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Tuesday, April 8, 2008

Network Neutrality Thoughts

There's been a lot of talk about network neutrality and how the telecom corporations are trying to kill it. I liked this article on the Internet and network neutrality.

Network neutrality means that all data packets on the Internet are treated equally and given the same priority, regardless of the source or destination. Internet service providers charge you based on your upload rate and download rate, but not based on the actual data you choose to send or receive.

Due to network neutrality, the cost for starting up a new Internet business is practically zero. You only have to pay for bandwidth.

Consider telephone service. Network neutrality applies for telephone service. Suppose I have a Verizon phone and you have and AT&T phone. I can dial an AT&T phone as easily as I can dial another Verizon phone. If a Verizon customer calls an AT&T customer, and the call is billed by Verizon, Verizon makes a small payment to AT&T. If an AT&T customer calls a Verizon customer, AT&T makes a small payment to Verizon. Most of the time, the net payment is nearly zero.

In this way, telephone service provides network neutrality. Most people would get angry if you owned a Verizon phone and couldn't call someone who owns an AT&T phone.

Telephone network neutrality is mandated by the government. The telephone companies don't mind this regulation, because they have an oligopoly. When AT&T had an absolute telephone monopoly, that was seen as too exploitative. An oligopoly is just as exploitative as a monopoly, but it's easier to pass off an oligopoly as being legitimate.

Even in a free market, telephone businesses would provide network neutrality. It would evolve through mutual cooperation agreements rather than by government mandate.

Consider TV service. Television does *NOT* support network neutrality. For broadcast television, the broadcaster has an absolute government-backed monopoly. For cable television, the cable company also has an absolute government-backed monopoly. If I tried to create my own TV show, it would be nearly impossible for me to get a broadcast network to carry it, unless I was a TV industry insider. If I tried to create my own cable TV channel, I would have a very hard time getting the local cable monopoly to carry it. Even though modern cable networks have a really high bandwidth, the local cable company still maintains monopoly power over what channels are offered.

If I tried to start my own cable network, I would be unable to get permission from the government to lay my cable. The current cable company has a monopoly backed with full government force.

The Internet follows a different model than telephones and television. Telephone communication is one-to-one communication. Television is always one-to-many communication; the person generating the content has a monopoly. The Internet is many-to-many communication. Multiple people can contribute to the same discussion, as occurs on many discussion forums, blogs, and websites.

Another advantage of the Internet is that you can reach many people with little cost. With the Internet, it's practical to set up a website or blog even if you have very few readers initially. If I had to distribute my blog via printed pamphlets, it would be impractical. This is due to "network neutrality". I only have to pay my ISP based on my upload and download rates, and not based on the content I'm sending. Services like Blogger and YouTube are provided for free by Google, because Google hopes to make money off AdWords. Even if I didn't like Blogger and decided to self-host, my cost would be limited to around $50/month and I could buy more bandwidth as my site grows in popularity.

The Internet was originally developed my the military. That's something that a lot of people forget. The Internet was designed as a WEAPON. The goal was to create an advanced communications network that would continue to function even after a lot of its nodes were removed, such as during a nuclear attack.

The military has advisers who try to predict what technologies will be developed for the next 20-50 years. I heard rumors that their predictions are INCREDIBLY ACCURATE. They also try to predict the social effect of various technologies, and they're good at that also. It's hard to believe that the Supreme Leader of Humanity didn't know about the Internet as it was being developed.

The Internet is a disruptive technology. The disruption it's causing suits the Supreme Leader of Humanity's agenda. Otherwise, he would never have allowed the technology to be released in the first place. Alternatively, he could have taxed and regulated the Internet out of existence as soon as it was created. The Supreme Leader of Humanity can't go on television and announce that he's enslaved the entire world. That would cause a massive panic. If the truth spreads slowly over the Internet, that won't cause total chaos. If he allows the most intelligent people to discover the truth first, they can figure out what to do without disturbing everyone else.

On television, you can't send an advertisement unless you pay a huge fee to the television company. The telecom corporations want the Internet to work the same way. You won't be able to set up a website that loads quickly, unless you pay a huge fee to the telecom corporation. This would substantially raise the cost of starting a new Internet-based business. Companies like Google, Yahoo, eBay, and Amazon.com would have to pay huge fees to the telecom corporations just to keep their business running. Yahoo could pay the telecom corporations in exchange for making their website load faster than Google's.

A naive person would respond "Isn't that how a free market works?" The problem is that the USA doesn't have a free market. The USA is a Communist Dictatorship! In a truly free market, if a telecom business didn't support network neutrality, they would soon find themselves without any customers. In the present, the telecom corporations have a government-granted oligopoly. If they act as a cartel and don't support network neutrality, then everyone else is left with no alternatives. A competitor can't raise money and set up a "free Internet", because it would be impossible to deal with all the government regulations designed to stifle competition.

Telecom corporations receive MASSIVE government subsidies. First, they received spectrum rights at a huge discount to the fair value. When you buy land, you pay property taxes each year based on the appraised value of the land. I believe that telecom corporations DO NOT pay property taxes on their spectrum rights! (I have to look that up.) They bought full allodial title to their spectrum! When telecom corporations lay cable, they receive easements from local governments.

I consider network neutrality as one of the things telecom corporations need to provide in exchange for their government-granted oligopoly. If they're going to stop providing network neutrality, then they should also be forced to give back their spectrum rights and give back the easement rights for their cables.

For now, the Internet still supports network neutrality. The telecom corporations are arguing against network neutrality, but other large corporations like Google are arguing for network neutrality.

There are several different types of network neutrality.

There is strong network neutrality. All data is treated equally, regardless of source or destination. This is how the Internet works now. This method is simplest and fairest. Customers are billed solely based on their upload and download capacity.

There is type-based network neutrality. Data is given priority based on type, but not on source. Streaming video is a given a higher priority than plaintext, but Google's streaming video is not given higher priority relative to anyone else's streaming video. This is sensible, but this is not going to happen. Some people say that even type-based priority would kill the Internet, because that would make it harder for new services to be developed.

There is pay-for-speed-based network neutrality. The sender or receiver can pay for slow delivery or fast delivery. If you pay for slow delivery, the data is guaranteed to arrive but no guarantee of speed. If you pay for fast delivery, your packets get priority. The important point is that you're paying for speed, but not based on the source or destination.

Finally, there is a corrupt network. The telecom corporations has a veto over whether your data is delivered at all, or at a usable speed. If one corporation signs an "exclusive fast video delivery contract", then other people won't be able to deliver video at a high speed. This would be a disaster. Hopefully, there are enough sensible people to prevent this from happening.

One excuse that the telecom corporations give is "We have to profit from our investment!" or "We won't pay for upgrading the Internet backbone unless we're allowed to kill network neutrality!" This argument is nonsense. The telecom corporations ALREADY receive massive government subsidies and they ALREADY have an oligopoly. If their expenses are increasing, they can just pass their expenses on as higher prices. The "pay based on data used" model already works for telephone service. This model is already working for Internet service.

I expect that the Internet won't be killed. The Supreme Leader of Humanity *WANTS* the Internet to exist. If the Internet didn't suit his goals, he would have taxed or regulated the Internet out of existence by now. Even if network neutrality is partially weakened, services like Blogger and YouTube are going to continue to exist. They aren't going away.

2 comments:

Thomas Blair said...

First, I enjoy your blog. You have a clarity of thought and word that is unmatched among the blogs I read regularly.

I'm curious to know why types of technology the SLH has had access to prior to their wide dissemination. Your posts are all so well reasoned up until the point where you (seemingly inevitably) tie in the SLH. In that way, he appears like God does to theological writers - as an unsubstantiated phantasm. I'm very curious to know what other kinds of evidence you have for the existence of an SLH other than inductive reasoning. I, too, am inclined to think that some group exists behind the scenes, manipulating media and money for their own gain, but I have no evidence to back up my thoughts. Have you any?

Thomas Blair said...

Now, thoughts on network neutrality:

I'm really very torn on the issue of network neutrality. Given that the whole network neutrality debacle is the result of government presence in the first place, I find that there is only one morally (but impossible to implement) correct solution and a few difficult but easy solutions.

1) Get government completely out of the telecom (and for that matter, any, every, and all) business. But we know this isn't going to happen in my lifetime.

2) Support net neutrality. Force ISPs to treat every packet equally in return for their already-granted oligopoly. This has a nice ring to it, but all it means is that the government is going to pass some legislation where they get to define "packet", "equally", "treat", "every", "is", etc. I see this as a bad thing.

3) Oppose net neutrality. The data is going through the ISPs servers, routers, equipment (including subsidized cable,to be sure) and it should be their business if they want to offer varying levels of service to different clients.

In the end, the choice is for liberty, and to that end, I haven't any idea what will cause the least harm (or if you subscribe to the hasten-destruction-to-get-to-the-revolution-sooner creed, what will cause the most harm). It's a sticky, shitty mess, and it's because government got involved in the first place. I'm inclined to support net neutrality, but those inclinations are tempered by the fact that Congress will decide exactly what it is, and it may not be as favorable this time as last.

This Blog Has Moved!

My blog has moved. Check out my new blog at realfreemarket.org.