Jun 8 2008
Net Neutrality Legislation
A couple of weeks ago, I blogged about the importance of net neutrality. In the meantime, the first actual challenge to net neutrality took place this past week. Time Warner Cable has launched a trial tiered pricing program to new subscribers in Beaumont Texas. The tiers are “$29.95 a month for relatively slow service at 768 kilobits per second and a 5-gigabyte monthly cap to $54.90 per month for fast downloads at 15 megabits per second and a 40-gigabyte cap.” Every gigabyte beyond the cap costs $1. It’s a bit odd that landlines, like DSL service, is going toward tiered service and cell phone carriers are going toward an all you can eat service. How does that affect you? Well, an iTunes movie is between 1 and 1.5 gigabytes or a tv livestream of its primetime broadcasts measure around 300-500 MB depending on the quality of the video. Obviously if you are a big consumer of online video, you’d hit your cap pretty soon every month.
While Time Warner Cable has every right to cap its service and charge more for more users, the tiered pricing, as we discussed last week, can represent an access issue. It further represents the power that the ISPs have over the free flow of information on the internet and their willingness to exert that power.
So what is the history of Net Neutrality legislation?
Internet Freedom Preservation Act. This bill was introduced by Senator Olympia Snow (D-ME) as an amendment to the Communications Act of 1934. The bill, S. 2917, was first proposed on on May 19, 2006 (and had a notable sponsorship by both Barack Obama and Hilary Clinton). It was referred to the Senate commiittee and then referrred to Committee on Commerce, Science, and Transportation. It died in committee. It was reintroduced in 2007 by Snowe and Senator Dorgan (D-ND) to no avail. In 2008, however, the Commerce Committee finally held a hearing on the future of the internet and discussed the need for legislation. No action has been taken on this since the committee hearing.
Network Neutrality Act of 2006. This House bill was proposed by Representative Edward J. Markey (D-MA 7th) on May 2, 2006. The bill, like the Senate bill, would give the FCC the power to prevent discrimination and impose penalties. It would have also explicitly prevented service tiering. It was referred to to the Subcommittee on Telecommunications and the Internet. The bill did not survive the Committee and instead a telecom based bill called COPE came out of the Committee and was passed by the House in 2006 with the Markey amendment failing (roll call vote). The Senate version of COPE died in committee. (as you know, probably, a bill must pass both chambers and be signed by the Pres – or not signed within 10 days – before it becomes a law).
Internet Freedom Preservation Act of 2008. Markey is not to be deterred. He re-introduced legislation (PDF link) with support from his fellow Massachussets Congressman, Chip Pickering (R-MS). Bipartisanship FTW!
We’ve got the Snowe-Durgan bill in the Senate and the Markey-Pickering bill in the House that are both designed to allow the FCC the power to enforce discrimination free access to the internet. The good news is that there are major corporations who are interested in net neutality like Amazon, eBay, Google, Microsoft and the like. I would think that any content provider like the major television stations who want to continue to stream video over the internet or Apple and Netflix who want to stream DVD rentals over the internet, would also be supportive of net neutrality.
It’s an issue that I hope we readers will stay apprised of. At least take some time to educate yourself about the issues so you can determine which side you stand on.
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Jun 08, 2008 @ 04:39:49
I would *kill* to have that kind of access for that kind of money. In Australia, tiered pricing/download limits are standard on almost every ISP. I’m with Telstra/Bigpond, and this is the kind of plan they offer:
http://my.bigpond.com/internetplans/broadband/adsl/plansandoffers/default.jsp
Basically I’m paying $70 a month for less than a third of the download limit you mention. (the dollars are pretty much on parity at the moment.) The speeds are mythical anyway on ADSL. I’ve never had 1500 kbps on my service.
Net neutrality as you’ve described it, is a non-issue in Australia. No one cares if Jane J Blogger or Joe D Video Hog can’t get their downloaded movie or live streaming. We’d be grateful if the internet was even half as good as what the Americans had. The internet access is about the only thing I miss about Britain (well, I miss the beer and my friends and the National Ttust too :) )
Jun 08, 2008 @ 08:12:14
That monthly cap is horrific. I sincerely hope it never comes here.
Jun 08, 2008 @ 08:28:40
I would never make it with 40 gigs a month. I can do 40 gigs in a day, easy. I upload a lot of videos, I download a lot of music, software, etc. I never buy things in a store that I can buy instant downloads of online. Games, movies, tv shows, software, music, I download everything. I can’t remember the last time I bought any of that stuff in an actual store.
I pray that never comes here, or dies a swift death there. Both, preferably.
That said, ISP’s used to do that, did they not? Then stopped when high speed came along? I sincerely remember signing up for my first ISP and being told I had a certain amount of bandwith each month and if I went over I’d get charged. I had no idea wtf bandwith was lol. I swear I do remember that. Am I hallucinating?
Jun 08, 2008 @ 09:13:26
What would it do to educational institutions that have distance learning? There are high schools “without walls” and colleges whose lecturers provide online content for those students who can’t make it to class. And what about teachers who upload lectures for elementary school kids? A cap like that, besides being too expensive for parents, would hinder a lot of school systems.
Oh, and telecommuters would be affected as well. This seems like another money making scheme like the switch to all digital TV. Who benefits and who loses? Government benefits and taxpayers lose.
Jun 08, 2008 @ 11:32:02
Here in Toronto (Canada) Rogers (don’t know about the other cable/internet providers) introduced the tiered system last month. Once you go over your limit they charge you up to a max of $25/month. The problem is my son (the download bandit); by the last few days of (last) the month, I did notice getting online and/or surfing around had become a bit spotty/slow on my laptop, and my couldn’t get online at all the last two days unless we rebooted the wi-fi each morning.
Jun 08, 2008 @ 19:16:14
Jane,
The legislative bills that you mention in your post relate to net neutrality, however the example of Time Warner Cable implementing a tiered pricing system is not a net neutrality issue.
Net neutrality is simply making sure that packets that traverse the network are treated equally – no matter their origin or destination – so that a particular ISP does not discriminate or delay traffic from a particular party. (Net neutrality wants to ensure that Comcast can’t get ticked off with Google and then delay any traffic originating from Google for its customers.)
Tiered pricing is simply the market in action. It doesn’t present an access issue (there is still cheap dial-up available, libraries still have Internet connected computers and Time Warner is still offering its lighter service.)
While the idea of tiered pricing may be worrisome, or irritating, I believe it has come about because cable providers need to see their revenues grow. Cable providers are facing stagnant television subscriber growth – if not actually losing subscribers every quarter. The US market is mature; the housing market has hit the skids; and Verizon FiOS and AT&T U-verse are encroaching on their territory. So in order to meet Wall Street’s expectations of consistant growth, some providers are raising their rates (or implementing tiered pricing) to increase their revenue and meet those growth expectations.
Many cable providers’ pipes are being squeezed as bandwidth usage grows. They simply don’t have the capacity to handle all the traffic and they hope that implementing a penalty, in terms of cost, for the high-bandwidth users will keep casual surfers from downloading so much and clogging up their pipes.
However, my hope is that someone like Verizon FiOS, with its big optical fiber pipes to the home, will take advantage of the fact that Time Warner Cable is pissing off their customers with the tiered pricing and will keep a flat rate for their Internet service. That way Verizon will be rewarded with new subscribers and TWC will be punished by having customers defect. Then maybe the pendulum will swing back to TWC having to offer flat-rate pricing in order to keep their subscribers from defecting.
Time will tell how this will play out.
-Beth
ps – I don’t work for Verizon or any other ISP. I’m just using them as an example.
Jun 08, 2008 @ 19:21:25
Beth – my understanding was that the Markey proposed legislation in 2006 did originally fight the idea of tiered pricing and that tiered pricing is in the mix with pure arguments against net neutrality. I do understand that the tiered pricing is a way in which ISPs can capitalize on natural monopolies and that it is an economic goal of price discrimination. However, given the way that information can be disseminated over the internet, tiered pricing is one way of limiting the free flow of information.
Jun 08, 2008 @ 21:20:02
By virtue of there being a fee to get onto the Internet, you’ve already limited access to those who can afford it. So the idea of limiting the free flow of information – creating the information has’s and the information has nots – is inherent to the Internet in the US.
However, who is to say that someone in need of information must get it over the Internet? Information can still be found in other places. People can get news via over the air tv for free (once they get their digital converter, of course.) They can still buy a newspaper. They can go into their local library or have someone else do that for them. So there are still multiple points of access to information.
What tiered pricing does is place a limit the amount of bytes that are downloaded under certain pricing schemes. It will make people think before consuming their bandwidth. Do they want to incur the extra cost to download that extra video? [And, I would hazard a guess that the vast majority of those bytes that are bandwidth hogs are entertainment-related, not information that, by virtue of someone not being able to download it because they can't afford tiered access, creates a society of information has nots or creates a society that does not allow for free flow of information.]
I hate to admit that I sound like a free-market republican; I shudder at the thought. But in a world of innumerable corporate evils, having someone like Comcast or Time Warner Cable discriminate on sending bytes across according to their own whims sounds much more dangerous than having those people who utilize a lot of bandwith pay for their bandwidth use via some form of tiered access.
Luckily, cable providers don’t have a monopoly – they are in competition with the telephone co’s (DSL) as well as the overbuilders (Verizon and AT&T.) And that competition just may bring about the end of tiered access.
-Beth
Jun 08, 2008 @ 23:32:17
This whole issue and the fact the cable companies are the major scam artists luring people with promises of cheap high bandwidth with no limits and then charging them later with these tiered packages and now we find out they are starting to block certain types of traffic altogether.
I am staying with the phone companies DSL. It’s expensive but at least it is spelled out what you get.
Jun 12, 2008 @ 11:32:46
I don’t think it’s yet a net neutrality issue, but it could easily turn out to be. Say T-W offers its “portal” content free, or portal content doesn’t count towards the b/w caps. Then T-W develops a conflict of interest between being an access provider versus a content provider.
But then too, mesh-networking will take off and the internet won’t be hooked to a system created for choo-choo trains.
Jun 12, 2008 @ 12:57:13
That’s exactly what Telstra does here in Australia. No one blinks an eyelid.
Jun 24, 2008 @ 12:37:36
I would kill for no download limit.
I’m serious.
But for aussies, tired of telstra etc.? Try internode or iinet, much better prices, speeds and limits! go nuts.