Doing the Big Thing

With Time Warner Cable does the right thing, David Isenberg breaks ranks with fellow net neutrality advocates by lauding Time Warner Cable’s “plan to charge more when you send or receive more Internet data”. David explains,

  If the problem is, indeed, congestion, or the related problem that a few “bandwidth hogs” are using more than their share of the network’s capacity, tiered pricing is a simple, straightforward solution.

In this statement David not far off Adam Thierer at The Progress & Freedom Foundation Blog, in his post Broadband metering experiment in the works in Texas.

They’re coming from different angles, but I see light in their converging tunnels.

David:

  If you must manage congestion, then doing it explicitly is, at very least, honest. It is better than doing it (a) covertly or (b) indirectly, by injecting artificial interrupts and (c) denying you’re doing it — like Comcast currently does...

  Let’s remember that getting an offer like this right is an iterative process. We should help TWC, not kill them. As long as they don’t discriminate on the basis of specific applications or devices or app providers, and provided they don’t charge grossly unfair amounts for video levels of traffic usage, and provided they continue to upgrade their network as technology improves, what they’re doing is a good thing.

Adam:

  I already can hear Mike at TechDirt pounding away at his keyboard to post his next “bandwidth scarcity myth” essay! But even if he is right that current pipes aren’t as constrained as some fear, I don’t see why it would hurt to allow metering experiments to play out in the marketplace.

  Then again, if Mike is wrong, and we see more of a capacity crunch in coming months and years because of growing traffic burdens, then metering might offer a constructive solution. Mike is always talking about the need for companies to consider innovative new business models to complex marketplace challenges. I think metering certainly counts as one. Of course, ongoing network upgrades and expansion is also part of the answer, as Mike and others suggest. But I don’t think it’s the only part of the answer. Network expansion requires significant ongoing investment and a steady revenue stream to pay for it. So where is that money going to come from? Is it written in stone that the we have some sort of God-given right to flat rate pricing forever more? More importantly, is flat-rate really the fairest way to price access for light users? I appreciate all the old grannies out there who are essentially cross-subsidizing my bandwidth usage every time I download massive HD movies on my Xbox 360, but is that really fair to them?

The key phrase is “steady revenue stream”. Should that come only from usage? And the “triple play” of TV, internet and telephone service? True, that’s all the mainstream knows or cares about today, but how much is their knowledge blindered by limited offerings from the carriers?

I’m lucky to have Verizon’s FiOS (fiber to the home) service here, but I’d probably pay more than I’m already paying if Verizon allowed me to scale back the massive bandwidth allocated to live television (all of which I’m not watching, nearly all the time), and scale up my business here at home. But right now the pricing for home business service is prohibitively high, and not based on any obvious costs I can see. What does it cost to provide a few IP addresses? Or to provide symmetrical bandwidth? Or to unblock Port 80 so I can run a server? Hey, I’d be glad to pay based on bit traffic, whether it’s metered or not, provided I have the opportunity to run a server at all. Verizon’s (and every carrier’s) high prices for business use is an ancient telco habit that continues to prevent more business than it allows. I’d like to see Adam and other (commendably) pro-business bloggers step up and challenge their friends at the telcos and cablecos to think more creatively about what they can do to help business happen where the big bandwidth is actually there to deploy.

My own fave suggestion is for the carriers to take advantage of their existing real estate to provide offsite storage and web services that either compete with or complement Amazon’s EC2 and S3. I wrote about that almost a year ago. But maybe now the time is a bit more right.

Scarcity may or may not be a myth, but abundance is both inevitable and highly leveragable.

So the carriers face a fundamental choice. They can contribute to a tide that lifts all boats, including their own — and get all kinds of both incumbent and first-mover advantages from that. Or they can continue to play the same scarcity games that they’ve been playing for decades, and find themselves drowning in the oceans others will create instead.

There are ways to move from the latter to the former, I believe. But I also believe the former has a future that goes a lot farther than the latter.

10 comments

  1. Dennis Howlett’s avatar

    Those prices are in nose bleed territory. Pay per drink is the way to go and it’s fair on everyone.

  2. Mario Olckers’s avatar

    That sounds about fair; pay for what you use
    have a flat rate per MB or GB and if you’re the heavy downloader; you pay for every streaming HD download and every one is happy

    where the problem comes in is the heavy streamers clogging up the pipes and slowing the whole network down and everyone suffers; that’s neither nice nor fair
    there’s gonna still be lots of politics about this still…

    when bandwidth becomes like electricity or radio is still way off; until then the big guys who owns the infrastructure or gateways thereto will open or close the valves of the pipes in a way that secures the optimal revenue stream for them alone; that’s just how the world works

  3. Jim Spencer’s avatar

    Home and small business Internet service needs are often relatively similar. Yet, the small business sees a huge price increase compared to home pricing due simply to the business address.

    Lower prices will result in greater adoption in this market.

    There remains an untapped hidden market in borrowed wifi signals. Most folks would rather have their own service and the reliability that is assumed to come with it. Lower prices and earn this business.

    Maybe Congress should… Oh never mind. ;)

  4. Mike Warot’s avatar

    I’m thinking you might have changed my mind on this… I’d be willing to pay a reasonable amount/byte if the base price were lowered as a result, or there was a reasonable threshold to keep below.

    I don’t think Flickr would exist if we could all just open up a server on port 80 and share our photos, for example. Same goes for YouTube.

    I’ve got 120+ Gb of stuff, and I would really like to be able to get at it all from anywhere, and to truely share it with friends and family. The current “home” access packages are all engineered to prevent this.

  5. Doc Searls’s avatar

    Speaking of heavy downloaders, I’ve got hundreds of channels being poured into my set-top box, at up to 6Mb/sec, by Verizon over fiber to my home. With the exception of the only channel I’m watching at any given time, this is a waste of a perfectly huge pipe.

    It also speaks of huge opportunity for something/anything else, provided Verizon wants to take advantage of it. And to let its customers take advantage of it.

    While charging for use is a legitimate subject, it’s also a red herring next to the challenge of abundance.

    “How to pay for it” needs to be re-framed in terms of all the businesses abundance makes possible, and how the carriers can make that happen.

    This is old hat for everybody in the retail and real estate building business. But it’s new hat for the carriers. Still, they need to wear it.

  6. Net Neutrality Links 01-20-2008’s avatar

    [...] Doing the Big Thing By Doc Searls With Time Warner Cable does the right thing, David Isenberg breaks ranks with fellow net neutrality advocates by lauding Time Warner Cable’s “plan to charge more when you send or receive more Internet data”. David explains, … Tags:consumers choice democracy dying denial of service freedom threatened net neutralityRelated StoriesNet Neutrality Symposium January 26, 2008Net Neutrality Links 01-06-2008Net Neutrality Links 01-13-2008Net Neutrality Links 11-24-2007Work Boxers Widget [...]

  7. fp’s avatar

    Not sure why you think David has “broken ranks.” I suppose some think tiered or usage based pricing unfair, but “net neutrality” is a big tent. We want an open network with the most throughput possible at the highest speed possible. We want to be able to connect every network to every network, every device to every other device. We want high speed, high capacity networking at the lowest cost possible, but we want a network with a sustainable operating model, a network that is able to grow to meet future needs as well as to be operated day by day with adequate maintenance to assure that the high speed, high capacity doesn’t waver as demand grows. Someone has to pay. Somehow.

    I prefer a national and state regulated model that assures users of fair and universal access and best performance, a model that holds shareholders accountable for any failure to meet mandatory service levels, sort of a return to public utility regulation. But I’m not knocking a pricing model that charges based on use, as long as it’s fair. Of course I’m stuck here with a DSL connnection that the telco has pawned off on me as “high speed,” and for which I pay an incredibly high price. No cable down my rustic road and definitely no fiber to these 19th century homes spread out a mile or so apart. Maybe someday we can resolve that.

  8. Doc Searls’s avatar

    Frank, I think I was wrong to say “broken ranks”. If I had written it in less haste I would have said “In a surprising move…” or something like that. I’m never sure in these cases whether I should go back and make a correction, or let it stand and work it out in the comments.

  9. Wes Felter’s avatar

    Doc, FIOS TV is carried over essentially a separate network, and it’s simpler and probably cheaper for them to send every channel to everyone.

  10. Doc Searls’s avatar

    Agreed, Wes. But the fact that FiOS is architected primarily to provide cable TV over fiber is no excuse for ignoring all the opportunities that it would be wise to explore, especially as the cable TV model becomes more and more obsolete every minute.

    Not that you’re disagreeing. I just needed to say that. :-)

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