Broadband Steps Backwards

The recent news from broadband providers seems to be all about how to make their product less appealing to customers.

First of all, the AP reports that AT&T is still considering filtering backbone traffic. They say they’ve noticed the massive amount of copyrighted data being shared over P2P networks, and feel a need to do something about it — “It’s like being in a store and watching someone steal a DVD. Do you act?” However, I think it’s likely that this is not just AT&T having an attack of conscience (not exactly something Ma Bell is known for), but rather AT&T being pressured by the usual suspects, the MPAA and RIAA.

They’re looking at this as a security problem — how do we stop unauthorized traffic (piracy) while allowing authorized traffic? From this perspective, it’s tractable — the technology exists to do it, albeit clumsily (you either miss a lot of piracy or you throw out a lot of legitimate traffic.) However, this is more than a security problem — there are legal and business problems here that in my opinion should overwhelm the security concern.

I’m surprised that AT&T is actually considering it. Currently, AT&T is shielded from lawsuits over content carried over their network by having “common carrier” status — they do not discriminate based on content. If they begin discriminating based on content, they may cut down on music and movie piracy — but they also render themselves vulnerable to being held liable for what music and movie piracy does occur. Perhaps the MPAA and RIAA have offered to indemnify AT&T in exchange for its help with the filtering. There is another problem with filtering, though — AT&T’s Internet backbone lines carry a staggering amount of traffic, so any kind of filtering would of necessity have to be very rudimentary or the processing power requirements would be enormous. Essentially, they would have to do something like what Comcast did with the Sandvine system — just interfere with all BitTorrent (or other P2P) traffic, without making any attempt to differentiate between legal and illegal content.

Perhaps AT&T has another ulterior motive, though — P2P traffic is representing an increasing proportion of all Internet traffic, at this point more than half. If killing P2P would drop AT&T’s bandwidth requirements by 60% while not affecting their revenue, this would have to be tempting for the corporation.

The increasing amount of P2P traffic is causing another major Internet company to consider sabotaging their own business — Time-Warner Cable. Ars Technica reports that Time-Warner is considering switching to metered rates, where users pay different amounts based on how much bandwidth they are using. They’re undoubtedly considering this due to the public’s reaction to Comcast’s filtering of P2P traffic (outrage and lawsuits.) Cable companies are in a bind — they built their networks under the assumption that traffic is extremely asymmetric — many users send small amounts of traffic (requests, acknowledgments) to centralized servers which respond with large amounts of traffic. This made sense when almost all Internet traffic consisted of web pages, but P2P networks destroy this assumption, with each user uploading as much, or more, than they download. Essentially, with P2P everyone is a server, and the cable companies simply can’t handle this without massive, expensive upgrades to their entire infrastructure. Their problem is one of failure to plan — they didn’t see this coming, and spent billions of dollars in capital building the wrong network. Even without piracy, P2P would be an increasing proportion of Internet traffic today — the world has changed, and it won’t be changed back again.

On one hand, metered pricing is fair. Right now, the people who use P2P are getting their Internet connections below-cost — we’re unprofitable for the ISPs, who can only support us because the masses of people who do nothing but occasional web-surfing are so profitable that they subsidize P2P users and result in an overall profit for the ISP. ISPs can afford to offer “unlimited” broadband only so long as they can be sure almost no one will use it. With metered pricing, heavy users pay for their heavy use, and light users can pay less since they don’t have to subsidize the heavy users. On the other hand, there’s a problem — customers despise metered pricing, especially when they’re used to flat-rate. In the 90’s, phone companies experimented with metered local service, and it was outrageously unpopular even with people whose phone bills decreased as a result. Sure, they were paying less, but now they felt limited.

Switching to metered pricing will indeed save money. However, it will do so by driving away customers, starting with the unprofitable heavy users. Perhaps this is intentional — banks set up their fee structures to drive away unprofitable customers, too, so it’s not unprecedented. But in the long run, P2P use is increasing, and the old usage patterns are decreasing — if the networks don’t adapt to this, eventually they’ll have no customers left. Competitors like Verizon FiOS, which (due to a fiber-optic last mile) don’t need to limit upstream bandwidth and have been built in the modern P2P world will kill off any network that tries to live in the past.

legal, networks, piracy, society

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