Verizon Thinks 'The Most Important Concept Of Net Neutrality' Is Giving Verizon More Money

from the feel-healthy-yet? dept

It's pretty clear at this point that after nearly a decade of histrionics and hyperbole on all sides that the definition of net neutrality has been somewhat warped. That's in no small part thanks to the larger carriers like AT&T and Verizon, who have consistently done their best to argue that they need to be allowed to engage in "creative" and "innovative" new pricing (read predatory price gouging) or they simply won't invest in the networks of tomorrow. Between the recent peering debates and Verizon's defeat of FCC neutrality rules things are as murky as ever.

Verizon's defeat of the FCC's neutrality rules was a double-edged sword for the company. On the one hand, they killed the rules (which they helped craft with Google and AT&T, and as a result did little), but on the other end, their real goal was to kill FCC authority to regulate broadband for good. Instead, the court re-enforced that the FCC does in fact have some (albeit shaky) authority to regulate broadband providers and impose neutrality rules, they just have to argue their case differently. All in all, things are murky as hell on the net neutrality front, but apparently not for Verizon CEO Lowell McAdam:
"McAdam addressed the U.S. Federal Communications Commission's proposed net neutrality rules during a conference call about the company's acquisition of Vodafone's 45 percent stake in Verizon Wireless. The FCC's move this month to resurrect net neutrality rules should provide "clarity" for the broadband industry, said McAdam, whose company successfully challenged an old version of the regulations in court."
So McAdam apparently believes by throwing a stick in the spokes and killing the existing neutrality rules (which again, most ISPs liked because they did little to nothing, and didn't touch wireless), his company has brought "clarity." But what McAdam thinks is the most important thing for people to take away from the neutrality discussion is that paying Verizon increasingly more money is the truly important part:
"McAdam dismissed concerns that his company would selectively block or slow some Web content. "We make our money by carrying traffic," he said. "That's how we make dollars. So to view that we're going to be advantaging one over the other really is a lot of histrionics, I think, at this point." But McAdam suggested that broadband power users should pay extra. "It's only natural that the heavy users help contribute to the investment to keep the Web healthy," he said. "That is the most important concept of net neutrality."
That people already paying an arm and a leg for bandwidth never somehow pay their "fair share" has long been the cornerstone of the industry's effort to impose usage caps and overage on wireless and wired networks alike. In reality, it has never been about heavy users paying more, it has always been about all users paying more. And more. And more. One thing I believe Verizon can take comfort in is that while there's some uncertainty about what the new FCC rules will be, I think they'll largely be superficial in nature and will go to great lengths to avoid tramping Verizon's right to make the Internet "healthier" through abusive pricing practices.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    icon
    Violynne (profile), Feb 26th, 2014 @ 10:56am

    One can only hope they price themselves out of existence.

    Then again, when all the carriers/broadband providers of the nation have the same price, you'd figure someone would take notice.

    Instead, T-Mobile shakes up the wireless industry with its price change.

    Perhaps T-Mobile should get into the broadband market.

    Then, perhaps we'll start seeing better prices given that most broadband providers now demand service contracts.

     

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

  2. This comment has been flagged by the community. Click here to show it
     
    icon
    Sinan Unur (profile), Feb 26th, 2014 @ 11:43am

    Red flags go up

    I stop listening when I hear people say "price gouging". When I also hear the word "predatory" in conjunction, I realize, the person has no good argument to make, and is not worth wasting time on.

    People who use these terms cause perfectly capable poor people in the world to starve. Then, they get shiny desks at some non-profit, directing the dumping of dirt-cheap goods on said countries' markets to further undermine their productive capacity while maximizing tax write-offs for their clients.

    I used to think TechDirt was better than this.

     

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  3.  
    identicon
    Anonymous Coward, Feb 26th, 2014 @ 11:48am

    They just don't get it...

    I don't pay for how much data I can transfer per month, I pay for how much data I can transfer each second... That is why there are different speed plans.

     

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  4.  
    identicon
    Bengie, Feb 26th, 2014 @ 11:52am

    Re: Red flags go up

    Sorry, maybe TechDirt should have said "Abuse monopolistic power to increase profits"

     

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

  5.  
    icon
    That One Guy (profile), Feb 26th, 2014 @ 11:53am

    Re: Red flags go up

    Please tell me that was an example of Poe's law...

    How else would you describe companies taking advantage of their monopoly, or near monopoly, positions to charge insane rates to their customers, knowing that no matter how lousy their service, or how expensive it is, they will still get away with it because there are no other options.

     

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  6.  
    identicon
    Bengie, Feb 26th, 2014 @ 11:56am

    Why don't they give us an option?

    They complain about "heavy users", but they don't give a fair way to charge us.

    Give us an Internet plan with a $30 line charge, a 10mb/s minimum commit, and charge us $4/mbit on the 95th percentile of dedicated bandwidth? They'll have at least 300% profit on that.

     

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  7.  
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    John Fenderson (profile), Feb 26th, 2014 @ 12:02pm

    Re: Red flags go up

    Huh? I don't understand the point you're making here.

     

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  8.  
    identicon
    Anonymous Coward, Feb 26th, 2014 @ 12:10pm

    Rarely do the interest of the monolithic mega-corporations align with those of the public benefit. The rare circumstances in which they do are usually little more than coincidental as the mega-corp stands to gain in some aspect.

    Now don't get me wrong, I believe the right to pursue profits, but we need to start employing fact-checkers in-between the corporations and lawmakers.

     

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  9.  
    identicon
    Anonymous Coward, Feb 26th, 2014 @ 12:17pm

    Re: Red flags go up

    "I stop listening when I hear people say "price gouging". When I also hear the word "predatory" in conjunction, I realize, the person has no good argument to make, and is not worth wasting time on."

    Exactly. Along with "crony capitalism". It's all just good old "capitalism", which all the commie socialists just hate. Techdirt has turned into a haven for left-wing nut-jobs.

     

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

  10.  
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    Karl Bode (profile), Feb 26th, 2014 @ 12:24pm

    Re: Red flags go up

    You just wrote a lot of words, some of them complaining about no point being made, without making any point.

    People who use the word predatory are killing poor people? Wha?

     

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  11.  
    identicon
    Anonymous Coward, Feb 26th, 2014 @ 12:26pm

    Heavy users...

    So, if it's really about 'fairness', then throttle back connection speeds for a user when they've reached a certain threshold.

    But in my (not so) humble opinion, when I pay for 10 Mbits a second, I should damn well be able to use that 10 Mbits a sec for the course of the period! Stop selling me 'Unlimited Data' in your advertising if that's not what you're selling!

     

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  12.  
    identicon
    Anonymous Coward, Feb 26th, 2014 @ 12:27pm

    There has long been this bogey man about users getting more than their fair share of the internet pie. You can't do that. You are sold a particular package that states you have x amount of b/w.

    All of this hokum is about charging you more for the same service. No provider turns away potential customers because they are exceeding their capacities. They could of course roll out new equipment and activate a new strand of fiber but it is about charging you more, not about improving services.

    I notice that prices constantly creep up but the service doesn't. In fact over time it seems to degrade. Until we actually have competition nothing on this is going to change. If you take notice, where Google comes in with fiber, suddenly in those markets, the incumbents are willing to do more to improve their services. This did not happen until Google showed up on their block.

    That pretty much tells you exactly where the problem is and what it is about.

     

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  13.  
    identicon
    Anonymous Coward, Feb 26th, 2014 @ 12:28pm

    Re: Re: Red flags go up

    He hasn't one, that's the point.

     

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

  14.  
    identicon
    vastrightwing, Feb 26th, 2014 @ 12:57pm

    You can't hear me anymore!

    Verizon, I have some unpleasant news for you. I'm in the process of pulling at least some easy revenue from your coffers: I'm leaving you as a broadband customer. You have abused my generosity long enough. Sure, your service is good, I like it, but the value isn't there for me any longer. I can pay $20/month less for the same thing. You've gouged me for $52.99/month now after raising your rates constantly. I've had it! I don't need your 20mbps. 5 mbps is enough, but you don't offer it because you have little competition. Fine. I'm taking my ball home. Goodbye!

     

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  15.  
    identicon
    Anonymous Coward, Feb 26th, 2014 @ 1:15pm

    'they simply won't invest in the networks of tomorrow'

    getting them to invest in the networks of today would be a good start!!

     

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

  16.  
    identicon
    Anonymous Coward, Feb 26th, 2014 @ 1:51pm

    Re: Red flags go up

    Words are just tools. Whether they are promotive of starvation, other harm, or legitimate proposes deepens on the intent of the person using.

     

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

  17.  
    identicon
    Anonymous Coward, Feb 26th, 2014 @ 1:52pm

    Re: Re: Red flags go up

    Words are just tools. Whether they are promotive of starvation, other harm, or legitimate proposes deepens on the intent of the person using them.

     

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

  18.  
    identicon
    Anonymous Coward, Feb 26th, 2014 @ 1:54pm

    Re: Re: Red flags go up

    Now you sound like an NSA plant. You apply communnism and socialism, which is itself a manipulation of the American people, seeing as both cannot exizt in a state simiultaneous to one another.

     

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

  19.  
    identicon
    Zonker, Feb 26th, 2014 @ 2:00pm

    I pay for 25 Mbps service from my internet provider. That means I paid for 25 Mb * 60 sec/min * 60 min/hr * 24 hr/day * ~30 days/mo * 0.125 bits/byte = 8.1 Terabytes per month. I don't actually get anywhere near that amount, so the way I see it I'm being ripped off if we're going by the "how much you use" measure.

     

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  20.  
    identicon
    Anonymous Coward, Feb 26th, 2014 @ 2:18pm

    Re:

    Correction: 8100000 megabytes / 1024 MB/GB / 1024 GB/TB = ~7.7 Terabytes per month

     

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

  21.  
    icon
    Sinan Unur (profile), Feb 26th, 2014 @ 2:48pm

    Re: Re: Red flags go up

    You want something. You don't think it's worth the price the supplier is charging. You have some alternatives: a) don't buy it, don't do anything; b) cry "price gouging", "predatory behavior" and get politicians to steal the fruits of someone else's efforts and give to you at supposedly a lower price.

    (b) is not just lazy, but it reduces the incentives for, and usually even legal possibility of competitors entering an industry. When competitors do not enter the industry, you get interest groups fighting over some monopoly's surplus, not market forces. We are still living with the repercussions of the regulatory barriers to entry in the telecom industry.

    In a different context, for example, in a country where there is a food shortage, people who actually invested in food production, storage, distribution, actually get to make a windfall profit. If they can keep that profit, it gives others an incentive to invest in things like food production, storage, and distribution.

    However, in most instances, such as in the case of gas prices in the wake of Sandy, people start crying about "price gouging" and "predatory" behavior, and enlist politicians to steal other people's property by not allowing prices to rise to reflect the shortfall in supply relative to demand. You get low prices on the signs, but no gas in the tank. You get low prices in the grocery stores, but no food to buy.

    In the case of the poor country with a food shortage, rich, Western countries not only do not object to the destruction of the profits of productive people in such countries, they actively sabotage them by immediately dumping whatever surplus food, shoes, blankets etc their producers could not sell. Therefore, no one ends up having the incentive to actually make or distribute these things in times.

    So, crying about "predatory behavior" and "price gouging" causes people to go without food, without gas etc.

    In the case of telecoms, you must ask why these companies seem to be able charge the prices you do not like. Assuming they are making a boatload of economic profit as you seem to imply, why are other competitors not coming in? Why are people not coming up with providing alternative access methods?

    There is a simple answer: Barriers to entry in this industry, as in the case of taxicabs, and many other things, are backed by government power. It is not just FCC regulation. Patents, tax structures, etc also stand in the way potential entrants.

    So, if you want the telecom market to improve, think about how to bring in more competitors, not another granting another power to government bodies.

     

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

  22.  
    icon
    Karl Bode (profile), Feb 26th, 2014 @ 3:49pm

    Re: Re: Re: Red flags go up

    "cry "price gouging", "predatory behavior" and get politicians to steal the fruits of someone else's efforts and give to you at supposedly a lower price."

    You'll excuse me if I stop reading at this over-simplification and distortion of a point and go have some ice cream.

     

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

  23.  
    icon
    Josh (profile), Feb 26th, 2014 @ 7:32pm

    Re:

    Charter dosn't require contracts, and it's doubling speed but not changing price. We're the T-Mobile of broadband.

     

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

  24.  
    icon
    Josh (profile), Feb 26th, 2014 @ 7:33pm

    Re: Re: Re: Re: Red flags go up

    Can I have some ice cream?

     

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

  25.  
    identicon
    anon, Feb 27th, 2014 @ 3:49am

    Re: They just don't get it...

    When paying for access to the internet you are paying for access, that means there should be no artificial restraints. If the network is not of the size where it can serve customers with the amount of use they want to use it for then the ISP should be forced to shut down their enrollment office and stop connecting new customers until they have upgraded their network to allow everyone to use it as they have purchased it. I dont look at my connection and think oh i can only watch one show this month as it will take me to my limit of data transfer i look at it and think if it was a little faster i could start watching HD shows instead of SD. Why are ISP's allowed to block you from accessing what you want, it rarely happens in countries other than the US and google has shown that even with the fastest connection data being used is not an issue as they have configured their network to deal with the most demanding person.

     

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

  26.  
    identicon
    anon, Feb 27th, 2014 @ 4:00am

    Re: Why don't they give us an option?

    What people need to understand is that traffic or downloads are essentialy the same as water, would you be happy if your water supplier said you can only use x amount of water a day or per month then they would charge you extra for every liter. And yes the traffic is like water, if the fiber can carry 1gb of data then that is what you should have, there is no charge for the isp if you use more than your neighbor, and in fact where water is limited, traffic we are talking about is unlimited there is no charge for it and it cannot run out , so if anything if the isp's just upgraded their networks this problem they have of congestion from a few people using their connection to the max would disappear.

    Oh yes they blame torrenting for the high traffic people use but these days it has changed the most traffic is being used for legal access to legal services that are going to become more available as people improve and increase the production of free video and free access to movies, as per Google and many other sites.

     

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

  27.  
    identicon
    anon, Feb 27th, 2014 @ 4:08am

    Re: Re: Red flags go up

    Shame you missed a good post that you spent time commenting on..troll??? Anyways the big businesses are price gouging, they use their an artificial monopoly one granted by the governemetn to gouge more and more money from customers, the only problem they have is knowing what to call increases in cost but then again they do it in a way where people with price guarantees have to suck up the new charges, they know they will get away with this as customers have no choices there is rarely two isps in the same area due to the monopoly, i am sure Verizon will not drop peoples subscriptions due to them suddenly making millions from charging netflix and allowing their customers to access netflix without them purposefully slowing the speed customers can access them with.

    I wish there were not so many shills for the industry on here, it is becoming trying replying to them to correct their lies.

     

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

  28.  
    identicon
    Pragmatic, Feb 27th, 2014 @ 5:40am

    Re: Re: Re: Red flags go up

    @ Sinon Unur, I think we've got a new OOTB here.

    You want something. You don't think it's worth the price the supplier is charging. You have some alternatives: a) don't buy it, don't do anything; b) cry "price gouging", "predatory behavior" and get politicians to steal the fruits of someone else's efforts and give to you at supposedly a lower price.

    Say what? Permitting some competition would actually solve the problem. There is such thing as a middle, you know. And what do you mean by "the fruits of someone else's efforts?" Verizon is making very little effort because it has no incentive to. If some competitors came in, they'd have to raise their game or lose out to T-Mobile, etc.

    (b) is not just lazy, but it reduces the incentives for, and usually even legal possibility of competitors entering an industry. When competitors do not enter the industry, you get interest groups fighting over some monopoly's surplus, not market forces. We are still living with the repercussions of the regulatory barriers to entry in the telecom industry.

    Which are...? Name one.

    In a different context, for example, in a country where there is a food shortage, people who actually invested in food production, storage, distribution, actually get to make a windfall profit. If they can keep that profit, it gives others an incentive to invest in things like food production, storage, and distribution.

    In every famine/shortage situation I know of, what happens is that some people either hoard food or interfere with distribution to drive up prices. You're not really interested in the causes of famine and shortages, are you? It's not as simple as you pretend.

    However, in most instances, such as in the case of gas prices in the wake of Sandy, people start crying about "price gouging" and "predatory" behavior, and enlist politicians to steal other people's property by not allowing prices to rise to reflect the shortfall in supply relative to demand. You get low prices on the signs, but no gas in the tank. You get low prices in the grocery stores, but no food to buy.

    Please, for the love of God, STOP pretending there is such a thing as "the free market." It's a MYTH, damn it, and creating artificial shortages by hoarding is stealing the people's money, if you want to look at it in terms of money/profit = property. The moment you intervene in the free exchange of goods and services by constricting supply or stimulating demand, the market is not free and pretending that it is causes the poverty and starvation you described earlier. Those "windfall profits" end up being spent on the other things that tend to run short in a crisis, so it's only beneficial if you can hoard ALL of the necessities you require. Few of us can do that.

    In the case of the poor country with a food shortage, rich, Western countries not only do not object to the destruction of the profits of productive people in such countries, they actively sabotage them by immediately dumping whatever surplus food, shoes, blankets etc their producers could not sell. Therefore, no one ends up having the incentive to actually make or distribute these things in times.

    Now, now, you're advocating that we "steal the fruits of someone else's efforts" - in this case, those of people in rich, western countries. If over-supplying the market to drive prices DOWN is theft, what of the reverse? Why is under-supplying the market to take advantages of people's needs NOT theft?

    So, crying about "predatory behavior" and "price gouging" causes people to go without food, without gas etc.

    Sorry - HOW does crying about "predatory behavior" and "price gouging" cause people to go without food, without gas etc.? Those things continue to be needed and in the case of the USA, they are abundant and compared to the rest of the world, quite cheap. So relatively few people go without food, gas, or the other things they need. Yes, there is poverty in the US, but there's also food and gas.

    In the case of telecoms, you must ask why these companies seem to be able charge the prices you do not like. Assuming they are making a boatload of economic profit as you seem to imply, why are other competitors not coming in? Why are people not coming up with providing alternative access methods?

    Because, in many cases, they've made it so that THEY ALONE supply that particular service and actually ban competitors from entering the market. In some cases, this means that the will of the people is subordinated (when municipalities cannot set up broadband, for example) to that of the telco, in this case Verizon, though they're not the only one that does it.

    There is a simple answer: Barriers to entry in this industry, as in the case of taxicabs, and many other things, are backed by government power. It is not just FCC regulation. Patents, tax structures, etc also stand in the way potential entrants.

    Uh, you've forgotten about the mergers and consolidation that keeps entrants out. That's because the anti-trust laws we have on the books aren't being enforced, as they should. That bit of government power would enable other entrants to compete.

    So, if you want the telecom market to improve, think about how to bring in more competitors, not another granting another power to government bodies.

    So, at the end of your confused Libertarian rant, we're blaming the government for everything, but not the innocent-of-all-wrongdoing companies. As I've stated, when companies become too powerful by becoming too big to let other companies in, the exercise of government power to break them up via anti-trust laws is the answer.

    As for your other complaint about under-pricing wrecking the economies of poorer countries, it'd solve the problem there because they wouldn't have the buying power to flood foreign markets with cheap goods.

     

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  29.  
    identicon
    Anonymous Coward, Feb 27th, 2014 @ 8:10am

    Google fiber needs to come in and cannibalize verizon's biggest markets.

     

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

  30.  
    icon
    missyg (profile), Feb 27th, 2014 @ 8:36am

    Internet Must Go

    Net neutrality is an issue that needs to be fought for, and the first step is to keep up with the issue as much as possible. If anyone needs a refresher on the basic issues, here's a great short mockumentary: http://www.theinternetmustgo.com/

     

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

  31.  
    icon
    John Fenderson (profile), Feb 27th, 2014 @ 9:29am

    Re: Re: Re: Red flags go up

    Are you actually arguing that harming people in the middle of a disaster for personal gain is a socially positive thing to do? Really??

     

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

  32.  
    icon
    John Fenderson (profile), Feb 27th, 2014 @ 9:31am

    Re: Why don't they give us an option?

    They do have a fair way to charge us, and they use it. Their complaint is that they think that they should be able to overcharge.

     

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

  33.  
    icon
    btrussell (profile), Mar 1st, 2014 @ 3:00am

    "...or they simply won't invest in the networks of tomorrow."

    Does that sound like they are committed to increasing investor value?

    They can keep their horse and buggy, I'll be in my core vet.

     

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


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