How Industry Intends To Kill The 'Net As We Know It
Jeff Chester is executive director of the Center for Digital Democracy.
The Internet�s promise as a new medium -- where text, audio, video and
data can be freely exchanged -- is under attack by the corporations that
control the public�s access to the 'Net, as they see opportunities to
monitor and charge for the content people seek and send. The industry�s
vision is the online equivalent of seizing the taxpayer-owned airways, as
radio and television conglomerates did over the course of the 20th
century.
To achieve this, the cable industry, which sells Internet access to most
Americans, is pursuing multiple strategies to closely monitor and tightly
control subscribers and their use of the net. One element can be seen in
industry lobbying for new use-based pricing schemes, which has been
widely reported in trade press. Related to this is the industry�s new
public relations campaign, which seeks to introduce a new "menace" into
the pricing debate and boost their case, the so-called "bandwidth hog."
But beyond political and press circles are another equally important
development: new technologies being developed and embraced that can, in
practice, transform today's open Internet into a new industry-regulated
system that will prevent or discourage people from using the net for
file-sharing, internet radio and video, and peer-to-peer communications.
These are not merely the most popular cutting-edge applications used by
young people; they also are the tools for fundamental new ways of
conducting business and politics.
These goals and objectives are visible to anyone who cares to look at the
arcane world of telecommunications policy and planning, either in the
industry trade press or government documents. The bottom line is the
industry want to kill the Internet as we know it.
Take a minute and wade through this bit of arcana -- and ponder its
implications.
"The IP Service Control System from Ellacoya Networks gives the Broadband
Operator �Total Service Control� to closely monitor and tightly control
its subscribers, network and offerings." So reads the Web site of
Ellacoya.com, a relatively new firm, describing the business-to-business
service that it is selling to large Internet service providers.
Ellacoya is backed by Wall Street investment powerhouse, Goldman Sachs,
which sees a major opportunity to turn around the red ink-plagued
broadband sector. Continuing, the website explains, "Establishing Total
Service control enables operators to better manage traffic on the
network, [and] easily introduce a range of tiered and usage based service
plans... Talkative applications, especially peer-to-peer programs like
KaZaA and Morpheus, tend to fill all of the available bandwidth... The IP
Service Control System allows operators to identify, limit and report on
these aggressive applications."
The fundamental character of the Internet today is that it lacks
precisely these kinds of tolls, barriers and gatekeepers. But technology
like Ellacoya�s hardware and software is not just an enticing idea; it�s
more of a silver bullet for beleaguered telecom executives. It�s being
tested in industry trials and points to the kind of Internet the industry
would like to develop over the next few years. The way telecom
corporations get from today�s open-access Internet to their version of
the future starts by changing how people pay for the net.
Industry's New Business Plan Most people now pay a flat fee for online
access. But the big media companies offering Internet service; Comcast,
ATT, AOL -- would like to change that, and already have in a few test
locations.
The broadband industry�s plans to institute tiered pricing have been
widely reported in its trade press. There are numerous articles about
replacing today�s open 'Net environment with industry-self-described
versions of "walled gardens" or "Internet Lite." (See "Cable Operators
Seek to Corral Bandwidth Hogs", Cable Datacom News, 10/01/02) The central
feature of these proposals is much like telephone companies; there�s a
price plan for everyone.
To make the case to regulators that such pricing is fair and overdue,
cable operators have begun a PR effort, spinning that a small percent of
users account for a disproportionately large amount of bandwidth used on
broadband networks. They�ve created and embraced the pejorative term,
"bandwidth hog," to describe those -- such as music-obsessed college
students -- who find robust uses for high-speed connections. Already
major news sources, such as the BBC, and technology journalists are using
the term in their reports.
To deal with this "problem," the companies are considering a variety of
approaches to ensure they remain in full control of their bandwidth --
unless consumers can afford to pay the hefty access fees. Under a typical
plan, a user would be allotted a limited amount of bandwidth per month,
and would be charged extra fees for going over this amount. This approach
isn�t very different from the software industry, where the free versions
of an application are intended to frustrate and prompt people to buy the
�better� version.
Bandwidth caps have already been implemented in Canada by major Internet
service provider Sympatico, Inc., and observers have been quick to note
that the limit -- 5 GB per month -- would effectively restrict regular
use of emerging applications such as Internet radio, streaming media and
video-on-demand.
Consider this excerpt from an article about Sympatico�s bandwidth caps in
the May 6 edition of Toronto Globe and Mail by reporter Jack Kapica.
A classic conflict has arisen over streaming media, especially of radio.
In a recent letter to globetechnology.com, Andrew Cole, manager of media
relations for Bell Sympatico, defended the 5GB bit cap, saying that "In
my experience, Internet radio stations usually transmit at approximately
20 Kbps. This equates to 1.2MB per minute, or 72MB per hour. At this
rate, a HSE customer could enjoy 70 hours of Internet Radio per month and
remain within the bandwidth usage plan."
But a 20-Kbps stream is considered poor quality by many people who tune
into Internet-based radio stations for such things as classical music
concerts. For these people, audio quality streamed at 20 Kbps has been
described as "pathetic at best, somewhat akin to AM radio" by Tony
Petrilli of Level Platforms Inc. of Ottawa.
"Decent audio quality starts at 56 Kbps to 64 Kbps, and really gets
acceptable only around 100 Kbps," he said. This alone, continued Mr.
Petrilli, "will blow the cap, let alone any other form of surfing, such
as looking at movie trailers or even reading Web-based news. Heaven
forbid that someone listens to 90 minutes a day of quality Internet
radio. That way we'd blow the cap in 20 days.
When you consider the fact that the largest American telecommunications
firms are often part of the same mega-corporation with music, video or
movie-producing entertainment divisions -- such as AOL-Time Warner -- you
can see how an industry-regulated Internet would handily end music and
movie industry worries about Napster-like file swapping by people who
don�t want to pay industry-monopolized retail prices for content.
Thus, the strategic and technically feasible solutions embodied by
companies such as Ellacoya is obviously why Goldman-Sachs was keen to
invest in the firm -- as it offers the actual means to monetize the net
and turn around the revenue-poor broadband sector.
According to Ellacoya�s technical datasheet, operators can create "up to
51,000 unique policies that can be combined to generate limitless numbers
of subscriber policies." Such rules, they explain, can either permit,
deny, priority queues, address lock, rate limit or redirect access. The
same technology also poses new concerns over privacy, since Ellacoya's
technology "collects usage statistics for subscribers and applications,
capturing service events, session details, and byte counts.... Operators
can 'stamp' the subscribers identity on all records."
The Industry Spin The cable industry will argue that such ubiquitous
control systems and restrictive pricing structures are necessary to
resolve bandwidth backups. But the fact is, this cannot be the case,
because cable systems are constructed to avoid bandwidth shortages. But
don't take my word for it.
Mike LaJoie, vice president for advanced technology at AOL-Time Warner
told MultiChannel News, "The way that the HFC (hybrid fiber coaxial)
architecture works, we never run out of bandwidth," LaJoie said. "We can
always split or do other things that will give us the bandwidth that we
want, so it really ends up being a desire to provide the best and highest
experience for our customers." (See "HD on VOD Searches for Resolution",
Multichannel News, 09/30/02) What these statements make clear is that the
cable industry's goal for broadband is to monetize bandwidth. By charging
a toll for every bit, the industry can simultaneously extract great
profits from the new applications that it allows on its networks, as well
as restrict access to those that it finds problematic, i.e. those that
compete with its own content offerings. In short, the industry finally
sees a way to make money online.
Of course, these calculations are utterly self-serving, ignoring the fact
that the net was developed with tax dollars and has been an incubator for
an array of innovations that extend far beyond creating new profit
centers for big media companies. The envisioned control structures will
inhibit robust Internet use by early broadband adopters, and discourage
development of new high-speed applications such as Internet-based
telephone and video-on-demand, thus slowing overall broadband growth.
Worse, this business model will erect high economic and technical
barriers to entry for non-commercial and public interest uses of the
high-speed Internet, threatening civic discourse, artistic expression and
non-profit communications. In moving to implement this highly centralized
vision for broadband, the cable industry does not simply ignore the
democratic and competitive history of the Internet -- it is actively
hostile to it.
Consumption-based pricing and other restrictive access controls
contradict the spirit of openness and innovation that built the Internet
in the first place, and will do irreparable harm to its future as a
medium for small business initiatives, non-commercial users and
democratic discourse. New threats to privacy are also clear, given the
intrusive nature of the technology to closely monitor all online use. If
you think spam is bad now...
And Where Is The FCC? This new threat to online communications is a
direct consequence of recent Federal Communications Commission policies
by Chairman Michael Powell that permit cable companies to operate their
broadband platforms in a "discriminatory, non-open access" manner. This
legalese means the FCC, the historic guardian of the public interest in
the communications field, has abdicated its founding charge: to serve the
public interest before private interests.
In sum, the Internet as we now know it -- and its revolutionary promise
-- may soon pass into the history books. In the absence of public policy
safeguards, the emerging pricing and control structures will
fundamentally change the kinds of information -- and way it�s delivered
-- on the Internet. The ramifications extend far beyond the quarterly
reports and shareholder earnings for the nation�s telecommunications
corporations.
The consequences are cultural and will affect the pace and character of
progress in the early 21st century. If the communications companies
impose tolls, roadblocks and dead ends on the information �superhighway,�
they will be robbing public trust resources in much the same way 19th
century mining companies pilfered public lands and 20th century radio and
television networks privatized the public�s airwaves.
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