Very useful chart over on the Verizon policy blog put together by Link Hoewing and Larry Plumb. Link uses it illustrate the changes we have seen over the past three decades in terms of Internet access platforms and speeds. It's too small to read here, so make sure to go there to see it more clearly and also see Link's interesting discussion.

Web Pro News' Jason Lee Miller seems to think he's hoisted my colleague Bret Swanson, and The Progress & Freedom Foundation in general, on our own collective petard. Bret had responded to Tim Wu's NYT op-ed by questioning Wu's argument for developing "alternative supplies of bandwidth" to free us from the tyranny of the OPEC-like broadband cartel:

Unlike natural resources such as oil, which, while abundant, are at some point finite, bandwidth is potentially infinite. The miraculous microcosmic spectrum reuse capabilities of optical fiber and even wireless radiation improve at a rate far faster than any of our macrocosmic machines and minerals. It is far more efficient to move electrons than atoms, and yet more efficient to move photons. Left unfettered, these technologies will continue delivering bandwidth abundance.

Miller suggests that this response to Wu destroys arguments Bret and others at PFF have made against net neutrality regulation--a crusade led by Wu (who taught me Internet law, as it happens):

So what [Swanson is] saying is bandwidth scarcity is a notion invented by internet service providers and wireless providers to jack up prices and provide excuses for interfering with competing services on their networks. Nice. In a weird way, Swanson focuses so hard on disproving Wu's analogy one way, he misses how the analogy is proved in another: a few organizations (government or not) controlling an important resource and forcing artificial scarcity in order to control the market for that resource is called a cartel.

Miller's "Gotcha!" rests on the seemingly undeniable premise that broadband can't be both abundant (as Bret argues) and scarce (such that ISPs must management traffic on their networks, however non-neutral that may be). But in fact, this seeming contradiction is inherent in the very nature of the Internet--and the way Internet access is currently priced.

In today's New York Times, Tim Wu writes in favor new regulation of the Internet and uses a number of bad analogies to do so. Let us count the ways.

My colleague Adam Thierer has already noted that OPEC is a group of mostly government-run oil companies whereas U.S. broadband service providers are private companies operating in an intensely competitive environment.

Wu bungles another analogy between oil and bandwidth. Wu writes, "Americans today spend almost as much on bandwidth -- the capacity to move information -- as we do on energy....If we aren't careful, we're going to repeat the history of the oil industry by creating a bandwidth cartel" -- implying that bandwidth prices, for lack of competition, are about to skyrocket.

But in the last decade, the nominal price of oil has risen by a factor of 12. In the same time period, the nominal price of U.S. residential bandwidth has dropped by a factor of five or more. Mobile phone bandwidth has dropped in price even more. Thus $10 worth of oil in 1998 now costs around $120. Ten dollars of residential bandwidth in 1998 now costs about $2 or less.

Wu could not have chosen a worse metaphor.

Oil prices are mostly governed by the Fed's monetary policy (not OPEC, yet another Wu blunder), and we don't know which way oil prices are headed. But we know for sure bandwidth prices measured in dollars-per-bit-per-second will continue falling dramatically. The imperial forces of Moore's Law and the equally powerful innovations of fiber-optic, memory, and hard-disk storage technology assure it.

This isn't to say broadband networks are cheap. No, they are very expensive. They will cost hundreds of billions of dollars over the next five to 10 years. It is to say silicon and optical technologies are massively productive and will deliver ever greater services at ever lower prices. As Wu states, Americans may actually spend more and more dollars on monthly communications services overall. But per bit, they will be spending dramatically less. All this means is communications is becoming a vastly more important part of our lives.

By all means, let us explore and develop "alternative sources of bandwidth" as Wu desires. Unlike natural resources such as oil, which, while abundant, are at some point finite, bandwidth is potentially infinite. The miraculous microcosmic spectrum reuse capabilities of optical fiber and even wireless radiation improve at a rate far faster than any of our macrocosmic machines and minerals. It is far more efficient to move electrons than atoms, and yet more efficient to move photons. Left unfettered, these technologies will continue delivering bandwidth abundance.

But Wu fools no one with his slight of hand -- attacking a phantom bandwidth "OPEC" -- when his real goal is to establish and further empower his own cartel of scarcity-rationing bandwidth bureaucrats.

Berin Szoka and I just released a short article on the FCC’s proposed follow-up to the failed 700 mhz D Block auction: a free, nationwide wireless service that would serve public safety users as well as consumers. It's attached down below or the PDF can be found here.
_________________________________

What's Worse Than Rigged Auctions & Internet Censorship?
How About Both in One Package!

a PFF Progress Snapshot
Release 4.12 June 2008

by Adam Thierer and Berin Szoka

The big spectrum policy debate in town these days continues to be the fight about how to redo the botched D block auction. As we all know, FCC Chairman Kevin Martin's previous effort to micro-manage that auction failed miserably. Sadly, the follow-up plan isn't much better, as the Wall Street Journal notes in an editorial today:

You'd think Chairman Martin would have learned from this experience. It's not the role of regulators to pick winners and losers to achieve their preferred social outcomes. Private competition and the price mechanism can most fairly and efficiently find the best use for scarce spectrum. The FCC's clumsy attempt at social engineering resulted in a failed auction that has prevented otherwise desirable spectrum from being put to commercial use.

Alas, Mr. Martin has now proposed another wireless auction for a separate piece of spectrum. And this time he wants to require the winner to offer free Internet access that filters out pornography--conditions that obviously would decrease the value of the license and turn off potential bidders. It just so happens that Mr. Martin's proposed auction seems tailor-made for the business plan put forward by M2Z, another politically connected Silicon Valley start-up looking to enter the wireless broadband telecom market.

Barbara Esbin and I have just released a short PFF essay asking the question: "Where is the FCC's Annual Video Competition Report?" The FCC is required to produce this report annually and yet the last one is well over a year past due and the data is contains will be over two years old by the time it comes out. I've embedded our paper about this below.

As I have argued many times before (see 1, 2, 3, 4), some sort of usage-based bandwidth metering or consumption cap makes a lot of sense as a way to deal with broadband network traffic management. So, if this is the direction that Comcast is heading--and this recent Broadband Reports piece suggests that it is--that is fine with me. The article says it might work as follows:

A Comcast insider tells me the company is considering implementing very clear monthly caps, and may begin charging overage fees for customers who cross them. While still in the early stages of development, the plan -- as it stands now -- would work like this: all users get a 250GB per month cap. Users would get one free "slip up" in a twelve month period, after which users would pay a $15 charge for each 10 GB over the cap they travel. According to the source, the plan has "a lot of momentum behind it," and initial testing is slated to begin in a month or two.

"The intent appears to be to go after the people who consistently download far more than the typical user without hurting those who may have a really big month infrequently," says an insider familiar with the project, who prefers to remain anonymous. "As far as I am aware, uploads are not affected, at least not initially." According to this source, the new system should only impact some 14,000 customers out of Comcast's 14.1 million users (i.e. the top 0.1%).

It's always been my hope that we could potentially head-off burdensome Net neutrality regulations by encouraging carriers to deal with the problem of excessive bandwidth consumption by using time-tested price discrimination solutions instead of the sort of packet management techniques that are the subject of such heated debate today. Of course, on one of our old podcasts on Net neutrality issues, Richard Bennett pointed out to me that this still might not alleviate the need for other types of traffic management techniques to be used. And he also pointed out that the very small subset of true bandwidth hogs are almost entirely heavy BitTorrent users, so perhaps the way Comcast was dealing with them was just another way of skinning the same cat.

Technology blogger Ike Elliott has a terrific series underway over at his blog this week looking at the differences between cable and telco-fiber infrastructures. He is "looking at why cable companies are kicking the tires on fiber-based passive optical networks, even though they have a heavy investment in hybrid fiber coax (HFC) networks." The series is a good primer on these issues. Here are the entries in his series so far:

* "Internet Capacity Demands Increasing"
* "Does Cable Need Fiber to the Home?"
* "How Far Does Cable Fiber Go?"
* "Fiber vs. Coax"
* "DOCSIS 3.0 Upstream Still Skinny"
* "When Will Cable Bite The Bullet and Upgrade to Fiber?"

And here's a handy table that Ike put together comparing the capabilities of fiber vs. coax:

Kyle McSlarrow of NCTA this morning hosted a teleconference on network management practices. He made a number of good points about the costs of archaic regulatory requirements, the near ubiquity of cable high-speed services, the work that is being done to build faster and better broadband networks, and the need for sensible, balanced, and equitable customer service disclosures. I can do little to add to the force of those points and won’t endeavor to try.

More importantly from my perspective, though, is that Mr. McSlarrow added color and line to a vision of the future that is hazy shades of gray for most of us. As he pointed out, the broadband market is yet in its infancy. It is the offspring of diverse experimentation, and it shall grow only through more, and varied, experimentation. Like Walt Whitman putting the chuff of one hand on our hip and gesturing with the other to the vast unknown landscapes before us, Mr. McSlarrow rightly cautioned against taking our ease with what we know today – today’s technologies, today’s protocols, today’s data sharing applications, today’s networks or services.

For tomorrow will turn upon technologies, networks, applications, and protocols that, in 2008, are nothing more than mysterious phantoms of ideas. And the speed of innovation is, if anything, increasing. We may well, in very short order, and assuming the government doesn’t freeze technology into place with misguided regulations or unnecessary limits on innovative new business models, all interact with technologies in ways that would seem completely foreign now.

And therein lives the magic of ingenious engineering, creative marketing, and courageous entrepreneurship. The vast, unknowable landscape of tomorrow can only be discovered by leaving the market free to explore where it will. “Here are bisquits to eat and here is milk to drink, but as soon as you sleep and renew yourself in sweet clothes, I kiss you with a good-by kiss and open the gate for your egress hence.”

Mr. McSlarrow today showed us the open gate to the future.

I wanted to make sure that everyone saw the filings that Richard Bennett and George Ou made this week to the FCC in the proceedings regarding broadband network management policies. They are excellent. I thought I'd clip a few of the highlights here, but make sure to read them all the way through.

Here's some of what Richard had to say:

The four prongs of the Policy Statement do not include a “right to be free of delay” or a “right to infinite bandwidth”, and in the real world someones ox must be gored when the load offered to a network segment exceeds its capacity. Hence, the petition for declaratory ruling must be rejected. [...] So this is the choice that Comcast has on its network of today: should it allow a handful of BitTorrent users to degrade the performance of VoIP and web users to the point of distraction, or should it limit the bandwidth that BitTorrent users can consume? This is not a hard choice to make, and the only interesting implications it has concern methods employed and obligations for disclosure owing to the customer. [...] If ISPs have the freedom to experiment with different methods and business models, and consumers have reasonably broad choices, the market will sort this matter out. Hence the policy priority should be the promotion of market-based competition between Fiber, DOCSIS, DSL, and wireless. [...] It's worthwhile to point out that Internet2 schools practice traffic shaping and policing on their campus networks, for the same reasons that public carriers such as Comcast do: it's not economically feasible to build networks around the excessive bandwidth appetites of a few users. [...] There are alternative methods and policies that may be employed by ISPs to address problems of network congestion and overload; the market should decide among these, not the government.

I found this article by Ernesto over at TorrentFreak ("Decluttering The Tubes, Solutions to the BitTorrent “Problem”?") to be very interesting and open-minded, but his readers are really taking him to task for it. In the piece, Ernesto outlines the upsides and downsides of 6 possible ISP responses to the "BitTorrent Problem," which has been in the news a great deal lately. (These models were apparently suggested to Ernesto by Art Reisman, who is chief technical officer at APConnections):

1) Ask for voluntary cooperation.
2) Keep connections within the providers network.
3) Usage based quotas.
4) Limit the total connections allowed at one time per user.
5) Build out networks to handle the increased load and pass the cost onto the consumer.
6) Cancel the service of users who abuse their privileges. There have been reports of providers doing this already.

[Again, see full article for explanation of strengths and weaknesses of each.]

I think many of these solutions sound quite constructive and could possibly be used in some combination to alleviate network congestions problems. But the reader response over at TorrentFreak, which obvious skews towards the heavy BitTorrent user, is perhaps all too predictable: Just give us more capacity!