FCC Gets Hands Slapped

[waterboy]

Yeah, we all obey the speed limits too. No, I'm talking about a fundamental shift in the way business is done and why no one thinks the infrastructure supporting it, owned and paid for by the people, should be subject to taxes. The resulting impact on bricks and mortar business and the communities they support is real.

[Gaspar]

Nothing is free and when one door closes another opens. Since more sales are being made online without taxes being collected, I am in reality paying less taxes. Everyone who buys online is. That's great for some, a loss for others. But think about this. Should I decide to buy a magazine at the book store, I pay a tax on it. Yet, when I obtain that same text through the magazine's website, I do not. The price at the local bookstore also includes the city property taxes, license fees, etc. that goes towards improving streets, protecting the public etc. The website does not. They make their money from advertising I suppose. Isn't that patently unfair to the bricks and mortar store who committed to my community?  Aren't they sucking the life out of my community by avoiding the traditional costs of doing business?

So, why is this form of retailing being pleasured with no taxes? Markets change and the way we do business changes but death and taxes are always the cost of life. Why do you want these giant companies to monopolize AND get a free ride?

[Conan71]

Here's where I can see the company line on this by the AT&T's with an over-simplification analogy:

Let's say you've got a good sized farm, you raise produce, livestock, and even have some hybrid products no one else produces.  You spend your own money to build some roads to get your products to market.  You pay your neighbors for right-of-way when you cross their land, you pay local, state, and federal governments when you cross their land.  You even pay maintenance fees or on-going access fees to others.  You have a large investment in your road and you spend money keeping it maintained and upgraded as needed.  You pay the government taxes on your profits, enterprise fees, franchise fees, property taxes, etc.

Now the government steps in and wants to tell you which products you can and cannot ship on the roads that you built and paid for.  They also want to tell you whose products you can or cannot promote more favorably on the shelves to the consumer, and they want to further tax your product and your customers.

That's where it gets a little kinky for Libertarian in me.  Far as I know, fiber optic networks were paid for and installed mostly by companies like Williams & AT&T, not the federal government.  It's not like a publicly-funded interstate highway infrastructure.

I'm going to defer to the people who actually work around this area as far as what the ultimate good or bad ramifications are about the FCC action and the court ruling.  Just illustrating the logic behind the skepticism on this.

[sgrizzle]

The problem with your analogy is that if you have DSL at home, AT&T doesn't connect you straight to youtube, you got through multiple companies who have always sold on the size of the pipe, and allowed any content. If say, sprint decides they don't like youtube traffic anymore then your AT&T connection, your COX connection, whatever it is, may not work anymore because sprint owns some key pieces of the internet infrastructure.

The protections being sought aren't just about your home ISP, but also the backbone of the internet as a whole. The problem with Conan's analogy is that with a few key telecom's controlling this backbone, THEY are the "big brother" role who want to filter, and basically extort, more money which hurts smaller businesses and individuals. Imagine if the city said that the only pizza delivery trucks allowed on the roads were those that paid them (in addition to their already existing taxes) $20,000 per year? All the small stores would quit delivering and the big chains would gain more market share. Sure, maybe someday someone could build a whole new set of roads and let small pizza companies drive on them, but that's extremely unlikely to ever happen.

[we vs us]

It shares some similarity with the national rail system.  It was built by a patchwork of private concerns, and traffic has to share the load.  This is one reason why Amtrak has had problems in the past being efficient on long hauls . . . they don't have precedence on private tracks and have to either shuttle to the side or wait outside of major switching junctions to let private haulers go through. 

The problem with this sort of system is that privately-owned and operated infrastructure -- without regulation --  makes further development inefficient because each ownership interest can determine their own profit margin.  It makes costs for people using the system unpredictable and possibly prohibitive. 

[YoungTulsan]

Wow,

I work in a related industry, and I have to tell you that your understanding of this issue is WAY off base and this is a very bad, very anti-competitive (anti-capitalistic) ruling.

Let's say an Internet provider, let's say AT&T, doesn't like you using Vonage for phone service. Done, Vonage can't be used on AT&T's network. You would have to buy phone service from AT&T. Let's say they sign an exclusive deal with Bing to provide search on their network. Boom, Google and Yahoo are gone.

I think we're damned if we do and damned if we don't.   AT&T restricting what sites you can go to, or giving the Feds regulatory rule over the internet.  I fear the latter more because it opens the door to banning free speech on the internet.  AT&T is a business, and if you don't like their business practices, you can take your money elsewhere.

[sgrizzle]

I think we're damned if we do and damned if we don't.   AT&T restricting what sites you can go to, or giving the Feds regulatory rule over the internet.  I fear the latter more because it opens the door to banning free speech on the internet.  AT&T is a business, and if you don't like their business practices, you can take your money elsewhere.

As I said before.. you can't. It is very possible that cox's cable network passes through AT&T fiber at some point so if AT&T cuts off vonage you are just up a creek. That's it.

[YoungTulsan]

As I said before.. you can't. It is very possible that cox's cable network passes through AT&T fiber at some point so if AT&T cuts off vonage you are just up a creek. That's it.

Are there examples of this happening?

[godboko71]

Are there examples of this happening?

Have you ever had an issue getting to a website knowing it isn't down? If you have, then you have most likely contacted the website or your ISP for support, either one you call will have you run a trace rout (unless your ISP blocks such network commands then they will run it for you.) The reason they have you run this command is to find out where its dieing for you. Right not this normally happens by accident when a line gets cut or a router gets changed.

In the future any pipelines you ISP goes through could effect which sites you have access to and which ones you have to pay extra to get to. What really sucks about this is these companies are already charging users for bandwidth through cable or DSL bill, and the websites already have to pay for there bandwidth trough there hosting/co-location/rack fees.

It is one thing as a site builder if I opt to pay extra to have servers housed within your network to let my users on your network to have extra speed, it is another all together to ban my site so you can charge even more to consumers.

Though this is a case where we are damned if we do and damned if we don't. If we don't regulate, ISP's will start double and triple charging at both ends to keep stock holders happy and an ever increasing cost to consumers. That will in time spur so called "spider" and other cheap/fast to implement and expand networks, though the operators of these networks will have to pay high premiums to the backbone providers, and in some areas where there is only one pipe line some users may still have all the restrictions. Another downside to this in the short to mid term is the speed and reliability of these networks.

If we do regulate, the ISP's will find other ways to raise our bills, and the government will add to this burden over time by forcing fees to have the capitol to enforce any new regulations. On the plus side, it should limit the ISP's from stifling innovation on the internet, though it may limit some innovation in the distribution of internet.

[godboko71]

Want to add a disclaimer, most ISP's will use filters on there direct residential/business clients and not there wholesale threw traffic. At least not at first.

[nathanm]

Are there examples of this happening?

Sure, several long distance companies decided they'd quit passing calls to certain numbers in Iowa.

The lack of competition in ISPs is particularly annoying when big ISPs get in peering fights and decide to sever links with each other. The big guys don't pay for transit, they just peer with other ISPs to pass traffic directly between each other's network, so if they disconnect from each other, there's no "routing around the damage" for customers of the two networks.

This has happened semi-regularly over the past few years.

[sgrizzle]

Are there examples of this happening?

At the moment it is conjecture as the big telco's have been investigating "internet prioritization and filtering" as another way of making money off the pipes they already charge people to use. They've been testing the waters to see if the feds will block them.

I apologize in advance for this... but this is one of the promo videos for net neutrality.
[youtube]http://www.youtube.com/watch?v=8VrCCpaEoxI[/youtube]

[YoungTulsan]

At the moment it is conjecture as the big telco's have been investigating "internet prioritization and filtering" as another way of making money off the pipes they already charge people to use. They've been testing the waters to see if the feds will block them.

Would it be in their interests to screw their customers though?  Internet users can get pretty angry over stuff like that.  What if, instead, they wound up charging fees on those things rather than shut them down to "make money off the pipes" as you suggest?  Or was that outlawed when they deregulated telecoms in 1996?

[nathanm]

Would it be in their interests to screw their customers though?

Several companies already do screw their customers with impunity. Cox was blocking BitTorrent in some markets for a while. They return fake DNS results to redirect you to their "search page" if you mistype a domain. There's supposed to be an opt-out, but it doesn't work.

Both at&t and Cox block a bunch of ports besides, because they presume to know better than the customer what they should be doing with their computer. The point being, that even in our local market, the two biggest ISPs started down that road long ago.

[YoungTulsan]

Bunch of coxblockers.