Shed No Tiers for Broadband Pricing

OMG! Some claim that the FCC's recent ruling that Comcast violated the FCC's network neutrality principles will inevitably lead to metering, caps, tiered Internet service and higher prices for consumers. Not so fast, says Free Press, which led the fight in bringing Comcast's decision to block P2P applications like BitTorrent to the FCC.

It's been one week since the Federal Communications Commission bopped Comcast's ears for blocking the peer-to-peer application BitTorrent, ruling that the broadband provider violated the FCC's network neutrality principles.

After the predictable celebrations by network neutrality advocates came the darker, more ominous message from other circles: If broadband providers can't manage their networks to keep bandwidth hogs from clogging the pipes, tiered service, caps or metering are sure to follow.

The chief disciple of this line of thinking is Craig Moffett, an analyst with Bernstein Research. On Aug. 1, he wrote on his blog:

"If network operators can't manage traffic loads one way, they'll do it another. By banning discrimination based on application or content, the FCC-and net neutrality proponents more broadly-are pushing network operators closer and closer to what increasingly is their only viable alternative-usage-based pricing."

Bernstein argued that usage-based pricing could be "the best thing that ever happened to the network operator crowd," but "the worst thing that ever happened to applications and content."

Not so fast, countered media reform organization Free Press. Along with Public Knowledge, Free Press brought the FCC case against Comcast after tests by the Associated Press and others showed that Comcast blocks users' legal P2P content. Bernstein, said Free Press in a report released Aug. 7, (PDF) is climbing a rope attached to nothing. The report, written by Free Press Director of Research S. Derek Turner, stated:

"These assertions are simply untrue. By stirring up fears of higher monthly bills, this posturing attempts to delegitimize the Commission's worthy action, giving consumers the false impression that they must choose between secret Internet blocking or the very undesirable practice of metering."

Turner added, "This is a false choice, one most providers don't even consider necessary or practical. These scare tactics shouldn't deter anyone from pursuing the policies we need to preserve a free and open Internet."

Free Press noted that such a switch in broadband pricing models would represent a significant shift by broadband providers, "But to believe such a move is right around the corner, we must accept the argument that there is congestion in the network."

There isn't, at least according to the available data. Broadband providers like Comcast claim the pipes are filling and dire predictions of the coming "exaflood" of Internet traffic abound, but the amount of data supporting these claims is slim.

Predictions about the Internet collapsing under its traffic flow have been popular since at least 1995, when InfoWorld's Bob Metcalfe wrote a piece entitled "Predicting the Internet's Catastrophic Collapse and Ghost Sites Galore in 1996." Metcalfe wrote, "Almost all of the many predictions now being made about 1996 hinge on the Internet's continuing exponential growth. But I predict the Internet ... will soon go spectacularly supernova and in 1996 catastrophically collapse."

It didn't, but that didn't stop the continuing predictions of doom and gloom. Since broadband providers do their best to obscure any data (for competitive reasons, they claim) from the FCC, there's no real proof that Comcast's throttling of BitTorrent was necessary in the first place.

But in Canada, there is some proof. According to the Free Press report:

"Bell Canada was forced to disclose the level of congestion in its network after Canadian regulators began an investigation into the company's practice of application throttling. The data indicated almost no congestion in Bell Canada's network, despite the company's prediction of a bandwidth apocalypse."

If the network traffic congestion isn't so bad, why are providers making the claim? According to Free Press, the historical trend in pricing models has been simplicity (bundled packages) and more for less.

"ISPs may well buck the historical trends and economic incentives and move forward with limitation pricing anyway," the Free Press report stated. "Cable ISPs may be particularly worried about the threat that online video poses to their own video products, and might turn to limitation pricing as a way of disfavoring services like Netflix, AppleTV, Vudu, Hulu, Vuze, Miro and a whole host of commercial online video distribution applications."