Highway Robbery or Public Internet Systems?

There are some toll roads in Canada - and even at least one that is operated privately if I recall. 

Would you allow the toll agent on such a road to look inside your vehicle and ask you your ultimate destination, even if that destination was somewhere well off the road you were on at the time, and then base the toll you paid or even if you could drive on the road on the information gained from looking and asking?

I sure wouldn't - but that is what Canadian ISPs are trying to do, and the Canadian Government through the auspices of the CRTC may just let them do it.

Would you allow a private toll road to your home to be operated in such a fashion that goods and services you want from someone other than the owner of the road were charged exorbitant tolls, but the road owner's own goods and services got a free pass? The CRTC here in Canada has just allowed the incumbent (and dominant) ISPs to do exactly that.

Personally, I (almost) find this an excellent reason for the public to take over the creation of and management of the digital highway system - and I'm not only generally anti-government's involvement in business, but one of the founders of the commercial internet business in Canada. Here's why I feel this way.

Note that I'm NOT in favour of government having the ability or the right to shut down such a system as Egypt's government has done in recent (late January, 2011) days. Somewhere between the extremes of business walled gardens and bureaucratic strangling there has to be a reasonable balance.

The internet is no longer a luxury. It is now part of our way of life, along with the wireless telephone systems and other infrastructure that goes toward making up our connected society.

The problem is, the connected society has grown up so fast that many aspects of what it is and can become are only just starting to be recognized, and the types of companies that have ended up in control of major portions of the infrastructure have other, older business models that they're trying to protect, to the detriment of the growth and development of the internet.

We are in a period of massive transition and upheaval, both in our societal and personal communications, and in the business of communications services - and the changes are leaving some businesses in the dust and threatening others with massive revenue stream changes - changes which are meeting with equally massive resistance.

The older business models are things like telephone and cable television. Skype and even the cell-phone revolution are eating away at traditional phone revenue. Streaming video and rapid downloads are eating away at the traditional cable TV revenue (which in turn ate away at the broadcast TV revenue in its own time by the way.)

The problem is, the telcos and cablecos own a lot of the long-distance infrastructure used by the internet; the fiber-optic cables. They also own and control the "last mile" infrastructure of wires and coaxial cable, and have the agreements in place to string more throughout the various cities and towns via easement rights.

So we have the concept of "Usage Based Billing" or UBB. But it only applies to internet. The movies and other content controlled by the incumbent get to travel without this extra bill, even though they are using exactly the same infrastructure and technologies.

"The ostensible, theoretical reason behind UBB is to conserve capacity, but that issue is very questionable," noted the ISP's CEO Rocky Gaudrault on TekSavvy's news page. "One certain result though, is that Bell will make much more profit on its Internet service, and discourage Canadians from watching TV and movies on the internet instead of CTV, which Bell now owns." ars technica 

The changes noted in the above referenced article include things like moving from a 200GByte/month cap to a 25Gbyte/month cap - and charging between $1 and $2 per Gbyte for excess.

To put this in context:

Watching 1 live streaming (low resolution, 350Kbps) video stream from (HWF) Hancock Wildlife Foundation's famous eagle nest cameras continuously for 1 month (24x7) consumes approximately 100Gbyte's of network traffic. Some of our "eagleholics" watch several such streams at once, up to 4, for many hours/day. Even though they don't watch 24x7, their incoming total probably is somewhere in excess of 100Gbytes/month without any other traffic such as email (with video clip and still image attachments) and visiting the web site for forum interaction, etc. Chances are many of them will have to cut back dramatically on their watching if their ISP starts charging for bandwidth over unreasonably low caps.

As a contrast, one high-resolution video channel, sent via digital technology (analog is gone in the US and all but gone in Canada) takes from 4 to 10 times as much bandwidth as the above noted low-res video stream, and of course is not subject to the usage cap because it is sent by the owner of the cable or telephone wire, not by someone from outside the ISP's network.

The raw (non-capital) "transit" cost of getting the ISP's network connected to the rest of the world's network (so HWF's stream can get to you) is measured in dollars per megabit per month, if there is any cost at all (the cost is based on "peering" and is only paid if the connection traffic is mostly only in one direction.) As an example of how little it can cost, the server you're reading this from is hosted on a link where we pay something less than $20/month per megabit, and we're buying from a second-level hosting company, who in turn buys from the local phone company - and both make money at that rate, so the raw cost to the phone company must be (much) less than $20/month. The real irony of this is that, if you consider the cost to the telco as 100% for incoming to their network, the more we use (mostly outbound), the lower their cost is as their total bi-directional traffic approaches equilibrium.

One megabit of traffic for one month is roughly 600Gbytes of total traffic. So, all things being equal, charging $1 per Gigabyte to the end user for this would gross about $600 for a cost somewhere less than $20 - quite a profit margin.

These "incumbents" also have the dollars to lobby the various levels of government to protect their "rights" and make it difficult, if not impossible, for others to horn-in on their territory. Competition has grown since the late '80s and early '90s, when telecom deregulation initially took place, but it is far slower to show up than the need for it would otherwise dictate.

In terms of our original infrastructure, the problem is as I see it is lack of what is called "common carrier" designation of services.

Common Carrier has its roots in the designation of goods carriers (wagons, trucks, railways, etc.) transporting goods under license and regulation of government in a fashion that is without discrimination - no different rates for me than for you, or discrimination of what may be carried (other than hazardous goods.) In return, the carriage company gets a license to operate from the governing body or government, and may get some legal protection from certain types of events that might befall their cargoes (acts of God, etc.)

In the telecommunications business, common carrier means the phone company cannot (should not, will not, does not) discriminate between customers or listen in on what you and others do with your telephone. In return, the telecommunications company is not liable for the content of the conversations that happen on their equipment.

Of course if the regulatory body that sets up this common carrier regime is government (as it is in most cases) then the carrier may be called upon to facilitate things like cargo inspections and wire-taps and such, but that's for a topic for other times.

Today, we have the specter of telecommunications companies having in-house services (like telephone service or cable TV service) that is being supplanted by other companies (such as Skype and Netflix) providing similar competing services through the same infrastructure they provide their own customers directly, the phone lines and cable links.

Not unreasonably (from a business point of view, not from a consumer point of view) these local companies that have the "last mile" connections to you and me want to protect their other business and not be just "pipe" providers because the internet bit transmission infrastructure really does not earn them the kind of income that the content provision and things like long-distance and dial-tone services provide them.

Let me digress a bit and give you some understanding of what can be (and is being) done to make your use of the internet less satisfying than it otherwise might be unless all you do is interact with your provider's content.

As I intimated in my opening, your ISP can, and does, look into every single packet of information that you send and receive - and their equipment deals with the packet in a manner based upon what it finds there.

The good news is - they have to do this in order to get your packets to and from where they are destined. The packets all contain routing information - the address they need to get to. They also contain basic information on how good and how fast the overall link between you and the packet's destination is, be it Google or your aunt's computer in Poland when you're on Skype. This is akin to looking at the address on the outside of an envelope, or getting the telephone number of the person you're calling.

The bad news is - they also can infer and/or see what you are doing by looking at not just the destination address but the actual style and packet content (akin to the post office opening your mail and reading it to see if it is business correspondence or personal chatter for example) - and they can discriminate your traffic based upon this look inside.

They can (and do) also keep track of how much data you're sending/receiving to/from a particular site. This is also the basis of "Usage Based Billing" noted above.

This means they can see that you are getting a video from Netflix or some remote TV via a Slingbox or other competing content (to their own TV and video offerings) - and they can slow them down and make your viewing painful, despite the fact that their infrastructure could give you a much better viewing experience if they just did nothing but pass packets.

It means they can see that you are using a facility like Bittorrent, and, despite the fact that it is used for many things other than pirated videos and music, break your connection and slow it down. (I experience this sometimes with downloads of the open source software I deal in for example)

It means they can and do discriminate between you using their own content, and you using some other company's content - just so there is a reason for you to use theirs (UBB).

It means they can and do set themselves up as judge, jury and executioner in what should otherwise be a criminal (or civil) matter between the likes of record and movie companies and you, the consumer of (maybe pirated) content; thereby circumventing law. The fact that they do this reflects the fact that the content providers have a hold over them due to their own video and music business interests. This is like a manufacturer telling a trucking firm that "you won't get our business unless you stop doing business with that other firm that is competing with us" - a direct threat to competition and directly against all common carrier rules and regulations about discrimination.

So, what does it mean to you as a consumer of the internet if your local carrier is not reigned in by "common carrier" or as is the current hot topic "Net Neutrality"?

If nothing else, it will mean your cost for doing the things you want to do on the internet will go up - not because you get better service, but because you get poorer service from everyone but the incumbent - and then have to pay higher charges to the incumbent for what you otherwise could have gotten from their competition. Anti-competition!

Usage Based Billing is just one method of making the incumbent's services more appealing than the competition's. Slowing down the competition's traffic is another. Breaking the connection (purposely or by "accident") is another. There are all manner of stories circulating in the tech community about this type of thing happening at ISPs all over the world.

What can you do about this?

First - complain, loudly and often, to your MP, MLA, local politician, chamber of commerce, the CRTC (FCC in the US) and anyone who will listen. 

Take the time to understand what the problem is. If I have not explained it in a way that you understand, write me and let me know - ask the questions in your words and I'll refine my article and write more. My chosen task is to try to let the non-technical people of the world have an insight into what goes on behind the scenes in words that they'll understand. 

Change suppliers. You may not actually get better service, but "churn" (lots of people changing all the time) is one major indication of dissatisfaction with the overall industry's methods and structure - and encourages newcomers into the fray.

Don't allow yourself to be locked into any system that can change the rules at its whim. Read the contract and try to understand it. Better yet - don't allow yourself to get locked in at all.

Make your wishes known to all the sales people at those suppliers you might deal with - make them work for your business.

Give me feedback - tell me what kind of story you get from your supplier and what kind of deal you get. 

richard

Tag: net neutrality usage based billing incumbent isp costs toll road common carrier