Net neutrality and TANSTAAFL

First up is the complaint about having to pay for service: 200GB to 25GB: Canada gets first, bitter dose of metered Internet. “Metered Internet usage (also called “Usage-Based Billing”) is coming to Canada, and it’s going to cost Internet users.” — wow! this is just like electrical power and other utilities!

While an advance guard of Canadians are expressing creative outrage at the prospect of having to pay inflated prices for Internet use charged by the gigabyte, the consequences probably haven’t set in for most consumers. Now, however, independent Canadian ISPs are publishing their revised data plans, and they aren’t pretty.

Note the “inflated prices”! Of course, the complainers denigrate the supposed reasons for the change in pricing.

“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.”

Another view of this is in the report Cash, please! A Nordic change of heart on net neutrality.

“The regime for distribution of data content is free for the sender, and this must be changed,” said Telenor’s CTO. “For the content providers it means that they will have to pay to make content available online, regardless of how much they send.”

Sites that pay up will get quality of service guarantees; everyone else goes into the “best effort” pool.

The real issue behind all of this is a fear:

the common concern with most of these pay-to-play arrangements: they tend to favor an ISP’s own services. “When Telenor both controls your Internet connection as well as the music streaming service Wimp, it’s clear that we need predictable guidelines that grant everyone, also competitors such as Spotify, the same access and quality,” said Nortvedt.

The philosophy and desire is a bit different:

“the quality of the content must not be affected by the Internet service provider’s agreements, preferences, financial interests or other concerns.” As for investing in new capacity, it “must be met with further development of capacity, not by traffic management.”

What is happening is that video content is starting to take hold as a predominant source of I’net traffic. That creates two problems. One of those is that video needs a much larger volume than text or voice or static media. The other is that it needs steady high volume flow at close to full pipe rates. That is why video, such as YouTube or Netflix present a problem for traffic carriers. They are an entirely new problem that the networks were not designed to handle.

One way to handle the new traffic needs is with traffic management. This is a software change that can be done with less investment and less infrastructure disruption. It is also the source of the fear as the cynicism of the era does not trust those evil corporations to function in the interests of the end consumer. With traffic management, the services can favor their own offerings and partners and squeeze out the competition. The market has shown repeatedly (e.g. the Comcast vs Netflix tussle) that the fear is misplaced but reality often takes a back seat to emotion.

Another way to handle the new traffic needs is to upgrade the infrastructure. The consideration here is that video puts ‘orders of magnitude’ pressure increase on things. That means the upgrade needs to be on that order as well and that means massive capital investment. The traffic providers are indeed upgrading but the demand has stepped up faster than their infrastructure and that creates dissonance between demand and supply.

The change in demand is shown in the first article talking about 25GB and 200GB thresholds. The cell phone services start at a few tenths of a GB for text, mail, and basic browsing needs. The new smart phones can bring the need up to the 3 to 5 GB/month range which is about where most ‘normal’ I’net activity fits. Video is another story as an hour of video needs almost 1 GB of download. A movie every night could mean a demand for 100 GB/month. In that light, the Canadian telecom price tiers make sense. 25 GB will cover traditional usage with plenty of headroom. 200GB will cover those who use the I’net as a replacement for Cable or Satellite TV.

From these considerations, it appears that a lot of the net neutrality rhetoric is about wanting the common folk who use the I’net for email and browsing and an occasional video to subsidize those who use the I’net as a daily video resource and replacement for other video services. As with many top down, socialistic oriented desires, this basic subsidy issue is not confronted honestly and instead you see the fear mongering about evil corporations stealing service or whatnot. As Heinlein made famous, TANSTAAFL – there ain’t no such thing as a free lunch! Those pushing net neutrality want a free lunch anyway even if you have to pay for it for them.

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