How The Death Of Net Neutrality Could Hamstring The Internet Of Things

from the Comcast-certified-and-approved-devices-only,-sorry dept

So we’ve already spent a lot of time talking about how underneath the hype, the “internet of things” is a bit of a shitshow. A lack of device security and a general apathy toward anything resembling privacy standards has resulted in an absolute torrent of new attack vectors being introduced into millions of homes and devices nationwide. Many of these devices are being quickly compromised in a matter of minutes for use in historically massive DDoS attacks, and most security analysts believe it’s only a matter of time before they contribute to an attack on essential infrastructure putting notable lives at risk.

But the internet of things segment is facing another threat: the looming death of net neutrality.

We’ve already watched as large ISPs have used their market power to force you to upgrade to more expensive broadband tiers if you want certain services (like Facetime) to actually work. We’ve watched as ISPs have imposed completely arbitrary and unnecessary usage caps and overage fees, then used those punitive limitations to give their own streaming services a leg up on smaller competitors. And we’ve watched as Comcast simply refused to let its broadband customers use the hardware of their choice, using a rotating crop of faux-technical, nonsensical justifications.

So as the FCC looks to effectively strip away most meaningful oversight of these broadband duopolies, what will stop these massive companies from expanding these behaviors into the internet of things realm as they try to corner the home automation and security market? If your answer is “jack shit,” you win!

Several startups and former FCC boss Tom Wheeler warned Wired this week that the kind of anti-competitive incumbent ISP behavior we’ve seen already well documented in other segments will be certain to manifest itself in the IOT space, eventually. Why wouldn’t companies with thirty years of documented anti-competitive behavior use the death of net neutrality to give their own (or paying partner) IOT products, a leg up?:

“For example, imagine Comcast or Verizon partnering with a few select internet connected smoke detector companies and then delaying notifications from smoke detectors made by other companies. New companies could not meaningfully enter the market without partnering with these major internet service providers. After all, who wants a slow smoke detector? “The future could end up being controlled by four companies,” Wheeler says. “That’s why open networks are important.”

Given what we’ve seen from ISPs so far, there’s really not much reason to doubt they’d also try to implement new pricing paradigms that somehow require additional payments to connect “formally approved” devices to the network to ensure the best security and “optimal performance”:

“Without the FCC’s net neutrality rules, providers might also be free to force you to rent a cable modem or WiFi router the same way you already have to rent a cable box, or even to charge you for each computer, tablet, or IoT gadget you connect to the web. Instead of one flat fee for an internet connection that supports all your gadgets, you could end up having to manage multiple subscriptions.”

This isn’t just some hyperbolic, overly-dramatic parade of potential horribles. We’ve already watched these very same companies block mobile payment companies they didn’t want to compete with. And we’ve watched as they’ve fought tooth and nail to prevent consumers from being able to buy and use the cable boxes of their choice. Why wouldn’t these giant ISPs press their advantage after spending millions in lobbying? Especially when the FCC is clearly signaling that we’re entering an era of zero accountability for some of the least liked companies in America?

To be clear, even if the FCC does kill net neutrality rules later this year, large ISPs likely won’t engage in this behavior right away. AT&T has a Time Warner merger to get approval for, and Verizon, Comcast and Charter will want to make it appear like blindly gutting oversight of the uncompetitive sector isn’t going to be the epic shitstorm most of us know it will be. But sooner or later, without adequate safeguards, the lesser angels of these companies well-documented natures will shine through, and that could spell significant trouble for consumers and startups alike that run afoul of massive duopolies’ IOT, home automation, and home security ambitions.

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Comments on “How The Death Of Net Neutrality Could Hamstring The Internet Of Things”

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Daydream says:

Re: Re:

Good question. In a normal market, ISPs who give their customers ‘all websites, high/unlimited download cap’ will naturally appeal more than ISPs that offer ‘few websites, low download cap’, if those two offerings come at the same price.

Something I’d like to know is, what are the barriers to entry to becoming an ISP? What kind of cost of capital is there?

Anonymous Coward says:

Re: Re: Re:

Barriers of entry are very high. You need to invest in expensive infrastructure. At the same time, you need to to buy packages of data on speculated use from the internet backbone provider.

The problem is further increased by every competitor needing a lot of doubling on infrastructure to compete.

And that is not even taking into account that the technology is changing rapidly, meaning you need to reinvest in infrastructure at a rapid time table… The collectives having build their own network 10 years ago have a connection that is already barely scraping by.

And then there is competition… You basically wont get around having to build more of the expensive infrastructure with the short horizon, you have to par down the expected economy in the investment based on how large a market you can capture. As with any infrastructure it is like competing on building harbors in the same places… It is a bond market sector, not a stock market sector.

So in the end, the market is ridiculous in so many ways and the companies are monopolies on their own infrastructure. Competition is really not a solution without reducing the infrastructure investment in the equation.

If you have good ideas on how to solve these problems without some heavyhanded regulation, spill the beans!

Anonymous Coward says:

Re: Re: Re:6 heavyhanded regulation

Regulators are precisely the “law and order” types — they want to legally control everything in society from the size of your home toilet flush to the price of milk … and punish you for any non-compliance. There is no overall limit to the amount of “order” they seek to impose.

Thad (user link) says:

Re: Re: Re:5 heavyhanded regulation

U.S. has the largest prison population in the world — Why ?

Uh, I’m gonna go with "the drug war, minimum sentencing requirements, and racism."

But "regulation of broadband ISPs" is a good answer too.

No, wait. Not a good answer. What was the other kind? A very very stupid answer. I always get those two things mixed up.

Anonymous Coward says:

Re: Re: Re:3 heavyhanded regulation

“all government regulation is heavyhanded — ultimately enforced by rough men with guns, clubs, and shackles”

As opposed to that found in a little to none regulatory environment.

Build an entire city for workers, pay them in company script good only at company stores and at a level of pay that ensures their poverty …. what’s wrong with that?

If one were to investigate the origins of the regulations you so hate, one might find them to be the result of many decades where civil unrest – much of it justified. These measures were not put in place by one “side” or the other, they were a compromise in order to keep the peace. What do you recommend to replace that?

Anonymous Coward says:

Re: Re: Re: Re:

So basically your point “Shit’s hard son now pay up, this ain’t a charity”.
Typical “got mine, f you” big business stance but whatever.

We need “heavyhanded” regulation because the market takes too long to correct itself.

But make no mistake the market WILL self-regulate.
If prices keep going up soon enough people will start “cutting the cord” and joining local mesh networks.
As for entertainment there’s still cinema and TV. Oh yeah, and never underestimate the bandwidth of a car with a trunk full of HDDs.

Anonymous Coward says:

Re: Re: Re: Re:

When a corporation does not meet their obligations I suggest revocation the corporate charter granted by the government which allows certain privileges to said corporation.

If you’re not going to play by the rules then you lose your perks – plain and simple, but this requires politicians with a backbone – people who care about everyone, not just themselves.

Daydream says:

Re: Re: Re: Alright, so let me try to get my head around this...

Okay, so, having read a bit on the subject and not quite understood all of it, I’m going to try to explain the situation to myself using a metaphor. Let me know if I get it right.

The internet is like a mail service. If you have a letter, and you know where someone is, and you have the means to reach them, sure, you can deliver it yourself (it’s possible to have an intranet connection between computers in your house, or with your neighbor, or so forth).
However, you likely don’t have the means to hand-deliver a letter to someone on the other side of the world; therefore, to get your letter delivered, you go to the post office (ISP). They take your letter and either deliver it themselves, or give it to another post office who can deliver, or give it to an organization that facilitates moving mail between post offices internationally (NSP?), or whatever.

And…um…alright, I think I can see where the anti-net-neutrality guys are coming from; a post office offering express delivery for a fee doesn’t sound all that horrifying. Except that rather than committing additional resources to deliver your mail faster (ISPs already offer different plans with different speeds, right), they’re…rerouting their post route just to deliver your mail first at the cost of slowing everyone else’s deliveries, or something? I’m not sure.
And also, something about purposefully delaying or even not-delivering mail to or from rival companies competing with their subsidiaries? Anti-competitive thing?

So if my metaphor holds up, the question is, if/when our post office is misbehaving, how do we send our mail across the world?

Anonymous Coward says:

Re: Re: Re:2 Alright, so let me try to get my head around this...

Well, in the (often-seen) worst case scenario in the USA, your ISPostOffice has created laws that ensure that only ISPostOffice trucks can pick stuff up from your door, and then have colluded between each other such that only one ISPostOffice operates in your city, and then have paid off your local lawmakers so that not only are the official ISPostOffice trucks the only trucks allowed on the local roads, but also that nobody else is allowed to build roads, not even your local city, even if you vote for your city to build new roads, because they’ve also paid off your state lawmakers to prevent cities from running ISPostOffices.

So, the answer to your question " if/when our ISPostOffice is misbehaving, how do we send our mail across the world?" is "you’re not allowed to, so pay up".

Anonymous Coward says:

Re: Re: Re:3 Alright, so let me try to get my head around this...

Well, in the (often-seen) worst case scenario in the USA, your ISPostOffice has created laws that ensure that only ISPostOffice trucks can pick stuff up from your door

That’s not so far from the truth:
"The USPIS has the power to enforce the USPS monopoly by conducting search and seizure raids on entities they suspect of sending non-urgent mail through overnight delivery competitors. According to the American Enterprise Institute, a private conservative think tank, the USPIS raided Equifax offices in 1993 to ascertain if the mail they were sending through Federal Express was truly ‘extremely urgent.’ It was found that the mail was not, and Equifax was fined $30,000."

Anonymous Coward says:

Re: Re: Re: Re:

“If you have good ideas on how to solve these problems without some heavyhanded regulation, spill the beans!”

Seen this asked so many times, but the answer is always the same.

Unless your answer fits my politics, then it is like you have never even given an answer at all.

Anonymous Coward says:

Re: Re: Re:3 Re:

I’m sorry I haven’t read everything you’ve ever written, and saying, “I told someone the answer yesterday so obviously I know!” doesn’t add anything to the conversation.

The answer people give to regulation is always competition, but that ignores the fact that companies will collude to eliminate competition.

Thad (user link) says:

Re: Re: Re: Re:

There used to be rules requiring that DSL providers allow third parties to offer service on their lines; I don’t think those rules exist anymore, but I’ve been out of the business for the past decade.

Thing is, even when DSL providers were obligated to allow other ISPs to use their lines, it wasn’t a tenable source of competition. The reasons should be obvious, but in case they aren’t, here they are:

Qwest (it was Qwest back then) provides DSL service.

Qwest also runs an ISP.

Qwest turns a profit licensing its lines to third parties.

So, a third-party ISP can try to compete with Qwest’s ISP on price. But it’s never going to be able to. Qwest can reduce the subscription fee for internet service to, effectively, zero, and still turn a profit from the cost of the line it’s using (even for just the first year, and then jack rates up once customers are less likely to switch to another provider).

There’s no free-market competition there, because when the ISP is the same company as the infrastructure owner, it has an insurmountable advantage. The only way any other company can compete is by building its own infrastructure — and so around these parts we only have two ISPs, CenturyLink (formerly Qwest) and Cox. And at my address, it’s just Cox.

It seems to me that the only solution to this problem is for the ISPs to be separate entities from the infrastructure owners. Whether or not that counts as "heavyhanded regulation" is a matter of perspective.

Anonymous Coward says:

Re: Re: Re:2 Re:

The FCC ruled that DSL providers are not required to lease their lines.

See the update at the bottom: a CLEC still gets access to the lines at the Central Office and can run DSL on the lines (still owned by the ILEC). But it doesn’t help much these days–you need to be within a few hundred meters of the ISP’s equipment to get modern "broadband" speeds, and ILEC’s don’t have to give anyone access to their "remotes". The possibility of competition mostly exists in theory.

Also note the bad reason: "The reasoning behind the decision is that it puts DSL on the same level as cable services, who aren’t required to lease their lines." In other countries like Canada, regulators instead made cable companies allow third parties on their lines, and there are several cable ISPs plus several DSP ISPs in most areas.

Pahrump says:

Re: Re: Re: YNOT share infrastructure

>> “You need to invest in expensive infrastructure.”

… Do small startup airlines have to build their own airports to enter the airline business ?

… Do small startup retailers have to build their own shopping malls for a broad customer base ?

… Do commercial trucking companies have to build their own bridges over rivers ?

No. Infrastructure can efficiently be shared/leased/tolled by many users. Think Outside the Box !

Local governments are a HUGE barrier to efficient use and upgrade of internet infrastructure. Absolutely Must get politicians out of the internet business.

pixelpusher220 (profile) says:

Re: Re: Re:2 YNOT share infrastructure

Indeed public infrastructure can be shared. The Cable and fiber currently deployed is NOT public infrastructure. Definitely should be but it isn’t. As such, either a competitor has to put up their own poles over the entire area or run buried lines.

Both things can be seriously stopped up by the existing provider.

We absolutely should have the gov’t in the ISP business; it’s a utility like anything else.

The corporations are the ones stopping things. Having politicians simply write laws in exchange for campaign donations root of the problem.

Anonymous Coward says:

Re: Re: Re:3 YNOT share infrastructure

typically, at least half the cost of getting competitive “new” internet-cable installed locally…. is buying ethereal “permissions” from local government & established local utility companies.

….plenty of room there to sharply cut costs by eliminating red tape & extortion

the “rights-of-way” needed for cable… are usually existing ‘public infrastructure’ used by multiple utilities and controlled by local government

John says:

Re: Re: Re: Common infrastructure leased by all

Although it has been kicked about as political football and the tech has been undercut by competing interest, Australia is rolling out a common fibre to the home, fibre to the node and remote wireless & satellite for the entire country.

The owner of that hardware is NBN who wholesale leases that to any ISP who comes up with the cash. As a result there are over a hundred ISPs to choose from in each area. For example Mackay in North Queensland (population 80,000) has been on NBN since 2015. They are more than 1600km (1000 miles) from Sydney they have 138 ISPs to choose from.

Its not perfect. The NBN rollout has been delayed and changed many times. The wholesales and cost model has been criticised by ISPs. The back I also fear that NBN will be privatised and we will have a monopoly.

Even under the ADSL system we currently have, the main ISPs who owned the copper infrastructure had to lease it to other ISPs at a price approved by the Consumer & Competition authority.

The biggest problem Australia has is our population is small compared to US, so data rates tend to be low per dollar spent. But at least we have competition and I can change ISPs with a single phone call. I don’t have to bundle TV or other services just to get a decent price.

Not perfect but a heap better than what I read about in most USA twons and cities.

Talmyr (profile) says:

Re: Re: Re:3 Common infrastructure leased by all

Not really. They are free to compete on price and customer service. Also, depending on the contracts, they may have a smaller or larger slice of that copper wire. Regardless, it will tend to being a better service than one with only 1 or 2 operators.

BTW, this is how competition works in a lot of Europe too.

My_Name_Here says:

Re: Re: Re:

The question you are asking is good, but is based on a pretty silly notion that ISPs would suddenly start blocking sites for fun and profit, say charging you an extra $20 a month to access youtube or sites with .COM extensions. It sounds perfectly reasonable when you put it up against an attempt by AT&T 5 YEARS AGO to block a single app from it’s wireless network because it was a bandwidth hog.

Net neutrality is a bit of a mystery in many ways, because people like Karl seem to enjoy muddying the waters with all sorts of “what if” horror stories. He ignores the bigger what if, which is “What if ISPs start to block the internet, won’t that encourage new competition?”.

Technology advances quickly, especially when there is demand. Wireless / last mile solutions have been hard to come by because the costs have been too high and the demand too low. But companies like Google have been looking at their options and sucking up frequency blocks and they will most certainly show up with something. There are also a number of unlicensed bands that can be used for short range communications, and the potential is that one or more players may find a way to overcome the last mile issue.

Moreover, no matter how many politicians are in ISP’s pockets, they cannot overcome public anger if the internet is seriously cut or limited. You can be sure that in many areas, new networks would spring up almost overnight to suck up consumers who want to get away from their current ISPs.

So given that, the situation is pretty simple: No matter how much Karl and his ilk try to play out horror stories, the reality is that ISPs don’t want more competition, and they will do everything possible to avoid creating the circumstances under which competition can be born and thrive.

More importantly, they don’t want to create the circumstances under which public demand for new connections will drive innovation and development of wireless products. They would never want to do anything that would damage their control over that final mile. That’s why Karl’s only examples point to wireless 3G networks.

Taken as a whole, the internet grew up without net neutrality, and turned out fine and getting better all the time. Do you have any sites blocked by your ISP today? Did you have any blocked 3 or 4 years ago before Wheeler decided he could write laws by himself? I think your answer tells you everything.

Anonymous Coward says:

Re: Re: Re:

Something I’d like to know is, what are the barriers to entry to becoming an ISP?

That depends on the model. In most of the USA the cost is very high because you can’t use existing infrastructure. Probably a wireless ISP (which installs its own antennas) will be cheapest. In an open access network it would be considerably cheaper. In countries where DSL/cable incumbents have to sell wholesale access to third parties it’s also relatively cheap.

Look at the history of the early consumer ISPs. Many were hobby BBSes that gradually became businesses when they got popular and the owners had to pay for extra lines and hardware. Often the "internet" part was a toy that later became the main business. The high school kids who started many of them didn’t need permission from anyone except their parents–they were running off normal consumer phone lines and the telcos couldn’t do anything except switch them to business tariffs if they started charging.

Bergman (profile) says:

Re: Re:

In many cases, it is illegal to compete with the monopoly or duopoly without their permission — which they take even the flimsiest excuse not to give.

You can’t attach wires to city-owned utility poles or run wires through city-owned under-street conduits without permission from every company that already has a wire on that pole or in that conduit. In many states, the city can’t do it themselves either — on their own poles no less — because public-private partnerships and government-owned infrastructure are both illegal under state laws.

The incumbents are not required to give permission to allow competitors to compete with them, and if they do they lose money — so why would they ever do that?

Anonymous Champion says:

terroresa May the PM of britain is aobut to....

terroresa May the PM of britain is about to BAN gitHUB and SOURCEFORGE as well as any place you can download applications for encryption or any tools for privacy

Thad (user link) says:

Re: terroresa May the PM of britain is aobut to....

The link you provide does not say any of the things you claim it does.

I’m not ruling out the possibility that she intends to do that, and her plans to weaken encryption are certainly foolish, but if you’re going to claim she’s going to “BAN gitHUB and SOURCEFORGE” (and, presumably, force people to randomly cycle their Caps Lock key as well), you might want to include a citation that actually says that.

Lurker Keith says:

Re: Re: terroresa May the PM of britain is aobut to....

I came across something, in passing, that I didn’t look much into, that sounded similar to what he said. Not paying much attention to whatever I saw, it did seem to come across as saying she was going to do something that would affect Open Source projects, including Open Source Academic Papers stuff.

Now, whether it will mess with Open Source, or just sounded like that on the surface, is to be seen.

trixtag (profile) says:

Internal forces

What I wonder about is how the internal silos at companies including AT&T, Comcast, Verizon and Alphabet will be allowed to compete. We see AT&T killing copper landlines in favor of wireless; Comcast desperately wants to add content value (NBCU) to its dumb pipes; Verizon looking for new revenue growth from AOL/Yahoo; and Alphabet abandoning their broadband efforts for the moment.

A long way of saying, all the big conglomerates are placing chips on several markers and will they let the market affect how they react internally?

And hopefully progress continues and enables competition from SpaceX satellite internet, 5G wireless, mesh wifi, and reallocated TV/radio bandwidth.

Anonymous Coward says:

Comcast announcement:

The Internet of Things will NOT be affected by the lack of net neutrality. In fact we’re selling a new baby monitor/security cam to all our subscribers. (it’s only $999.99 and is opt-out. simply sign and return all 600 pages of out opt-out document in the blood of a virgin and return to [REDACTED] no less than 30minutes after receiving your device by Fed-Ex roadside Catapult).

Securicam will monitor your baby for compliance with Comcast TOS, and comes equipped with a 20,000 volt tazer aimed directly at babies precious soft skin. Thus ensuring mommy and daddy NEVER forget to pay their TV bills!

quisp65 says:

It's always over dramatized.

Net Neutrality is always over dramatized. I really wish our ideological corrupt media would talk of the pros and cons of all the different angles rather than always pushing one idea.

Net Neutrality will be just as available with or without Title II. It’s just a few decisions might have government influence if needed. It’s not a doom and gloom scenario. We got here with relatively free internet without the heavy management. Pros and cons people and you need to learn to be skeptical when you only hear one side of the argument.

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