What I don't get is on, on one hand, you have the CEO (was it Verizon?) saying "Americans don't want gigabit internet" and continuing to build out these 20-40mbps networks, yet trying to serve TV/video through IP as well. I'm trying to understand the long game here but I'm struggling. The only thing I can think of is that they're trying to get us thinking that 20-40mbps is "worth" $40/month therefore when we finally get 1gbps, they can charge $150/mth (or something to that effect).
What happens when Google, Netflix, Microsoft wise up and start charging AT&T and Verizon to access their services? This is how cable works, Comcast pays Fox, ESPN. This will backfire on Verizon and AT&T.
Smaller companies already do pay when they buy bandwidth. I don't see the economics working for AT&T and Verizon to charge startups. Maybe some kind of tier bandwidth general cheaper bandwidth and "network optimized" bandwidth for some additional fee.
But beyond that I see the internet playing out like cable but on a larger scale. A simple winner take all game with almost all network capacity dedicated to a few services.
The case centered on the question of whether those companies would have to pay twice--once to buy bandwidth from their own ISP and then again to get through a toll to the end user, paying originating ISP then the terminating one.
Long-term the only way to avoid this war is to promote opening of spectrum (both licensing and software defined spectrum sharing).
Until then the local access duopoly has too much power, at least in the US, and both well intended and not so well intended legislation will only hamper the market.
They all face the same problem: a captured FCC. I agree on opening up spectrum (spread the gospel!) and wish we could adopt policies against the duopoly like open access to the wires. Yochai Benkler has written on both if you're interested (you're probably aware)
This whole attempted money grab is a real howler. AT&T and Verizon are already getting paid fairly from their subscribers. The subscribers are paying for YouTube/Netflix/et al to be available to them. Further, YouTube/Netflix/et al are all paying their own respective access fees. Everyone today is getting paid fairly. So while the argument on the surface is about something that's somewhat esoteric, what it really boils down to is that the ISPs want to bill twice for the same service.
Not only that, these companies have absorbed state and local subsidies to build out their infrastructures based on the promise that they would provide service to the public good. That invalidates any faux-libertarian defense they might have-- their networks are now in part public property.
This is nothing but bald-faced rent seeking. Middle-men setting up toll booths on a "limited" resource. Limited of course, only by their own investment. The mathematics of this are terrifying. Broadband should be a public utility.
When I see people making seemingly irrational decisions I tend to think that there is some information that I don't have but is available to those CEOs who are making these decisions.
Internet businesses have grown like anything in last two decades and we haven't really fully exploited its potential. What Verizon and AT&T are doing is basically killing a Golden goose. AT&T's core strength is to lay out those cable, build towers and give internet endpoints to consumers. AT&T's knowledge about what people can potentially do with those endpoints is as good as an Indian farmer's knowledge about flying planes.
End of net neutrality will add friction to new ideas getting successful. It will also mean internet will have less and less meaning to end consumer eventually leading to a scenario where both internet businesses and ISPs will lose.
For example I have been using a prepaid AT&T card with Google Nexus because I find the contract based shit and expensive data plans nothing but thuggery. I am not willing to live without 3G, 4G and whatever comes next because At&T pricing does not make sense to me (though I can afford it).
Net neutrality as it's discussed now focuses on the wrong thing. We need neutral last mile with the ISP of our choice. There are no issues with lack of competition if you are inside major meet me rooms. The only reason att,verizon,etc can have this stranglehold is their government granted monopoly over the last mile.
It's too late for the telecoms companies to do this. If they try, then Google, Facebook and Amazon will do an end run around them by building their own telecoms networks offering services to all comers and competing against the telecoms companies. And the telecoms companies will all be gone within 3 years.
It's in the best interest of Google, Facebook, and Amazon to play ball here. These restrictions will make it harder for DuckDuckGo, Medium, or Craigslist to compete with them.
17 comments
[ 4.0 ms ] story [ 49.6 ms ] threadBut beyond that I see the internet playing out like cable but on a larger scale. A simple winner take all game with almost all network capacity dedicated to a few services.
Until then the local access duopoly has too much power, at least in the US, and both well intended and not so well intended legislation will only hamper the market.
When I see people making seemingly irrational decisions I tend to think that there is some information that I don't have but is available to those CEOs who are making these decisions.
Internet businesses have grown like anything in last two decades and we haven't really fully exploited its potential. What Verizon and AT&T are doing is basically killing a Golden goose. AT&T's core strength is to lay out those cable, build towers and give internet endpoints to consumers. AT&T's knowledge about what people can potentially do with those endpoints is as good as an Indian farmer's knowledge about flying planes.
End of net neutrality will add friction to new ideas getting successful. It will also mean internet will have less and less meaning to end consumer eventually leading to a scenario where both internet businesses and ISPs will lose.
For example I have been using a prepaid AT&T card with Google Nexus because I find the contract based shit and expensive data plans nothing but thuggery. I am not willing to live without 3G, 4G and whatever comes next because At&T pricing does not make sense to me (though I can afford it).