Goodbye to net neutrality—and good riddance

Time for the data hogs to pay up

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A giant node of organized network cables

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As much as I love all the technical goodies we’ve been blessed with in this digital age, I do have the odd moment when I long for the way things used to be. Like last week, when the episode of House of Cards I was watching on Netflix juddered and stopped, and I spent the next half-hour rebooting various black boxes so I could find out how Frank Underwood’s latest machiavellian scheme worked out. That never used to happen with cable.

One of the reasons my Netflix service acts up from time to time is because streaming video eats up tons of bandwidth, and it’s fighting against all the other traffic on the net to get to my Apple TV. If only the digital carriers could prioritize streaming video traffic, then my shows would go jaggy a lot less often.

Well, it turns out that the cable and telecom companies not only can prioritize video traffic—they’d love to. They haven’t been allowed to though, because of regulations protecting “net neutrality”: the fundamental principle that all content on the web should be treated the same by Internet service providers (ISPs), no matter what kind of data it is. Luckily, in the U.S., the era of net neutrality looks like it’s about to end—and thank God for that.

In January, the U.S. Court of Appeals struck down the Federal Communications Commission’s old net neutrality regulations, and just yesterday, the FCC responded by voting 3-2 to advance a new set of Internet rules. If adopted, the new rules would ban large broadband firms like Verizon and Comcast from purposefully slowing down or discriminating against different types of data, but they would allow content providers to pay extra to access a virtual Internet fast lane.

You’d think that Netflix and YouTube would be thrilled—finally, ISPs can prioritize their content—but that’s not what’s happening. You see, the big streaming video guys have mixed feelings about the whole thing. Yes, they do want ISPs to be allowed to stream their content faster than other data—but they don’t want to be forced to pay for it.

Netflix is worried because only a few major distributors like Comcast control access to almost all the homes in the U.S. (it’s a similar situation in Canada), so ISPs could potentially charge outrageous rates, and it would have no choice but to pay up or go out of business. Under the old regulations, all data had to be treated (and priced) exactly the same.

So it’s a much more complicated issue than the net evangelizers who preach that annoying “free the data” gospel would have you believe. Under the old rules, Netflix, YouTube and Skype were getting free rides, because they could flood the Internet with data, slowing down everyone else’s traffic in the process. (And they did: Netflix and YouTube alone account for as much as 50% of all peak fixed network data in North America.) Under the new regulations, ISPs would be able to charge the data hogs more to cover the cost of investing in their networks to accelerate all that extra video traffic.

Which situation sounds more fair to you? To me, there’s no doubt that it will be better for everyone if the net neutrality rules are tossed out, the FCC stays out of the way and ISPs are allowed to charge the true cost of carrying streaming video. The regulators could always cap rates to prevent any gouging. With the extra cash, ISPs could then upgrade their networks so that everyone gets better streaming video service. Yes, that means Netflix will have to pay more in network fees, so my monthly bill for watching House of Cards will likely go up. But, hey—if my shows stop stalling right in the middle of the exciting bits, I’ll consider it money well spent.

24 comments on “Goodbye to net neutrality—and good riddance

  1. If Netflix has been slowing down, you’re probably on Rogers. Your viewing experience is being degraded purposefully by Rogers, and yet you applaud the court ruling that ALLOWS them to do what they’re already doing. Out of the frying pan and into the fire.

    And if you believe that Netflix does not pay for its internet traffic, you are only considering the “last mile” that the ISP connection provides. Since you seem to lack the understanding of how the backbone of the internet works, you hardly seem competent enough to voice an intelligent opinion.

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    • You fail to realize this writer is probably being paid to spread this misinformation. People in the know realize the FCC is the main tool these corporations “use” to increase profits in the U.S. They only get to do so periodically but if anyone believes prices will go down, access will be ‘more fair’ or that ISP’s will invest in upgrades in your area I have a bridge for sale.

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  2. I don’t think I understand this post.

    The landline telephone networks – which were, for decades, by far the largest and most successful world-spanning information-transmission network the world had ever known – have since very early days operated under “common carrier” status – that is, telephone-network neutrality. They can’t discriminate on the type of communications – business vs personal vs fax (and this was very controversial when fax and other data communications started becoming common) – but they certainly can and did charge lots of money to “network hogs” – those who used large amounts of their network time, particularly the once-rare and valuable international links, used to pay through the nose; those who tied up long-distance lines during the peak period of business hours, when the network was nearly at capacity, used to charge much more.

    Network neutrality has nothing to do with network hogs. Under neutrality regulations, ISPs and carriers of all kinds would retain the ability to use metered billing, or even to do things like throttle a users connection once they start using too much; all that network neutrality means is that they’d have to do that *neutrally*, regardless of the _type_ or _source_ of traffic. They couldn’t charge more to get the same number of bytes from (say) one political party’s website than another, or intentionally throttle access to only their competitor’s websites.

    That sort of content-neutral rule has served the telephone network extremely well for decades; after having read your post, I still have no idea why it’s supposed to be a catastrophe for the internet or broadband consumers.

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  3. You’re going to love it when you’re paying for Google searches, paying to get your email and paying for netflix ontop of paying for netflix.

    Obviously you haven’t a clue.

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  4. This is such a terrible opinion – like KC already mentioned, the problem is throttling by the major companies. Canadian ISPs should be investing in projects like the Google Fiber Cables instead of trying to charge more for data they are already making massive profits off of.

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  5. Do you even understand the concept of net neutrality? It doesn’t sound like it. Do more research before you write an opinion piece. Never reading nonsense written by you ever again. What an asinine article.

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  6. Disagree!!
    This guy hasn’t a clue as to the real issues.

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  7. Hmm! You must be employed by one of the data companies that stand make more money from the decision. The Cable and data companies do not make as much from users that goto Netflix or Youtube rather than pay for content packages to get the1 or 2 channels that the users actually want. Why is it that we have to pay for 60 or 100+ channels for the 10 we want?

    Just because the data companies cut speed on certain types packets to serve their own interests, and not their customers, is not a reason to reward their greed.

    The real question that should be asked here; how much money did the lobbyists spend to get this political decision?

    You might want to do a bit more research in this matter.

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  8. This article is complete nonsense. So Netflix pays and roger streams for free.

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  9. What’s going to happen is the ISPs are going to artificially keep bandwidth speeds slow to force Netflix and YouTube to pay up. Now they have no incentives to improve their infrastructure, they’re going to hold the bandwidth for ransom.

    I think the solution would be for the government to standardize a fee that ISPs can charge the high traffic generators that would be used to improve overall bandwidth and keep the net neutral. We can’t leave it up to the ISPs to determine and control this.

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  10. I can only assume that you work for Rogers! Not only this is a bad article but also a lame argument!

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  11. So it’s better that we remove “net neutrality”. Are you insane! It’s the only barrier we have to stop Cable/Satellite companies from protecting their antiquated television services by raising their “competitors pricing. Their competition is the Internet. It’s also their cash-cow. Removing Net Neutrality allows them to double their income. It will allow them to “legally” increase costs for Internet usage (Ka-ching!). Thereby raising the cost of being a Netflix customer. Making traditional cable services more “appealing” without reducing it’s prices. Wish I could increase my competitor’s prices and in the process “pocket the increase”.

    Next time disclaim that Canadian Business is owned and operated by Rogers Canada’s largest Cable Communications and Internet Service Provider before you write drivel and propaganda under the falsehood of “journalism”.

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  12. Duncan, you have no idea what you’re talking about. If you want internet to be like tv or radio, the law should change and have ISPs be common carriers. Do some research before writing or if you’re getting bought off to write this garbage, don’t be so obvious.

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  13. Duncan, thank you for putting the ridiculousness of your argument in one sentence so that it may be quoted more easily:

    “If adopted, the new rules would ban large broadband firms like Verizon and Comcast from purposefully slowing down or discriminating against different types of data, but they would allow content providers to pay extra to access a virtual Internet fast lane.”

    Please explain how speeding up those who pay is different from slowing down those who do not.

    Thank you.

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    • Ah, thank you. I pointed out the exact same thing in my comment.

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  14. Sorry Duncan, I have to agree with everyone else here. I’m going to pick on something no one else has pointed out, though there are quite a few things. Well, let’s run through a couple of them.

    1) Is your Apple TV connected via wireless connection at home? If so, 99% chance your netflix lag is caused by the fact that your router isn’t good/strong enough and you have tons of neighbours who have wireless as well – they’ll interfere with each other from time to time especially if you’re using the same wireless channel. Connect via ethernet then try again :) If it still lags, get a better internet connection.

    2) Why should streaming traffic get prioritized? Why not VOIP traffic (to be honest, I think it already may)? Does someone trying to make a 911 call on their VOIP phone deserve lesser service than you watching Spacey on Netflix? Why is streaming more important than a kid trying to research for his school project? Who decides what’s most important for the internet?

    3) You say “If adopted, the new rules would ban large broadband firms like Verizon and Comcast from purposefully slowing down or discriminating against different types of data, but they would allow content providers to pay extra to access a virtual Internet fast lane.” …. right…. so…. they can’t purposely slow down data based on type(s), but they can purposely speed up data based on type(s). Umm… isn’t that one and the same?

    There are other things I could pick on, but generally, you show a lack of understanding of the subject and are only propagating ignorance – “just give me my netflix and eff everything else”. Not cool.

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  15. Full disclosure I work for a major Canadian telecommunications company and have previously worked for smaller regional ISPs
    As the previous commenters have mentioned that it’s the so called last mile that’s to blame for lagging on streaming most of the time. They don’t have the bandwith to get the traffic from their big backbone pipes to the various nodes and central offices to your house because growth in demand is far outpacing the growth in network capacity.

    The telephone network is designed and legally required to support over 99% of their users demand for service at any given time. Meaning if 99% of their customers made calls at the same time they could all talk to their hearts content. No such rule in the Internet game. A provider can sell way above their capacity and because they quote their speeds as up to… There is not a lot a consumer can do but switch to another provider who may have done the same thing.

    So ISPs throttle traffic for “heavy users” such as netflix even though your usage rules don’t say they include 200 Gb of data from x source and 100 from y they just say 300.

    As for Google /YouTube and Netflix thinking this would be great of course they don’t and shouldn’t they already pay for every bite of data they send out to the Internet.

    Net-neutrality is the exact same way the phone networks were designed to operate. If you recall when me long distance networks and providers were launched deregulation required incumbents to allow long distance calls to originate on the providers local exchange then routed through their long distance carriers network to its final destination. There is nothing like this on the Internet from a consumer prospective and there are not many choices in ISPs since there are only 2 incumbents in most areas and most of the others are resellers of those incumbents.
    This is not a simple issue but ultimately data is data it’s so much more efficient to require companies to match their capacity to their customers demands.

    This isn’t that different than going to a restaurant and ordering your meal only for the chef to come out of the kitchen and say sorry everyone we are very short staffed and low on food so we will be auctioning off the fastest service and largest portions unfortunately one table won’t be receiving their meal tonight but is welcome to come back tomorrow for breakfast and try their luck again.

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  16. The other componenant that saves ISPs money is something called local caching. The ISP recognitizes that certain sites, files and individual sites are very popular today so they create a cache of the website content or page and only need to download the content a few times. This means when you download that file or view a viral video your ISP redirects the request to that internal file. This is very common when a new iOS comes out for example. The upshot is a faster download for you and less data they need to pay to download form their backbone pipes.

    Companies like Google and Netflix actually participate in the operation of these servers because it saves them money on bandwidth too.
    The time however has come that the capacity of the major broadband companies in Canada and elsewhere have failed to build their own networks to support their business needs all the while convincing consumers that they are the fastest most reliable and so on. Their comercial portray people doing all sorts of high demand things simultaneously yet they (Rogers) have a shill employee who clearly didn’t understand how the Internet actually works wire some propaganda. Not that Rogers is by any means alone on the propaganda front but they do own this magazine.

    Be honest with your consumers and say our network isn’t big enough to support our customers and commit to building up the deficiencies to meet demand. Don’t say one thing in your advertising and another in your magazine. Even the weight loss companies state results not typical in bold letters across the screen when they show the before and after pictures.

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  17. I’d like to know how an article can get the subject matter so wrong. Either Canadian Business is trying to sell the reader a bill of goods or somebody in the editorial room is asleep.

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  18. this articles was copied from “Journalism for dummies” .

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  19. I used to think that Net Neutrality was bad. Then I did some research. Our delivery of the “last mile” is the problem. This country needs to build a better network.

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  20. You seriously do not understand the implications of removing the net neutrality.

    It will stifle innovation, reduce choice and increase consumer costs through an increased entry costs for many businesses. Slippery slope mechanic from there. A start–up can not afford the bandwidth Netflix can even with a superior product. You are thereby willfully creating oligopolies and monopolies.

    You seem to possess a very narrow view and do not understand basic business and economics.

    Since you are familiar with blogs, as an author, how popular do you think blogs would have been if net neutrality never existed and you had to pay extra views? Now compare your individual ability to pay for those views to a business with $500,000 in sales. How about 5 million? Or 250m?

    I am sorry your entitlement pisses you off but I have watched Netflix without a single problem for the last 3 years. On rogers no less. Perhaps you should look to your set up or to your ISp having issues. You should most definitely not spread your personal biases as fact, especially when they fly in the face of business and economics history from industrial revolution onwards.

    Your blog – a perfect example. If it cost $2 per 100 views, you think you would have a

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  21. Duncan, I’m not sure you’ve thought this through all the way.

    Big Data and BI are starting to transform business (SMEs in particular). And this trend is set to really excelerate as more SaaS providers come online.

    These SaaS providers transfer massive volumes of data everday. So what will happen when the ISPs start to throttle their data transfers or charge these companies “business data rates”? I expect that SMEs will be left in the dust as prices rise and Big Data becomes an “enterprise only” technology.

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  22. Unbelievable, I cannot believe the lack of knowledge and understanding Mr. Hood demonstrates here. It’s even more telling when there is not a single comment that agrees with or can at least provide some supporting evidence for this awful piece. Back to the drawing board Mr. Hood, perhaps you can try doing some research instead of writing a knee-jerk response to your clearly traumatic experience with streaming Netflix.

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