Network neutrality became policy after Comcast, Verizon, and ATT were all caught throttling Netflix while their own competing services were lagging behind in market share. It was a response to a real problem that was harming competitors and consumers.
I literally had this happen to me; it’s why I don’t use Verizon anymore. Youtube, too. There’s a technical breakdown somewhere of precisely how they did it (roughly speaking, “accidentally” underprovisioning the exact exits from their network that would lead to Netflix’s servers for no possible reason except to fuck with Netflix and degrade that service and only that service, which it accomplished very effectively.)
That’s a real problem for sure, but I’m not a fan of the solution.
They should have been found guilty of anticompetitive behaviour and split up into multiple companies.
Here in Australia we’ve gone down that path though there was no actual lawsuit. We just saw problems starting to creep in and dealt with it proactively. The vast majority of network infrastructure is now owned by a company called “NBN Co” (National Broadband Network) which is required to provide the best available network technology to every single household/business in the country. All pre-existing network operators were forced to sell their infrastructure to NBN Co and any business can provide services to anyone for a reasonable fee paid to NBN Co. Mostly it’s broadband internet, but literally anything can go over the pipes. The fee varies depending on the bandwidth and QoS level.
They are also investing in network upgrades, including state of the art DSL routers that can run at decent speeds for most people (I get about 80Mbps) and all new connections are Fibre as well as existing connections are gradually moving to Fibre (on those, you can usually get 10Gbps). Each building can have multiple connections, at least four but large buildings obviously get more. If you live in the middle of the desert with no wired networking at all, then you get a wireless one. Satellite if necessary, though usually it will be “fixed wireless” which is basically cellular with large/high quality a rooftop antenna.
NBN Co is tax payer funded, but mostly only to accelerate fibre installations. Aside from that upfront capital expenditure it is profitable and some of those profits are paying off the tax payer’s uprfront investment.
Net neutrality is just Common Carrier rules as applied to the Internet. It’s frankly a no-brainer.
Your proposal should definitely also have been done – allowing telecoms to also produce content at all is a massive conflict of interest and should never have been allowed in the first place – but it doesn’t obviate the need to also regulate the pure telecoms even after the breakup.
The thing is there are no pure telecoms anymore. There’s a company that maintains underground infrastructure and gets paid when that infrastructure is used, and is incentivised to upgrade the infrastructure because they make more money if it’s used more.
And there are thousand of companies that benefit from the infrastructure, and they can charge customers pretty much whatever they want… though it better not be an excessively high price because every ISP, even a tiny one with a single employee, can provide service nationwide at the same raw cost as a telco with tens of millions of customers.
The difference between what we have done, and net neutrality, is our system provides an open book profit motive to upgrade the network. Net Neutrality doesn’t do that.
Fundamentally there is a natural monopoly in that once every street in a suburb is connected, then why would anyone invest in digging up the footpath and gardens to run a second wired connection to every house? The original provider would have to provide awful service to justify that, and they can simply respond to a threat of a new network by improving service just enough (maybe only temporarily), for that new investor to run for the hills.
Net Neutrality stops blatant abuse. But it doesn’t encourage good behaviour. Our NBN does both.
The difference between what we have done, and net neutrality, is our system provides an open book profit motive to upgrade the network. Net Neutrality doesn’t do that.
Net Neutrality has nothing to do with network upgrades, it only relates to how traffic can be treated on the network. That’s it. If the network is insufficient, it needs to be upgraded, not reprioritized so preferred traffic is fast while everything else is slow.
I don’t know anything about NBN Co, so I’m going largely based on this Wikipedia article.
Financials:
Revenue - A$5.3 billion (2023)
Operating income - A$133 million (2023)
Net income - A$−1.1 billion (2023)
Total assets - A$37.94 billion (2023)
So they’re subsidizing by ~$1B/year, or ~20%.
There has been a significant failure of the NBN to deliver nominal performance to end users. There has been contention between RSPs and NBN on the reasons for this. Bill Morrow, then CEO of NBN, admitted in 2017 that 15% of end users received a poor service through the NBN and were ‘seriously dissatisfied’. In addition, Morrow indicated that, at July 2017, prices and performance for end users were suppressed through a ‘price war’ between RSPs.
So let’s look at prices, since surely they should be low if there’s a “price war”. Here are prices for the top ISP, Telstra (speeds in download/upload in mbps):
Basic (25/4) - A$85 - $56 USD
Essential (50/17) - A$100 - $66 USD
Premium (100/17) - A$100 (6mo promo)
Ultimate (250/22) - A$135 - $89 USD
Ultrafast (700/40) - A$170 - $112 USD
Here’s my local ISP which isn’t government owned, and all prices include all taxes:
20/10 - $40
50/25 - $55
100/50 - $70
250/125 - $100
1000/500 - $125
And we’re installing a municipal fiber network because we think that’s too high, and the new network will provide 10gbps. Larger cities near us have gigabit symmetrical for $70-ish. The only reason it’s relatively inexpensive is because the big cable companies actually have competition here. We have: DSL, cable, fiber backed Ethernet, and radio, and we’ll be installing a new fiber-to-the-home network.
So not only is NMN government subsidized, it’s also more expensive than our local service. And I’m not in some urban area, we have tens of thousands of residents, hardly a big city, and in one of the smallest states by population density in the country.
So no, I don’t think your model is working properly. I’ll take national Net Neutrality and push for local muni fiber.
Network neutrality became policy after Comcast, Verizon, and ATT were all caught throttling Netflix while their own competing services were lagging behind in market share. It was a response to a real problem that was harming competitors and consumers.
I literally had this happen to me; it’s why I don’t use Verizon anymore. Youtube, too. There’s a technical breakdown somewhere of precisely how they did it (roughly speaking, “accidentally” underprovisioning the exact exits from their network that would lead to Netflix’s servers for no possible reason except to fuck with Netflix and degrade that service and only that service, which it accomplished very effectively.)
That’s a real problem for sure, but I’m not a fan of the solution.
They should have been found guilty of anticompetitive behaviour and split up into multiple companies.
Here in Australia we’ve gone down that path though there was no actual lawsuit. We just saw problems starting to creep in and dealt with it proactively. The vast majority of network infrastructure is now owned by a company called “NBN Co” (National Broadband Network) which is required to provide the best available network technology to every single household/business in the country. All pre-existing network operators were forced to sell their infrastructure to NBN Co and any business can provide services to anyone for a reasonable fee paid to NBN Co. Mostly it’s broadband internet, but literally anything can go over the pipes. The fee varies depending on the bandwidth and QoS level.
They are also investing in network upgrades, including state of the art DSL routers that can run at decent speeds for most people (I get about 80Mbps) and all new connections are Fibre as well as existing connections are gradually moving to Fibre (on those, you can usually get 10Gbps). Each building can have multiple connections, at least four but large buildings obviously get more. If you live in the middle of the desert with no wired networking at all, then you get a wireless one. Satellite if necessary, though usually it will be “fixed wireless” which is basically cellular with large/high quality a rooftop antenna.
NBN Co is tax payer funded, but mostly only to accelerate fibre installations. Aside from that upfront capital expenditure it is profitable and some of those profits are paying off the tax payer’s uprfront investment.
Net neutrality is just Common Carrier rules as applied to the Internet. It’s frankly a no-brainer.
Your proposal should definitely also have been done – allowing telecoms to also produce content at all is a massive conflict of interest and should never have been allowed in the first place – but it doesn’t obviate the need to also regulate the pure telecoms even after the breakup.
The thing is there are no pure telecoms anymore. There’s a company that maintains underground infrastructure and gets paid when that infrastructure is used, and is incentivised to upgrade the infrastructure because they make more money if it’s used more.
And there are thousand of companies that benefit from the infrastructure, and they can charge customers pretty much whatever they want… though it better not be an excessively high price because every ISP, even a tiny one with a single employee, can provide service nationwide at the same raw cost as a telco with tens of millions of customers.
The difference between what we have done, and net neutrality, is our system provides an open book profit motive to upgrade the network. Net Neutrality doesn’t do that.
Fundamentally there is a natural monopoly in that once every street in a suburb is connected, then why would anyone invest in digging up the footpath and gardens to run a second wired connection to every house? The original provider would have to provide awful service to justify that, and they can simply respond to a threat of a new network by improving service just enough (maybe only temporarily), for that new investor to run for the hills.
Net Neutrality stops blatant abuse. But it doesn’t encourage good behaviour. Our NBN does both.
That’s just not true.
Net Neutrality has nothing to do with network upgrades, it only relates to how traffic can be treated on the network. That’s it. If the network is insufficient, it needs to be upgraded, not reprioritized so preferred traffic is fast while everything else is slow.
I don’t know anything about NBN Co, so I’m going largely based on this Wikipedia article.
Financials:
So they’re subsidizing by ~$1B/year, or ~20%.
So let’s look at prices, since surely they should be low if there’s a “price war”. Here are prices for the top ISP, Telstra (speeds in download/upload in mbps):
Here’s my local ISP which isn’t government owned, and all prices include all taxes:
And we’re installing a municipal fiber network because we think that’s too high, and the new network will provide 10gbps. Larger cities near us have gigabit symmetrical for $70-ish. The only reason it’s relatively inexpensive is because the big cable companies actually have competition here. We have: DSL, cable, fiber backed Ethernet, and radio, and we’ll be installing a new fiber-to-the-home network.
So not only is NMN government subsidized, it’s also more expensive than our local service. And I’m not in some urban area, we have tens of thousands of residents, hardly a big city, and in one of the smallest states by population density in the country.
So no, I don’t think your model is working properly. I’ll take national Net Neutrality and push for local muni fiber.