A Net Neutrality Case Study
Apparently anyone who gets their Internet connection from Cablevision was blocked from accessing Fox programming on Hulu yesterday. Here is a screen shot a Fortune columnist took and shared on the web.
This is the kind of stuff that happens in the world of cable television every once in a while when cable companies and the programming companies have a fight over their contracts.
This is the kind of stuff that should not happen on the web. The way this should work on the web is each and every consumer should have a subscription (via Hulu or direct with Fox) to recieve programming. And once that contract is entered into, they should be able to get that content regardless of how they get their Internet connection.
If you want to know what we are fighting for, this is it. I see more signs every day that we need some basic rules governing Internet access. Maybe we shouldn't call it Net Neutrality. Maybe we should call it a bill of rights for consumers on the Internet.
I’m now in Europe, using the web. The same web as you, who reads this comment, with my Mac, on my Chrome browser… but I can’t check Hulu’s content either. Is that a net neutrality issue? I’m not saying I should be able to see the content, and I understand that there is a lot more than just the bits involved (like copyrights…), but I just want to point that the problem is way more complex than it looks.When you look at it, it’s not radically different problem than the one you just exposed.
yes, of course you should be able to subscribe to this content from anywhere in the worldunfortunately the US government doesn’t have the ability to require that
Precisely my point 🙂 What’s a neutral, open web limited to borders?Why is that there is no real political organization which takes the web into account? Should there be some kind of UN for the web? Maybe part of UNESCO? WTO?
Absolutely, but I don’t have a lot of faith in that happening any time soon. Given the extreme differences in views towards freedom around the world (China, America, Europe, North Korea – you know, for the five people with internet), getting them to agree on something like this would be nearly impossible.There are a lot of things that the US does better than the rest of the world when it comes to liberty, but we’ve also got some extreme backwaters. When massive corporate interests are aligned against the provision of some of those freedoms…well…we don’t get the best results.
I love the UN concept. The UN has been so effective in solving the world’s problems. Joshing.
most content owners don’t have the rights to offer shows on a single service globally because each show is distributed differently in each territoryFor example, a show like CSI is distributed on CBS, CBS.com in the US, but is offered on a completely different network (alongside a group of different shows) in the UK (perhaps ITV and ITV.com in the UK — I dont know what the actual partner is).If you could access CSI globally on CBS.com, this would reduce the amount of money the owner of CSI could make from selling its show to ITV in the UK. This reduction in license fee $ is unlikely to be offset by the increase in AD $.Also – you cant say that CBS is acting foolishly because if it DIDN’T act in a profit maximizing way, then Jerry Bruckheimer (producer of CSI, and a participant in the profits generated by the international sales) would sue CBS.The net of this is that these deals are very complex, and have many stakeholders / participants. it is not simple as a single buyer and single seller in any case.
I agree w/ everything you say. What is happening is that national borders are being overtaken by the new city-state — THE Internet.One would think that if a single viewer or consumer has some discernible value per capita that it would be a simple financial analysis issue to determine the value of a single delivery system rather than multiple delivery systems.That is after all how advertising of all forms is evaluated and priced.
I think everyone would love it if things were that simple – but laws, commercial practices and content / advertising standards are set nation by nation.for example – lets say the “formula” dictates that 10 minutes / hour of advertising can generate an acceptable profit up and down the value chain. what happens if a country’s laws say that 6 minutes is the maximum allowable?while the “network” is technically global, behavior is still regulated locally. and companies have to play by those rules.
At some time the commodity price of a minute of the Internet and a banana will be equally easy to understand. Our tariff system enables us to trade bananas freely and theoretically fairly. Why not a minute of Internet?
Who is it then that is allowed to define what is “acceptable” for profit?
I think you should be. Living in Europe it is annoying to see all these Hulu videos on different blog posts or youtube videos that because of some strange laws can be seen only in U.S.Why wouldn’t these big music companies want to show them to a global audience does not make much sense….
Interesting that the opponents to Net Neutrality are the gatekeepers and industry dinosaurs that won’t let go of control, and look after themselves and not users benefits.I’m for Net Neutrality, but I can see how some governments may want to restrict TV/video programs which can invade their own culture and weaken the local market. Even Canada was having that debate not too long ago, pertaining to the % of US programming that can be allowed to intermix with Canadian programming. It was a cultural issue at the end of the day.How about when iTunes tells me I can’t buy Last.fm or Pandora with my Canadian iTunes account? That sucks.
I don’t view these “gatekeepers” as dinosaurs. I view them as normal businesses functioning in a free economy.What the Net Neutrality gang wants to do is take the *real* dinosaur in the room — the technocommunist Google — and privilege this ad agency, feeding the old fashioned communist oligarch model.
“technocommunist Google?”Wow. Somebody’s been drinking a bit too much of the Ayn Rand koolaid…
I write this comment now from a Cablevision connected home. I was going to call you on my Cablevision telephone line, but I think they’re already blocking all VC’s that are net neutrality proponents. 😉 But seriously, I had the triple play (Net, Phone, and TV) from Cablevision. As you know, a triple play is almost a homerun…for Cablevision, that is. Not so much for me. $80+ and nothing on. So I canceled my cable TV service (they never asked why) and now stream content…including the kids’ favorite shows. Next up? Gonna cancel the phone service. The times they are a changin’
i run a VOIP web service over a $70 dedicated internet connectionthat VOIP service costs me about $50/month for almost a dozen numbersfunny that the data connection costs more than the voice service
Shouldn’t the data service cost more than the VOIP Phone?I figure bits are bits and you should pay for what you use. VOIp phone costs almost nothing – takes no bandwidth.Look at the detailed financials of any cable company. Video EBITDA margins are 30% or so. Broadband – 80% or so – and VOIP like 96%.
“Freedom to Purchase” would do it.The status quo: We have two transactions, each of which are reasonable.First, a content producer selling distribution rights to a distributor (e.g. Fox to Cablevision) is not only reasonable, but in many cases required for them to stay in business. We shouldn’t expect each and every content producer to also become industry standard-competent in distribution.Second, the distributor typically bundles and sell content to consumers as they see fit. Newspapers which rely on wire reports do this explicitly. So do cable television companies but in an entirely different way. And again, we shouldn’t expect this to stop. It’s just too good for the distributors (and it’s not bad for producers, either, who gain additional reach).If those to things allow the consumer to purchase the content, I’m fine with it. Cutting out the middleman distributor would be better from a consumer’s standpoint, sure. But they’re a necessary evil.HOWEVER, when that framework causes content to not be available, and the medium (i.e. the Internet in our case) allows for easy direct distribution — quite literally, Fox/Hulu need to do nothing to distribute Fox’s content to Cablevision subscribers; rather, it’s more difficult to block it than to distribute it — that’s a problem. And that’s when we need freedom to purchase directly.
It appears Fox is hanging out the same sign McDonald’s has for years. “We reserve the right to refuse service to anyone.”I strongly believe that the monopoly/duopoly of telecom cannot be allowed to decide which services can flow over public rights-of-way and public spectrum to the consumer.But we should beware of making up “rights” and “freedoms” from whole cloth just because we want something to be so.That’s a VERY slippery slope and whatever business you are in, you’ll live to regret supporting it.
Fred, I COMPLETELY agree with your views on Net neutrality and if this were Cablevision blocking the Fox content from Hulu, I would be up in arms. But in this case, Fox was the one who had Hulu remove its content to Cablevision internet subscribers. I think that position is totally wrong, and actually somewhat disgusting. However, doesn’t Fox have the right to decide how and to whom they distribute their content? If one is paying for Hulu, it’s a different story because they have a right to expect the content streams, which they paid for, to be there. But if you’re accessing Fox for free on Hulu, I have a tough time supporting the argument that Fox doesn’t have the right to cut off their nose to spite their face if they want to.
my point is simply that if you were paying for fox content via Hulu,you’d be screwed
Then you don’t pay Fox because they aren’t giving you what you are paying for.
Curious what you think about ‘device neutrality’. This is probably old news, but I discovered last night as I wanted to catch up on Glee thru Hulu on my iPad, that to access Hulu programming through the iPad I’d have to pay a $9.99 subscription?Or is that all part of the same thing. Glee is Fox.So I grabbed my laptop and watched it free instead.But totally annoying. And no, I’m not interested in getting roped into a $9.99 monthly sub for Hulu just for iPad, on top of other subs.Interestingly, I have Cablevision up where I live and the message you got is not one I received.
content producers will try to extract extra money for mobile devicesnot sure it will work
And who cares about Fox’s and Cablevision’s right to their own property especially if it is superseded with a Bill of Rights for the internet because everyone should have a right to watch whatever they want whenever they want damn everyone else’s rights to hell.
that’s not my pointif i subscribe to fox, pay for the right to see it, i don’t want aspat between fox and cablevision to cut off what i have rightly paidfor
you dont subscribe to fox – you subscribe to cablevision. fox sells to cablevision, who is no longer paying for fox.fox has the right to cut off cablevision, which they exercised.ergo this cuts you off.this dispute means that you are paying more for all of the non-fox content.
that’s what we need to fixISPs should not be in the business of determining what programming we geti want to subscribe directly to programming with Fox or Huluand i want the ISP to simply be a dumb pipe
you can subscribe to hulu.but the cable model is the only one which has proven to be able to sustain an entire ecosystem of actors, producers, leagues, studios and networks.without that dual model of fees + advertising, the #s just dont work. Even the NFL (arguably the only content in the US that can essentially name its price) is unable to make a pure direct to consumer model work….it relies on a network of licensees (cable, satellite, broadcast, etc.).
And that is why you overpay.
lets take the NFL as an example – according to wikipedia, the NFL generates about $3.8B /year in revenue from TV contracts.back of the envelope, the NFL would have to get 75M subscribers (more than the total # of cable subs in the USA) to pay $50 / season (less than 1/4 the cost of direct ticket), to get this amount of revenue.This is simply not realistic.
Great way to put numbers to my original point. When you have delivery providers charging for content the numbers don’t work.In this case the NFL should not be generating this much revenue…and therefore not paying the players so much. If it was free market you are right the NFL would make much less.
delivery providers ALLOW the #s to work…. by bundling access with content, delivery providers have been able to provide more choice at lower cost, while still being able to pay content owners.there is virtually no such thing as a free market…everything has distortions and inefficiencies. just ask the players union.
No, ask the NFL players of the sixties…I think that is when the market was working.I myself would love to see the numbers go back to there.
now I think we’ll have to argue over what brand of football is more fun to watch 🙂 I’d argue todays football is far more fun… but that debate is probably more appropriate for ESPN.com!
If you would like to see a quick case study look at boxing and MMA.
No, Fred, these companies are going to convert to “dumb pipes” just so that *your* particular set of “dump pipes” (Google) can roam free.And why should they? They provide content, they don’t just move content. They select. They pay for content. They aren’t just electrical wires. And that’s ok. That’s what the business is about.
True of cable TV, not true of internet.I run a great blog (my opinion). I have yet to be paid by a single telecom for transmitting it to my readers.I think I’ll sue. 🙂
right, but i want to subscribe to fox not cablevisioni think that’s what will happen on the web
Now you’re on to something. When Fox offers you the ability to subscribe, Cablevision (using public rights-of-way) should have zero ability to cut it off.But Fox isn’t offering you that ability yet. And I can guarantee you that they are the ones cutting the feed to Hulu to put pressure on Cablevision.
Rules defined by who. As most free market proponents, I am guessing you would say that business can make the decisions and if it is not right the market will thump them.What most free market proponents and their Republican brothers and “democrat” sisters ( all those Clintonites, Rubinistas, who are basically trans-gendered ball less Republicans) have framed the whole concept around rules and regulations around the term CHOICE= FREEDOM and that having any rules and regulations is impinging on ones freedoms.That is true if you are a smart educated person, where you may have the capacity to make the right choices, for everyone else who is Stupid (including myself) we need a fair arbitrator who has the ability to make sure I don’t get cheated, sadly in the modern concept of governance, that role has come to be held by Government that works to protect the stupid and maintain freedom of choice.Bill of rights that you propose goes against those who stand to gain from having less of it.If you are a Cablevision customer my suggestion is cut your subscription and buy yourself a $20 power antenna and get the best quality over the air programming.
If you were paying for a subscription to Hulu this shouldn’t happen. The problem is that the CableVision subscribers aren’t paying Fox for a subscription to Hulu. They are watching ads on Hulu, but that pays a fraction of the value that Fox gets from the cable subscription.Fox essentially thinks of Hulu as a way for customers to catch up on shows they missed. Yes, they let non-subscribers watch, but if they could avoid that they probably would, and if enough people stop paying for subscriptions, they’ll stop providing content to Hulu.Fox creates the content and the cable company is the reseller of the product. Cutting off Hulu is actually good for both the cable company and Fox. Neither the cable company nor wants people to figure out they can watch shows on Hulu and avoid the subscription.Personally, I hate these games between cable companies and content creators. They both try to make the cable subscribers pawns in the fight. Neither side is the good or bad guy. But turning off Hulu has nothing to do with net neutrality. It’s a content provider who’s deciding not to provide content to some of it’s customers because of a dispute with it’s reseller, the cable company.
I think in the fine print Hulu Premium subscribers were NOT impacted.
I’m not sure how this is a case of Net Neutrality, Fred. Wikipedia defines it as a position that “advocates no restrictions by Internet Service Providers” on content. This is a case of the programmer blocking access. I’ve not heard proposals that mandate programmers show the same thing to every IP address that visits their site.To the presumably larger point that you’re making — these spats have a way of escalating and consumers get caught in the middle — I nonetheless think it’s equally dangerous for us to impose a regulatory solution on an emerging business model, even if it is with the best of intentions.
the ISP was part of the spat – cablevisionconsumers got caught in the middle
I have to agree with mcenedella here. This is not a net neutrality issue. If it were, Cablevision would have blocked Hulu. It was actually the other way around.The day that websites are forced to provide their service to everyone, that will be scary.While I agree net neutrality is needed and I disagree with what Fox/Hulu did, it was within their rights.
In our related ‘access over IP’ industry (EDI message routing) we are fighting a rear guard action against the incumbent, evil monopoly – the right to equal interconnection access. Although we flow over IPSEC, we are routed at layer 7, and this is where the rights of the trading parties are trampled, and where the competitive innovator networks, the little guys as it happens, are being shut out.In the large consumer access case, we do not want our connections messed with. In the EDI Comms case, the choice is a VAN that fits the user’s business model, according to technical and market merits. All the evil started when the bad men said the small networks could not interconnect. Same diff. Dealing with the agencies is like a walking a maze, but sometimes you meet an interested party, an advisor who is one door from the Chairman. This happened to me, and I made my written and oral plea – same with DOJ – now we hear that the agencies are talking. Yeah, Yeah, so who cares about EDI and I want my Hulu too! But all of these access and control issues boil down to issues of consolidated Incumbency. If the telecom act of 1996 does not treat ISP backbone nets like common carriers, then what are they? If we decide to foster innovation by allowing the major access providers to not be controlled by the act, then are there adequate anti-trust remedies in place. MCI WordCom was the last case of scrutiny being applied to a divestiture, and rather than being regulated as common carriers, the ISP wholesale transit and peering providers got a finger wagged at them, “be good boyz”, and they barely towed the line. The Evil EDI Network Monopoly, who bought up the competing networks with private sovereign equity of questionable provenance, bought and merged till FTC asked the DOJ to screen for HSR benchmarks, and let’s face it, I have not seen a merger with ordered remedies for a decade. DOJ wagged its finger, and said, “be nice with the interconnections to smaller providers, it don’t cost ya nuttin'”, and they said in their best Al Jolson voice, “Yezzzz bosss”. But they acted horribly, crushing with their practiced boot-heel the shining Web 20 and Enterprise 2.0 golden imagineers. So are there cases for the laws of common carriage and the doctrine of Essential facilities to play a role in the ISP access and equal data the use (case blind) user? We shall see.I hereby appeal to the FCC office of policy and analysis to look into these matter, both for the retail internet, and the EDI message routing interconnection arbitrage practices of the evil empire – we can’t say their name, but Generally eXigencies Suffice.
An excellent discussion. Well reasoned. Thanks.
Because it is a backbone and has this convergence problem- why exactly should it be treated like common carriers beyond convience? I think we need to rethink the question of telecomm
We need to start focusing on treating the disease (lack of competition) and stop obsessing over the symptoms (worries of content discrimination).Requiring telecoms to open their networks on a wholesale basis would be a good start. This would not only allow competitors to more easily enter a market, it would give users choice in a much more dynamic marketplace. Wholesale access is already required in most of the developed world.At the end of the day, the best way to encourage a free, open and thriving internet is to allow for more choice and competition – not more (often dysfunctional and difficult to enforce) regulation.
In every instance, competition results in a superior final product.In almost every instance, regulation has stifled innovation which has diminished competition.Regulation is like spice — a pinch adds to the savory flavor and a handful destroys the soup.
we don’t have competition in the local loop and never willwe tried that back in the late 90sit was called the telecom reform actit failed
Huh, I thought you were currently using VOIP for local and long distance at very competitive prices?I would call that a competive success — though a splash of bathwater went the way of the baby in the process. Sometimes that is not a bad solution.Sometimes competition results in abandoning the current paradigm and adopting a new approach entirely. It requires one to look beyond the boundaries of the problem. [My greatest hope for the IRC BTW.]In a subtle manner, this also stands for the proposition that the government’s intrusion into most everything results in the least informed people “solving” the most complex problems. It did not “solve” the problem, it created a free for all and the strong ate the weak.VOIP did not come as a result of government regulation, it came in spite of government regulation and it was breathed into life by that most precious of American strengths — entrepreneurial zeal.In absolute fairness to the 1996 Act which was, indeed, the first such reformation since 1934, it did break down interstate barriers to service providers which was ultimately the driving force which created the massive consolidation of the industry ownership which resulted in many of the naysaying voices heard today.The bottom line is that today we pay much, much less for phone service than we did then, so success is much in the eye of the beholder. This is a case of de-regulation having the desired result but having taken a bit different path. This is what can happen when artificially restrained forces are unleashed.
Yet, there’s a vexing dichotomy about what competition is supposed to do to prices. How come the US (and Canada/UK for that matter) still pay the most for cell phone usage?See this: http://oti.newamerica.net/p… E.g. Text message: US 20 cents, Denmark 3 cents, Taiwan 4 centsData service: US $10, Denmark $1.70, South Korea .01 cent
It is difficult to understand how such comparisions are made.My ATT family plan offers unlimited texting for a fixed monthly price and with 2 20-somethings on the plan, the cost must be approaching $0.00/text.In addition, all ATT sub to ATT sub calls are free which has allowed us, over time, to lower our plan minutes by over 60%. No fewer minutes, just fewer paid minutes.
You’re right there are bundles that are better than what they listed. Showing a range would have been better.
>In every instance, competition results in a superior final product.I would agree that in most instances, this is true. However, some services, like roads, fire, and police protection, the military, for example, I’d rather not treat them like products. In some instances, I actually want to subsidize services to produce what the market wouldn’t. I want to spend beyond demand, and produce a ‘product’ greater than the market would bear out.The market doesn’t always deliver. Sometimes the market just does enough, and sometimes that isn’t enough. I do believe a dynamic market is the best option for most solutions, just not all of them.
Competition is a force which must be harnessed in different ways even in the examples that you suggest. I do not suggest the use of the word “competition” in a narrow or one dimensional manner.In the instance of roads, as an example, competition may take the form of competitive bidding and the offering of a early completion bonus to the successful contractor. The public good is served while no compromise is made in the construction of the road itself. Nonetheless, competiton has its fingerprints all about the murder weapon.The military harnesses competion to create elite units whose training and esprit de corps makes them more likely of succeeding in the face of a particular type of adversary. They are the tip of the arrow, the point of the lance.While I am perfectly content to agree that it is possible that the “…market doesn’t always deliver…”, I am quite sure that competition almost always delivers and that a thougthful fellow can always find a way to harness competiton to make the final product better in its final utility.
Using competition that sense, I can’t help but agree. With good ground rules, competition can accomplish the rest better than any design.In fact, that’s where I see Net Neutrality to be a boon. As a start-up, if I end up going head-to-head with a service that Google provides, I want to succeed or fail because my service was better or worse than theirs, not because Google could pay the ISP to deliver their content faster than mine. It’s as if I started a new parcel courier, I want my trucks to have the same speed limits applied as FedEx’s trucks. To me, the game on the internet should be all about the quality content, not the speed of its delivery. -This is my hope for Net Neutrality.
You are not one who needs regulation cuz u can read between the lines and are smart enough so that people can’t pull a fast one over you. Generally historically speaking regulations, rules and standards did not come because some folks said we want a big government. They happened because businesses did not always do the right thing and too many people were getting shafted.You wont need the FDA or the Dept of Buildings for example if drug manufacturers were honest and were above board or contractors and builders followed basic rules and did not mix cement in sand but sand in cement. When you constantly see businesses cutting corners and not doing the right thing, you have to have some oversight so that businesses don’t get away with it.Sure regulations can get too far but it does not happen overnight, it takes a lot of negative desires of businesses to push the envelope that forces more regulations.Show me a set of rules/regulations that are holding back businesses and I will show you how many people were hurt in many ways before those regulations were put into place.Voluntarily show me big businesses doing the right thing always ( they are a rare entity)We don’t have to have the SEC or the FDA if we have honest businesses wiling to do the right thing.Until that happens you will always see the battles being fought and sadly the stupid folks who need most protection are the ones who have drunk the coolaid of those who oppose Rules/Regulations and thereby taxes and government.Sad but true.You and I are going to be fine because we have been lucky to have been born into good families and made the best of it. Most I speak for and fight for don’t have the luck of the draw and I don’t pretend to be against businesses that don’t do the right thing. I do everything I can to speak for those who have a disadvantage in the system that is not fair.
You are absolutely right and my generalization was overbroad. I was speaking of competition in a commercial setting.There is no doubt that things such as the SEC and the FDA are a legitimate reaction to a call out for “appropriate” regulation — but I would say they call out more for ENFORCEMENT of the existing regulations rather than the enactment of new regulations.An awful lot of what poses as regulation fits neatly under the cover of the word — FRAUD. Garden variety fraud. What Bernie Madoff did was not a complex securities scheme. It was as old as the first Ponzi scheme and was only coincidentally related to securities.Again, I fall back on my universal observation — a pinch of regulation makes for a more flavorful environment and a handful of regulation ruins the broth.I would also note that much of regulation poses as competitive advantage enacted by those enterprises who have enacted the cleverest legislationi and employed most powerful lobbyists.The revision of the bankruptcy laws in the US was a paen to the banking industry and deflated the very reason those laws existed — to allow a debtor some chance of long term recovery.In the arena of the issuance of securities, as an example, much could fall under the heading of FULL EMPLOYMENT OF INVESTMENT BANKERS and STOCKBROKERS and be properly categorized.Underwriting as a business action has long ago ceased to exist with an underwriter able to shift their liability to the issuer or to write away any real liability in a prospectus that screams — you would have to be crazy to actually purchase these securities — or to flee into a safe harbor of risk disclosure.
Totally agree about enforcement..if we made every government employee either an enforcer or a teacher/provider….instead of an administrator…..it would be an insane increase in our productivity.
Every time someone says “Every time” I know without study they are wrong.Well, almost every time.
we did that back in the late 90sit’s called the telecom reform actit was an utter failure
Noting what I wrote above, it is not my intention to suggest for a second that the Telecom Reform Act of 1996 was a “success” as it was intended to be.However, at the end of the day, it was a huge deregulation effort which has NOW delivered in retrospect a hugely more competitive telecom system — granted perhaps relying a bit more on cell phones rather than twisted pairs.Perhaps the most striking impact being the virtual elimination of state regulation and the ability to compete on an interstate basis.Current phone rates, quality of service, level of services, VOIP — these are the arbiters of the long term success of the Telecom Act.In that view, it is very difficult not to see this deregulatory effort as anything other than a smashing success.
This kind of thing would not happen in an unregulated market. Companies would be falling over themselves to provide customers what they wanted. The reason they don’t today is that there is no unregulated market except the black market. Net neutrality takes the power away from the market and consumers and gives it to unaccountable corrupt government officials. Come on.. Can you honestly look at the morass we have today and thing that government can solve any problem?
Funny, I’m on a cablevision data service (I use DirecTV for video) and I’m sitting here watching Glee on Hulu. Not sure if Fox has turned he service back on – but it is working for me.I agree that it is unfortunate that the consumer gets caught up in the dispute between content owners and content distributors. As long as the owners of content decide that they are better off NOT going direct to the customer, you are going to see these situations arise.Let’s face it, right now ESPN gets paid over $4 per month per sub on a cable system – and their ratings are a fraction of Fox’s – and Fox is asking for something like $1 per month per sub. I know what I would take given the choice.Ultimately it is just a financial exercise. Does Newscorp do better going through distributors who charge you $80 per month for a pool of services and take their cut – or are they better going direct to the customer.I think one thing is clear – the guys in the best position are the content owners – and even better is the position of the sports leagues.
I think the real issue is allowing the delivery providers to charge at all for content.Delivery providers are those that provide digital bandwidth. As one can see today that means voice, video, text, etc.As I’ve always said you have to regulate delivery providers because they use public right of way be it wiring on poles, wiring underground, using wireless spectrum, etc, etc. The scale and cost of the business means it makes sense to have relatively few providers and having unlimited ones just doesn’t work.A big problem however is content providers that really like the fact delivery providers can charge. Since its Sunday Morning lets take ESPN and the NFL for example. They both love the fact that they can charge everybody for their service because if people had to pay individually for it, the cost would be much more or the revenues would be much less. Charlie for instance couldn’t care less about Football…..I on the other hand love Sunday Football. The popularity is partly everyone gets it for “free”. If I had to pay a bunch to make up the revenues for the Charlie’s of the world, I probably wouldn’t watch.So you have a two fold problem. Content providers love having delivery providers charging for their product and forcing everyone to pay, and delivery providers never have been able to accept the fact that they are providing a dumb pipe.The reason why delivery providers HATE the fact that they should accept being a dumb pipe is the value that others have by delivering content on that dumb pipe. In some ways I can’t blame them as when people talk about pricing they always focus on what value do you deliver. So it is maddening having to charge the same for a worthless conversation or YouTube diversion that two teenagers are having versus super valuable content like a phone call closing a $100M deal or the NFL Superbowl.Speaking of which that was a long post and I need to go watch some football.
Hidden behind this particular issue you present is the not so simple concept of convergence.Once upon a time that cable provider was providing only TV and now the same cable can provide Internet and voice and who knows what else.The largest single cost to the cable company was — stringing that damn cable.All of these services or products have now converged upon that cable and the cable company, rightfully in my opinion, wants to have control over the two ends of the cable. If they can swing it in an otherwise more competitive marketplace — satellites, etc.While I agree that cable providers are providing “dumb pipe”, they are also controlling the valve which introduces the content into that last mile of pipe which ultimately connects to the consumer who has the pocketbook that everybody wants to dip into.The cable guys are packing content and theoretically making a better package deal than a consumer buying each individual content supplier and service individually.All of this will be sorted out in the last 100′ by competition. I just hope we don’t fall into the ATT & Baby Bell circle jerk.
I liked your interstate example. I would say its similar. Could you imagine if the interstate system could charge you differently or prohibit your access if you were out for a Sunday drive versus going to a meeting? I’m not saying they couldn’t charge everybody the same for higher value (i.e. rush hour)As for the ATT & Baby Bell circle jerk. In today’s dollars long distance would be about $5 a minute. So while I think Judge Green absolutely overstepped his judicial authority, the results ended up being better than the situation beforehand. Do you call long distance more or less and pay more or less?
Once you exit the IH system, YOU decide whether to eat at Cracker Barrel or Scottish food (McDonald’s). That’s where the pricing point — the POS — should be located. IMHOAs to the ATT & BB circle jerk — the beginning of long distance competition was when entrepreneurs began to buy ATT long lines night time excess commercial capacity in bulk and then sell it to consumers making night time long distance calls.ATT sold excess capacity — a dark pipe generating no revenue.Entrepreneurs bought it and repackaged it and made a buck.The decline of long distance costs was going to happen with or without Judge Green’s ruling.
Having known and worked with Bill McGowan (MCI’s founder and investor) I think he would strenuously disagree with you.Again staying with your analogy, it would be like the IH controlled where you ate (watch you watched, how much you pay etc, you are exactly right that is where the POS should be located. In the current case the IH controls that POS….you made my point better than I could.
I am not absolutely sure what point I made but I am always happy to help.As an aside, Bill McGowan is one of the most tragically flawed business people ever to have been hugely successful in business. I studied his early career because of his interest in turnarounds.He killed himself by smoking, coffee drinking, over work and even had a heart transplant and went back to work.There is absolutely no question that he was the leader of what became a long, long battle over the ATT perceived monopoly on long distance costs but the drip, drip, drip had already begun. He just inserted the dynamite and lit the fuse.
The point is the cable company in this case is saying you can eat a hamburger (regular programming in HD) at Cracker Barrel, but if you want to buy it in a new medium (takeout at McDonalds) the answer is NO.
Remember my IH analogy is how I think it should be, not necessarily how I think it IS.The beauty of the Internet in the long run is that you will be able to access a bit of ether or ‘net real estate which will ultimately provide what you want.You will GO to CB or McD rather than arrive there.
Also, why is he flawed???Yup, he loved to smoke. I am famous for stomping out three cigarettes the COO of Mitsubishi Corp had going (including one out of his mouth as a twenty something nobody)But he loved his life, he lived his life, and he died doing both….who am I to say that’s flawed….he didn’t want to take any of my tax dollars.
Hell, we’re all flawed in some manner. It’s no big thing.Flawed in the context that the world lost his gifts due to petty vices that cheated him of a long life and cheated the world of his contributions and talents.While he certainly is entitled to live as he sees fit, I mourn his passing as he died a relatively young man.I regret that his passion and vices put him in his grave.
Fred, I am totally sympathetic to the issue and am with you intellectually. Not quite ready for the armed revolution but cleaning my guns and counting clips nonetheless.What I fear is the typical regulatory morass — the last guys to the party, who know the least about the issues, who are most impressionable by the largest checkbooks, will be the guys REGULATING the business and IMPOSING THEIR solution.And they WILL be influenced by the politics of the situation. Oh, yes, indeed! Politics will be seated at the head of the table.This is why my default position is always against GOVERNMENT regulation — not regulation as a concept but blind pig looking for the acorn government regulation bought and paid for by the “big boys”.I think the Internet is going to have to evolve into something like the Interstate Highway system — perhaps the greatest triumph of the Feds doing anything?The ‘net is going to have to allow easy on/off access and the business relationships which exist at the exits are going to have to be regulated by general rules of commerce — contract law.To the extent folks can “plumb around” the problem — any problem —, then creativity should be fostered but one must realize that the big boys are going to stick their fingers in any pipe which does not go through their cash register.The real challenge will be to ensure everybody is using the right words when defining the problem. Already Net Neutrality has begun to be confused with “organized” religion or crime. When what some really want is “disorganized” religion, crime and ‘net.It is going to be very, very interesting to see this matter played out.
Love it!Going to have to engineer a way to get this into an email/conversation tomorrow”Not quite ready for the armed revolution but cleaning my guns and counting clips nonetheless.”
I covet the lack of organization on the net and how information seeps through protocols between services.
If things are this messy for the consumer when a cable provider (Cablevision) gets into a fight with a content provider (Fox), what happens when a rival cable provider (Comcast) actually owns a content provider (NBC)?
Totally agree and should apply to mobile also.
We need to start treating telcos and cable companies like the dumb pipes they have come to be. TV and phone winds up as IP traffic sooner or later whether it’s a private network or not it’s still IP traffic. Cable & Teclos now only have a monopoly on the lines running to your house no longer is your local telco the only place you can get phone service. Just as the cable company is no longer the only way to watch TV shows/pay per view. The networks should realize by now that cable isn’t the only place to sell shows. My generation (Gen Y) doesn’t want to be tied down to a dumb TV screen when they spend a most of their ‘screen time’ in front of a much smarter computer that can do the same as a TV and much more. Roku, Apple TV, Boxee and Google TV are evidence of this trend. In a pro-consumer world we would get 1 dumb pipe into our house be it DSL or Cable. The modem would have a built in UPS for emergency situations in power outages. The cable company’s set-top box would be replaced with a leased Roku (or similar) box, buy or roll one of your own. We would then choose our VOIP provider and be done with it. The channel paradigm as we know it is now gone. We buy season passes available for streaming any time like Amazon and Apple are doing now. Only you’re purchasing through the cable company so they would get the biggest cut of the sale. For non-tech savy people there would be a ‘dumb’ interface with pre-packaged channels just like we have now for the same price as we’re paying now. Screw the channels that won’t survive without a bundle they can go web only and charge per show. Cable companies know that consumers are tired of paying an arm and a leg for programming filled with commericals that’s available online free the next day with a whole lot less ads. It’s only a matter of time before they’re toppled.
Voting with my wallet, I use a phone over google voice and gizmo5. The quality is still pretty bad compared to other VOIP options (Skype).Unfortunately I’m still bound to the net by a single provider Cablevision. The good news, they haven’t blocked Netflix that I’ve noticed (maybe they will soon?). And at least I get wifi over a wide region from different providers (optimum , xfinity, and one other).
Fred,I think your title is misleading. This case has absolutely NOTHING to do with Network Neutrality. At its core, our battle to preserve network neutrality is about preventing the NETWORK PROVIDERS using what market power they may have from discriminating against CONTENT PROVIDERS. This is the reverse of that scenario, and the four principles of network neutrality do not and, in my opinion, should not cover this issue.THIS IS A CONTRACTS QUESTION/DISPUTE – As a previous commenter already stated, you (probably) don’t have a subscription to Fox content. Your subscription is with your cable, satellite provider, or even Hulu. If you’re an actual paying subscriber to Hulu+, the contract may have certain guarantees for programming.A REGULATORY/LEGISLATIVE SOLUTION WOULD GIVE NETWORK PROVIDERS MORE LEVERAGE – The entire point of the network neutrality movement is to keep the power of network providers to discriminate against Internet content/services. If we ban the ability of Internet content providers to play hardball with network providers, we only increase the advantage of the network guys.There is no question that this sucks for Cablevision subscribers, but your proposal of a regulatory/legislative solution would likely only make things worse.
Discrimination? Don’t be ridiculous. It’s called mangement of a scarce resource through rationing. Don’t like it? Pay more than, and lobby for these companies to have premium subscriptions that ensure fast and full delivery, instead of whining for the Internet to be further collectivized.
Just got back from watching the Giants at a bar since we have Cablevision and got blacked out. I was surprised the NFL didn’t step in and have the game put on ESPN or a local channel.
get yourself a $22 antenna http://goo.gl/EHta & u can watch great HD quality programming & cut the cord. You will save more money you can use to buy more rounds of beer.
They’ve run out of kasha in the stores in Moscow due to the forest fires this summer, too, Fred.Some things are scarce commodities. And there isn’t enough to just spread around in communistic glee. Capitalism works better than communism to distribute scarce goods. Bandwidth is a scarce good.Yes, stop calling it by the fake name “net neutrality”. It’s not about any “neutrality” or “blocking of freedom of speech” (the EFF and ACLU gambit). It’s about “net congestion” or really “net consumption”. Don’t try converting a *consumption* problem into a fake “rights” problem. Pretending this is about “consumer rights” doesn’t do any better than the fake “neutrality” or “free speech” gambits used by the lefty organizers on this issue to conceal the fact that it is about *distribution*.And this notion that it is about “lack of competition” makes no sense either. There are enough different TV channels, telecommunications companies, and even your big friend Google. Telcos and cable companies aren’t “dump pipes,” “Big Dan”, they are normal companies in a free-market system that pay for content, aggregate it, and distribute it. Google the ad agency is far more of a “dumb pipe” than they are, and yet you it remains out of your blinkered view.And yes, Fox is a capitalist company in a free society that gets to decide what content it provides. I don’t see that you have a case here that somehow Fox has breeched its contract with its customers.Stop trying to apply communistic solutions to remove competition you don’t like for your big IT friends, Fred, you are sawing off the branch that you yourself are sitting on.
Your argument might have had legs to stand on if it were not for the fact it hinged on “Bandwidth being a scarce good.” This was not about the unavailability of bandwidth, this was about a contract dispute that used what many people feel should be off limits.Let me use an analogy. The government decides to privatize road building and maintenance. So you by a house on a road run by OpenRoads, Inc. On one day you are trying to drive home only to find out that OpenRoads is in dispute with Ford who also has a division building and maintaining roads. The OpenRoads people tell you “Sorry, since you drive a Ford our roads are not open to you until we resolve this dispute.” It’s your only route home but it’s all legal. So you would be screwed and I don’t think you’d have the same opinion about that.
Let me get this straight: you own Fox? Or is it that you own Cablevision?All kidding aside, your analogy stacks up quite well if you’re talking about the monopoly / duopoly telecoms using public right-of-way and public spectrum to pick winners and losers in another market.It doesn’t stack up quite so well if Fox is refusing to deliver content to the Cablevision road for whatever reason it darned well pleases.Let’s remember what this is about: Fox wants more money from Cablevision for their content. If Cablevision doesn’t want to pay, Fox doesn’t have to deliver.This is the equivalent of me saying: I want to buy Promoted Tweets from Twitter for a penny a day. Consumers are being deprived of my service by Twitter’s stranglehold on the Promoted Tweets market. I have a right to buy those Promoted Tweets for a penny.As I said earlier, we all had better think about where the trail of logic goes before we just think something ought to be so. It’s one thing to demand fairness when a telecom is using public assets to make money. It’s quite another to make some of the statements that have been made here.
“Maybe we shouldn’t call it Net Neutrality. Maybe we should call it a bill of rights for consumers on the Internet.” Sound political instincts.
Just make it more concise and call it “The Internet Users Bill of Rights.”
I was not happy I could not watch football yesterday on TV or Hulu until the Jets came on CBS @ 4pm. Isn’t cable supposed to want to be like a utility? I haven’t had any problems getting power to my house because my electric company has issues with their suppliers… the cable company wants us to get involved in their fight, and the fact is I couldn’t care less who makes what on the back end of their supply chain. It’s their job to figure it out, and to hold their customers hostage is irresponsible.
Fred, I thought you had posted about a campaign on this topic a while back. Can you link to that?
I am fully satisfied with the agreement that it is possible that “… the market does not always deliver …”, I am pretty sure that competition is almost always offer, and that man thougthful can always find a way to exploit the race and make the final product the better the final utility.
Comforting to see that data discrimination will be the last screams of the old guard.This is the kind of thing that no self respecting Internet providing business will allow in a few years.
open internet = free speechThanks for keeping on this issue.
This is a shame. I aspire to live in a world where it is not required that we legislate fairness. We pay for a connection, give it to us. Unfiltered, unbiased, and fairly priced.
We’re already here. iPad won’t play web video when the same content is avail for pay on iTunes in some cases.
This definitely sets a dangerous precedent for the future of web content but as long as these disputes are just about the major TV networks, there is another option – a $20 antenna from radioshack and the quality is way better too. Wish we didnt take such a step back in coverage though when we moved to digital TV signals. Suffolk county’s coverage (where cabelvision is the default) sucks!
What would really make sense and is really how the Internet has generally worked is: it should matter not where you come from, you should be able to purchase the content if you can afford to. While this post brings up the issue of network neutrality (Fox content not available if you’re coming from Cablevision) within a country, what about the issue of being able to access the content while you’re in the US but not while you’re roaming out of the US?This might seem like a new problem, but for folk that have been living outside of the US, we do find this rather annoying. I know that media rights aren’t sold beyond a certain country, but maybe its time the model changed?
I wonder how hulu handled this for hulu plus customers. I pay $10 a month for access to hulu, a part of which is Fox programming in HD. It’s also a lot more than the cable companies pay in retransmission on a per user basis.
Non sports fans end up subsidizing the high costs of sports broadcasting rights. ESPN is the highest priced basic channel. MSOs frequently get into spats about whether regional sports networks will be on basic tiers (more viewership, greater ad revenue) or premium tiers. These regional networks sometimes get $2/sub, which is about 4x the broadcast networks.I remember that when the Nats were coming to DC, some politicians got involved in the dispute. Apparently watching baseball on basic cable is some sort of right.
In almost every instance, regulation has stifled innovation which has diminished competition.
I agree that would not be for here…..and I’m not sure I’d know which I prefer. I do know that many leagues are in danger of becoming Hockey where the ticket prices got so high the average person couldn’t afford to go.
Yeah, but the point deserves to be made again, minus the koolaid.The cause of net neutrality was lifted out of obscurity by Google. As it happens, net neutrality regulation would benefit Google enormously.It would prohibit internet service providers from charging Google for the privilege of delivering ads to consumers across their wires (an idea I’m sure terrified Google execs from the moment they heard about it)–or selling Google and its competitors fast service on those networks (which could turn into an expensive and pointless arms race).William Mougayar’s point was that the opponents of net neutrality are “gatekeepers” and “industry dinosaurs”. But its champion is the biggest gatekeeper on the net, the biggest “industry dinosaur” of them all. It is clearly looking out for its own interests. And somehow it has a whole lot of us inviting the FCC to regulate the Internet.
Our tariff system doesn’t require banana sellers to do business in every country.If you want a system where Apple is required to sell all its products in Canada exactly the same as in the U.S., the tariff system is not a good analogy.
Not to quibble with you but you have misread the comment.I am not suggesting that bananas have to be handled the same in every country — but if they are, then like the comprehensive system of tariffs they have to be “figured out” in some comprehensive manner. In the same way that the selling of bananas had to be figured out.Perhaps bananas will not be sold in every country. Perhaps the tariffs will be different from country to country but an attempt can be made to solve the problem.I was speaking of the Internet and not Apple products. My comment had nothing to do w/ Apple.
“If you want to know what we’re fighting for, this is it.”This is an important case study precisely because the net neutrality regulation people have been fighting for so far, as I understand it, wouldn’t cover it.The bad actor here is not an ISP discriminating against Web sites, but a couple of Web sites (Hulu and fox.com) discriminating against an ISP (Cablevision). It’s precisely the reverse of the case net neutrality addresses.Net neutrality could be broadened to cover this kind of case. That means regulating Web sites though. Is that what you want to see?
Will insert the name of a tune I didn’t finish writing a few years back… “You Gotta Have War To Get Your Piece” ;D
I have found one thing in my life to be true- rapidly changing technology leaves very little time for consumers to catch up
Things are changing. Think about it… in the world of television, they are more concerned with the lack of young viewers. Why? They are texting, sending videos and/or watching Youtube. Think about it.So we have the development of WebTV. You can choose to watch Youtube or Network.The provider of the bandwidth is paid either way. The choice of purchasing what you want directly from the producer is coming. Then the competition will be between the bigger outfits trying to offer packages that apply to you at a price they will claim less than what you would pay ‘per program’.Will the networks try to smother this? Yes. It fits real nice into that jargon referring to the rich boys can buy their shows while the working poor can’t and blah, blah. But it is coming soon.
Consumers aren’t in the middle, and that’s the problem.Fox’s licensing revenue is dependent upon the cable company to consolidate billing for authorization to access the content. They’re not licensing the content to me directly, and thus in this aspect of their business don’t consider the end-user their customer.The big issue to overcome with a distributed IPTV marketplace is a common, open authorization platform. I don’t really want to deal with licensors directly, but an open platform would encourage innovation in licensing models (adware, all-you-can-eat like Napster/Netflix, rewards programs sponsorship, a la carte) as well as curation — think custom TV channels in addition to custom TV packages. If Fox raises their price for their content, I’d have redress with them. If, however, the content originated with another provider, and simply using Fox for distribution, if my Fox authorization to access that content no longer applied, I could find alternate licensing mechanisms allowed by the licensor. Ultimately, maximizing the licensed distribution is in the interest of the content creator.As well, the platform could support supply chain transparency, as is being demanded with physical goods. Layers of licensing by type could be applied — for example, songwriter copyright royalty information, performance royalty information, etc. No more sob stories about how money doesn’t filter down to artists — allow me to choose only content matching my ethical criteria, such as residuals to sitcom writers on internet distribution.The way to have the IPTV revolution that WE want is to decouple authorization from distribution, and allow for new business models around licensing and curation.There are plenty of implications for licensing possibilities for derivative works, as well, with strict technical definitions of acceptable use (including existing distribution-specific restrictions, meaning that it could be a drop-in replacement) which could include authorization/royalty information for sampling, non-commercial use, royalty payment information for “covers” of songs…The way to get rid of RIAA, MPAA, and SoundExchange is to replace them with something disruptive and flexible, while retaining authorization to ensure that folks are compensated for their work.
I have only a basic idea of how ISP’s, search engines, and web sites work in conjunction with one another. So I’d appreciate someone straightening me out if this is totally wrong (which it very well could be!).When a company like Google can exercise control over the hierarchy of search results, how is that radically different than an ISP restricting the rate at which data moves too and from a given website?Google can make or break a web business virtually on a whim if it decides to move your website past the 3rd or 4th page of search results. It has also given rise to what seem to be ridiculous inefficiencies with these businesses that do nothing but artificially maintain your position (or help you move up) in Google search results.Can someone explain why these two things are radically different? And why one requires a pretty substantial degree of regulation while the way search results are filtered should be left totally ungoverned?
“You are absolutely right and my generalization was overbroad.”:-) This is the kind of statement I want to see more often on the Internet. Seriously. Well done.This thread is extraordinarily civil. It makes me very happy when I see this on the Net.Have a great day.
I’m waiting for ESPN3 to start working in full over my xbox360. With that and netflix, I don’t really have a need for cable. Sadly, I’ve heard mumblings that Time Warner won’t be allowing me access to the full slate of scheduled programming.Next up, I’m pretty sure they’re going to come into my apartment and take away the books they don’t approve of. (ok, maybe a bit alarmist for a sunday morning).
The politburo that you talk about i sable to exist because there is little or no Consumer resistance.So cut the cord now and be without it, listen and watch over the air broadcasts.I don’t have cable, won’t have it and will share my broadband connection via a WiFi environment and have no problems “sticking it to the man”I think if we had a truly progressive society then we would have broadband access run by municipalities & it would be run efficiently and be a low cost to society. But private enterprise has created oligopolies that make it difficult for any new entrants to compete and thus by lower prices.Netflix uses USPS to deliver it’s material, it could have gone with UPS or FedEx but they would cost more and the USPS delivers it for lower price and offers similar quality.In the end you have to show businesses that you don’t partake in their shenanigans and that is the best way to make them change and let them know.So cut the cord now.
Right, but the difference between denial of access to proprietary content and the active removal of pre-existing content that I already own is fairly large. Whereas the former is a violation of what I feel are my rights as a free citizen with access to a broad range of market options, the latter would be a violation of those as well as my privacy, property, etc.In any case, the net neutrality debate is a fascinatig mix of free markets vs local monopoly vs government regulation.