Posted by Cameron @ 9:40 pm on January 26th 2009

Net Neutrality, Part I (The Post Office)

This post has been in limbo for quite a while now.  It began as a response to a short little remark I made in November, the gist of which was that I am opposed to network neutrality because of free enterprise and free speech. I’ve decided to break it up into three or four individual posts, all dealing with a specific facet of my opposition to net neutrality. We being with stifled innovation. Look forward to upcoming ones on free enterprise, and free speech/government regulation.

I think we should first start with a short lesson on the concept of net neutrality. The basic concept of net neutrality is one of data transportation equality. That is, your data should not be treated differently from Microsoft’s as it travels through various servers owned by various ISPs. This concept does not cover speed of data access to the end user as much as data preference protocols within the ISP’s servers. An easy way to conceptualize this is to think in terms of latency. Latency is different from throughput. Throughput is the ‘speed’ of the internet when downloading a single file. Latency is the lag in contact time between two computers as they negotiate sending data. As that negotiation occurs, the various computers trying to contact each other must be sorted by the server doing the negotiation. Under a network neutral system there can be no differentiation in the priority with which these packets of data can be processed. It’s a first-come, first-served system. This ensures equal access among all participating parties. Your email to your friend with wedding photos tomorrow has the same priority as the teleconferencing neurosurgeon and the same priority as the miraculous penis enlargement system you were alerted to this morning.

Let’s look at a post office as an analogy. As you arrive, you are directed to stand in line in a first come, first served basis. This line does not discriminate in importance. The busy CEO must wait behind the grandmother based only on who stepped through the door first. This is economically inefficient. It would be ideal if the system were able to discriminate based on need. However, such a system exists as soon as the CEO reaches the counter. The CEO is able to pay for highly expedited service for an additional (hefty) fee. They are able to ensure that their correspondence reaches the addressee faster than the grandmother who is simply sending a care package to grandchild at summer camp. The overnight letter has priority at each stage of it’s journey when compared the the care package. This increase in speed is associated with a fee. However, the existence premium services like overnight mail allow highly efficient transportation for those willing to pay. That willingness to pay is directly related to the need that the buyer has for the service. If there was no tiered service for mail transportation, there would be no way for the CEO to ensure faster delivery of critical correspondence. The letter holding up a billion dollar deal would be stuck behind the care package throughout the entire journey, and not just in line at the post office. That is net neutrality. By preventing tiers of service, we are all stuck behind the retired grandmother. Such a system has the appearance of fairness, but is actually unfair and horribly inefficient.

This inefficiency stifles innovation. By not permitting preferential treatment of those willing to pay, services that require priority are hindered. They are forced to wait in line behind spam, based simply on the fact that the spam was sent first. It is not hard to imagine a new internet technology or company springing up that requires incredibly expeditious data service. Even with a need to pay, such communication would be required to sit in line behind menial other data transactions. Net neutrality is essentially the same as one size-fits-all ground mail service. Had such a regime been in place as airplanes were developed, the development of airmail and other expeditious forms of communication would have been greatly hindered simply because there was no need to send all mail via airplanes. Since all mail did not need to go, none could. Forcing data transportation to abide by similar rules will likely stifle the development of similar technologies and services.

Expect my next installment, free enterprise, in a few days.

10 Comments »

  1. Problem is cable companies have what is essentially a government endorsed monopoly. Until I can start my own cable company and go door to door seeking cable customers in already serviced areas any claim of competitive environment are fantasy.

    In this situation the government should enforce net neutrality.

    Comment by daveg — 1/27/2009 @ 12:03 am

  2. You’ve got this all wrong. Your analogy breaks down from the very beginning because it isn’t like the post office at all, unless your hypothetical post office sends everything priority, overnight, ASAP, because that’s what the internet does. Killing net neutrality would privatize the post office so that instead of USPO you’ve got at couple (at most, maybe only 1) CoxP.O. and instead of everything being sent out immediately, now they demote your mail to a lower tier, jack up the price on the original service and sell it to those who can afford it. The only innovation it permits is for ISPs to wring profits from discriminatory packet filtering.

    Oh, and it isn’t just about sending packages out, it’s also incoming mail too. When you access a website, you send out very little; most of the information is incoming or mail being delivered to you. Eliminating net neutrality allows this new postoffice-like entities to give preference to particular clients so that, for example, your Wall Street Journal gets delivered on time but your New York Times arrives three days later. The WSJ paid for preferential access while the NYT didn’t.

    Sure, I suppose that’s innovation in the sense that there is a new system that didn’t exist before, but it sure isn’t any kind of progress. The ONLY people who benefit from this are the ISPs, but it gets really insidious when you realize that many ISPs are also content providers. These massive media companies are the chokepoint of access into people’s homes. Even without the example I gave of WSJ vs NYT, ISPs can give preferential treatment to the sites they own and slog down the sites of others. Imagine Sky internet subscribers getting blazing fast access to Foxnews.com but cnn.com taking 12 minutes to load. This is not a step forward in any sense.

    And all that being what it is, as soon as you have a discriminatory network it becuase much much harder for new uses of the network to emerge. Here is why I have to take your pro-innovation argument from you and serve it back in your face. In a net neutral world, everything from flash to flickr to youtube to gchat to rss to blogs to email to…just abotu everything the net is used for is possible. You come up with an application and the internet treats its transmissions equally. You kill net neutrality, you kill these applications. Non-neutral networks aren’t going to be open to everything except X, they’re going to be closed to everything except Y.

    Sorry, mate, but giving up net neutrality would kill the internet as we know it. There is absolutely nothing good of it. An anti-regulation attitude would serve you well here. Only keep in mind that regulation is regulation whether its enforced by governments or businesses. Net Neutrality is a policy of unregulated internet traffic which absolutely maximizes efficiency and innovation. Allowing anyone, governments or corporations, to impeded this is a bad, bad thing. There are anti-NN out there that portray their position as an anti-regulation position, but that’s just smoke and mirrors. They’re the ones that want to regulate it, and regulate it to their benefit only they will.

    Comment by Jerrod — 1/27/2009 @ 8:35 am

  3. Yeah, I’m a little unclear on how ending the “all data are created equal” premise of the internet, which has served it pretty damn well so far, spurs innovation in any practical sense and doesn’t just yoke it with a commercial business model not particularly suited to it (or even created for it).

    The flip side of your post office analogy is that, for the most part, what most users are going to see on their end is not pockets of quicker service, but great swaths of slower service. It would be like if the post office was running great, but you artificially hamstring non-premium consumers for the sake of hopefully creating more premium demand. Or, in a business model, it’s essentially trying to create an oligarchical monopoly on content. In free market terms, it’s an un-leveling of the playing field, where another factor is added into the competitive paradigm. As it is now, the best product usually wins. Without net neutrality, it becomes the best product with the best service that wins, the latter not necessarily having anything to do with the former. Right now the internet is about as pure a free market system as you can get. Abolishing net neutrality is essentially deciding to use government action to stick a thumb on the scale in favor of those with the deepest pockets and most political access.

    Ultimately, I’m of a “if it ain’t broke, don’t fix it” sort of mindset in regards to the internet, and am inherently suspicious of any attempts by government to yoke it into a model they’re more comfortable with. I can sort of see some perhaps marginal benefits of the sort you’re talking about, weighed against some pretty significant detriments and a galaxy of potential unintended consequences, but I’m of the mind that overwhelming need/benefit should be shown before we start monkeying with it, and the more you think about it, the harder it is to come up with any here.

    Comment by Brad — 1/27/2009 @ 6:56 pm

  4. Brad sort of heads towards one of my big concerns about prioritized packet routing, and that is the fact that it only becomes a valuable thing if the traffic is at a significant load level. Prioritized packet routing would be a disincentive to increasing the bandwidth of the backbones of the internet in order to handle loads. So when the internet gets slow, don’t add more bandwidth, just make more tiers and jack up the prices.

    Wasn’t there something said about being pro free-market not being the same as pro big-business? Because no one is going to profit from prioritized packet routing but big businesses, most of whom are already profiting off the same internet.
    If you’re ok with a few large companies having a stranglehold on the internet(even more so than already) well, we’ve got no ground to discuss from.
    I await your next post explaining how this is going to bring about internet progress.

    Comment by Mortexai — 1/27/2009 @ 10:51 pm

  5. To be fair, the big business is not the same as free market post was mine, and I’ve been lukewarmly for net neutrality (I think Rojas says he was entirely on the fence). And I hope Cameron does the next three parts; it’s helping me at least.

    Comment by Brad — 1/27/2009 @ 11:09 pm

  6. Be aware that I’m not just letting you guys hang here; when I get a free moment, I’ll address your thoughts and concerns. Life’s been busy the last few days.

    Comment by Cameron — 1/30/2009 @ 6:29 pm

  7. I’m sort of with daveg here. However, I’d say that, insofar as cable companies have been granted a government monopoly, the answer is not net neutrality, but an ending of the government monopoly. Then there’d be no need for government imposed net neutrality.

    As a general rule, I’d say that the answer to a government created problem is less government, not more.

    Comment by Redland Jack — 1/31/2009 @ 2:58 am

  8. What’s the government created problem?

    Comment by Jerrod — 1/31/2009 @ 8:45 am

  9. Cable monopoly, I assume. Typically the government has created monopolies for ‘natural’ monopoly businesses (e.g., railroads, phones, broadcast).

    I’m not sure, though, if this is true of cable either historically or currently. I’ll try to take a look at it today.

    Comment by Redland Jack — 1/31/2009 @ 5:08 pm

  10. Ah, I see what you’re talking about. I was thinking you were talking about internet functionality.

    In general, one would think that more competition would be an answer to the net neutrality worries but I’m not convinced. First there is no reason to assume that one ISP is going to continue to provide service unchanged; it’s more likely that all ISP would have tiered packages and competition over tier pricing would emerge.

    Additionally, even if you’re ISP didn’t discriminate traffic, the rest of the internet would be doing it and that would affect your access.

    And finally, using Region encoding as an example, bad ideas get spread among groups all the time. Maybe region encoding isn’t a relevant example but I’m going to complain about it anyway. It’s getting so bad that its in cyberspace now, and I can’t download from the US iTunes store or watch Hulu over here. I’ve run into downloading XBox content as well.

    Comment by Jerrod — 1/31/2009 @ 7:48 pm

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