What's actually going on is fairly complicated, because there are five different parties involved: the consumer, a consumer ISP such as Verizon or Comcast, a backbone provider such as Cogent or Level 3, a business ISP such as Linode or AWS, and a business with a web site. The wires look like this:
Consumer --- Consumer-ISP --- Backbone-provider --- Business-ISP --- Website
Consumer --> Consumer-ISP --> Backbone-provider <-- Business-ISP <-- Website
Consumer --> Consumer-ISP --> Backbone-provider <-- Business-ISP <-- Website
Unfortunately, I don't expect Congress to have access to clear explanations of all of this. But if you happen to have a congressperson's ear: rather than convince them of a position, please make sure they understand the full shape of what's happening. They're smart enough to draw the correct conclusion, but are constantly bombarded by misinformation.
I am not a believer in big or overbearing govt per se, but I feel like, just like power or water, Internet is a utility and it needs to be regulated - hard. The future depends on it. Imagine you're a startup and between 2p-6p you don't have any or super stoddy internet access. Kinda like Comcast from 5p-11p actually..
Anyway, It's pathetic really; we invented the f-ing internet and other countries completely surpass our speeds and ability to access. My brother teases me all the time because he has gigabit in Japan (in the early 00's, he had 100 Mb).
Step outside the US and you realize our options are a total joke.
Internet as a utility seems like it will quickly be out of date and getting governments to upgrade it will be just as hard as getting them to upgrade anything else.
I'm not well informed enough to know why, but in all cases (cable, railroad, powerlines, ether frequencies) the system devolved into a state where the "provider" linked to the hardware maintainer is the dominant player still.
I'm not syaing it can't work, just that over here it didn't really work.
Practically overnight (metaphorically) it went from only metered dial up or expensive isdn to ultra fast dsl. There was huge competition mostly lead by SoftBank Japan. The actually handed out routers at subway station exits. Every time their competitors including the old monopoly matched their speed they'd double it. It was awesome to watch
The real solution is to municipal networks. Which would look like: consumer -> municipal network -> Tier 1 ISP -> website.
Its been done in Tennessee. Los Angeles was looking at implement this model as well. But wouldn't you know the cable monopolies has sued and threatened to sue the local governments because they say a municipal would have an "unfair advantage." These assholes couldn't compete in fair market, they'd be out business.
There are two responses to this. The first is OK do it and then we'll get rid of the regulations as soon as there actually are 5 or more competitive ISPs.
But the more important point is that it doesn't actually solve the problem in question. There could be 10 ISPs that every consumer could choose from but every website would still have to pay all of them if they were allowed to charge websites, because the site can't get faster access to Verizon's customers by paying AT&T or vice versa.
For example, say I'm paying for a connection with a 20 Mbps upload speed but when I upload to backblaze my upload only runs at 10 Mbps. The problem could be my hard disk, filesystem, CPU, software, wifi, router/modem, ISP, or backblaze themselves.
Currently we don't do a particularly good job of giving nontechnical users the information they need to make rational decisions about what they need to change or upgrade.
One of the ISPs would charge lower prices while offering crappier service. Some customers would still stick with it because it's cheaper. That ISP then strikes a deal with some smaller websites to make them faster than their competitors. Then the ISP offers a sweetheart deal to the larger competitors (at first) which they'll take to avoid losing ground, so then everybody is paying them for faster service.
Now that ISP has the lowest prices and their service is suddenly better because it's being subsidized by the websites, so they get more customers. Then they use the leverage of more customers to negotiate higher prices from the websites ad infinitum. The competitive advantage forces other websites to adopt the same business model.
It isn't a problem that competition solves because the people who have to pay can't choose between competing ISPs.
Sanders said that Romania has faster internet than USA, but it's not because the romanian government did something about it, but exactly because it was oblivious to it's development.
It started when campus students started laying ethernet cables to connect into a big LAN party. Then any kid with some knowledge of networking got some switches and cables and connected with his neighbors, sometimes connecting two or more blocks of apartments. When grown big enough, they got an internet connection directly from a backbone provider.
Soon enough, cables were flying around, from rooftop to rooftop, and almost everyone had 50Mpbs/100Mbps (and dedicated IP) for around 10$ a month (and most providers were registered companies, paying taxes).
The providers were usually small (hence were called "neighborhood networks"), but some grew big (2-3 of them grew to almost 1/6 of the city, each).
Thankfully, the government learned only to late of this little activity, and everyone was already high with internet.
The networks weren't regulated, but none dared to limit or censor (or cared to). They probably over-committed the bandwidth, but the speeds were good.
There were some issues. The block of apartments have something called an "administrator" handling the maintenance of the building. Some companies started bribing (or administrators demanding bribes) to deny access to competition in the block and cut cables.
Then there was talk in the parliament and the city hall to remove the cables (because it was "ugly"). But every cable cut during day reappeared over night.
At that point, the only alternative to those networks was at most, 256kbps DSL.
Lucky enough, a big provider came and bought all the big networks in the city, buried the cables, but kept the service (probably to avoid a fallback to the old ways).
I now have a 1 Gbps fiber for same 10$. They also offer unlimited SIM cards with unlimited 4G for 3$, but they don't guarantee signal coverage (mostly in rural areas).
So, increasing competition is the solution. No one will dare slow down anything, or if they will, a new player who doesn't will appear and steal the market.
Similar practices already exist with satellite TV providers, who drop content providers over contract disputes , and with cell carriers, who provide preferential billing for in-network calls. Not that these practices are inherently bad, nor are monopolies good, but these are clear examples of the free market inducing discriminatory carriage, directly counter to your claim.
"The market" only "sorts things out" in fantasy worlds with infinite liquidity, no financial transaction friction, and no information imbalance. The world of consumer internet is none of these things. The most direct route to net neutrality is regulatory enforcement via common-carrier status.
There is one person in that lineup who often can't put their money elsewhere if the connection is slow, and that's the consumer. This is the main reason that the Consumer-ISP is in the economic position to demand payment for passage through the monopoly gateway to the consumer. If the consumer could chose other access options then Consumer-ISP isn't going to be able to demand extra payment for passage.
Competition like, preventing states from making laws that limit competition. If the free market is truly healthy then it CAN compete with government provided services.
It's naive to think that a group that created these monopolies have any interest in the sort of deregulation that would actually encourage competition, and in particular would allow the success of new telecoms/ISPs.
That's the reason for the asymmetry in the second diagram that was not present in the first.
That's true for Netflix and a few larger sites. But for the other 90% of sites there aren't enough customers who would switch for ISPs to care.
I didn't know about the consumer ISP-proposed demand for payment from business. That indeed seems inconsistent with the mental model I've held re: how the internet is organized (i.e., like the first diagram). It seems pretty simple so it's surprising that the elected officials didn't grasp it. Perhaps their advisers/staff didn't inform them of the extortionate ISP demands.
BTW looks like I'll need to write to my senators again about net neutrality, etc. It would be excellent if US citizens contacted their senators for the same purpose.
> The problem is that this arrangement would have businesses paying money to ISPs that they didn't choose, and can't walk away from. From a consumer's perspective, if a web site is slow, it looks like the website's fault rather than their ISP's fault, which distorts the incentives.
If a website is using significant resources, it shouldn't be on the ISP to subsidize their engineering. There have been plenty of websites throughout history that took up significant amounts of traffic relative to the total traffic. They always paid for leased lines (your third diagram) -- it's only recently that one very well liked company running almost entirely off Amazon decided that leased lines were extortion. If you compare the physical infrastructure of Google's YouTube or MLB.tv to Netflix, the difference is huge.
Also, money doesn't always flow like that. If data is flowing equally (in bit-miles), there is generally no exchange of money. If it's not, money should flow the other way. Many of those backbone providers also were in the business-ISP market, and were leveraging their settlement free peering for more competitive pricing. When video streaming caused them to be pushing more data onto the networks than they were taking - the consumer ISPs wanted to be paid since it was no longer qualifying for settlement free.
I don't follow. I am a consumer who has purchased an internet service package that advertises 100Mbps down, 10Mbps up, and 100GB of transfer every billable month.
If I, the ISP, have 1000 customers fully utilizing that 100Mbps down between 6-11pm _it is my engineering problem_
Whether it is netflix, google, mlb, or literally anything else. _it is my engineering problem_ to provide the service I am charging for.
You purchased a package that gives you access to your ISPs network at that rate. Not even the highest business packages will provide an end to end SLA unless you're paying for a leased line from your location to the location you want the SLA for. Once your packets leave their network they have no control.
You're only purchasing access to their network, and their network happens to be attached to other ones. If they weren't connected to a network with Netflix, you wouldn't have any recourse because you're not buying a connection to every computer on the network. Of course, practically they provide access to every site. But that's not what you're actually paying for if you check your contract.
no one is purchasing comcast service just to connect to other comcast customers.
I'm not super enthusiastic about buying access from Facebook or Google, but that seems like the endgame if the ISPs really end up getting a cut of the money.
To be clear I am not disagreeing with the explanation but rather asking for help in understanding the leap from "this looks as though it just prevents the FCC from setting price floors and price ceilings" to "The problem is that this arrangement would have businesses paying money to ISPs that they didn't choose, and can't walk away from."
If Netflix wants to subsidize my Verizon bill I am okay with that. Yeah yeah I know...how will startup X have a chance to compete with Netflix then? Guess what nobody can. And even by some miracle if they get disrupted the benefits again will keep accruing to a handful of people. So what the point of the story?
Netflix, Youtube, Facebook, Google, Apple and Amazon are unregulated monopolies that I worry about much more than Comcast and Verizon. The EFF needs to bring that onto the table every time they talk about Net Neutrality.
If netflix has to "subsidize your verizon bill" that may be appealing at first (although I doubt you'll see any of that money). But why should verizon stop there? Why not cut out the middle man? Does verizon offer anything like netflix? Take a good look at that: it's what you're going to end up with, except that now they're still trying to complete with netflix. They won't have to do that if they're no longer required to carry netflix's traffic.