BB CEO asks government enforcing development of apps for all platforms
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Isn't this exactly what Netflix and other businesses are trying to do with "net neutrality"?
The core problem with net neutrality is that a number of big consumer ISPs have spent years under-investing in their infrastructure. (Such investment would've been expensive, sure. Enough with the sob stories already?) That worked fine for a while because most people used only a small fraction of what the infrastructure could support most of the time. This meant that infrastructure could be over-committed heavily, and allowed the ISPs to be rather more profitable than they would have otherwise been. This has continued for a fair number of years, and because of general hassle of running infrastructure out to all those customers, the ISPs that have the infrastructure have gravitated towards being local monopolies.
But now the chickens are coming home to roost. Newer high-bandwidth online services that the ISPs' customers really want are available, and the over-commitment is starting to really hurt. It was predictable that this would happen. Yet the ISPs don't want to change the terms of their contracts with customers to stop claiming silly things like “unlimited”, and don't want to substantially reduce their profitability (because Wall St. doesn't like that sort of thing). So they're trying all sorts of other tricks, most notably including:
- Trying to force the providers of the high-bandwidth services to give them (the ISPs) money for access to their customers. (Note that the likes of Netflix are already paying for the bandwidth that they use. They might have got a good deal for it, but it sure ain't gonna be free.)
- Trying to stop disgruntled customers from leaving by blocking (usually through local legal/political shenanigans) attempts to introduce more competition.
This has pissed a lot of people off. The resolution of it all is likely to piss a lot of people off too.
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This meant that infrastructure could be over-committed heavily
What other infrastructure is "over-committed heavily"? Electric, gas, water, sewer, roads... Your water company may "guarantee" 40psi to your house, but if EVERYONE in your neighborhood is filling their pools, then the water pressure will be shit. Who should pay for upgrades to allow everyone to fill their pools at the same time? Should it be the people who actually DO want to do that, or should we instead socialize the costs onto the lower-class apartment complex down the street? I can guess which side YOU would take.
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What other infrastructure is "over-committed heavily"?
I understand, but the fundamental issue is that usage patterns are shifting towards more bandwidth usage.
It's a bit like shifting towards more electricity usage because more people are fitting aircon units. The electricity company can say anything they want, but people really like aircon, and who can blame them? (I'd quite like aircon, but only for a few weeks a year, and then mainly for its superlative power to dehumidify. Different climate to almost all of the US.) With that sort of shift going on, they'll have to get more daytime power available, and possibly also upgrade local transformers and so on. They have to invest.
Similarly, bandwidth consumption is going up online. Has been for a long time, and it has been predicted to do so too. It's not like it should be a surprise. Services like Netflix and Hulu are definitely at the forefront of the bandwidth consumption increases, but they're just the most visible aspects; it's a general shift across loads of services and usage habits. Because of that, it is becoming more important to have network infrastructure that can support this sort of thing. (Duh!) The consumer ISPs are the part of the network industry that has been most noticeably underinvesting (i.e., not working on building up the predictable and predicted capacity) so they've got the most work to do. (Compare with the companies that operate the internet backbone; they've been spending much more wisely.)
However, the US consumer ISPs have been charging as if they have been making the investments. (Seriously, your network charges are pretty high for what you get.) This wouldn't have been too big a problem if they'd been setting aside the money in a fund so that they would be able to spend when technology was suitable for rolling out, but it appears that they've instead used the money to pay larger amounts to their shareholders and management.
Oh dear.
The service providers (Netflix et al) are upset at being asked to pay twice for network service, and are pushing back very hard indeed. The ISPs' boards are loth to divert money from shareholder payouts to infrastructure investment as that will hit their bonuses (and possibly also their employability) very hard. The ISPs' customers are going to be hellishly upset at being asked to pay for the upgrades given that they think that's what they've already been doing. And there's lots of people upset that the ISPs are using shenanigans to try to restrict competition (which would be a different way to get infrastructure investment done otherwise). There are probably a whole other bunches of reasons for upsetness brewing; I'm no expert on all this.
Something's gotta give. Not sure what, but I do know that it will make many people upset.
We'd have same problems in the UK except we did the equivalent of forcing the telco monopoly to go Common Carrier for network access a decade or so ago. We have a different balance of power between different parts of government; in this case it seems to have worked out for the best. Time will tell…
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They have to invest.
Of course, electricity usage is metered. Thus, the electric company can expect to get people to pay for increased usage and thus get a return on their investment. Any time an ISP even suggests usage metering, however, the bitching and moaning reach epic levels.
@dkf said:The consumer ISPs are the part of the network industry that has been most noticeably underinvesting
Please point to some figures to justify the "underinvestment" argument.
@dkf said:your network charges are pretty high for what you get
Cite, please.
@dkf said:The service providers (Netflix et al) are upset at being asked to pay twice for network service
Specify exactly how they're being asked to pay twice. Keep in mind the fact that Netflix sends a shit-ton of data outbound, while barely receiving any data inbound, and thus they can't make a reasonable argument for peering agreements.
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Replying properly to your post would require me to do a significant amount of
researchGoogling so you know what? I can't be bothered. Let someone else write some of the like-bait here for a change.
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Comcast is even worse, because if you have an Internet-only plan, you're still paying for all their cable TV negotiations. you're subsidizing people who want to watch reruns of The Dukes of Hazzard.
There's no law to require their fee structure for one service to only include costs incurred providing that one service.
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People would be well-served to read Chen's actual blog post and figure out whether people reporting on it are full of shit or not. It's a crazy idea, I know.
I read it. They're not. I gleaned from it the same thing the reporters did.
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How to Succeed in Business, BB style:1. Make unprofitable business decision2. Get government to force other businesses to do unprofitable stuff3. ???4. Profit!!!
They've succeeded in step 1, at least.
With a few tiny changes, that list will work for Wall Street also. ;-)
