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Friday, May 9, 2014

Nate Taylor writes about Proposal to Allow ISP's To Charge For Faster Access to Internet

Basically, the proposed plan would have Internet Service Providers (ISP's) charge companies extra money for faster access to their site or services. Companies such as Netflix, Google, Blizzard, Amazon, eBay, etc

A little more complicated:
ISP's would would create a "block" price for regular internet access at regular speeds. ISP's could then charge companies for faster access to their sites (such as Netflix) or programs (such as World of Warcraft). If the companies choose not to pay, then the access to their sites or programs would be at regular speeds.

Imagine, you are surfing the internet using the "regular" speeds, which could be as slow as dial-up. Then, if Netflix or Blizzard didn't want to pay for the faster speeds through your ISP, then you would be forced to deal with those slow speeds when trying to watch a movie or play a game while other people with different ISP's would have a faster connection.

This could ultimately come down to having to go with a competitive company with HORRIBLE prices and/or support because you want to be able to watch a movie or play a game online. This can result in an increase in member prices for companies like Netflix and Blizzard.

Here's an example for you:
Company A, a large ISP, proposes a good price for faster speeds to Netflix and Blizzard. Both Netflix and Blizzard agree to the contract. Company A lowers their overall speeds but offer a faster speed when watching Netflix or playing "World of Warcraft". Company A charges $60 a month for their internet.

Company B, a small local ISP, wasn't able to propose as good of a contract as Company A. Blizzard accepts the contract, but Netflix refuses the contract. Company B lowers their average speed (including Netflix) but speeds it up for Blizzard. Company B charges $60 a month for their Internet.

Company C, a random ISP, decides that they don't want to change their speed packages and leaves all their speeds the same. They charge $60 a month for their internet.

As a result, Netflix raises their membership prices to $15 a month for everyone. Blizzard raises the price for World of Warcraft to $20 a month for everyone.

Some people won't be able to sign up for services with the company that offers a better deal for them. Some may want to watch Netflix but are only able to connect with Company B because Company A or C doesn't service their area. Finally, even if you are in an area that is covered by Company C and don't have anything change with your speeds, you are still forced to pay more in order to watch Netflix or play World of Warcraft.

Feel free to replace company names in this example with things like eBay or Amazon or Facebook. Imagine, because Facebook now has to pay in order for customers to be able to access their site, they are now charging for a membership in order to use their apps or you aren't able to play Farmville because the speeds aren't as high anymore.

Think about it. I'm against it, how about you. Contact the FCC and let them know.
FCC Toll-Free Number - 888-225-5322
Chairman Tom Wheeler -
Commissioner Mignon Clyburn -
Commissioner Jessica Rosenworcel -
Commissioner Ajit Pai -
Commissioner Mike O'Rielly - Mike.O'


Anonymous said...

the big boys will get what they want, they always do in the end

and after that netflix and others will start with commercials and become polluted as cable tv is now,
the greed for ultra profits is too great
if you don't spend the extra $$$$$ for a higher bandwidth they will slow you down because will not spend money for to update their capacity

the consumer will get the shaft again !!!

Anonymous said...

I’m Bob and I deliver stuff to everybody. I charge everybody for my ability to deliver. You want you covered, news, weather, shoes, pizzas… miracle weight-loss plans…no worries that’s all included. Business is going good and I’m hoping to expand… you know bring more stuff to you.
My cousin John—the entrepreneurial spirit that he is, has decided that since I already deliver things to everybody, that I should also deliver his wares to his customers with no charge to him or his new company—John sell tractors, John sells gravel. Since I’m the delivery guy, I should be the one to raise prices to my customers while he keeps costs down.
John says, after all…. When you get that load of gravel, the PIT only charges so much for it, the real cost is in the delivery. John says he just runs the gravel pit and charges for gravel. Sure it’s big and heavy, but a delivery is just a delivery—right.
John complains that I will not deliver 4 tons of gravel –free to him—like I deliver junk-mail, newspapers and catalogs for others.
When I try to tell John that not all of my customers want or need a steady flow of gravel deliveries and should not have to pay for it, he says, “That’s your problem”.
The US Postal System, FedEx, UPS, all charge for delivery… and demand cash up front (you know those silly shipping and handling charges on your on-line orders).

Hey, If I have to up my route from my fleet of 2 station wagons and a mini-van by 5 dump trucks and a Freightliner with a lowboy… somebody is going to pay. …
So I’m thinking I might just stop the flat rate service and charge for deliveries by the pound. Pound of gravel, potatoes, un-friend requests—whatever. Get out your checkbooks.

But hey, Bob this is the internet—not trucks—the internet is MAGIC and should be FREE to all who might partake in it……RIGHT?

Anonymous said...

Net Neutrality...look it up, it's been going on for years.

Nate Taylor said...

To Bob,

By your reasoning, we should all get the same speeds for what we want on the internet but pay for how much we use the internet. This is called "Usage Limit" or "Usage Cap", and has been a battle between ISP's and Consumers for years. But, that's a whole different argument.

That being said, your analogy about this situation is broken. For one, the USPS, FedEx, and UPS all have "Flat-Rate" options. And, there are a lot of online orders where you don't have to pay shipping (and not just the "Free Shipping for Orders over $XXX" deals). Also, according to your analogy, there is only 1 person paying for the "shipping". In terms of the internet, both the consumer and the company pays for internet access.

There's an interesting post on "How Stuff Works" that explains the costs that ISP's incur in order to provide the service. In the "Worst Case Scenario", it equals about 1.9 cents per gigabyte (Yes, that's $0.019).

The daily usage of a family of 5 in the U.S. is 10.6 GB a day (that's 4 smartphones, 3 ipads, 1 Transformer prime, 1 kindle fire, 3 Apple TV boxes, 3 Set-Top Boxes, 3 Kindle e-Readers, 4 PCs, 2 Macs, 1 iPod, and 1 XBox).

That means, that the average that the ISP's are paying, for the average American family, only $0.209 a day or $6.27 a month. The average American family pays $55 a month. So, we are more than paying "per pound".

Not only are we paying for the internet access through the ISP's, but those websites and services that we all enjoy, such as Netflix or World of Warcraft, we also pay for (there are a few out there that we don't pay memberships for, but they are paid through another means). Those companies also have to pay for their internet connection as well.

Anonymous said...

So, to off set the great service of our local government, the taxes will rise so that the courthouse, etc can enjoy fast speed on the internet on the taxpayers dime.

Banks, credit cards, utilities will pass the fast speed cost onto its customers.

Anonymous said...

It's this simple:

You pay your cable company to provide you internet. And no small amount of money for it.

They happily claim speeds and bandwidth for the price.

When you actually want to use it, they go after the people delivering the websites and services YOU thought you were paying to get.

You bought your cable, so why shouldn't you get to watch netflix?

See, they want to have their cake and eat it to. They're your only real option for decent internet, and they want to charge you out the wazoo for the connection, then charge the people you want to visit on the net for the traffic that generates.

So the question must be asked? What exactly are we paying for in our cable bills if not the websites and services OF the internet!?

And if the cable companies get to decide what parts of the internet it will deliver to you and what will just fall out the bottom, how far will they take that? And how far will they extort the companies on the internet providing content? How long until you have to pay extra for anything on the web you actually want to see?

It's not a left/right issue. It's a simple issue of whether or not you, the American people, are going to allow the regional cable monopolies to control and stifle the internet.

You may not know this, but the internet speeds in this nation are already the laughing stock of the world. And these greedy cable ceos will glady drag us into the communications stone-age and kill internet startup businesses so they can play copper boss with what is the only option for "high speed" internet to well over half of the American public.

Time to stop watching the Fox and CNN news that are loading you full of B.S.,

time to open your eyes and put on your thinking caps, and write some emails and letters.

This is an issue you NEED to actually care about, an issue your children NEED you to get involved with.

Anonymous said...

People are so naïve sometimes. All you need to do when it comes to decisions like this, is follow the money. That's how our "democracy" works. Get used to it.