do we incorporate these new tools into our area of politics to create new successful models? That’s what we are hear to discover.
The reality though is that people that are passionate about anything can’t keep it from seeping out even when they are trying to hold back. There is nothing wrong with this. I take zero issue with individuals who wear their heart on their sleeve. At least it’s out there.
But at some point a balance issue develops. If panels are mostly chaired by a certain orientation of political enthusiast, the point of view is always the same. If the audience to which they are speaking is of the same enthusiasm, then they are preaching to the choir. The cheers and hardly applause comes because of political orientation and alignment and not because all political technology enthusiast share the same goals.
We don’t.
Case in point was the fine display of two sheep being led on stage for the final panel of the day. The sheep, in the form of two teleco representatives, had their achille’s slit so that they couldn’t escape and then were promptly ritually massacred by the Picadores Josh Silver. Silver, well known in tech policy circles for avoiding any concerns or facts outside of his own talking points was suburb in his beat down. I honestly couldn’t tell if the teleco reps were ill prepared or just trying to play the saint for the audience, the obvious antagonist.
But why was this happening? Silver has a particular motivation and a goal, and not one with which all parties in the tech policy community would agree. Why was no one with a differing point of view sitting on this panal? Not to defend the telecos, but to ask questions from a differing foundation, or to call Silver’s bluff. Where was Wayne Crews of the Competitive Enterprise Institute, or Adam Thierer who started Technology Liberation Front? Where was Timothy B. Lee, CATO fellow and Ars Technica contributor? (Who in my humble opinion has hands down written the best scholarly explanation of network neutrality available. Which is mighty humble of me, if I do say so, considering I’ve written on it myself.)
I did appreciate hearing the audience gleefully suck up every drop the FCC commissioner Blair Levin had to say; especially the part where he told us that they were creating a plan. Really? The plan he is referring to of course is the National Broadband Strategy which comes due in February of 2010. What hardly anyone knows though is that the US Department of Agriculture who has used the Rural Utilities Services (RUS) division to improve broadband distribution in the past has been awarded funds for distribution from the stimulus. RUS plans to distribute its roughly $2.5 billion by September 30th, 2009. The National Telecommunications and Information Administration?who received the bulk of the broadband stimulus funds?will hand out their dollars in three phases occurring Spring of 2009, Fall of 2009, and Spring of 2010.
Spend first, formulate your plan later, Mr. Levin? Sort of seems counterproductive to planning at all.
Conservatives are boned at PDF 2009. There is certainly not enough representation amongst panel members. Some of this is absolutely not the fault of Personal Democracy Forum. We are under a liberal Administration, and that administration appoints liberal bureaucrats. An invite to Robert McDowell or Meredith Attwell Baker would have been nice. Maybe they were invited, and turned it down. This too is a possibility. At least Cas Sunstein with his Fairness Doctrine-esque “electronic sidewalks” for the Internet isn’t present.
I’m not laying the wood to PDF. Yes, from initial indications it doesn’t appear that the ideological sides are well balanced, and possibly they don’t know where to look. The real trouble however is the attendees.
The Personal Democracy Forum doesn’t help conservatives. Because conservatives aren’t there to be helped.
The numbers are simply overwhelming. I’d guestimate that the attendance is somwhere close to one thousand. I’d also venture to say that there are roughly five conservatives there. And I’m incorporating the one libertarian I saw with a Ron Paul button.
I’m dismayed.
I know these folks are out there. I’ve written about them. So where are they? After this past Fall why aren’t ogles of people from the right side of the aisle on Capitol Hill all over this event? Did the speakers shy them away? I don’t really think so. I’m a strong conservative-libertarian, and have been for years. And while there are a few people in the speaker list that irk me on the average day, I wouldn’t let them keep me from attending when the majority of lectures and panels are simply focused on an examination of content in some form, a discussion of getting content to an audience, or about tools to help you be more efficient and productive.
This is subject matter that conservatives need to hear. Maybe PDF needs to market themselves more to conservative circles on the web? Possibly all conservatives on the web are poor and couldn’t afford to attend? It could be that conservatives don’t fit in with all the Apple fan boys present at the conference. If there were more Dell owners then it might have been more balanced.
All thought provoking questions.
These are just initial reactions. I’m sure I will be thinking more about it into the second day of the event as I look for reasons for the paltry representation.
Secretly though, I think the liberals in the crowd are ecstatic. Why wouldn’t they be? It’s like someone serving up a box of free gold to anyone who shows up at the box and takes the gold. And only liberals are showing up, so they get to take home all the gold.
You can’t teach a dead dog new tricks. And you certainly can’t expect to win a fight you don’t show up to.
Very much looking forward to Tuesday.
-nick
?and Net Neutrality for All: An Advisement Against Regulated Broadband Expansion
I’ve recently posted my paper investigating broadband expansion policy within the broadband stimulus portion of the American Reinvestment and Recovery Act of 2009 on bepress.
You can find it here: http://works.bepress.com/nicholas_brown/2/
Here’s the abstract:
Ever since the now YouTube famous Google interview of then Senator Barack Obama promoting broadband Internet deployment nation wide, broadband deployment as part of Obama?s overarching $825 billion stimulus package has been a ready topic of conversation in technology circles. Broadband penetration in the United States is only 25.67% of all Internet connectivity or available to roughly 71 million Americans, ranking the U.S. 19th in the world. Home connections via broadband have risen to 92.4%, creating the argument that the majority of Internet users are engaged in daily activities that require, or at least benefit from, broadband connectivity. Obama has promoted this line of thinking, and believes ?that America should lead the world in broadband penetration and Internet access?. Pushing it even farther, he believes that the Universal Service Fund should be implemented in the expediting of deployment. This line of thinking is more than likely impossible.
This paper looks at the Broadband Stimulus portion of the American Recovery and Reinvestment Act of 2009 to investigate the feasibility of expanding broadband into underdeveloped and undeveloped areas and the forced implementation of Network Neutrality into networks funded by the federal government.
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Be sure to post any feedback you may have. Would love to hear it.
-nick
Does Anyone Understand The Internet?
[Editor's Note: This is a recent post I did on openmarket.org. It's sort of indirectly political in that it deals with the panic and state of fear a few non-profs created by stirring up non-existent scenarios of Net Neutrality violations if Time Warner Cable dared to look at new service provision models. It's really a situation where we should allow private enterprise to work with their customers to find that happy medium and allow the free market to work.]
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I?m beginning to think ?no? is the definitive answer. While most tend to understand the basic concepts of Internet connectivity and its associated parts, it seems that it is becoming abundantly clear that terminology has been misused by media and public organizations such that no one really understands what they are even talking about anymore.
It?s understandable that people who don?t work in the telecommunications sector are unfamiliar with networking. But a group of writers that should understand these concepts are the individuals that are paid to write for PCWorld.
Today, David Coursey discussed the recent decision of Time Warner Cable to back off its plans to test metered broadband service in an essay strangely entitled, ?Why Metered Broadband Would Work?. It?s odd, because he describes why TWC is up to no good and why metered broadband is greedy.
The column states that metering broadband service violates net neutrality and concludes that, ?anything that hinders Internet neutrality hinders the development of new technologies and new business models.?
Where do I begin? First of all, net neutrality has nothing to do with metered broadband service. Nothing.
Metered broadband has nothing to do with how fast your connection is.
Metered broadband is a cap on the total amount of data you transfer during a given billing cycle. That?s it. There is nothing more to it than that. It has nothing to do with giving certain packets priority. It has nothing to do with preventing the use of certain applications or equipment (like a VoIP handset) on your computer. It has nothing to do with blocking access to sites that have competing content. And it has nothing to do with Quality of Service.
Let?s look at this in different terminology. The speed at which you travel in your car has nothing to do with the number of miles you choose to travel in a given month. If you were to rent a car, and your rental agreement dictated that you could not travel more than 100 miles in 30 days, (assuming speed limits and the police were not a factor) you could travel at whatever speed you desired until you traversed 100 miles. In this case, whatever connection speed you have from TWC would not change. If you had a 10 meg connection, you would still get a 10 meg connection. The difference is the number of miles you could travel on the Internet in a given billing cycle, not the speed at which you could get there.
Interestingly enough, metered broadband is a new business model that Coursey claims Internet neutrality would hinder. Since metered broadband has nothing to do with Internet neutrality, and the column claims that in a recession the last thing we need to do is hinder new models, then this was the perfect opportunity to allow the free market to test a new model.
Metered broadband does cap the total amount of data that an individual can transfer in a given month. That is not a negative thing, though. Transfer speeds and data transferred are two different things. The first is the speed at which data could potentially be transferred to or from your computer. These are commonly referred to as ?downstream? and ?upstream?. Over a given billing cycle ? generally a month ? an individual receives data and sends data by surfing the Internet, receiving email, using instant messaging, etc. The benefit of a bandwidth cap is that it creates tiers that allow for more affordable service, and open up the doors of barred entry to individuals that could not previously afford Internet service.
TWC reports that their users in the Austin, TX area averaged 5-6 gig a month. A benefit of metered service is that if a user falls into this category, there is no reason for them to be spending $50-$75 a month for unlimited access. This is similar to a cell phone plan, in that if you don?t talk 3,000 minutes a month, purchasing the 3,000 minute or unlimited plan would be a major waste of money when you could get a lower plan for far cheaper. TWC was proposing lower-priced tiers combined with higher fees for heavy users. A relatively basic plan would have offered 5 GB a month for $29, and a more robust tier would have offered 15 GB a month for $40, all the way up to unlimited plans for $150.
Metered service could be a major benefit for most average or below average users. The only people that it hurts are Bittorrent fiends. Additionally, those that use larger amounts of data on movie streaming services would have probably fallen into a data tier that was similarly priced to what they were paying before a switch to metered service.
Something that Coursey hints at, but never comes right out to explain, is the concern that caps are in response to television and movie distribution on the Internet. The implication is that monthly caps would deter individuals from watching TV online, causing them to return to the couch where profits are higher. It is a certainty that cable providers do not want to simply become sellers of bits. But the individuals that are concerned of this notion that caps force individuals into higher caps, or that they are somehow being cut off from certain services is really just silly.
Consumers are not forced to use the Internet. They have the right to determine how much data they will transfer in a month and purchase an appropriate tier. This occurs every day when consumers purchase cell phones. They purchase the tier that is suitable for their needs. This approach by TWC opened the door to allow low volume users to have very affordable rates. Yes, the higher cap tiers were arguably pricey. But that isn?t a reason for the media to create such a false state of fear over the issue that the entire trial is pulled. The free market would have caused those tiers to adjust and match companies offerings like Comcast?s 250 gig cap.
Coursey is right about one thing. In these dreadful economic times, we don?t need to be hindering new business models. It?s too bad the noise heavily outweighed the signal on this issue and caused TWC to back off on something that most likely would have saved the majority of their customers a great deal of cash.
-nick
The State of the Internet…
…is strong.
But we will be led to think differently in tonight’s faux State of the Union Address. Obama will undoubtedly speak on the subject of what I have decided to call Social Internet Expansionism. This is the extension of networks into rural areas for people that can’t afford or don’t want Internet according to Pew studies, but of whom Obama asserts need it and has determined it will create 300,000 non-farm jobs for every 1 percent increase of penetration. This assertion is of course based on a paper by Robert Crandall, William Lehr, and Robert Litan who have repeatedly stated that their research is being taken out of context. Mainly because the project was completed almost 2 years ago and was looking at 2005 numbers for non-rural areas.
Nonetheless, the Obamulus will pour almost $7 billion into funding projects led by the National Telecommunications and Information Administration and to a lesser extent the Department of Agriculture who previously headed the Rural Utilities Service Braodband Grant and Loan Program (RUS).
My top 10 questions for the President regarding Social Internet Expansionism:
1) Will the public or private sector be building your networks?
2) How precisely will bureaucracy define “unserved” and “underserved” areas?
3) If it is the private sector, how will grant winners be chosen?
4) Will the grantee manage the network after it is built?
5) If so, will maintenance costs be solely their responsibility?
6) Will the government pick winners?
7) What if a grant holder does not have a stake in an area, and they begin building a network in direct competition with an existing area network provider who does not have government financing?
What if a service provider who does not have government financing is pushed out of business because of a service provider that has government financing? Will the out of business service provider receive compensation?
9) If a service provider constructs a network in a government mandated rural area and cannot attain service contracts and therefore cannot continue service in that area, will they receive compensation for any privately invested funds?
10) If Social Internet Expansionism proves unsuccessful, will you return the original investors money in form of a tax rebate?
