Well, aren’t we all having lots of fun heaping scorn and derisive laughter on Senator Ted Stevens for his hilariously uninformed commentary on how the internet works? The audio is all over the web, and doesn’t he just sound ridiculous? And yet, it takes some reading between the lines and a sympathetic ear, but the truth is that what he says is not entirely ridiculous. FULL ARTICLE
Source link: http://blog.mises.org/5333/senator-stevens-is-not-as-dumb-as-he-sounds/
Senator Stevens is Not As Dumb as He Sounds
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I don’t necessarily agree with all points:
(a) E-Mails don’t get delayed for days because of traffic congestion. Probably the “dregs” who work for such critters just don’t know how to configure things properly.
(b) The Internet is a typical case of crowding out. If some big carrier interests are now allowed to use the ressource for their peculiar interests now that it’s here, it’s nothing more than the usual game of loading cost onto the public and giving the profits to those who bought the right politicians. Once the private alternatives are destroyed, you do not get really efficient rates any time soon in a market that was severely distorted for most of its lifespan, governed by a legal system that favors big business on one side and ambulance chasing shakedown artists on the other. Not to speak of IP laws.
(c) Services like Google don’t get something for nothing; we all have to pay for bandwidth at rates that are quite profitable for carriers (or they wouldn’t do it; nobody is forced to run data exchanges). What carriers, very often in bed with specific content companies, seem to aim for here basically is making the cost of entry prohibitive for new/small content providers, much like the FCC did for the airwaves.
Deregulation is a funny word for abolishing some rules, handing the cake to some bullies, letting them write what rules remain and then telling them to run with it.
But yes, of course Stevens is not as dumb as he sounds; he also isn’t really incompetent.
You just have to understand what his real job is (corrupt hatchet man for some business interests), and how good he is at that, and you see how great he really is.
I have submitted this story to Digg:
http://digg.com/tech_news/Senator_Stevens_is_Not_As_Dumb_as_He_Sounds
The story about the Stevens speech has been one of the most popular stories on Digg, with over 5,700 diggs:
http://digg.com/tech_news/Senator_Ted_Stevens_Downloads_the_Entire_Internet_and_Complains_It_s_Slow!
I’ve been reading Mises for quite awhile, because the economics are something I’m generally in favor of, so it was very painful to find out that your knowledge of the Internet is not much better than Mr Stevens.
Did you have your article screened for accuracy by someone familiar with the underpinnings of the Internet, like a Network Operations Specialist (or whatever those guys at NOC’s call themselves)? I won’t claim to be one, I’m a web developer and have been working with various technologies on the Internet for about 15 years now (not long compared to the ones that were on Arpanet and such). But there’s many problems in this article.
You might’ve learned some valuable information about why you’re almost as wrong as Mr Stevens. I hope you get a lot of email and issue an update to your story about the fallacies involved.
Wrong. Tubes and pipe’s work for the laymen, if you want a better analogy, consider a complex freeway system like in LA. If one freeway is “full”, you can take alternate routes. Also, those “enormous” files are not a single super-truck on the freeway, their load is divided into hundreds or thousands of small cars, all of which might take different routes to reach the end destination (where your computer re-assembles them or ‘streams’ the video).
Wrong, just as the freeway system has carpool lanes to expedite carpool traffic, the Internet has routers all over, many of which will prioritize certain packet types (individual cars), so that they won’t be delayed. They prioritize many different types of traffic, as some are more important than others.
Did you know that people are using the Internet for LIVE phone calls? Entire businesses are routing their phone traffic over the Internet (its called VoIP, aka Voice over Internet Protocol). These are LIVE connections, that have little lag (aka latency). This works because routers prioritize these packets to ensure that the phone call goes on without a hitch.
First, there aren’t structural problems, you swallowed the same bull-crap that Stevens did (from the lobbyists). Second, the government designed Arpanet (http://en.wikipedia.org/wiki/Arpanet) which was the precursor to the Internet. It is drastically different from the Internet we have today, which was built by the private sector and run by the private sector.
Now, regarding Stevens original point about his email, why was it delayed? I can almost guarantee it had nothing to do with “tubes being full”. The mere fact that he can load a web page instantly proves that the tubes aren’t full, it’s so easy to prove false I’m amazed other people actually believed that.
E-mail is sent between SMTP servers on the Internet. It is not end-to-end between the sender and reciever. The sender sends an email which is then held in a queue by their ISP (Internet Service Provider). When their ISP decides to send the e-mail, it goes out and sends it to the SMTP server that is designated to handle the e-mail for that domain name (the stuff after the @ in the email address).
These two SMTP servers are sending the e-mail messages to each other, and they could be very busy themselves. Some ISP’s are lazy and don’t setup enough mail servers for their clients, so your email could be held by your ISP and NEVER SENT for up to a day. This is NOT the Internet being “full”, this is your poorly run ISP delaying your email for who-knows-what-reason.
It could also be held by a busy mail server that is busy scanning every single e-mail message for virus’s and spam (which takes some time for thousands of messages). The huge amounts of spam delay these SMTP servers from getting around to your legit e-mail becuse they’ve trying to filter it out so you don’t have to see it.
The fact is, these SMTP servers are the delay, not the time spent doing the actual transfer of the e-mail message across the Internet. Mr Stevens does not know what he’s talking about, and neither does the writer of this article.
Regarding network neutrality, did you forget that Google and Yahoo alreay pay for the traffic they send over the Internet? Did you forget that I already paid for my Internet access?
If they want more money, they should charge more for Internet service, or charge for different levels of Internet service (they already do actually). A two-tier Internet is just unnecessary given the existing ways they can extend profitability by charging for various levels of Internet service.
I think the technicality of the article have been harshly attacked in the previous comment, so I am not going there.
But the question of government getting into telecoms is something libertarians can’t just apply lasseiz faire full scale. Yes, the government made a decision to regulate who gets access and how much by issuing licenses. Let us think what happens when it steps out. Take an example of cellular companies to take some pressure of poor Steven’s back. Mobile telecom providers had to obtain licences from the gov for certain band frequences. It makes sense. What if 10 companies decided to build their networks operating on the same band? None of us would be getting any service. How in a perfect competition would they resolve this conflict? You would say – well, common sense, some would have to step down since no one is making any money. Who would be the one of refuse a chance of getting a great payout?
No matter how you look at it, I still keep finding areas where economic intervention of the government makes sense.
P.S. Living in Alaska for a while, I observed that politicians tend to explain things for people to understand their point rather than wanting to look intelligent. My sympathy for Stevens could be biased
Olga said;
“It makes sense. What if 10 companies decided to build their networks operating on the same band? None of us would be getting any service. How in a perfect competition would they resolve this conflict? You would say – well, common sense, some would have to step down since no one is making any money. Who would be the one of refuse a chance of getting a great payout?”
Simple – the market would handle it( with help from courts – public or private – see the Oak Leaves Decision). If they had not clearly established a prior homestead, the major players would have to pay the infringing minor players a sum based on profits going forward. The majors would have homesteaded clearly non-infringing (on each other) bands of spectrum. What’s so hard to see here?
Incidentally, the arguments for government intervention, whether spectrum allocation, patents and copyrights, etc all seem to accept as a given that unless some entity can make mega-profits, no progress will be made. That, my friends, is the problem with the analysis – it assumes a condition it is allegedly trying to prove. Look at the vibrant small-business sector of the economy – much innovation and progress occurs there, mostly without benefit of intervention, in fact most times despite massive interference from the government (mostly on behalf of big business, but I digress).
Ben,
While your technical points are largely correct, I think you miss the forest for the trees. Rockwell doesn’t claim that there is a problem with the “pipes” of the internet being “full”, that there are literal traffic jams on the net, or that packet prioritization technology does not exist.
Rockwell’s and Steven’s basic point is that internet bandwidth is a scarce resource, and the only way to efficiently use it is to allow entrepreneurs to decide how resources should be allocated, and how traffic should be prioritized. While the internet was not initially a private entity, the companies that now run it have found many ways to do so in the past, and are currently experimenting with new methods that have been made possible by new technology, and that will make new technologies possible.
Until recently, it was not technologically practical to prioritize certain types of internet traffic over others, making the internet unreliable for mission-critical applications, which required expensive dedicated connection that were only feasible for large corporations. However, the exponential growth in computational power has recently made it possible to examine the contents of individual data packets and prioritize them accordingly. What the net neutrality debate is essentially about is whether ISP’s should be allowed to prioritize those packets by the sender of the packet in addition to the type of packet it is.
I think that there are many possibilities that are made possible by such party-based “packet discrimination” – such as remote surgery, which is currently too unreliable without a very expensive dedicated line. This can’t be done by class-based packet prioritizing alone, since it can’t distinguish between a YouTube homemade video download, and a surgical telecast. Email another area packet discrimination can help –charging a small “toll” for email traffic has been frequently mentioned as the best way to make spam unprofitable.
These possibilities may or may not pan out – but what right does a politician have to stop me from investing in them?
Ben,
The pithy statement that best sums up this quagmire is actually found at Digg:
None of the pieces of net neutrality legislation fix the underlying problem of State intervention brought by regional monopolies/subsidies. Reregulating the telecom industry is not going to help anything, in fact, it will arguably make it worse (plus it will cost $$$ to enforce any kind of NN policy, where do you think that money comes from?)
Ben,
Internet — high-speed (broadband) internet — is a right! There will always be multiple tiers, so long as the greedy capitalist companies charge for this right. Therefore, we must Leap Forward and allow everyone to access the vitally important internet!
Tim,
I’m really confused why people think bandwidth isn’t rationed right now. Did you know that companies are charged money for the bandwidth they use in addition to the privilege of having the line available that they send it over?
The majority of comments I see reflect a gross lack of knowledge about the existing cost infrastructure for Internet access and the cost of bandwidth for content sent over it. On my own website I run, I will be charged for content sent over it in excess of a base amount (included in my main hosting bill).
Companies such as YouTube pay a decent amount for their bandwidth for all that content sent over the net. If the telecom companies need more money for their infrastructure, why don’t they raise the cost for the bandwidth that they’re already charging?
Some estimates peg YouTube’s bandwidth costs at between 10k-600k per month. Surely if there was some “clog” on the Internet, the telecom could use the revenue they charge for bandwidth.
This is why almost every single consumer organization, tech company, the EFF, and generally anyone knowledgeable about the technology involved is in support of Network Neutrality. While the only ones against it are economists, politicians, and the telecom industry eager to find even more ways to charge people for what they already pay for (in new ways!).
I am in agreement with Tim about the problem of regional monopolies however. I don’t think NN would be necessary if there were no regional monopolies because it’d be extremely difficult to guarantee network qualities of service (this is what the telecom people want) when they don’t own the whole network the traffic is flowing over. Of course, we only have regional monopolies instead of national ones because of State intervention to begin with…
David,
I’ll admit my attack was largely due to how upsetting gross inaccuracies are in the article. As you mention, there are some valid points ignoring the technical issues.
As I mentioned, I’m already paying for bandwidth and connectivity, this is how the scarce resource is allocated. The cost structure is already in place. Those arguing that the Internet is scarce and that phone companies need more ways to charge is false since they already charge varying prices depending on how much you use this scarce resource.
As to remote surgery, the last few articles I’ve read on it indicate that its mainly been held up by bandwidth in addition to latency issues. The Internet just isn’t high enough capacity for the resolution of video they require, and as you mention the latency guarantee isn’t present.
Would a two-tier Internet make that possible? I don’t think so. I think those kind of applications need their own Internet, and that kind of traffic should have absolutely nothing to do with the general Internet. If it was routed differently because they paid more, that wouldn’t be enough to stop a random DoS attack against the ISP unless it was a completely separate system (Internet2).
My main concern with allowing the phone companies to go ahead with this, is that they’ll have little interest in upgrading the infrastructure of the general Internet, and use the profits they make from the bandwidth costs to create and upgrade their “premium services”. The fact that having mediocre Internet reliability is in their best interest to drive people to their higher end premium services almost guarantees that the general Internet will degrade with two-tier and higher systems.
The phone companies say that won’t happen, but there’s nothing stopping them from letting it happen so I see no reason to believe them.
Ben, the bottom line is that most of the inefficiencies in the current system are relics of previous government interventions (Federal, state, and local) in telecom, and it is being carried over to the internet, expressed as differential pricing as the public flees from wireline like it is being chased by a demon.
It is not coincidence that regulation of the internet is on the agenda at the exact moment VoIP is putting nails in the coffins of the copper-wire phone companies.
Regulation, accompanied by regulatory capture can only harm consumers. This is exactly where “net neutrality” will end up.
Lew might not know his pipes from his tubes, but he sure has Ted Stevens’ number.
Ben said,
Yea, I’m fairly certain I understand the technical aspects of how the infrastructure works, see my discussion of these:
- Who Owns the Internet?
- Network Nationalization: Net Neutrality In Action
- Terminating Net Neutrality
Internet 2, hmmm, not being an expert at how the internet is hooked up (though I have written lots of socket code) it still seems to me that it would be pretty easy to support multiple internets at the same time.
There could even be competition on which internet one uses. Companies could spring up that worked like vpn connections to get from one internet to another.
Unlike electical and cable-tv wires, I don’t think there is any reason why there can’t be many private internets. It’s not like these biggest of tubes
can’t be duplicated and run virtually parallel to one another. I don’t see where the community would have a claim on the public space used to string the wires (that is, after all, why these were regulated in the first place, is it not – or am I being naive).
Ben is right and the idea that bandwidth is finite is wrong. Internet bandwidth depends on the state of current technology used on the routing of data through the internet. If the hardware or software that routes that information is upgraded or a technological advance is found that moves information more efficiently and quickly then bandwidth is increased or is used more efficiently.
Fact is that the problem with this discussion is that the examples of “pipes” or “tubes” is being used as a direct representation of what the internet is and how it works and this is wrong. The idea of pipes may help explain what network routing is to a politician or a reporter but it is no where near being a complete and true representation of this technology. Compression, smart routing or latency is not easily explained with “tubes” or “dump trucks”.
“As to remote surgery…Would a two-tier Internet make that possible? I don’t think so.”
I disagree. But the point is not which of us is right, but that this disagreement should be resolved by entrepreneurs and consumers, not politicians who half-blindly regulate business models out of existence.
The irony of Senator Steven’s argument is that his ignorance makes his point: the architecture of the Internet must be left up to the market, because politicians are far too ignorant to make such decisions.
Tim,
I won’t doubt your knowledge of the technical issues involved, but I do doubt the conclusions your blog posts draw that you cited. If they need to lay more fiber for increased bandwidth, why don’t they charge more for bandwidth right now? I have failed to see anyone attempt to answer that. Trying to ensure QoS is a losing proposition as its realm is very limited and better QoS would be ensured for all with more bandwidth capacity.
As you cited in an article, they need more fiber and routers to handle more traffic. Again… if you need money, charge the customers. Every other business does that to pay their costs. If the business didn’t put infrastructure into their cost analysis when determing the price to charge for bandwidth, why should we allow them to degrade the entire Internet in favor of the rich, just so they can compensate for their own failure to charge properly?
The businesses you all cite have enormous barriers to entry for newcomers. One of the driving components of the technology industry has been the ability of newcomers with close to zero funds able to easily jump in and compete with the big guys. This is free market behavior at its best, no? If you can’t compete without 30 million to pay for quality that matches the Industry leader, you’ve just made it harder for competition.
I agree entirely with your articles points however regarding these monopolies. If they didn’t have regional monopolies, they wouldn’t have so much control over so much bandwidth and a two-tier system would be significantly less feasible from the get-go. It’s my agreement with the point on the monopoly that I’m generally a big fan of Mises.
Ben, you’re indeed getting lost in the forest while examining trees.
I am one of those “network operations” people you referred to earlier, and was actively and intimately involved during the boom 1993-1999 as the rules of conduct for the commercial internet were being thrashed out. You might find my comment under one of Tim’s articles of interest.
The reason you’re not being charged more for access right now is because of competition. Competition is also how more bandwidth is being put in right now. The fact is that most people utilize the ‘Net via burst “real time” usage, where they click and they want it right now.
That makes the last mile connection quite a bit more effective to the common user than the backbone, what people talk about being overloaded (but isn’t).
There is also one point I want everyone to understand: there is no “INTERNET”. What we have are thousands of companies sharing packets in a common format. How a packet gets from me to you is entirely dependent upon the agreements made through ISP after ISP, backbone provider to backbone provider. These packets may cross the country or world two or three times before you and I are linked. There is no “INTERNET” that regulates who talks to who, and there hasn’t been since the NSF released the routing tables and absolved themselves of the effort of trying to do it, in 1992.
Every content provider, be it YouTube, Mises.org, CNN.com or Google, wants to be accessable by every user. Every user wants to reach every site. When a user cannot reach a site, they treat it like a network failure and complain. If their ISP doesn’t do something to fix the problem, they get a new ISP that will.
That is why the inter-network system works, and why anything that government does can only make it worse. The free market in packets is already tending toward efficiency, via technical issues I go into elsewhere and the tendency for people to choose those ISPs who provide universal connectivity.
Let the ISPs prioritize packets, I don’t care and you don’t have to either. If you cannot get somewhere, treat it as exactly what it is: A Network Failure.
What I don’t ever want it to be is a political failure.
Great libertarian article, great incentive in the comments. (perhaps everyone here should post his comment on digg as well?).
The first comment how smart Mr Stevens really is, that’s most probably the terrible truth… Every debate on television I see, I notice how much “professional” modern politician get… as compared to business representatives. If you are not extremely careful somehow, you’re dead before even noticeing where they bit you. Rattle snakes.
As someone who has more than a passing idea of how the Internet works (well, it wouldn’t without a pair of my ideas; and I was running engineering for few large backbones) – my opinion is that the Senator is horribly incompetent and shouldn’t be allowed within a mile of any governing body making rules for the Internet.
For that matter, no government employee is any better qualified.
The best they can do is to take their rules and stuff them up their arses. The amount of damage they already did is enormous.
Oh, and local municipalities and Public Utilities Comissions, etc, are the real culprits in the sorry state of telecoms – the artificial monopoly on placing wires on the poles and in the ground which they created in the first place is what caused the real problem – the inadequacy of the “last mile” infrastructure.
On packet prioritization – no long-haul (backbone) ISP does that in reality, for a very simple reason: there’s no shortage of long-haul bandwidth, and most traffic flows cross several backbones anyway, so prioritizing it in one place makes virtually no difference). Few informed customers express interest in paying more for merely marginal gains. Most of the noise about “priority” service levels is created by the equipment vendors, trying to sell more features in their boxes, and sales guys preying on uninformed customers.
It takes a government-supported monopoly (Baby Bells) to create an artificial scarcity and then exploit it to jack up prices for “premium” services. The “network neutrality” issue is, basically, about putting limitations on these monopolies preventing them from leveraging their monopoly positions into de-facto monopolism in other segments of the market. This does not fix the underlying problem, but also doesn’t make the situation any worse than it is now.
(I suggest looking at what happened to the DSL market when the same Baby Bells defeated another attempt to restrain them – the requirement to share the actual wires).
Again, the whole “network neutrality” story is not about limiting what businesses can do – it is about trying to prevent the idiotic regulations from killing the Internet by balkanizing it into the “walled gardens” of the government-propped territorial monopolies.
The defence of Baby Bells is, well, misguided. They’re not real businesses, they are parts of the government-big-corporation thievery ring. The more they are hobbled, the freer the market is.
I added a portion of Lew’s article to the Wikipedia article on the topic.
As other have mentioned, Lew didn’t get the facts right. Everyone has to pay for Internet access, of course; nothing is free, and everything is rationed by the market. If that were not so, the Internet would not work at all. In fact, it works very well, despite all the growing pains. Well, all except for the domain name system, which is controlled by an unaccountable quasi-government.
In the U.S., consumer broadband access is a duopoly, divided between the telephone company and the cable company. That’s a happy accident, since the telcos and cablecos were not originally in competition with each other. A duopoly is much better than a monopoly, but it’s not perfect competition. There are never going to be be a multitude of “last mile” competitors, because it is essentially a natural monopoly (the cost of the infrastructure is to a large extent independent of the number of subscribers).
So, there is a problem of what to do (if anything) if these powerful duopolists try to throw their weight around. Net Neutrality is an effort to preemptively reign them in, but it probably isn’t needed. If Verizon threatens to block Google (for example), I imagine that Google would respond, “Go ahead. We’ll tell your customers to switch to Comcast.”
If money does end up changing hands between Verizon and Google, it’s more likely to go the other way: Verizon paying Google. That’s how cable TV works: the content providers don’t pay for access; the access providers pay for content. But bet on the status quo.
Natural monopoly? Sounds like you haven’t read this: http://mises.org/journals/rae/pdf/rae9_2_3.pdf
TGGP, you might want to look at how cable overbuilders (e.g. RCN) have fared. As far as I know, they’ve all been financial losers.
Of course, I agree with the *conclusions* of Lew. But I just ignored the technical arguments of Lew and Peter Klein, especially about the lack of rationing, rational means, and the like. They are way out of their fields there and really grasping at air.
(As a side note: I worked for a while as a radio engineer for Metricom. Metricom was founded by Paul Baran, the guy who really did invent the internet. Metricom made wireless mesh packet networks that looked something like the new IEEE 802.16 networks. Metricom failed in a ch7 dot-bomb bust. However, the underlying reasons for the bust were not the technology or consumer tastes.)
“There are never going to be be a multitude of “last mile” competitors, because it is essentially a natural monopoly” – Max
I don’t buy into the natural monopoly idea. It may exist in the short term, but there will always be those who are coming up with new “last mile” infrastructure ideas that you or I have never thought of.
“Natural monopolies” only continue to exist as monopolies when they are forced upon consumers through a state granted status.
Glaring technical flaws aside, Rockwell is right, the best thing to do is total deregulation. However, I’m afraid that point is going to be just as lost on the general reader as the Senator’s point. Obviously the people posting on mises.org are not network guys; they are economists. Never the less, the quality of the articles on this issue would improve markedly if you guys would run them buy experts first.
P.S. Would the other Max on this board please use a last name, initial, or something else so that people don’t get us confused?
Wireless = unlimited potential competition for “Last Mile” access. No monopoly, natural or otherwise needed.
As a proof – I built a 6-node wireless network spanning a 2-square-mile area (in central Oklahoma). It links 10 instruments and a central server. It cost less than $10K. I got it to work in a week. It can handle up to 400 duplex connections at up to 11 mbps. And I was able to do this even though I am a total idiot.
Busted, Max!
The problems of implementing QoS on large networks, which the researchers for Internet2 realized at least as long ago as 2002, is that it doesn’t work because of our familiar economic (i.e. resource management) friend: the Economic Calculation Problem.
Neither ISPs nor the Government can determine in advance which packets deserve priority over which other packets, because they don’t know the subjective valuations of every unique individual Internet user. (In reality, Net Neutrality: The Law, merely represents a different kind of QoS to be imposed by a government agency such as the FCC.)
The only real solution is what network analysts (including those aforementioned Internet2 researchers) call overprovisioning the network. In other words, “grow the pie”, “increase the size of the tubes”, etc.
QoS is just Internet slang for “central planning”.
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