This one's a bit bizarre. We were just talking about the ridiculous boondoggle called the Universal Service Fund, which is one of those "taxes" on your phone bill that's supposed to go towards having the big telcos supply service to rural areas. Of course, since there's no oversight, it seems like most of the money just goes into the telcos coffers. There are all sorts of ways to deal with this, but one idea that makes no sense at all has been put forth by the Consumer Federation of America... who thinks that Netflix should be "taxed" to provide money for the USF. Why? Um, that's not clear. Basically CFA seems to think that big internet companies should now pay up just because:

"The Internet is not an infant industry anymore. It can certainly bear the burden of making sure that wires and the communications mediums are there."

So, really, what this "consumer" group is suggesting is that Netflix raise its prices on consumers, to give telcos more money that they just use to pay for operations, rather than actually investing in infrastructure for the disconnected. How does that possibly help "consumers"?

A few years back, we noted that Verizon -- who has a history of misleading ads itself -- had sued Time Warner Cable for a series of ads that implied that Verizon's FiOS fiber-to-the-home offering was just "catching up" to TWC's own "fiber" offering. Of course, that was blatantly misleading. Time Warner uses fiber within its network but not to the home, which is the whole selling point of FiOS. There have been numerous disputes over this and TWC always comes out on the losing end. The latest, from the National Advertising Review Board (NARB), once again found that TWC's claims were clearly misleading. TWC's response is to petulantly claim that it can no longer accurately describe its own network and this will make it harder to "distinguish their service in areas where their competitors have indisputably inferior products."

Hogwash. TWC can still accurately describe its network and, if it actually is facing off against "indisputably inferior products," it can continue to highlight the specific differences in bandwidth or whatever other metrics that accurately portray the difference. What it cannot do -- and what it clearly had done for a while -- is pretend that its use of fiber deep within the network is, in any way, comparable to Verizon installing fiber all the way to someone's home.

We've been pointing this out for years, but it seems that many of the "tech elite" are so focused on the phrase "net neutrality" that they're willing to jump on any sort of regulation that says it's "net neutrality." So, it's nice to see that the EFF is not following suit, but instead is warning that the FCC does not have the regulatory mandate to do what it's trying to do with net neutrality -- and if it is given that control, it will inevitably lead to much more internet regulation that we will all come to regret.

We're wholly in favor of net neutrality in practice, but a finding of ancillary jurisdiction here would give the FCC pretty much boundless authority to regulate the Internet for whatever it sees fit. And that kind of unrestrained authority makes us nervous about follow-on initiatives like broadcast flags and indecency campaigns. In general, we think arguments that regulating the Internet is "ancillary" to some other regulatory authority that the FCC has been granted just don't have sufficient limitations to stop bad FCC behavior in the future and create the "Trojan horse" risk we have long warned about.

In discussing this stance with Wired, Abigail Phillips, a staff attorney at the EFF said she wasn't sure what "the right solution is" to the question of keeping the basic end-to-end principles of the internet in place. I still don't think the "solution" is that complex. For over five years I've been pointing out that if there was real competition in the marketplace, net neutrality wouldn't even be an issue, because customers would go to ISPs that didn't discriminate. The real problem is how deeply connected our government is to a very small number of giant broadband providers. They've set the game up so that there's very little real competition, which allows those ISPs to pull stunts like trying to doublecharge, favor certain content, and do metered billing. Get more competition, and none of those things fly.

For years, we've spoken about why metered broadband stifles innovation, by adding serious additional mental transaction costs and limits to anything you do online. If you look at the history of various online services, you know that AOL didn't really catch on until it went to a flat-rate plan from an older metered (by time) plan. It makes a huge difference in how people use the internet, and putting gates and fences around them doesn't just keep the bandwidth down, but it limits all sorts of innovative services that rely on the fact that end users have no limits on their bandwidth. In the end, metered broadband always appears to be a way for ISPs to squeeze more and more money out of people.

However, as Canadian regulators seem prepared to let Bell Canada force all DSL providers into offering metered broadband, some are pointing out another reason for metered broadband. Not only does it stifle basic innovation, but it also protects the legacy media/entertainment industry and their business models. If downloading becomes more "expensive," then, in theory, fewer people will use services that require higher bandwidth. And this isn't just file sharing services either, but things like Netflix, which many studios still wish to limit and control when it comes to its online streaming plans. None of this is about "bandwidth hogs," at all. It's all about putting up barriers to anything that might be disruptive to legacy industries.

If you have T-Mobile in the UK you may be disappointed to know that the company has suddenly decided that you should be perfectly happy to use little more than just 500 MB per month -- a paltry amount. It's not quite a cap at 500 MB -- you'll still be able to do some basic surfing, but apparently, once you've used up your 500 MB, you'll no longer be able to do anything beyond browsing static websites or checking email. No streaming, downloading, gaming, etc. Many users previously had caps that were around 3GB, so this is a pretty big drop. Apparently, T-Mobile has decided it gets to tell you what you can and cannot use the account for:

"Browsing means looking at websites and checking email, but not watching videos, downloading files or playing games. We've got a fair use policy but ours means that you'll always be able to browse the internet, it's only when you go over the fair use amount that you won't be able to download, stream and watch video clips."

Basically, this is T-Mobile UK announcing to the world that it doesn't have the bandwidth to actually give people what they want, and it hasn't invested in the necessary upgrades to offer a reasonable service. Or, a simpler way of explaining it, is that this is T-Mobile UK telling users in the UK who actually want to use mobile broadband to find another provider.

For years, we've been pointing out that while the concept of net neutrality is important, any attempt by the government to put it into law would inevitably involve lobbyists twisting it to be quite favorable to the telcos and others. So, really, it should come as no surprise that the FCC is planning to approve a "net neutrality" plan that was heavily influenced by AT&T and from which long term supporters of "net neutrality" rules are distancing themselves. In other words, pretty much exactly what many folks had warned early on. We shouldn't confuse the concept of the end-to-end principle of the internet with the need for laws that start to regulate parts of the internet, because we've seen time and time again how the telco lobbyists will shape anything along those lines to their own advantage, and it appears this was no exception.

One of the popular claims from entertainment industry supporters, who somehow want ISPs to be liable for file sharing, is that "ISPs profit from file sharing." We hear this over and over again. But there's little evidence that's true. It's not like most internet users wouldn't have internet access if they couldn't file share (that's another myth, where the industry overvalues its own content, without realizing there are other reasons to have an internet connection). However, even more evidence can be found in the fact that various ISPs continue to work so hard to throttle file sharing traffic because it actually costs them a lot in terms of bandwidth. The ISPs already have some incentives to minimize traffic hogging (even if their methods are crude and lame right now).

Broadband Reports has a trio of posts pointing out the latest in ridiculousness coming out of the cable broadband industry. It kicks off by pointing out that, despite the claims of the industry, moving to metered and capped broadband is certainly not inevitable. Flat rate broadband has been amazingly profitable for these companies, but they're looking to squeeze even more money out of people. Yet, those on Wall Street who take an incredibly short-term view on how broadband companies make their money are pushing hard to get them to start offering metered billing and broadband caps. And, to top it all off, the cable industry's top lobbyist is trotting out the old ridiculous line that metered billing is really about helping out the poor by offering them more reasonable broadband deals.

Except almost none of that is true. While various attempts at putting in place metered broadband usually will include some "low end" offering so that the companies can make these kinds of claims, if you look more closely at those offerings, they are almost universally terrible. They're not designed to "spur adoption by price-sensitive consumers at the lower end of the socioeconomic ladder," as the industry claims, but to aggressively upsell people to higher rate plans by making the low end plans as crappy and unusable as possible.

Way back in 2005, we pointed out that all of these fights and discussions about "network neutrality" were missing the point. They were fighting a symptom, not a disease. The real problem in the US is the lack of competition in the marketplace for broadband. Despite the twists and turns industry lobbyists will claim, true competition just isn't there, and the FCC has done nothing to address that (even though, its own "reclassification" plans earlier this decade in large part created the problem). The current flare up about net neutrality has again been a silly fight that we've barely even covered, because none of it addresses that lack of competition.

Finally, some are noticing. Scientific American has an article pointing out that other countries have a lot faster speeds, at a lot lower costs -- and the key point is that they have a lot more competition:

Phone companies have to compete for your business. Even though there may be just one telephone jack in your home, you can purchase service from any one of a number of different long-distance providers. Not so for broadband Internet. Here consumers generally have just two choices: the cable company, which sends data through the same lines used to deliver television signals, and the phone company, which uses older telephone lines and hence can only offer slower service.

The same is not true in Japan, Britain and the rest of the rich world. In such countries, the company that owns the physical infrastructure must sell access to independent providers on a wholesale market. Want high-speed Internet? You can choose from multiple companies, each of which has to compete on price and service. The only exceptions to this policy in the whole of the 32-nation Organization for Economic Co-operation and Development are the U.S., Mexico and the Slovak Republic, although the Slovaks have recently begun to open up their lines.

The article's authors complain that in the fight over net neutrality, the FCC has carefully avoided tackling this issue, and suggests it may be because of the political power of AT&T and Comcast. Thankfully, Broadband Reports drives home the point of why politicians won't take on AT&T:

Some (like plan architect Blair Levin) will tell you the FCC simply didn't want a legal battle and that the die had already been cast. On the other hand, Levin and company didn't even bother to try. When a company like AT&T is not only the biggest campaign contributor in any sector and an integral part of your country's sometimes legal intelligence gathering operations, there's not a lot of people in DC rushing to stand up to them.

This is really disappointing. The whole net neutrality battle has been a silly side show while the rest of our broadband infrastructure has suffered. It's time we had real leadership in our government that got past the interests of one big company -- but that seems unlikely to happen any time soon.

Ok, so you bought an iPad in the UK with O2 and you signed up for either the 3GB data plan or the 500MB data plan. It's been a few months, and you're already recognizing how limiting those data caps are... and O2 tells you that they're already giving you too much. mike allen points us to the news that O2 has announced to many users who did not realize this, that this rate was really just promotional, and the actual data rates are really just 2GB and 200MB, despite what people thought they had signed up for. That must feel good...