
The implications of the end of net neutrality - kawera
https://techcrunch.com/2017/02/20/the-implications-of-the-end-of-net-neutrality/
======
nickthemagicman
Telecom is not a free market and ending net neutrality in no way benefits the
free market.

There are serious monopolys in telecom all the way down to the actual fiber in
the ground...

So ending net neutrality is not making the internet more free market...its
just giving control of the internet to the companies with established hardware
monopolys.

It's that simple.

Just like other public utilities like electricity and plumbing there's only so
much room for infrastructure so the companies with that infrastructure in
place have a monopoly.

It's as far from free market as it gets.

Google fiber couldn't compete because of local regulations for laying wire and
hardware and the massive barriers of entry involved that established carriers
overcame a half century ago before there were so many barriers.

When a company like GOOGLE couldnt make fiber happen you know something
seriously stinks in telecom land.

To truly establish free market internet, you need to end any ADDITIONAL
regulations keeping the Googles and the Elons from laying their own cables and
hardware and break up the major telecom monopolies or regulate internet like a
utility..not JUST end net neutrality.

~~~
rayiner
You make it sound like Google gave up because it was unable to fight
regulations designed to keep incumbents entrenched. Google got unprecedented
concessions from municipalities in terms of franchise requirements, fast-track
permitting, etc. For example, the kerfuffle in NYC with Verizon's FIOS
buildout (whether it has built out to all housing units?) Google won't even
bring fiber to any city that imposes build out requirements.

Your view of the world doesn't explain why Google doesn't build fiber to
cities like Baltimore and LA that have been publicly disparaging their
incumbent providers and begging someone to come build fiber and compete. Or
why Google won't wire up Silicon Valley. Is it at all credible to suggest
Comcast or whatever has more pull than Google _in Google 's own backyard?_

I tend to agree with your overall point that regulated monopolies are the way
to go for internet service. But that has its own set of challenges. The AT&T
monopoly worked pretty damn well to tell the truth. They built what was at the
time a gold-plated telephone network. It was also expensive for consumers, and
the government was willing to let AT&T be profitable enough to make building
worth its while. That's very different than how "utilities" are regulated
today, where they deal with crumbling infrastructure because no politician
wants to authorize raising water or sewer rates.

~~~
WorldMaker
Google is slowly giving up because even _with_ unprecedented concessions from
municipalities it still can't access the infrastructure it needs to do its
job.

The biggest municipal concession has been the "One Touch Make Ready"
ordinances (in Louisville, Nashville) that theoretically should allow Google's
installers access to poles without first waiting for red tape from existing
cable, telephone, and power companies...

Those ordinances are now all currently locked up in court battles that may
take years to sort out, with a byzantine individual lawsuit per city.

~~~
rayiner
The biggest municipal concession has been waiving build-out requirements. You
know that because Google won't even start projects in cities that impose
build-out requirements, whereas it has already deployed fiber in many cities
without one touch make ready ordinances.

(And again, that doesn't explain why Google hasn't tried to bring fiber to the
Bay Area. If OTMR ordinances are really what drive fiber rollout, why not
fight that battle on its home turf?)

~~~
WorldMaker
I can see build-out requirements being a big issue to picking a next city, but
I don't see it as the reason for why it looks like Google appears to be slowly
stopping all efforts across the board in existing cities. OTMR fights hint
that Google may be losing a war of attrition with the entrenched monopolies to
inflated costs and infrastructure battles.

«If OTMR ordinances are really what drive fiber rollout, why not fight that
battle on its home turf?»

I don't know much of nuance of geopolitics here, but I would assume that the
cities that have started the OTMR battles think they are particularly
underserved by incumbents, but more importantly may have more political
jurisdiction in their respective states to pass OTMR ordinances/legislation
within city limits. While Google has been the biggest suggestion influence and
has been helping to fight the OTMR battles, it certainly seems like thus far
the onus and a great majority of the work has been the cities themselves
trying to reign in monopoly control incumbents. (Most of the cities even seem
to be fighting for OTMR in _spite_ of anti-regulationist-controlled state
legislatures and public utility boards, where such a change might more
naturally be easier.)

I think the question is more why hasn't the Bay Area tried to fight for OTMR
ordinances than why hasn't Google tried to get the Bay Area to fight for OTMR
ordinances.

As to why Google doesn't include the Bay Area at the top of its priorities,
I'd assume it's economic as much as anything: they seem to be prioritizing
places they can most easily compete against incumbents, and their values seem
focused on "floating the most boats" for now by finding the cities that are
most currently underserved. You may personally think the Bay Area isn't
adequately served by Comcast, but have you seen some of the rest of the
country that doesn't have millions of technical workers living in it? (Spoiler
alert: we all have it terrible. Our for-profit infrastructure monopolies don't
have our best interests in mind and most of our regulations and oversight has
been defanged or destroyed.)

~~~
rayiner
Places like Austin, Atlanta, Provo, etc., were not "underserved" relative to
Bay Area cities before Fiber. I lived in Atlanta in 2007--we had the same
Comcast packages you could get anywhere else.

The difference between Atlanta and Menlo Park is not that Comcast had better
service in Menlo Park. It's that Atlanta is in a low-regulation red state and
was willing to give tons of concessions and waive requirements it imposes on
everyone else.

Moreover, deployment in most Fiber cities has gone forward without litigation.
There was no major litigation in Kansas City, Provo, etc. I think the OTMR
lawsuits are stupid, but pointing to them as the reason why Google is pulling
back on fiber is willful blindness to the obvious. Google is pulling back on
fiber because there isn't enough money in it.

~~~
WorldMaker
Sorry, I was using the OTMR lawsuits as a proxy/definitive example for why
there isn't enough money in it. I agree, the big problem is that there isn't
enough money in it, I just disagree that build-out requirements are the big
reason there isn't enough money in it. I may not have made that clear enough.

It's hard to control costs when the incumbents are doing everything in their
power to delay and inflate costs. OTMR is one attempted solution to one
particular angle in which the incumbents have a power to delay and inflate
project costs. The OTMR lawsuits are emblematic of how far the incumbents are
willing to go to continue to delay and inflate costs (to years in court and
years of legal fees) and how much "defense depth" they have to accomplish it
(the parties involved in the court cases are different incumbents in each
jurisdiction).

Build-out requirements can be estimated in the fixed capital costs of a
project, assuming no other interference. The need for OTMR and the current
OTMR lawsuits are proof that the interference exists and is not easily
contained/constrained and quite probably not even possible to estimate as they
will be different in every city in the country.

I use OTMR as an example because it is the most visible example. I mostly
suspect it is just the tip of the iceberg in terms of cost issues into a
project like Google Fiber.

------
gregmac
> And while the FCC currently supports some regulation, it still allows zero-
> rating, which many critics believe violates net neutrality.

> Eliminating regulations essentially means ISPs can continue charging
> consumers for access to the internet while simultaneously charging
> institutions for prioritized access to those customers. This means any
> organization without deep enough pockets to pay an ISP’s ransom will load
> much slower than those with ties to ISPs.

Zero-rating may actually lead to a much more dire but subtle future: it's
impossible to start a new service because you can't afford to have your
content zero-rated (let alone do it at every ISP). If zero-rating increases,
data caps can be lowered without a lot of consumer complaint. The lower the
caps get, the more necessary it is to be zero-rated if you want consumers to
use your service.

The really bad part of this is there isn't any need to have fair pricing.
Companies like Netflix, Amazon, and Google can all negotiate lower rates than
a new startup because of their volume. Worse, the ISP's own zero-rated
services automatically get a pricing advantage because they don't have to pay
to be zero-rated.

~~~
bdrool
This is the end of innovation on the internet, and the beginning of a few
large, highly-entrenched incumbents with high barriers to entry. Unless your
application is unusually low-bandwidth, you won't be able to compete, and
that's the way the big players will want it. In less than 30 years, we'll have
gone from a completely wild-west open internet to a totally locked-up playing
field. It was fun while it lasted, I suppose...

~~~
imh
Innovation could still happen in countries with net neutrality.

~~~
sounds
"The Internet...well, as much of it as only requires transit within Estonia"
would be a poor simulacrum of the whole.

I actually agree that it's going to be a county-by-country battle. Also,
Estonia in fact has some of the best ISP service. Yet the point of the
internet is that nobody should care where you are, _especially_ whether you
are in a G8 country.

~~~
leereeves
Why only Estonia?

Is net neutrality in danger in the rest of the EU?

~~~
onli
Yes. In Germany for example. Deutsche Telekom openly advocates against net
neutrality, [https://www.telekom.com/en/company/management-
unplugged/deta...](https://www.telekom.com/en/company/management-
unplugged/details/net-neutrality--finding-consensus-in-the-minefield-362382),
and already practiced (don't know whether they still do that) zero rating to
boost their offerings, and some partners like Spotify. Politicians wanted to
end net neutrality, see [http://www.dw.com/en/german-parliamentarians-tackle-
net-neut...](http://www.dw.com/en/german-parliamentarians-tackle-net-
neutrality/a-16900369).

The last EU regulations protect net neutrality, but afaik there still are
loopholes.

------
CurtMonash
People consistently ignore the middle course, which is to allow a market for
differentiated quality of service, zero-rating, whatever -- but to regulate
that market as to what can be offered in it. The point would be that large
companies couldn't get quantity discounts with which they can blow away small
ones.

It's legitimate to suggest that remote/waldoed surgery needs superb data
delivery guarantees, or that providers of ad-heavy contents should be allowed
to pay for the data their users consume. But it's also legitimate to ensure
that a small entertainment provider has a chance in bidding against the large
ones.

There's been a low-volume discussion of all this on my blogs for many years.
[http://www.dbms2.com/2014/05/14/solve-the-network-
neutrality...](http://www.dbms2.com/2014/05/14/solve-the-network-neutrality-
dilemma-and-make-money-too/) is pretty much the latest.

~~~
Chinjut
"waldoed"?

~~~
CurtMonash
A "waldo" is a remote manipulator. I think the term comes from 1940s Robert
Heinlein SF.

------
lend000
It would be nice if there was more focus on how to make our regulatory
landscape more competitive to enable new ISP competition and innovation,
instead of worrying about the lack of a particular regulation (which wouldn't
be a big deal if there was more competition/consumer choice in telecoms).

Can anyone with expertise on the subject shed some light on the kinds of
zoning changes, regulatory changes, and/or 'open infrastructure' policies that
established cities could take to make it easier for smaller entities to build
their own Internet infrastructure around public land? I'm not convinced it's
such a difficult problem to allow Internet providers to compete at close to
the same level as other industries.

~~~
AnthonyMouse
Here's the rundown.

The cost of providing last mile internet service is dominated by fixed costs,
meaning costs that are the same regardless of whether you serve 10 or 20
customers on a particular street, and regardless of how much data those
customers transfer. These costs are not small; creating the capacity to serve
a million households will cost north of a billion dollars.

There are some policies that can knock that cost down some. The best one is to
require conduit to be installed in the road anywhere it doesn't exist when
road service is done. We should enact this policy. It will save us a lot of
money. But it's hard to get passed because the cost is in current-year tax
dollars to install conduit and the benefit is in much lower long-term costs
for power distribution and telecommunications.

And it "only" lowers costs, it doesn't change the competitive dynamic. The
nature of the problem is this. If you have one telecommunications company then
you have one piece of fiber in the ground, and when some idiot with a backhoe
cuts the fiber, they need to send a truck out to fix it. If you have three
competitors then there are three pieces of fiber, all next to each other,
owned by different companies, all get cut at once, so you need three trucks.
If you have ten competitors you need ten trucks. Most of the costs of
operating last mile infrastructure share this horrible scalability.

Meanwhile if you have ten competitors then each competitor has 1/10th as many
customers, so the cost per customer is ten times as high. This is why last
mile telecommunications is called a natural monopoly -- having a single
provider will give you half the cost of having even two.

So that is the source of the problem, how do we fix it? The answer is to
isolate the natural monopoly to the fullest extent possible. Let it be a
monopoly but let it be nothing else. Some entity (the government, a nonprofit,
Comcast) owns the fiber in the ground but they do _nothing else_. They don't
offer retail internet service, they don't offer TV service, their only job is
to maintain the physical infrastructure and lease wholesale capacity to third
party providers at uniform rates.

Then you have plenty of competition, because anyone can lease capacity and
offer service, no one has any undue advantage over the others because the
rates are uniform and published, and the monopoly provider can't give any
advantage to its own over-the-top offerings because it doesn't have any.

~~~
ClassyJacket
>Let it be a monopoly but let it be nothing else. Some entity (the government,
a nonprofit, Comcast) owns the fibre in the ground but they do nothing else.
They don't offer retail internet service, they don't offer TV service, their
only job is to maintain the physical infrastructure and lease wholesale
capacity to third party providers at uniform rates.

This is a good idea and is precisely what Australia is doing. It's called the
NBN. The problem is, it was fibre to the home from 2009 - 2013, then a
conservative government got in and now they're deliberately running it into
the ground, by spending more money to do it with copper phone lines instead.
Just for the sake of partisan politics and not keeping Telstra/Foxtel happy.
Instead of a gigabit-fibre-to-the-home network, they're going to still be
installing new 25Mbit/s connections in 2020 (yes, really), that have no
potential for upgrades.

They also changed the "uniform rates" part, so that the big companies get a
big discount and small ISPs just straight up get charged more for the same
thing.

It was a great plan, 10% of homes got fibre! It just got screwed up by an
actively malicious government gaining power.

Luckily if you had Telstra cable before, or in your street, you can keep it.
(Not if you had Optus cable though, then you're bumped down to VDSL). And
there's those few areas with fibre, and new apartment buildings still get
fibre. So as a young person who hasn't settled into a long term house, I have
the luxury of making sure I at _least_ get cable. Sucks for the 60% of the
population that are stuck with horrible old unreliable copper lines that can't
be upgraded tho.

Here is a previous thread on the matter:

[https://news.ycombinator.com/item?id=13613308](https://news.ycombinator.com/item?id=13613308)

That being said, I'd still prefer this to the mess the US has, and the concept
of having a publicly owned utility own fibre everywhere and providing access
to ISPs is a great one. Just do it with fibre, not ancient technology.

Look to New Zealand's UFB for an actually good example, with gigabit fibre
just about everywhere.

~~~
AnthonyMouse
The nice thing about this is that in concept it doesn't require any
involvement from the central government at all. The monopoly part is purely
local. Any municipality can issue a bond to fund the network and then use the
subscription revenue to repay the bond.

This is exactly what was happening in multiple US cities until the ISPs
lobbied to kill it at the state level.

Presumably we could have it back if people would make enough noise in favor of
it.

~~~
ClassyJacket
I'm not an expert in network topology but I'd argue that there are benefits to
doing it at the national or at least state level, like structuring the network
to provide the lowest latency and highest bandwidth, general efficiency, and
equal access and pricing.

~~~
AnthonyMouse
The market does that for you when there is actually competition, which there
is for transit providers. The natural monopoly is only the last mile which by
definition is at city-level scale or less.

------
mncharity
I remember in the early 1990's, IETF leadership burning lots of time flying to
Washington, to explain the importance of common carriage and network
neutrality for the infant Internet. It wasn't clear it would be allowed to
survive. The telcos wanted it dead. Monopoly ITT crippled it throughout the
Caribbean. But it flourished. And even when neutrality wasn't law, it hovered
as a threat - don't get too sociopathic, or there will be crackdown. And here
we are, a human generation later. Still fighting the telcos, and still
struggling to educate an ignorant Washington. Let me make a prediction for the
next quarter century, and for 2040... we continue.

------
harshreality
Vi Hart recap of Net Neutrality:
[https://www.youtube.com/watch?v=NAxMyTwmu_M](https://www.youtube.com/watch?v=NAxMyTwmu_M)

The first 5 minutes are conceptual background and explanation, while the last
6 minutes move on to the 2014-era politics of net neutrality. It's my favorite
net neutrality summary for (IMO) naïve people who think net-neutrality stifles
innovation.

------
skywhopper
Basically if you wish the Internet were more like cable TV, then the end of
net neutrality is for you.

------
jcadam
Hey man, the internet is not something you just dump something on. It's not a
big truck. It's a series of tubes...

But on a more serious note, given this new environment if one were say,
developing/bootstrapping a B2B SaaS would it make sense to prioritize
developing/selling a self-hosted(e.g., "enterprise") version of the product
over a "cloud-based" offering?

Or, perhaps the major cloud-based IaaS/PaaS providers like AWS might negotiate
with all of the bridge trolls themselves (on behalf of their customers), and
just pass down the costs via higher rates to all of their subscribers?

~~~
jackmott
The series of tubes analogy was pretty sound. Hell, it is even literally true
now.

------
JumpCrisscross
I, like much of Silicon Valley, make more money with strongly-enforced net
neutrality. I try to remove those blinders from time to time and think from
the other side.

Could an oscillation between hard and soft net neutrality b better than NN
"always on"? Let me explain. Strongly-enforced NN earns those using the pipes
(including those not yet founded) more. Weakly-enforced NN earns those owning
the pipes (including those not yet laid) more.

When returns to content creators are low, you get incumbency--no Netflix or
Spotify. When returns to pipe owners are low, you also get incumbency. No
Google Fiber or SpaceX satellite Internet [1]. (Another solution is weak-form
NN on new (and utilized) capacity. After some time, that incentive would phase
out to strong-form NN. Like patent protection.)

Corollary: is a pro-NN ISP something consumers would pay more for?

[1]
[https://en.wikipedia.org/wiki/SpaceX_satellite_constellation](https://en.wikipedia.org/wiki/SpaceX_satellite_constellation)

------
sergioocon
There are alternatives to that would allow Telcos to profit without
compromising net neutrality, but are more complicated because they imply
cultural changes.

For instance, deploying content systems inside the network would reduce
bottlenecks and improve latency, and you don't need to mess with the rest of
the traffic to do so. Net neutrality is there because we don't want telcos to
differentiate traffic based on their value, but based on value for the
customer, and that changes faster than commercial agreements.

However, that means changing business models and creating value for users and
content creators, unless today, not only providing the network, but a real
service on top.

With the end of net neutrality, small companies (that can start without that
close to the home content distribution up to a certain traffic), would not be
able to compete with the established ones, so innovation will be hindered
(unless we all want faster horses)

------
woah
Can someone explain to me why edge servers do not have all of the terrible
effects of non-net-neutrality? ISPs install edge servers that result in faster
service for content from some providers. Maybe they charge for them. Maybe
they also charge for a leased line from the content provider's data center.
They can of course do this for their own content as a way of utilizing their
monopoly power. Why hasn't the sky fallen already?

~~~
forgottenpass
Because, generally speaking, the end users currently have an internet
connection with the capacity and (relative lack of) traffic discrimination to
pull that content over the internet.

If the boxes collocated at an ISP broke today, the data would flow to users
from distant data centers. All that would happen is the ISP and the content
provider might end up paying a little more in network costs.

The edge servers in the ISP network would only have the same non-network-
neutrality effects if the ISP offered a string-and-soup-can connection to the
internet that could not support the service.

The fear is - as it's always been - the ISP's ability to make a remote service
effectively unavailable to their customers.

------
at-fates-hands
Basically this whole argument comes down to two viewpoints:

1) If you believe in Net Neutrality, then you believe the government will be a
good and objective manager of the internet.

2) If you believe nearly everything the government touches it fucks up and
cannot be trusted to manage anything, let alone something as open and free as
the internet, then you're against Net Neutrality.

~~~
TheCoelacanth
I can use a strawman argument too:

1) If you are against Net Neutrality, then you believe Comcast will be a good
and objective manager of the internet.

2) If you believe nearly everything Comcast touches it fucks up and cannot be
trusted to manage anything, let alone something as open and free as the
internet, then you are for Net Neutrality.

------
gm-conspiracy
Am I correct in assuming this is only a US problem?

I am curious what the landscape will look like in the next decade, as "data"
prices increase, while local storage continues to plummet.

It reminds me of "Exit Strategy" by Douglas Rushkoff, where it discusses
vertical brand integration.

~~~
dragonwriter
> Am I correct in assuming this is only a US problem?

Yes and no. The direct effect is on US consumers, but because of how much of
the money made from internet content and online services is from US consumers,
it likely has a very significant indirect effect on global competition.

------
gm-conspiracy
I do not welcome the new Compuserve, AOL, and Prodigy oligopoly.

Also, how will this affect mobile app-developers that rely on a server
backend? Will this drastically curtail mobile app development?

------
ultrahate
I think yall are on the wrong side of this. Benefits of the free market vanish
once regulations begin. If comcast wants to charge by the hour, let 'em try.
How long until some guy creates the same product for 1/100 the price?

Scarcity being the key point here. You don't have a RIGHT to use the internet,
that's why it works in the first place as a commodity of sorts.

I want the market to destroy comcast, Google fiber, etc. No more megacorp
ISPs.

I'd love to see the FCC dissolved entirely, tbh. We're not helpless, if like a
meshnet initiative r we got some real big faces behind it, we'd have a gov-
proof Internet in no time.

~~~
lukeadams
I understand the sentiment, but doesn't it sound much more reasonable to have
strictly enforced net neutrality (or consumer protection policy X), than it
does to assume the "free market will take care of it someday"? These megacorps
have a stranglehold on large swaths of the States – they won't allow
challengers without a fight.

~~~
ktRolster
_" free market will take care of it someday"?_

I kind of hope it will be fixed sooner than "someday"

~~~
lukeadams
Precisely.

