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December 15, 2008


FWIW, the WSJ apparently also completely mangled Lessig's position.

Google frames the issue accurately, the WSJ is simply confused and underinformed.

Google would neither need nor want a lack of neutrality in order to make it harder on upstart competition. Upstart competition is hardly a threat to them to begin with. Indeed, it's where a lot of their own innovation comes from: they acquire start-ups all the time to add to their portfolio of products and services. Google knows the Internet has grown so explosively and thrived because of the competition that such openness and a low barrier to entry allows. Without that, the Internet as a whole will suffer, and Internet companies like Google will suffer with it.

It would also give the ISP's an unacceptable level of influence over all content and service providers, even the ones that can afford to pay the ISP's off, but especially the ones that can't.

The objective of the ISP's isn't to ensure priority traffic to bigger companies like Google, it's to get paid *twice* for the same bandwidth (once by the user paying for their connection to the internet, and again by the major web sites the user wants to visit). This doesn't benefit anyone but the ISP, it's a financial nuisance to the big companies that can afford to pay the ransom money allowing their customers to access them, and it's a huge impediment to business, free speech, and the internet as a whole for everybody else.

There is no reason Google, or *any* other company, no matter how big, dominant, or well established it is, should want to grant the ISP's that much power.

This is way off-base. Google and Amazon would be idiots to be OK with the tiered system. They'd become beholden to the ISPs in such a ridiculous way -- the ISPs could charge whatever they wanted and once the system is in place, they could jack up the price every week if they wanted and Google and Amazon would have to pay. Yes, Google has a lot of money (though I think Amazon is still barely profitable) but why on earth would they want to change the system to give someone else the ability to cut into their profit margins arbitrarily when their market share just keeps going up anyway in the current system? They are not afraid of the little guy at this point.

What would happen if I invented a way to send internet traffic at 1000 times the speed but it cost a little more? Cogent does something like it. Does net neutrality forbid me from charging the extra that I require?

it depends on what you mean. if you're offering to customers like us, then of course not. you pay for the speed you want. nobody has any problem with that.

if you're talking about charging content providers... again, these companies pay a lot of money for broadband access. if that price went up, they would obviously be required to pay it.

what neutrality prevents is providing your new super fast transmission only to people you cut special deals with and denying it for everyone else.

Let's see if the WSJs Tuesday edition will have a correction of the story...

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I'm assuming my invention would be available on a limited basis at first. Both to prove it's value and because it would take time to scale up. I would hope to be able to charge a premium price for it and the number of customers would be limited by my capacity to serve them.

you say //what neutrality prevents is providing your new super fast transmission only to people you cut special deals with and denying it for everyone else.//

All the deals I cut are 'special' to me and I would be in the position of denying access to others because of a lack of capacity.

I confess that I am skeptical about the legislature getting involved in pricing. Look at all the distortion that happens because medicare forbids billing anyone else less than medicare for the same procedure.

No, Dave, it looks like you have it upside down: Medicare doesn't forbid anyone billing less than Medicare for the same procedure. In fact lots of doctors won't take assignment because Medicare pays LESS than what they can charge private pay clients. Only in an alternate universe would anyone be dumb enough to bill for less than Medicare allows. Often it's less than the procedure costs to do, let alone overhead, etc.


Medicare does in fact say that they cannot be billed more than any other patient receiving the same procedure. Then medicare pays only a small percentage of what is billed to them. This has served to make the official price unnecessarily high.

elliot followup:

Q:Can you direct me to the law that states a Medicare provider cannot charge a Medicare beneficiary more than a non-Medicare patient?(10/08)

A:This regulation is part of Section 1128(a) of the Social Security Act entitled “Exclusion of certain individuals and entities from participation in Medicare and State health care programs.” This section can be found on the Internet at http://www.ssa.gov/OP_Home/ssact/title11/1128.htm.

If you have a super-innovative new service, I suspect you'll find you have to sell it at a discount just to get people to try it. And if you want to hook your invention up to the Internet, that highway designed largely if not wholly with public money, then you may have to put up with some regulation, the way you do when you take a vehicle out on the public highways.

I can't see Google or any other content company wanting to end net neutrality. They don't want to have to pay every single end user's broadband provider, as well as paying the (no doubt hefty) bills for their own pipes. Not to mention every other ISP their traffic might get routed over. They might see an interest in blocking out the competition, but if they have any sense they'll anticipate the ensuing bidding war and back away from the idea.

And Google of all companies should know that end users and small startups have a way of putting a stop to this kind of bullsh*t. Remember the pay-for-play search engines people were trying to build just about when Google appeared? It was the obvious way to "monetize" search ...

I suspect the whole thing is a shakedown operation by the broadband providers who keep trying to find ways to "add value to" (ie control) the content that goes over their pipes. At one point Cisco was trying to do the same thing by selling "quality of service guarantees" (ie preferential routing) to application's companies. Don't think that ever went anywhere either.

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