Thursday, June 28, 2007

Net neutrality, con't (part 3): payment for bandwidth

I've addressed some of your comments about the broadband market and differentiating web traffic based on type. Now I'll turn to another big subject of your comments on net neutrality.

Doug, Keith, Drywall, asokoloski, psmith, and others engaged in a lively debate about whether and how Google and other Web companies compensate the telecom infrastructure providers for our use of their network facilities. As many well know, the Internet’s longstanding charging arrangements allow each party to pay for its own connection to the Internet. That party then is free to utilize that connection in whatever lawful ways are desired. Google believes that consumers should be able to acquire higher speed or performance capacity from the broadband providers, and then use this capability to reach any service they wish on the Internet. In particular, consumers should be able to purchase tiered pricing arrangements, based on the use of bandwidth, latency requirements, or other objective measures. Such arrangements would constitute an appropriate, cost-based practice that fully compensates the broadband provider for the additional capabilities provided.

On the other end of the “pipe,” Internet-based companies spend billions of dollars annually on R&D to create and deploy compelling content, applications, and services for American consumers. This massive amount of material typically is deployed on millions of Web servers located around the country. In order for the content and applications to be delivered into the Internet, so it then can be made available to consumers, Web companies must arrange with network operators to: carry the data traffic from company facilities to their Web servers over local telecom lines (the “last mile”); carry the data traffic from the Web servers into the Internet over high-speed, high-capacity data lines (“special access”); and carry the data traffic over the numerous interconnected networks that make up the Internet (the “Internet backbone”). To accomplish these important connectivity and transport functions in a fast and effective manner, Internet companies collectively pay many billions of dollars per year to network operators, which fully compensates them for their network investment.

We believe that broadband providers should be precluded from charging content providers for terminating traffic to a particular end user. Allowing broadband providers to leverage their “situational monopoly” over terminating traffic would allow them to choose which content providers receive preferential treatment over others, thereby distorting the marketplace. The institution of terminating charges also could lead to the balkanization of the Internet, in which each of the hundreds of local telephone and cable operators around the country – and, perhaps even more importantly, around the world -- would assess its own set of fees for terminating traffic on its network.

I hope these clarifications have been helpful, and that you'll keep sharing your thoughts.

P.S.: Be sure to check out Robert Cannon’s outstanding blog, Cybertelecom, which should be required reading for anyone interested in the Internet and broadband policymaking discussions in D.C.


Connor said...

I'm glad that a company as large as Google has retained its sense of morality when engaging issues that affect its business. Compared to other markets, the broadband industry is dominated by a few BIG players, and in my opinion anything that policymakers enact to give them more power over the consumer is a step in the wrong direction. This seems to be a decisive issue concerning the future of the internet, which will inevitably become the primary medium for the dissemination of information, and I think more big players such as Google should continue to publicize it. I've always admired Google in particular for being a company that strives to protect and preserve the rights of the consumer-citizen. Keep up the good work, we all appreciate it.

Rodrigo Orihuela said...

Isn’t it slightly contradictory that you refer to Google’s production and creation “for American consumers” and you talk about Web servers located “around the country” when Google is one of the most global companies around and what you create and produce is instantly used all over the world? Isn’t your comment slightly partisan? I mean, I’m not American, I don’t live in America, I’m not even an English-speaker and yet I’m reading and commenting on this Google “made-for-Americans” blog.

Myrddin Emrys said...

Rodrigo, it isn't meant to exclude international users. He posts with a US bias because Net Neutrality is a proposed US law; his audience is US lawmakers, and their constituents.

Richard said...

Network neutrality is all about hiding the issue of IPTV under a pile of misdirection, obfuscation, ancillary concerns, and baseless hysteria. Here's what's really going on:

AT&T and Verizon have rolled out IPTV services that compete with cable TV and satellite but use the same physical lines as their telephone and Internet access services. They figure they can pay for upgrades to their physical plant - wires and routers - with TV subscriptions. They may be right and they may be wrong.

Google, Skype, Amazon, and others who want to sell IPTV and VOIP are nervous about these systems because they want a piece of the action and it doesn't look like they'll get one unless they can make deals with AT&T and Verizon. So they've ginned up network neutrality to enhance their bargaining position. Google is all about selling ads, and TV is mainly ad-supported. Google sees TV as the next step in their corporate evolution and doesn't want any barriers in the way.

There is no principle of law called "network neutrality", nor is there any principle of network design that goes by that name. And there is no natural right for Google to offer an IPTV service over AT&T's pipes for the price of standard Internet access. It's costing money for AT&T and Verizon to upgrade their systems to support this service, which is faster and more reliable than Internet access.

IPTV is not the Internet, but the campaign that Google and Skype are waging through sock-puppet organizations like Save the Internet make it look that way.

Our free speech is not threatened.

Bob Jonkman said...

I'd like to introduce a new term to the Internet vocabulary: "First Mile" -- unlike the "Last Mile", the connection from my ISP to my computer, the "First Mile" is the connection from content providers to their ISPs.

Google's First Mile is going to be very expensive. They're pumping out gigabytes (terabytes? petabytes?) of data all over the continent, all day long. This is markedly different from my Last Mile, which sees a little bit of e-mail, some Web pages, and a couple of podcasts. This all takes place only when I'm actually sitting at my computer.

All in all, it's a pretty cheap Last Mile, maybe $30 a month, compared to Google's First Mile, for which they're probably paying tens of thousands of dollars a month.

Carriers are being disingenuous when they complain that they're not being compensated for the bandwidth Google produces -- they're actually being compensated twice, once by Google for their First Mile, and again by me, for my Last Mile. Yes, there are intermediate carriers, and each of them gets paid by their downstream customers. One stream of data, many streams of revenue.

Ideally, the aggregate of all the First Miles should pretty much equal the aggregate of all the Last Miles.

So, to have the carrier charge me extra for "premium content" from certain content providers is completely bogus. The content provider has already paid for the bandwidth of that data in the First Mile, and I've already paid for the data I'm using in my Last Mile.

This is why it may be necessary to have Net Neutrality legislation -- to stop the carriers from charging us triple for data they've already been paid for twice.


Kickstart said...

How about a post clarifying the 'democratic' way that corporations can defuse individual speech, but individuals can't purchase ads criticizing corporations? link

Drywall said...
This comment has been removed by the author.
Drywall said...

There is no principle of law called "network neutrality", nor is there any principle of network design that goes by that name.

I see the point you're trying to make here, but referencing the name alone (a recent moniker) ignores decades of common carrier nondiscrimination rules, which is what NN amounts to.

Maybe a "part 4" tracing the history of network regulation from railroad to telegraph to telephone to Internet to Brand X would be in order, to help dispel the myth that NN amounts to "new government regulation of the Internet."

Might be good to help folk understand the regulatory history of nondiscrimination of FCC-designated telecommunications services, to which DSL belonged until recently if I'm not mistaken.

Rodrigo Orihuela said...

Myrddin, a rather delayed response to your own response. Thanx for explaining that to me, but I still don't agree. I get the point that it’s a proposed US law, but I also understand that US law sets important jurisprudence for other countries, especially other American countries. And, more importantly, I am sure that whatever policy Google has in the US it will have the same policy in most other countries, that's way I was slightly taken by what you call bias. Still, it don't think it's such a big issue, just something that caught my attention.

Gary said...

This is nicked from here(

Where the bill is summarized pretty well... but it sums up my thoughts nicely. End conclusion: Google can do better (you always do)

Limited FCC Jurisdiction — Good

Standard-Setting Bodies — Interesting:

Reasonable Network management, Additional Online Services — Troubling:

“Lawful” Content and Wireless Exclusions — Fail: