Wednesday, June 4, 2008

By The Way, What Would You Pay?

Comcast and Time Warner Cable have made their move--they're going to begin seeing what will happen when they slow down Internet connection speeds for heavy Internet users. Unless...unless the users want to pay for faster connections. And the FCC doesn't care because, well, why would they?

Cable service operators Comcast and Time Warner Cable said yesterday that they would begin testing new approaches that would slow Internet access for heavy users and charge more to those who want additional speed.

The tests come as the Federal Communications Commission wraps up an investigation on complaints that Comcast blocked certain users from sharing video, music and other files. The complaints fueled a larger debate, with hearings in Congress and by the FCC, on how much control Internet service providers should have over the flow of data.

"The cable companies see a hammer hovering above their heads and are scrambling to find ways to reduce the appearance of wrongdoing," said Ben Scott, head of policy for the public interest group Free Press, which advocates for better oversight of cable operators. He called the plans "Band-Aids" on the bigger problem of network capacity, which he said can be solved only by larger investments in the cable companies' networks.

Comcast said that on Friday it would begin tests in Chambersburg, Pa., and Warrenton, Va., that would delay traffic for the heaviest users of Internet data without targeting specific software applications. Public interest groups complained in November that Comcast targeted users of BitTorrent, a file-sharing application, by blocking or delaying video and other files exchanged with the technology. Free Press said the practice discriminated against certain content and impeded users from having full access to the Web.

Time Warner wants to try something else:

Time Warner Cable is trying a different approach with a test that will charge customers more for larger volumes of data and faster Internet access. The metered-billing test, which the company compared to cellphone billing structures that charge extra for those who go over their minutes, will begin tomorrow with new customers in Beaumont, Tex. The company said its approach allows customers to choose plans that fit their needs.

"Instead of raising prices across the board, consumers who are excessive users would pay," said Alex Dudley, a spokesman for Time Warner Cable. "It is clearly the fairest way to fund the investment that is going to be required to support that use."

So is there a chance of price gouging? I wouldn't expect consumer-friendly regulation to come out of the FCC any time soon. We are in a holding pattern until something approaching good government happens, if ever. The ultimate goal of the providers is to find a way to make more money from the networks they have instead of adding more bandwidth.

Dave Burstein agrees:

“I suspect what happened last month at Comcast is they decided the important battle was already lost,” said Dave Burstein, the editor of DSL Prime, a newsletter that covers the broadband industry. He argues that the restrictions on BitTorrent “don’t add up to a hill of beans” because Comcast and other Internet providers were only blocking a tiny fraction of file-sharing traffic at peak times. Yet the issue could have set the stage for the Internet providers to impose much more significant restrictions on video delivered over the Internet, rather than through pay-television services.

“The peer-to-peer issue was a sideshow,” Mr. Burstein said. “Everybody involved knew there was a bigger issue on the table: do Disney and ESPN go directly to customers if Comcast charges them too much? There is also a free speech issue: can Al Jazeera or the Jerusalem Post TV station get through if Verizon doesn’t have them in its channel listing?”

Several years ago AT&T openly discussed charging a fee to big Web operators to carry their traffic on its network. And at various times other Internet providers have expressed interest in such plans, although no one has tried to impose such a fee in the United States.

Mr. Burstein argues that if the broadband networks had been able to significantly slow down high-bandwidth uses, it would have created demand from television networks, video sharing sites and others to pay to have faster access for their programming. Now that the Internet providers have essentially been forced to agree not to discriminate against specific sorts of traffic, this scenario becomes much less likely.

When the network providers say, in effect, “we will never block anyone’s content or slow it down, network neutrality is an uninteresting issue for them, because they can’t abuse it enough to make the money they wanted to,” Mr. Burstein said.

Can't abuse it under the current structure--to be more exact. The providers have deep pockets and are never going to stop lobbying for a better regulatory situation. The Fall 2008 Presidential election means a great deal, in terms of, "who will run the FCC?" and "will lobbyists be given unfettered access to the Oval Office?"

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