Tue, 11 Nov 2014
Thinking past hop 1
I had a great idea a few days ago, to start a website streaming cat videos called
Petflix. I rented a server for $10/month that gave me 1Mbps of outbound
bandwidth.
Growth has been exponential. I now have 20 customers that now pay me $1/month
for streaming cat videos. Unfortunately, during peak cat video viewing hours,
I've started getting complaints that the video streams are choppy.
Each stream uses 100kbps. So when I get more than 10 concurrent viewers, I max
out my bandwidth, and packets start getting dropped.
I could buy another 1Mbps of bandwidth for $10/month, but that would make my
website unprofitable. So I came up with a brilliant idea that would keep this
operation going.
I have an old computer in my basement that I'm not using. I called up Comcast
and offered to send them my computer, preloaded with all of my cat videos.
They could install it in their data center, and I would configure my DNS
servers to send all of my traffic originating from Comcast customers to the
computer in their data center. Since 90% of my customers are on the Comcast
network, I can grow my website without incurring any additional bandwidth
costs.
Obama on net neutrality
The recent statement by Barack Obama on net
neutrality suffers from the same error that most proponents make in arguing
for net neutrality. It assumes away the problem of how the internet actually
works.
Packets don't magically appear on an ISPs network, ready for the ISP to either
send on to a customer, or throttle or block for some nefarious reason.
The Internet is a big interconnected network with lots of different agreements
for connecting two networks together. As the owner of Petflix, I pay
Tektonic for connecting my virtual server (which I also pay them for) with
their network. Tektonic pays to connect their network with TierPoint (and
for power and space in a data center). TierPoint pays to connect their
network with Level 3. Level 3 and Comcast connect their networks, but
the terms are contentious. And as a customer of an ISP, I pay for connecting my
home network with Comcast.
Traditionally, large networks like Comcast and Level 3 would form settlement-free peering agreements.
Both parties get about equal value out of connecting their networks, and it was
deemed mutually beneficial to connect their networks without one party paying
the other. Netflix started sending lots of traffic over the connection between
Level 3 and Comcast, and Comcast no longer thinks they are getting equal value
from peering, and wants to renegotiate so Level 3 pays them.
To be fair, Obama sort of recognizes that the problem isn't just between the
ISP and their customers. One of his bullet points argues that net neutrality
should apply between an ISP and other networks.
-
Increased transparency. The connection between consumers and ISPs - the
so-called "last mile" - is not the only place some sites might get special
treatment. So, I am also asking the FCC to make full use of the transparency
authorities the court recently upheld, and if necessary to apply net neutrality
rules to points of interconnection between the ISP and the rest of the
Internet.
But if we apply the other rules of No Blocking, No Throttling, and No Paid
Prioritization to the connections between ISPs and other networks, it's unclear
what kind of arrangements would be legal. Would the government have to mandate
the amount of bandwidth at these interconnects?
What We Talk About When We Talk About Bandwidth
Getting back to my parable, when a customer of Comcast pays for 20Mbps of
bandwidth, and they can't even get 100kbps of throughput to Petflix, whose
fault is it?
Is it Comcast's responsibility to ensure that there is enough bandwidth through
Level 3, TierPoint, Tektonic, and Petflix?
Is it Petflix's responsibility?
Fortunately, we have a pretty good way of sorting it out: markets. If Petflix
is so important to Comcast customers that Comcast will lose customers to
competitors by not providing a satisfying cat video viewing experience, Comcast
will likely work to ensure sufficient bandwidth is available, unless the cost
to do so makes those customers unprofitable.
If Petflix customers start cancelling their subscriptions because they can't
enjoy my videos, I will probably pay to ensure sufficient bandwidth is
available, unless doing so makes the operation no longer profitable.
Net Competition
I'm sure readers will object that Comcast is nearly a monopoly in most markets,
and therefore markets won't solve the problem. And I agree. So instead of
championing net neutrality, I encourage readers to champion net competition.
Instead of adding federal regulation on top of local regulation which grants
ISPs like Comcast monopolies, deregulate the market in ISPs. In Portland,
there could be three
high-speed ISPs competing for consumers' business soon.
Nobody knows what amount of bandwidth should exist between the millions of
connections between networks, and who should pay how much to whom for these
connections. Only the market can sort it out.
Obamacare for the Internet?
Senator Ted Cruz referred to net neutrality as Obamacare for the internet. Is
that a valid analogy?
I would consider these the primary
characteristics of Obamacare:
- Additional regulation of heavily regulated industry
- New tax on uninsured taxpayers
- Subsidies for low income residents
- New government-run market for insurance
Obamacare doesn't seem like a great analogy for net neutrality. Both do add
federal regulation on top of local/state regulation. And it's not inconceivable
that if the FCC were to start regulating ISPs in the way that Obama suggests,
that problems caused would lead to suggestions for more government "solutions"
like government-run markets for network connectivity, but that's a bit of a
stretch.
With a little research, Cruz probably could have come up with an act of
Congress that would make a better analogy than the ACA.
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