Network Neutrality

https://stripe.com/blog/network-neutrality

by tweakz • 12 years ago

224 97 12 years ago

stripe.com

jonallanharper• 12 years ago

"Why Net Neutrality Regulation is the Path to Ending Net Neutrality"

http://hustlebear.com/2011/01/05/why-net-neutrality-regulati...

Article is from 2011, but still pertinent.

x0x02• 12 years ago

Judd is deeply stupid.

   So… greedy companies “might” restrict us from things, or they “might” 
   prioritize content delivery to the highest payer.

in the sense that they are (to also use stupid quotes) "already" doing "just that"

Further:

   One problem with the diagram above is that our homes are not connected to 
   just one big ISP. The FCC’s own data shows that as of June 2008, 98 percent 
   of zip codes have at least 2 broadband providers, and 88% of zip codes have 
   at least 4 broadband providers

oh, wow, two (maybe four) isps! Ignoring, of course, that for most of us there are only two (cable + telephone) and everyone else has to pay to run on those wires. And for many, telephone line delivered internet is very slow, so now we're down to one actual isp.

And comcast costs $65/mo where I live for just internet. And they're looking at neflix and google and all those other internet businesses and chomping at the bit to steal some money from them.

Also, weirdly enough, my internet bill keeps going up but the speed doesn't. Feel the competition!

smokinjoe• 12 years ago

Also, just because a zip code has 2 broadband providers, does that mean the entire population residing within that zip code has that access?

masklinn2• 12 years ago

Article is from 2011, but still pertinent.

Except for the whole part where what he decries as non-existent (ISPs slowing down traffic for non-payers) which thus does not need regulating is happening right now.

altcognito• 12 years ago

FACT: The Net Neutrality cause is a response to a hypothetical problem.

Except, it's out of date as we've had ISPs intentionally manipulating their networks to their own advantage (and more importantly their customers disadvantage) for at least a year. Even when this article was written, overzealous throttling of select services was/is common. (Youtube in particular)

The condescending tone of the article is pretty entertaining given the level of ignorance he willfully displayed even then.

toddsiegel• 12 years ago

Even if this plan is not approved this is not over. Telecoms will just try again and again.

happyscrappy• 12 years ago

This is the most succinct explanation I have seen, most attempts make people's eyes glaze over from specifics.

tolmasky6• 12 years ago

"We’re building a platform ourselves, and we work hard to ensure that Stripe treats businesses of all size neutrally."

Since they set up the comparison themselves, I wonder if Stripe would be in favor of legislation that forced them to forever treat all their customers neutrally vs. us just trusting them to "work hard to ensure" that end. Perhaps making it illegal to offer sweetheart deals to bigger clients for example? Arguably payments is the next most fundamental piece to a functioning internet after bandwidth, so its not unreasonable to request. If MegaCorp A received much lower rates on credit card processing than little Startup B, how could we have fair competition after all?

masklinn2• 12 years ago

Since they set up the comparison themselves, I wonder if Stripe would be in favor of legislation that forced them to forever treat all their customers neutrally vs. us just trusting them to "work hard to ensure" that end.

ISPs already do that all the time with in-network CDNs, dedicated ports and the like. And nobody cares because it does not make things worse.

silverbax882• 12 years ago

I'm not sure how equal your analogy is. It would require that All Payment Processors, not just Stripe, would have to treat all users neutrally. Which would be awesome, because Stripe would beat the heck out of the competition.

Plus, to be a fair comparison, it would mean regulation so that payment processors couldn't actively make it HARDER for you unless you pay them. Which again, they should be in support of.

It's more like the DMV throwing down nails and tacks in your driveway and telling you that you can have them removed if you pay them more.

tolmasky6• 12 years ago

Yes, just like the current rules would affect all ISPs. Sorry if it wasn't clear that the law would apply to all payment processors and not be written to solely affect Stripe.

dasil003• 12 years ago

No they didn't set up the comparison themselves, and it is a false and harmful comparison. The Internet is not the same category of thing as Stripe, or pretty much anything else that I can think of. The Internet is a network of networks. Net neutrality is what allowed it to grow and flourish to everyone's mutual benefit. It is not AT&T/Comcast/Verizon that created the Internet and thus have the right to control it, rather they are selling access to the Internet which they can profit from not because of their initiative and innovation, but because of a much larger collaborative effort and series of gentleman's agreements that predate their involvement. They have leverage because of a monopoly on the last mile to consumers and they are trying whatever shenanigans they can to capitalize on that advantage, but it's all bullshit, and to even entertain their bullshit with false analogies for the sake of some deluded sense of fairness is really a bad idea.

What Stripe does is the same as any other payment gateway. Not only did they fully create their own platform, but there are dozens of competitors with no barrier to entry, and mind you, even if they did have some kind of monopoly to something they themselves built, it still wouldn't fall into the same category as the Internet.

Even suggesting this comparison is to frame the debate in favorable terms for the telecoms, and they definitely don't deserve the support.

tolmasky6• 12 years ago

You are free to believe that the analogy is not sound, or that the comparison is weak, but it is silly to say that they did not set the comparison themselves. You should definitely take it up with them (which was part of the point of my post). Its not really clear to me how to prove this to you other than just quoting the post back to you:

"As we’ve written before, we believe in the power of impartial platforms. We’re building a platform ourselves, and we work hard to ensure that Stripe treats businesses of all size neutrally. Mr. Wheeler’s plan would push the internet in the opposite direction. It would give larger players a distinct advantage, hurt new companies, and dampen the rapid innovation that has thus far defined the internet economy."

Unless you believe mentioning themselves and how they stay neutral was one big typo, or some sort of strange and irrelevant digression, it seems pretty clear that they are comparing their neutral intentions with the importance of keeping net neutrality. Their argument basically goes:

1. We believe in impartial platforms as a general tenant.

2. For example, our platform, as a subset of "platforms", should remain neutral which we strive to do.

3. The internet, another platform, should also be neutral, if not these bad things will happen: blah blah blah.

ThomPete3• 12 years ago

That analogy doesn't really work cause that is not really the problem with ISPs today. People pay different prices for different speeds.

The problem of network neutrality is much more subtle in that it introduces the idea of censorship with the type of content that is considered acceptable.

If Stripe started asking porn companies to pay more than lets say a church group for the same service you could start to talk about an analogy but thats not the case.

nileshtrivedi• 12 years ago

I would say that rather than type of content, the issue is about source and destination of the packets. Payment platforms already distinguish between type of payment (shopping, fund transfer, gambling and fraud) etc. The analogy would be to not discriminate among two shopping sites.

cs702• 12 years ago

There's a big difference between the ISP and payment processing markets in the US.

Most consumers and small businesses in the US can buy ISP services only from a duopoly, the cable company or the phone company, who therefore are in a position to dictate terms to customers. In other words, there's no functioning "free market" for consumer and small-business ISP services.

On the other hand, there are many payment processors in the US.[1] Say what you will about their service quality (most suck -- Stripe is an exception), but at least customers have multiple choices. No payment processor is in a position to dictate terms. In other words, there's a functioning market for payment processing services.

[1] http://www.quora.com/How-many-payment-card-merchants-are-in-...

gojomo4• 12 years ago

Then why not promote competition and choice, via antitrust enforcement and franchising/last-mile-infrastructure reforms?

Federal "net neutrality" regulations freeze into national law a particular formula for access, based on an idealized model that's never quite existed before. (To the extent the net has often been 'neutral', it's not because the FCC demanded it, but customers and businesses. And the legions of de facto exceptions have been practical, and evolving quickly, not waiting for telecom-lawyer mandarins in DC to design us a better internet.)

Even if new utility-style regulation prevents certain abuses, it equally prevents valuable experiments from incumbents or new entrants. The history of regulated utilities – electric, water, classic phones – is one of stagnation, and plenty of subtle abuses from those incumbents whose margins get effectively written into law.

collision• 12 years ago

Pricing neutrality is hard to enforce and can lead to price inflation (c.f. interchange), but we'd be game for something along these lines. Part of Stripe's raison d'être is making pretty advanced payment infrastructure — only available prior to those with considerable means and past experience — available to anyone. We're obviously not there yet (witness the limited number of countries, payouts only being available in the US for now) but that's where we're trying to get to.

tolmasky6• 12 years ago

Don't know why this isn't higher up, it shows a consistent position on these matters, and displays a pretty mature context to the original post that set up the comparison. The question was an honest one, and as someone mentioned earlier such legislation might actually be super favorable for Stripe.

runako2• 12 years ago

I think your analogy is flawed, and here's why.

As a broadband customer, I pay for access to "the Internet". Over the last couple of decades, "the Internet" has meant access with something akin to net neutrality in place.

What my ISP wants to sell me is not "the Internet", but something new, which they have yet to define. But from what their lobbyists have put into the FCC proposal, the "Internet" they want to sell me is one where both sender and receiver of data pay them for data. This is not a wholly unreasonable payment model, but it would represent a profound shift in how the Internet is paid for in the U.S.

Further, under their proposal, my speeds to any particular website are dependent on how much I pay and how much the other side pays to my ISP (not theirs). Crucially, half of this is wholly outside my control. Of course, I still pay for the full pipe regardless.

Note that in particular the source server has not been a customer of my ISP, but the FCC thinks they should become a customer of my ISP so that I can have the speeds I have been sold as of today. This is not how the Internet has worked, and is a new service offering being marketed as "the" Internet.

So a better Stripe analogy would be that Stripe offers would be if they 1) first became as big as Chase, Bank of America, Wells Fargo, and American Express combined (that would give them approximately the market heft of the American broadband ISPs); 2) required cardholders to buy a Stripe Consumer subscription before processing their cards for merchants. I'm fairly certain that even our lax banking regulators would have something to say about this.

tolmasky6• 12 years ago

So....?

Just because the internet would work differently it needs to be absolutely abolished? Consider the following:

If the funds ISPs get from service providers begins to completely overshadow the monthly fees from consumers, you may end up with really interesting incentives: namely, it may be in an ISPs best interest to provide as many people with as cheap as internet as possible. Doing so would mean more people using Netflix, which means Netflix paying them more. We could end up in a situation where the services providers do all the paying, and internet becomes free for consumers, since every additional free consumer is cheap for ISPs, and every additional byte delivered by Netflix to the consumer is a huge win for them. I'm not saying this WILL happen, but I think its silly to assume that everything in the world will fall apart with this model, just because its different.

jsz0• 12 years ago

If service providers are hit with unfavorable regulations they may reconsider being in the 'Internet' service provider business and instead return to an AOL/CompuServe style model.

guelo• 12 years ago

All you libertarian ubermensch refuse to acknoledge the historically unprecedented levels of innovation that the regulated internet has produced based off of government funded research. And you provide no good reason to destroy this miracle besides 'free market!'.

themichael• 12 years ago

It is not a good idea to compare 2 unrelated industries directly. In the ISP Industry, the customer pays for X Mbit of Bandwidth. In the payment industry, the customer pays for the transaction fees indirectly. Hence, if you were to get your internet connection for "free" and pay for it indirectly, then the comparison could be made.

jusben13692• 12 years ago

"We’re building a platform ourselves, and we work hard to ensure that Stripe treats businesses of all size neutrally."

One assumes larger customers get more favorable processing rates than smaller customers. So if two services do largely the same thing and both use Stripe and one is substantially larger than the other then I suspect Stripe is directly, even if inadvertently, favoring one over the other. Stripe's in the payments business and they favor one set of customers over the other based on their size and pricing power.

My issue isn't with Stripe. It's with the language around net neutrality. Basically 1000+ entrepreneurs and VC's who generally bemoan all things government are now asking that this area be protected from market forces. Very awkward. Any half way decent free market economist will tell you that every non Netflix user is subsidizing the crap out of Netflix users under the current set up and that's not very free marketish.

silverbax882• 12 years ago

They are asking that this area be protected from artificial scarcity (which is illegal in all markets), not 'market forces'.

protomyth3• 12 years ago

"Any half way decent free market economist will tell you that every non Netflix user is subsidizing the crap out of Netflix users under the current set up and that's not very free marketish."

Can you explain the reasoning of this statement?

SomeCallMeTim4• 12 years ago

I second the motion.

I think he means that people who pay for internet access and then barely use it subsidize the people who do use it. Just like gym memberships that aren't used subsidize those that are.

But it's a specious argument. Just because some users are more profitable than others doesn't mean that it's OK to charge money to providers to not degrade the pipe that I'm paying for.

If I want to download at full speed 24/7, I should be able to do that (barring any specific limits in my contract with the ISP). Yes, I will be a less profitable customer than one who sends an email once a week, but those are the breaks: Either change the contract so its limits are clear, or make sure that the average profit stays enough in the black to cover the cost of the outliers.

I'm paying for a service. If they aren't providing that service, and they are limiting my connection to try to shake down providers, they're doing it by hurting my service experience. And if they're doing that in a market where there are no ISP options, then it's an abuse of monopoly power.

And any "half way decent free market economist" should recognize that monopolies can and should be regulated. Especially when the monopoly is on something that the UN has declared to be a human right. [1]

[1] http://www.thewire.com/technology/2011/06/united-nations-wik...

seizethecheese2• 12 years ago

Explanation via analogy: imagine that your water utility had to charge the same price regardless of how much water you used. The price for water service would be set at a little above average cost per customer. Now imagine that 30% of water was used by people with pools in their back yard (Netflix users.) The pool owners would have an extremely subsidized service, while everybody else would be paying extra. This is bad for non-pool owners, and also bad for the utility who could be charging pool owners a lot more money.

Now imagine the poorest household in town has to decide if they can afford water service. They would like to purchase a small amount of water for showers and cleaning, but must buy an unlimited supply of water just like everybody else. Some households may choose to go without water to pay for food. This is bad for the poor and bad for the utility who loses out on would-be customers.

Now imagine if the utility proposed a variable rate structure. The businesses that sell products that are consumed along side water, like sprinklers or fish tanks, (Silicon Valley) would fight hard against the utility!

jessriedel2• 12 years ago

My issue isn't with Stripe. It's with the language around net neutrality. Basically 1000+ entrepreneurs and VC's who generally bemoan all things government are now asking that this area be protected from market forces. Very awkward.

Right. There's a good argument to be made that ISPs have local monopolies (due either to natural failings of utility markets, or to crony government intervention, depending on your political persuasion) and therefore government regulation is a necessary evil that can be accepted in this case even by people who are generally free-market oriented. But that distinction must be made clear by anyone who wants to salvage their free-market credentials. Likewise, they must acknowledge that net neutrality will unfortunately destroy benefits that would naturally accrue in a without government regulation: the ability for users who need it to pay a premium for fast or reliable service, a la first class mail. (You can try to carve out exceptions for this with even more complex regulation, but the serious downsides of this must too be acknowledged.)

Terr_• 12 years ago

the ability for users who need it to pay a premium for fast or reliable service, a la first class mail

So in that analogy, did the postal service also begin to mishandle regular mail that was being sent to certain specific apartments and office suites, in order to force people to buy first-class?

ejain2• 12 years ago

the ability for users who need it to pay a premium for fast or reliable service, a la first class mail

Net Neutrality does not prohibit an ISP from charging their customers more for a faster or more reliable Internet connection; it simply prohibits the ISP from accepting money from Dominos to speed up access to their website (or slow down or even block access to Pizza Hut's website).

pdonis3• 12 years ago

they must acknowledge that net neutrality will unfortunately destroy benefits that would naturally accrue in a without government regulation: the ability for users who need it to pay a premium for fast or reliable service, a la first class mail.

You must be joking. First class mail service has consistently gotten more and more expensive for poorer and poorer service, while private companies like FedEx and UPS have consistently gotten cheaper for better and better service. Are you maintaining that this would not have happened if the rule that only the US Postal Service could carry first class mail had been abolished? It seems to me that, if anything, abolishing that regulation would have given us cheaper FedEx and UPS sooner.

jusben13692• 12 years ago

Spot on thank you.

jbooth• 12 years ago

https://en.wikipedia.org/wiki/Natural_monopoly

Trust-busting and anti-collusion laws aren't "anti-capitalist", even though you could argue backroom deals are just the free market at work. The same goes for regulation of a natural monopoly.

dragonwriter8• 12 years ago

Trust-busting and anti-collusion laws aren't "anti-capitalist"

Sure they are. They are specifically directed at preventing capitalists from combining in certain ways to advance their interests as capitalists, and can't be anything but anti-capitalist.

dragonwriter8• 12 years ago

Any half way decent free market economist will tell you that every non Netflix user is subsidizing the crap out of Netflix users under the current set up and that's not very free marketish.

Note that no form of net neutrality regulation that the FCC has ever proposed prohibited metered rates for broadband. You don't need the absence of neutrality to correct any problem with high-use users being subsidized by low-use users in the current "pay for peak bandwidth" system.

But metering is more visible to customers and less effective and capturing the specific and proven profits of particular content firms than per-source tolls to the content firms.

Alupis• 12 years ago

Typically I'm very anti-regulation -- but it seems proven ISP's need to be regulated to some degree. An ISP should do nothing more (or less) than just pass data from point A to point B (aka. "dumb pipes"). We are in the Information Age and unhindered access to information should be a commodity.

It's a conflict of interest to be both an ISP and a content provider.

moskie• 12 years ago

Comparing themselves to an ISP does not do anybody any favors. It just confuses the issue. ISPs should treat all their customers (and their traffic) the same for reasons that do not apply to Stripe, and do not apply to the market Stripe is in.

pc• 12 years ago

For sure; they're different -- our argument isn't that ISPs should treat traffic equally for reasons that apply to Stripe. In mentioning Stripe, I think Jon was simply saying that we spend a lot of time thinking about platform neutrality in general since it's an issue that does (in other ways) have a bearing on what we do.

nakedrobot2• 12 years ago

the vote is tomorrow, but I haven't seen a widespread, concerted effort to make a visible and effective protest online, as was done successfully with SOPA.

I wish all interested players (including the huge ones, especially Google!) had agreed to slow down all USA internet users to "dialup speed" for the day, explaining why it is being done, and prompting people to phone/email the FCC about it.

JDDunn95• 12 years ago

The issue of Net Neutrality is consistently misrepresented. ISPs are not trying to extort the little guys (who have no money), they want to throttle YouTube and Netflix. The giant corporations have convinced average people to join their cause so they don't have to pay for their bandwidth hogs (which does cost ISPs more money than small sites).

jpwagner• 12 years ago

Sure, but that means a small site needs more money to become widespread. This will force earlier decisions to raise revenue. Whether it be desperate attempts at ad-based revenue, premature fundraising, or hurting adoption by asking for paying customers, it all amounts to stifling innovation.

JDDunn95• 12 years ago

This is the misinformation mentioned. Small sites won't pay until they reach the size of YouTube/Netflix.

widdershins• 12 years ago

No, they want to charge YouTube and Netflix for not throttling them. That makes a big difference. How can the ISPs make that kind of deal without throttling everyone else? Otherwise there's no incentive for YouTube etc. to pay.

dragonwriter8• 12 years ago

No, they want to charge YouTube and Netflix for not throttling them. That makes a big difference. How can the ISPs make that kind of deal without throttling everyone else?

By selectively throttling YouTube and Netflix.

protomyth3• 12 years ago

Why are there customers getting an internet connection other than "YouTube and Netflix"? The reason they and other services are "bandwidth hogs" is because they are popular and people want them. Those bytes just don't show up at customer's computers without the request.

dublinben• 12 years ago

Everyone is already paying for the bandwidth they use, on both ends. ISP subscribers pay their monthly subscription fee to get however much bandwidth they're allowed. Content providers pay their (quite substantial) fees to CDN and transit providers for the bandwidth they use.

Nobody is getting a free ride here.

JDDunn95• 12 years ago

Every business tries to maximize profits and minimize costs. Google has certainly done their fair share of exploiting people (e.g. knowingly selling ads for scams, stealing content from Yelp, etc.) for profit, so it's hard to feel bad for them now that they are getting squeezed.

dragonwriter8• 12 years ago

ISPs are not trying to extort the little guys (who have no money), they want to throttle YouTube and Netflix.

Right. They only want to impose tolls and kill competitors that have already spent the money to develop a market and show how to serve it, so that they can use the tolls to capture the profits, throttle the incumbent, and use the proceeds to deliver their own implementation.

So it won't necessary be bad for "little guys" directly, except insofar as it kills competition in any market with lots of money in it (including ones that the little guys may be customers of), limiting customer (consumer or business) choice, and limiting the ability of little guys to ever become big without themselves getting killed by tolls so that the dominant broadband providers can steal their market.

pessimizer• 12 years ago

The "bandwidth hogs" are more commonly called customers, and they pay for their internet service.

SomeCallMeTim4• 12 years ago

The issue of Net Neutrality is consistently misrepresented.

This is not only not true, but the problem is typically understated.

I'm paying for the bandwidth to my house. I pay extra to get a higher bandwidth capacity, in fact.

Under absolutely no circumstances is it OK for my ISP to throttle YouTube or Netflix or any other site just because it's popular.

They are double-dipping, it's that simple. I've already paid them for a pipe (allegedly) of a certain size. If I want to watch YouTube, then give me the bits at the rate that fit in the pipe I paid for.

If I want to watch SomeOtherVideoStreamingSite, then I want it to stream to the limits of the pipe I'm paying for, whether or not SomeOtherVideoStreamingSite has coughed up extortion money.

In markets where there are one or two ISPs available, if all available ISPs are engaging in this extortion, then my experience is degraded any time my ISP hasn't extracted its shakedown money from the site I want to visit. And that is abuse of a monopoly position, plain and simple.

JDDunn95• 12 years ago

I agree it's unfair to the customer, but the message is still being twisted to serve corporate interests. ISPs have been throttling bittorrent for a while now and no one was making a fuss about net neutrality then...

theoh• 12 years ago

It's all very well to talk about "platforms", but wanting to separate mechanism and policy is one thing, outlawing policy is something much more serious.

danielweber• 12 years ago

Where is the primary source for the actual proposal the FCC is voting on?

ewams• 12 years ago

Meeting information: http://www.fcc.gov/document/fcc-hold-open-commission-meeting...

Related Topic Info: http://www.fcc.gov/guides/open-internet

fayyazkl• 12 years ago

Until we find a way to truly achieve network neutrality which also means (from service provider's perspective) to throttle and keep in reasonable usage limit applications such as video streaming, specifically illegal torrent usage which chokes carriers bandwidth and prevents normal users too, this debate will continue. I don't see any thing principally wrong with providers point of view (i might be biased because i work in the industry that provides these tools/software. But logically, the word "neutral" to me should equate both sides - not prioritizing some high paying customer's traffic, but at the same time not allowing a regular user to eat every one else's bandwidth to download his favorite pirated content. I feel the discussion on the topic is mostly targeted at the former only. A side effect of such capability could also be better utilization of network resources i.e. charging customers ONLY when and what they use - there by decreasing costs as well.

adventured• 12 years ago

The Internet is already divided into fast lanes and slow lanes. Netflix is currently paying Comcast for a fast lane, after previously having been cast into the slow lane.

Whether the FCC plan goes forward or not, will change nothing about what Comcast and others are doing. Courtesy of an extremely accommodating Obama Administration, Comcast has joined the government protected monopoly crew, with Verizon and AT&T. They are now untouchable, which is why there is nearly zero political opposition to their acquisition of a cable monopoly. They're going to continue to degrade major services as they see fit to exact fast lane tolls, and there is no political group that is going to stand up and do anything about it.

The people fighting this fight, are waging a war they lost a long time ago. An entirely new approach to dealing with the FCC, the Internet, and the monopoly telecom providers is necessary.

Network Neutrality

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