Now Net Neutrality Will Ban Ad-Based Network Business Models?

from the say-what-now? dept

We've been dismayed at some of the really questionable or outright dishonest statements made by those paid by the telco industry on the issue of net neutrality. They keep distorting the debate -- which is disappointing, because there are reasonable arguments against net neutrality legislation. We just don't seem to hear them from the think tankers and the shills (sometimes, though not always, they're the same thing). The latest is a long piece by Hance Haney, who is certainly quite knowledgeable and experienced on the topic, but who writes up a long post explaining why enforcing net neutrality as a condition of the AT&T/BellSouth merger will make it that much more difficult for the US to have "world-class internet infrastructure." Amusingly, he points to the situations in South Korea and Japan as evidence of why the US needs better, cheaper broadband, failing to include the bit about how heavily state-supported both of these efforts were. Considering that he's warning about how it will stifle growth here to have the government involved, it's pretty bad to see him raise up those examples as reasons why we need less government regulation. He also says that AT&T/BellSouth wouldn't block web sites or degrade service, despite the fact that they've said they wanted to in the past. Hance, instead, says it's no problem since AT&T's CEO has promised he'd never do that (going against his own earlier statements). Of course, we've seen the telcos go back on their promises before -- so forgive us for being skeptical.

However, the meat of his piece is to suggest that if network neutrality rules were put in place, it would mean that telcos would be unable to experiment with business models that involved using advertising as a subsidy. Of course, he leaves out the part where he explains why this is. He just states it as true, when there's simply no evidence to support that being the case. A non-discrimination clause (while problematic in other ways), would not limit a telco from offering broadband service that's supported by advertising -- and there were even attempts (which failed miserably) to offer such services in the past. He even makes it sound like Google and Yahoo are somehow taking money out of the telcos hands by being able to advertise without having to give up a piece of it to the telcos ("content providers like Google, Yahoo and eBay get to keep every dollar spent on online advertising.") That's because those providers already pay the telcos for their bandwidth and provide the actual pages on which the advertisers advertise. What they do with it, is none of the telcos concern -- which is the point the network neutrality folks keep trying to get across. While I'm still worried about any new legislation that gives the government more power to regulate the internet, it's disturbing to see the continued batch of bad arguments coming out in favor of the telco position. It doesn't help their cause at all. It just makes it look like they don't have a real argument.
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  • identicon
    Rstr5105, 2 Nov 2006 @ 8:00pm

    Woot! First!

    This appears to be yet another case of the telcos trying to tell us how the internet is supposed to be withot bothering to take a second to trace the roots of the net.

    For those of us that don't know, the internet started as a way for universities to transmit data back and forth faster than the ol' sneaker net method. This worked well so DARPA signed on and funded it for a while. Eventually the DoD built it's own net, and DARPA funding ceased.

    It was at this point that AT&T (as well as a few others) signed on and formed the W3C (World Wide Web Consortium(Don't quote me on the consortium part) The W3C stated very clearly that the internet was to be used specifically for non-commercial gain. (IE Even E-Bay would not be allowed to operate under the original paramaters of the W3C.)

    Then the Internet went public, I believe, although I'm not sure if this is correct, it started with a few professors and business men saying something along the lines of "Hey, this is a good thing, now if only I could connect to my computer at work from my computer at home". It spiraled out from there.

    I don't know what caused the massive build up of the web that we saw in the nineties, but now everyone is "On Line" and looking to make a few bucks. It seems to me that although we have this powerful tool at our disposal, we are corrupting it by allowing it to remain in the hands of the telco's.

    It also seems to me, that under the terms of the original W3C, (I don't know what it's current rules are) the telco's weren't allowed to charge for the ability to connect to the net. YES, they had to run the cables to feed it, YES they have to run the servers we all log into and NO i don't have a problem paying them to be able to connect to the net, but it seems against what the net started as for them to be able to say, "Unless you pay this much a month you're going to be limited to seeing websites at a slower speed than somebody who pays $XX.YY a month."

    Okay sorry for the long post, but it's my two (four?) cents on this issue.

    reply to this | link to this | view in chronology ]

  • identicon
    matt, 2 Nov 2006 @ 9:18pm

    cut the telcos and the problem would be solved

    if consumers had a choice in broadband, net neutrality wouldn't be a problem. Users could just switch to another provider.

    But, unfortunnately, that is not the case at all. Thanks, FCC! Thanks for caring about the people!

    Second? I'm so cool!

    reply to this | link to this | view in chronology ]

  • identicon
    onizero, 2 Nov 2006 @ 10:21pm

    open mouth insert...

    firstly, Rstr5105, dont speak unless you know what your talking about. You just make your argument invalid by making assumpions with no facts to back them up.

    honestly you can sum this whole thing up with one word, money. if telcos wanted to charge for "enhanced service" let them. some one will come along with a better service and a better deal using better technology, and the mighty telcos will be no more than a memory.

    they know this by the way. why else get government involved. because the second its legislated its not about capitalism anymore. and the dinosaurs get to rule through regulation.

    I do wonder though, what goes through their minds as they look at ebay and google. is it "how can we squeeze more out our best customers?" or is it "who do i have to stab to get a piece of that action?"

    I dont think i could sleep at night.

    reply to this | link to this | view in chronology ]

    • identicon
      Matt, 2 Nov 2006 @ 10:36pm

      Re: open mouth insert...brain?

      the part you missed, oni.........is the part called "others are not allowed to compete".

      There are laws in place that don't allow placing of new landlines to provide service and other franchise laws preventing other companies from providing internet in areas.

      you think if there was competition, we'd have an issue of competition? come on, think it through onziero.

      reply to this | link to this | view in chronology ]

  • identicon
    Nervous Ned, 3 Nov 2006 @ 12:18am

    W3C?

    I thought Al Gore invented the internet??!!??

    reply to this | link to this | view in chronology ]

  • icon
    Richard Bennett (profile), 3 Nov 2006 @ 2:39am

    The Brilliance of Rstr5105

    Rstr5105's comment has got to be one of the all-time greatest examples of a self-cancelling argument I've ever seen. But don't quote me on that, Al Gore might not approve.

    reply to this | link to this | view in chronology ]

  • icon
    chris (profile), 3 Nov 2006 @ 7:34am

    the WWW and the internet are different

    network design and troubleshooting is based on the OSI model which describes the various layers of a network and how those layers function.

    the concept of the internet is a means of connecting different networks. this the DARPA project from the 60's that RSTR is speaking of.

    the WWW wasn't invented in the early 90's with the advent of tim berners-lee's hyper text application and protocol.

    the HyperText Tranfer Protocol operates on the Application layer of the OSI model, while the applications that make up the various internet protocols operate at the session level, which all operate over UDP and TCP at the transport level.

    in other words, TCP/IP is the internet, HTTP is the WWW. the WWW is just an application that runs over the internet, just like telnet, FTP, or SSH.

    reply to this | link to this | view in chronology ]

  • identicon
    Tim Lee, 3 Nov 2006 @ 7:44am

    Correction

    Mike,

    The name is "Hance Haney," not "Haney Hance."

    And while I think you have a reasonable argument here, I don't much like the statement that "the think tankers and the shills" don't seem to make "reasonable arguments." If your goal is to bring the two sides of the debate together, you're not likely to get there by questioning peoples' motives.

    reply to this | link to this | view in chronology ]

    • icon
      Mike (profile), 3 Nov 2006 @ 6:09pm

      Re: Correction

      The name is "Hance Haney," not "Haney Hance."

      Oops. Fixed.

      And while I think you have a reasonable argument here, I don't much like the statement that "the think tankers and the shills" don't seem to make "reasonable arguments." If your goal is to bring the two sides of the debate together, you're not likely to get there by questioning peoples' motives.

      Heh. I can't win. Last time I referred to someone who made a bad argument as a think tanker, and someone pointed out that the guy was not a think tanker but a shill. So this time I separated them out, noting that think tankers and shills might not be the same thing.

      reply to this | link to this | view in chronology ]

      • identicon
        Jim Harper, 6 Nov 2006 @ 10:31am

        Re: Re: Correction

        As the person who earlier pushed the shill/think-tank distinction, I want to thank you for noting and accepting it, Mike. I'm pretty confident that Hance falls on the think-tank side of that line. It's up to him, of course, to persuade on the merits.

        reply to this | link to this | view in chronology ]

  • identicon
    Hance Haney, 3 Nov 2006 @ 9:06am

    I'd like to respond to the point that I left out an explanation why a non-discrimination clause would limit a telco from offering broadband service that's supported by advertising.

    Let's suppose a telco creates a portal through which all its customers will access the Internet. Then the telco partners with various content providers and positions ads and links, where every user will see them, to direct traffic to the partners' sites. That's simply what I, at least, think of as online advertising. But that's discrimination. The telco is favoring certain content (e.g., it only takes one click to visit a partner's site). Any differential treament is discrimination. One can draft a statute or a regulation to permit certain types of discrimination, but the various net neutrality proposals I have seen prohibit all discrimination by network providers relative to services or content. Not just "unreasonable" or "undue" discrimination, but any discrimination. (I am not proposing to add ambiguous qualifications, because then judges have to ultimately decide what they mean.)

    reply to this | link to this | view in chronology ]

    • icon
      Mike (profile), 3 Nov 2006 @ 6:12pm

      Re:

      Let's suppose a telco creates a portal through which all its customers will access the Internet.

      Huh? If they're providing internet access, how will all of its customers have to go through a portal? Internet access is just the connection, not the content. That doesn't make any sense.

      Then the telco partners with various content providers and positions ads and links, where every user will see them, to direct traffic to the partners' sites. That's simply what I, at least, think of as online advertising. But that's discrimination. The telco is favoring certain content (e.g., it only takes one click to visit a partner's site). Any differential treament is discrimination.

      That's a ridiculous reading of the rule and you know that. No one believes that's what it says. Discrimination isn't about what they *link* to, but how they treat the transport of their data over the network.

      Come on, this is just silly.

      reply to this | link to this | view in chronology ]

    • identicon
      Lee A. Presser, 14 Dec 2006 @ 5:15am

      Re: Trying to understand your argument

      None of you seem to know how to clearly and precisely explain the issue of Net Neutrality. The Telcos have a well designed series of commercials that are working. Their simply message is getting through to the viewing public, “Net Neutrality Means You Pay More.” Your message is, “Net Neutrality means “ap sdij lzj lkjljv.” Unless you can simplify, “ap sdij lzj lkjljv,” into a message that the uninformed public understands, Congress will enact some form of telco suggested legislation. You need public pressure to balance the telcos money. The telcos are using their money to buy commercial time to implant a catchy slogan into the public mind. The purpose of the slogan is to put the public to sleep so Congress can be handled by telco lobbyists. In simple words, why should the net remain neutral? What does neutral look like today? Why is that good? In simple words, what will the net look like if the Congress enacts telco suggested legislation? How will that legislation affect the “Mom and Pop” websites? (The answer to this one is the most important.) Please email your answers to me, Lee Presser at: leepresser@charter.net

      reply to this | link to this | view in chronology ]

  • icon
    chris (profile), 3 Nov 2006 @ 9:47am

    why do they need to advertise?

    i am already paying someone so that i can get on the internet.

    google is already paying someone so that i can get to them.

    why do they need ads in the mix there?

    i know they want more money, i just think that they could make it offering something useful that isn't at the expense of others.

    if they want to make more money for faster delivery they should offer a mirror or colocation service where websites can host servers at ISP's central offices. rather than put everyone's traffic on hold while you service your higher paying customers, why not just move your higher paying customers closer to your users?

    I.E. if you have covad DSL in vice city, florida then google could pay covad to host a server in the covad office in vice city. all of the covad DSL customers would be 1 hop from a google mirror and performance would be faster than reaching a google server on the west coast. there is no discrimination against yahoo or because their packets are delivered just like everyone else's, it's just that requests have fewer hops to make to google. if yahoo wants to host with covad vice city, they are certainly welcome to.

    with that approach, google pays to host servers around the internet (in liberty city and san andreas) in cities where it sees the most activity. it's a win for google because it can deliver better service to it's customers. it's a win for the telcos because they can get money for providing a new service. it's also a win for you and me because it will mean less internet traffic from large cities with millions of people.

    internet sites already do this with mirrors. you can download faster and the load is better distributed (usually) when you download from a server in your country.

    universities do this with internet2. if you are at a major american university, downloading from a mirror at another american university is way faster than downloading from a mirror in anywhere else.

    online games like world of warcraft do this by hosting servers in europe and asia, not just in the USA.

    with this service you don't hurt others to benefit your higher paying customers. your higher paying customers just get served first, naturally.

    reply to this | link to this | view in chronology ]

  • icon
    Richard Bennett (profile), 3 Nov 2006 @ 11:00am

    Far out, man

    Chris says: "the HyperText Tranfer Protocol operates on the Application layer of the OSI model, while the applications that make up the various internet protocols operate at the session level, which all operate over UDP and TCP at the transport level."

    Totally. For the benefit of others, why don't you explain something about these session level applications, and how HTTP works without a presentation level protocol (or a session level protocol, for that matter.)

    That would be groovy.

    Then maybe you can tell why DARPA only decided to fund ARPANET years after it was started.

    Peace out dude.

    reply to this | link to this | view in chronology ]


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