Hacker News Reader

Comment by DiThi | Hacker News Reader

I keep seeing everywhere comments against Net Neutrality using this argument. And saying that it cripples free market, because new ISPs wouldn't be able to compete having the expense of regulatory compliance. But _nobody_, absolutely no one explained to me _why_ would it cost even a cent to ensure Net Neutrality (that is not part of ensuring a quality service in general). We should ask this more when discussing that argument, because it seems there's a lot of people truly believing this having that notion unchallenged.

View on HN

Unregulated Capitalism in the very reason monopolies are created. Founder of Capitalism favoured an economy where a lot of small companies competed together to the benefit of consumers. He also recommended regulations where natural monopolies arise due to limited supply. As an example, he recommended heavy taxes on rent seeking[1].

This is a case of American Capitalism taken to its logically conclusion where any regulation makes it anti competitive. American psyche is so attuned to "Free Market" that anything lazy argument will be invoked.

On the contrary we have Telecom Regulatory Authority of India (TRAI) in India which has done wonders for us. Our market is highly regulated, yet we enjoy cheapest ISP services. We have also favoured Net Neutrality by opposing Facebook[2] when they came knocking on our door and now its part of our regulations after a year long deliberation [3].

[1] https://www.prosper.org.au/about/geoists-in-history/adam-smi...

[2] http://www.thehindu.com/sci-tech/technology/internet/TRAI-ru...

[3] http://indiatoday.intoday.in/story/trai-differential-data-pr...

> We have also favoured Net Neutrality by opposing Facebook[2]

Interesting, wonder if Indians see it as a tiny bit ironic that Facebook then turns around and campaigns for net neutrality is US.

Once were in the position to be the ISP (effectively), they had no issue taking Verizon's side.

Companies will be opportunistic. OT but I am not sure why AntiTrust is not invoked against Facebook. They don't have any competition and have done things which can be considered abuse of position.

They have lots of competition. Twitter, LinkedIn, Snapchat (especially among younger sets), etc.

They don't have vertically-integrated competition, granted, but they have enough competition to point at to be left alone.

Counterexample: we had mostly unregulated (except for mandatory government survelliance boxes, billing software licensing, and a reasonably affordable license to provide telecommunication services if you have more than 1K subscribers or more than 2 years in business - but all of this wasn't particularly heavy) market in Russia and the competition had worked. From the subscriber perspective, it was a norm to have 5+ different options, that had actually competed on pricing, quality and features. Every year prices used to go down. Then, when they got real low (like 100-200 RUB - when it just didn't made sense to go lower), speeds and packages started to grow. And whenever one option did something wrong (like throttling P2P traffic) they started lose active userbase very fast. It really worked.

Then things had changed. Last 5 years our Czar and his pet Duma noticed there is lack of regulation, so they started to write laws one after another. All sort of mandatory logging, censorship, peering policies (who can and who can't peer), extra licensing rules, UGC-related policies, etc etc - and, of course, all for the sake of subscribers' and national "security". Small ISPs died like it was a plague. Larger ones grow even larger - for obvious reasons.

Various explanations are possible (and regulations here are mostly different from NN, just authoritarian government strengthening their hold), but here's what I'm absolutely certain of: not all regulation is good. At the very least, consider if you trust your government (and all future governments) with such powers.

---

Full disclosure: I've worked for 10 years for an ISP in Russia. Haven't been to the U.S. so don't know how exactly things are there. Yet, have a preliminary/uneducated opinion that they should've either hold NN (as a sort of a kludge - but there is no competition) and think how they can add more competition (=choice), or abolish NN but only simultaneously deregulating things so new ISP startups can actually enter the market.

> and regulations here are mostly different from NN

Not mostly, but totally. It costs very very little to comply with NN law, and protects the consumer. The ones you mention sound more costly and attacks the consumer freedom.

> or abolish NN but only simultaneously deregulating things so new ISP startups can actually enter the market.

There's a lot of regulations that should be gone, but NN is not one of them.

> The ones you mention sound more costly and attacks the consumer freedom.

Also, the problem is sometimes things work differently. For example, licensing/certifying billing system (not a recent thing, though) was meant to protect customers from broken accounting. In reality it primarily worked as providing "certified billing providers" a source of revenue. And billing failures were still not unheard of.

Data storage requirements (recent set of policies) were sort of pro-customer, with the idea to help privacy of personal information. In reality, it doesn't do any much (except for the fact every form with personal data now has an extra mandatory "I agree" field)

> It costs very very little to comply with NN law

The recent edition (as I've briefly seen it) - yes, probably you're right. It fixes the issues I'm about to mention. The "customer traffic is sacred" edition I think there was once (unless I'm mistaken - maybe I read someone's incorrect interpretation, or some early edition that wasn't complete) - nope.

Having a ton of hacks that analyze traffic and policy/route it differently - I believe is a norm for every ISP that respects their customers.

Without that you have phone lines full of customers complaining that YouTube buffers every minute, their favorite MMO ping is crappy so they can't raid, VoIP calls drop, commodity WiFi access point fails because it's overloaded by torrents, etc etc. In an ideal world, everyone would correctly tag their packets, no one would try to abuse the system and so on. In reality, sometimes even quite nasty hacks are necessary just to make users happy.

Heck, I'd admit - we even had to intercept DNS records once as a temporary measure. It was early 2010s, Google had some issues back then - some of YouTube servers were just slow and no amount of routing hacks (we tried to use every upstream) had helped. A great sin, but at least users were able to watch videos they wanted. And we had "don't mess with anything" option, directly in the self-service area.

That's actually why I believe NN is a sort of kludge, that only makes sense if there is no fair competition - when consumers can switch providers literally in a matter of days if not hours, so providers deeply care about customer satisfaction. Otherwise it's just irrelevant, and I'm generally against useless regulations.

Disclaimer (again): I've worked for an ISP so I'm probably biased. I try to debias myself (and I swear, I believe I write honestly), but still I can't be sure.

> That's actually why I believe NN is a sort of kludge, that only makes sense if there is no fair competition

This is completely true. America, as it happens, loves its natural monopolies wherever it can get them, and so that's why this kludge is our best (and only) option.

Your first paragraph is exactly what happened here but with regulations in place. Local ISPs here provides 20Mbps symmetrical bandwidth for $10 per month and this cost is going down rapidly. I think problem with Russia is its pseudo democracy which makes doing these things very easy. We have a messy democracy but it seems to works somehow :)

Might be OT but how does small ISPs operate in this market? Just as a last mile provider? I always thought they have to hook into one of the few backbone providers as only a handful of operators control the backbone worldwide due to requirements of heavy investment.

OT: Last mile, yeah. I've worked in one startup ISP (forked from a large company but started from scratch; our CEO was an ex-CEO of the other telco). Started small, with just a few households, and gradually grew to cover almost the whole city except for some hard-to-reach areas and far suburbs (city's Veliky Novgorod, 200k population; 90km²/35mi² area; about 200km/125mi from St. Petersburg).

There were also companies that had last mile fiber but offered other ISPs to use that fiber to provide actual Internet connectivity. I think it started that way because one larger ISP wanted to split into few smaller companies for tax purposes, but not sure.

We (and other our competitors) bought upstream bandwidth from higher-tier providers and covered the city with our own fiber. I don't think anyone (except for one large telco that's now a part of Rostelekom) got or had tried to get their lines to an IX in e.g. St.Petersburg.

There was some choice in higher-tier providers. We had 3 different uplinks and there were still at least pair of more options available that I've heard of. Maybe more, I don't know. Negotiating price downs ("hey, that other company said can give us a better offer") was quite common, I think I heard that every year or another.

I've worked on software components (website, various network services, software network access servers), though and wasn't deep into peering agreements and physical network building stuff.

The net neutrality order from 2015 did more than just mandate network neutrality. It also requires ISPs to keep certain records, possibly beyond their business needs (and other legal mandates). It also requires ISPs to make information available to the public via their own websites, which costs at least a cent ;).

Yes, it's all weak and such costs would be covered by just one month of customer bill payment, but ISPs like to complain and Ajit Pai has made a big show of addressing these costs. For example, the FCC will host information about ISP practices for any ISP that finds it too burdensome to have a website of their own.

One bit of irony here is that the ISPs have argued that there is too much uncertainty surrounding the Title II regulations. Today the FCC does not impose rate regulation, for example, but maybe tomorrow's FCC will. Of course, now it is becoming clear that the rules will change whenever the presidency changes parties, so if anything it would seem that there is far more regulatory uncertainty with Pai's approach.

>Today the FCC does not impose rate regulation, for example, but maybe tomorrow's FCC will. Of course, now it is becoming clear that the rules will change whenever the presidency changes parties, so if anything it would seem that there is far more regulatory uncertainty with Pai's approach.

This is also why the health insurance industry was overwhelmingly opposed to the Republican healthcare plan, why the financial industry was opposed to certain Republican regulation rollbacks, etc. All the infrastructure they'd built to refocus their business around the regulations might now be useless, but probably not, because there's a decent chance the Democrats might recapture the Senate and/or Presidency in 4-8 years.

Uncertainty is expensive and exhausting. Businesses are desperate for a compromise that lasts. Drastic and potentially ephemeral GOP regulation-slashing really serves no one except their own donor class -- not even big business, let alone small business and the middle class.

Thanks, you're the first person that explain me the costs. Not totally free but almost, and vastly cheaper than a 10% figure I saw in some comments.

Where can I read more information about those requirements without having to read the full law?

Comcast sells digital video services for hefty subscription fees to tens of millions of its customers. Those video services presumably use bandwidth that could be used by Google, Netflix or any of a dozen other competitors if the customer preferred. Under Title II, what stops the FCC from mandating that Comcast “open the box” and allow all competitors access to that bandwidth in a neutral fashion?

That’s the argument. Title II is just a framework for regulations that could potentially turn ISPs into true “dumb pipes”. While many have convinced themselves that would be great for everyone, there’s not a lot of money in the dumb pipe business.

To put it another way: 10 cent SMS messages built a lot of cell towers!

Still, that's "last mile" bandwidth

Owning the network it's much easier to cache at the boundary

But apparently it's easier and cheaper to lobby instead of doing the smart thing

What about Title II do you think makes boundary caching untouchable by regulators as well? Remember, this is the framework created to bring Ma Bell to heel.

Why should Comcast be allowed to build “fast lanes” for their own NBC content and exclude Netflix, just because the delivery vector is an IP cable box instead of an IP WLAN hub?

Remember, this is the framework created to bring Ma Bell to heel.

Is this irony? In what sense has Ma Bell been brought to heel? Do you mean that ATT and VZN haven't yet merged? Perhaps you mean that neither of them has yet consumed CenturyLink?

notes: https://news.ycombinator.com/item?id=15756334

It was the 1930's, and since that time the baby Bells have slowly re-merged. You mentioned CenturyLink (formerly USWest) ans Cincinnati Bell also still exists, as well as some other remnants elsewhere. Many people make the argument the the Communications act of '96 stifled DSL, which pushed data heavy users to cable internet as soon as it was available.

Given how things stand, and who is in power, I think it would be best to be pushing for further deregulation in telecom, since that is the argument they are making. They need to put up or shut up.

Reply on news.ycombinator.com