by Mike Masnick
Thu, Aug 25th 2011 12:24pm
by Mike Masnick
Wed, Aug 24th 2011 11:57am
from the crickets? dept
But Derek Kerton may have had the best idea of all, noting that Sununu and Ford will almost certainly ignore our request that they swap their broadband bills with Netflix. Derek suggests we up the ante, and offer to actually give Sununu and Ford some money if they agree to pay Netflix's broadband bills for the rest of 2011. He's putting up $500 and we at Techdirt will match his offer and put up another $500. So, that's $1,000 for Sununu and Ford Jr. if they're willing to pay Netflix's braodband bill. Hell, we'll give them some time to think it over, and say they only have to pay for the last quarter of the year. If they'll pay Netflix's broadband bills for October, November and December, we'll give them $1,000 ($500 each). Some others in the comments have also offered to chip in as well, so perhaps we can raise the ante a bit more.
So here we go. According to Sununu and Ford Jr., this is "free money" that we're offering them. Will they take it? Will they agree to pay for Netflix and its very cheap "free rider" broadband bill? I'm not holding my breath.
by Mike Masnick
Tue, Aug 23rd 2011 11:03am
from the simple-request dept
It looks like we're in for a repeat with some other ex-DC folks-turned-sell-out lobbyists. This time, it's former Senator John Sununu and former Rep. Harold Ford Jr., shilling for "Broadband for America," claiming that Netflix gets its bandwidth for free. There are so many things wrong with this particular op-ed piece, which is so dishonest that the Mercury News should publish a full retraction and apology. But, for now I'll just make the same deal that I offered to McCurry five years ago:
If John Sununu and Harold Ford Jr. really believe that Netflix is getting a "free ride" with its bandwidth and this is somehow socially irresponsible and unfair, will they agree to pay Netflix's broadband bills for the rest of this year?Perhaps they can trade bandwidth bills with Netflix. I'm sure if they're willing to pay Netflix's bandwidth bill, Netflix would have no problem paying for their home DSL lines. Hell, maybe Netflix will even cover their mobile broadband accounts as well.
As for the rest of the op-ed, it's pretty funny. While they play up how Netflix "saves" $0.40 in postage by not having to use the mail, they ignore the fact that in order to stream movies, Netflix has to pay ridiculously high licenses. With disc rentals, it could buy one disc and rent it out many times. Not so with streaming licenses. It needs to pay a ton for those.
Then there's this bit of economic cluelessness:
Netflix argues that the marginal cost to the network providers of streaming a half-hour TV show to a residential customer is "one penny." This ignores the hundreds of billions of dollars in sunken network investments needed to create that one-penny marginal cost efficiency at the customer's end.Um, yes, it does. And as most any economics professor will tell you, you're supposed to ignore the sunk costs in understanding how a market prices things competitively. Telling the market to do the opposite is the very definition of an anti-market, anti-efficient solution.
Consumers tend to pay more when they consume more goods and services, and pay less when they consume less.And, contrary to the claims in the article, Netflix pays more when its users consume more. Again, will Sununu and Ford pay Netflix's bandwidth bill?
The reality is that Netflix and similar services want a free ride on the networks built with more than $250 billion in design, engineering, manufacturing, construction and maintenance -- a system that now provides broadband services to 95 percent of American households.Hey, you know what? I spent a lot of money building Techdirt. All of you now owe me money. Apparently that's how Sununu and Ford view market functions. If one party spends a lot of money on something, everyone else is just required to pay. Of course, back here in the real world, that's not how things work. Various broadband companies (with massive taxpayer subsidies, by the way) built out broadband networks because they knew it would be profitable to do so. They made their bet and made their deal. Now they're trying to change the deal by pretending that someone's not paying. They're lying. What they really want is for service providers to pay twice for the same bandwidth. Netflix is already paying for its bandwidth. Consumers already pay for their bandwidth. Sununu and Ford (and really, the telcos they represent) are really trying to get Netflix to pay again, pretending that they should pay for the bandwidth that consumers already paid for, even though Netflix is already paying for that bandwidth. This is about trying to double charge.
If broadband providers are so hard up for cash, then just let them raise rates. Nothing is stopping them from doing that. But that's not what this is really about. This is about trying to force Netflix to double-pay for consumers' bandwidth as well.
So, once again, John Sununu and Harold Ford Jr.: since you insist that Netflix is getting a free ride, will you pay Netflix's bills for the rest of the year? Or will you pull a Mike McCurry and simply ignore this simple challenge and go on pretending that Netflix doesn't pay?
by Mike Masnick
Mon, Apr 11th 2011 4:47am
from the just-what-the-entertainment-industry-wants dept
I have three teenage daughters who also download music, TV shows and so on. I figured someone had just gone a little overboard, and since it was close to the end of the month, I thought it wasn’t anything to be worried about. The next day, however, I went online and checked my usage (Rogers has an online tool that shows daily usage), and it said that I had used 121 GB more than my allotted amount for the month. In other words, I had used more than 100 GB in less than two days.So he felt forced to go track down what the issue was. At first (with prompting from Rogers tech support), he thought the issue might be his open WiFi, so he closed that down. He asked family members about their usage, and they all insisted they weren't doing much. However, just a few days into April, he was told that his connection had already used up the monthly allocation, leading to a second search, and the eventual discovery that one of his daughters had downloaded some TV shows, but left a file sharing program running in the background, which probably accounted for the extra bandwidth usage.
I just about spit my coffee all over the computer screen. How could I possibly have used that much? According to Rogers, I owed $181 in overage charges. Luckily there is a maximum extra levy of $50 a month (just think what it would cost if I was subject to usage-based billing).
In other words, he had to become his own local area network cop, to figure out how his own network was being used and for what. Now, I'm sure some will argue this is a good thing. They'll say that you should be responsible for understanding everything that goes through your router. And, of course, those who dislike file sharing will argue that this is a wonderful side benefit to these bandwidth caps. But, it really shows yet another pain in having bandwidth caps. It adds a lot more work to having an internet connection at home -- work that really shouldn't have to be done by someone who just wants to access the internet. Perhaps we'll end up with more sophisticated tools for people to track their home internet usage, but in the meantime, it seems a bit crazy to force everyone to be their own local area network traffic cops.
by Mike Masnick
Fri, Jan 28th 2011 3:02pm
from the ah,-data dept
by Mike Masnick
Mon, Dec 20th 2010 4:20pm
from the uh,-no dept
by Mike Masnick
Tue, May 18th 2010 11:36am
from the well-this-might-get-interesting dept
by Mike Masnick
Thu, May 13th 2010 7:21am
the pirate bay
from the what-is-that,-fourth-party-liability? dept
by Karl Bode
Tue, May 4th 2010 4:39am
from the looming-capacitastrophe dept
Cable and phone company lobbyists (and their army of PR, consultant and think tank friends) have long pushed the bogus concept of an "exaflood," or the idea that explosive Internet growth will result in the Internet collapsing any day now. The argument is generally used by telecom lobbyists to scare politicians and the public into supporting something (deregulation, subsidies, higher prices, fewer consumer protections) lest the Internet explode. The problem is that the argument has been debunked countless times by real network researchers like Dr. Andrew Odlyzko of MINTS -- who highlight that traffic growth is actually quite reasonable, and what growth there is can be easily dealt with by intelligent network engineers and modest network investment. If carriers aren't investing money back into the network, it has nothing to do with bandwidth bogeymen -- it's usually because they face limited competition.
The exaflood term itself was actually coined by Bret Swanson, formerly of the Discovery Institute -- the think tank hired by evangelicals to help push creationism into the classroom via "intelligent design." Under the employ of major carriers, Swanson first used the term in a 2007 Wall Street Journal editorial, and despite it being largely nonsense -- it quickly became a common phrase in modern telecom lexicon. Of course the exaflood never arrived because it doesn't actually exist, but that's not slowing Swanson down. With the FCC considering network neutrality rules, Swanson (now under his his own brand: Entropy Economics) has given the ungracefully-aging exaflood myth a botox injection, based on filings this week with the FCC (via Ars Technica):
"We are intrigued by one particular innovation just around the corner. Call it online gaming. Call it cloud streaming. We call it the "exacloud." It is cloud computing but of a scope and scale never seen before. . . This exacloud will transform video games, movies, virtual worlds, business software, and most other media. Piracy goes away. So do DVDs, game boxes, and maybe even expensive personal computers. New content and software subscription models open up. Based in the cloud instead of on your device, interactivity thrives."
This miracle, piracy-curing super computing evolution Swanson references? It's just ordinary people using clients to access servers using networks. While Swanson throws out a lot of data points in his filing, none of them dispute the reality that Internet traffic growth remains reasonable and manageable. Amusingly, he even goes so far as to use the MINTs data that debunked his original claims -- as evidence supporting his "new" argument. It appears that all he's done is rename his imaginary bandwidth apocalypse for a more modern audience -- and hoped nobody would notice. He at least could have been a little more entertaining. How about the Tubeogeddon? BitTorrentialCollapse? The Tubeacalype? Capacitastrophe? The looming colocaust? Help us out...
by Karl Bode
Wed, Apr 14th 2010 6:03am
from the repeating-something-relentlessly-does-not-make-it-true dept
Back in 2005, former AT&T CEO Ed Whitacre (now the head of GM) boldly proclaimed that Google was getting a "free ride" on his company's "pipes," and that they should be charged an additional toll (you know, just because). As we've discussed several times now, Whitacre's argument made absolutely no sense, given that Google not only pays plenty for bandwidth (as do AT&T's customers), but the company owns billions in international and oceanic fiber runs, data centers and network infrastructure. Despite making no sense, this idea that Google was some kind of free ride parasite quickly became the cornerstone of the telco argument against network neutrality. In response,Techdirt has suggested that telco spokespeople should pay for Google's bandwidth bill for a month if it's so low -- with no takers.
Of course, lost under the circus of the network neutrality debate was Whitacre's real goal: to get content providers to subsidize AT&T's network upgrades, something many myopic investors don't want to pay for. Whitacre was also afraid; he understood Google poses an evolutionary threat, the likes of which traditional phone companies like AT&T had never seen before. Incumbent phone companies had grown comfortable sucking down regulatory favors, subsidies and tax cuts while operating in non-competitive markets. Suddenly, increasingly-ubiquitous broadband allowed companies like Google to enter "their" telecom space, gobbling up ad dollars and offering disruptive products like Google Voice -- which threaten sacred cash cows like SMS and voice minutes.
Instead of competing with Google by out-innovating them, Whitacre's first reaction was to impose an anti-competitive toll system like some kind of bridge troll -- which should tell you plenty about pampered phone company thinking. Whitacre's fuzzy logic was given a new coat of paint in pseudo-scientific studies paid for by phone carriers, and has since floated overseas. In the UK, incumbent phone companies have taken a page from Whitacre, insisting that the BBC should pay them extra money -- just because people were using the BBC iPlayer. Now Google's non-existent free ride has popped up in Europe this week, with Telefonica, France Telecom and Deutsche Telekom all jointly insisting that Google should be paying them a special toll for carrying Google traffic:
Cesar Alierta, chairman of Telefonica, said Google should share some of its online advertising revenue with the telecoms groups, so as to compensate the network operators for carrying the technology company's bandwidth-hungry content over their infrastructure. "These guys [Google] are using the networks and they don't pay anybody," he said.
Yes, Google doesn't pay anything -- except for the billions they pay for bandwidth and extensive infrastructure. Were Google a telecommunications carrier, they'd be the world's third biggest according to Arbor Networks. It's absolutely stunning that such a ridiculous argument remains in circulation (and that many press outlets don't debunk the concept as painful nonsense). If electric companies went to AT&T or Telefonica to inform them that they wanted a cut of revenues on top of payment for electricity "just because" -- they'd be laughed out the building. Yet somehow we're supposed to take phone companies seriously, when in reality they're simply repeating total nonsense in the hopes that repetition will magically make it true.