AOL parent revives usage-based billing

Time_warner_cable_logo_2The explosive growth of Internet use in the 1990s stemmed in part from the arrival of the World Wide Web, but also from the shift from pay-per-minute to all-you-can-eat pricing from Internet service providers. One of the leaders in that shift was America Online, which quickly became the dominant provider of dial-up Internet access. Now, AOL's parent, Time Warner, is flirting with a return to usage-based pricing as a way to reduce congestion on its cable-modem service. It could be a welcome development for consumers but not necessarily for content providers, particularly those offering video through the Web.

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Vuze and Comcast

VuzeEarlier this week, the online video service Vuze filed a petition asking the FCC to codify its 2005 policy statement into rules governing how ISPs may treat the data passing through their networks. It was motivated in no small measure by reports that Comcast was surreptitiously interfering with some types of online traffic in the interests of managing its network. In particular, Comcast was interdicting some types of file-sharing, including BitTorrent, which Vuze uses to deliver its content partners' videos.

I'll be writing more about this next week, either for the blog or the paper, but I thought I'd pass on a couple of observations by Vuze CEO Gilles BianRosa. The Comcast episode has often been characterized as having something to do with fighting piracy, because the vast majority of content that passes through file-sharing networks is bootlegged. But what's really at issue here, BianRosa said, is the architecture of the Net, which is ill-suited to the task of transmitting high-resolution video.

Comcast is one of a number of ISPs trying to rein in file-sharing, BianRosa said, and their traffic-management efforts don't discriminate between pirated and legitimate transmissions. Instead, they simply throttle applications that consume a lot of bandwidth (i.e., peer-to-peer networks). The catch is that those applications are also some of the most efficient ways to deliver what Internet users increasingly demand, namely, multimedia experiences. Programs such as BitTorrent are particularly well suited to moving big files around because they can use all the bandwidth available to a downloader, not just what's available at the source. But ISPs design their businesses around the assumption that customers don't use all the bandwidth they're paying for, at least not all the time. They can assign the same capacity to multiple people. That approach starts to break down when customers use BitTorrent to download huge files -- whether it be a licensed high-def program from Vuze or a bootlegged movie -- for hours on end.

"We really understand that problem," BianRosa said. "What we’re trying to say here is, there’s no point fighting where the Internet is going." Now that the public has acquired a taste for rich audio and video content online, it's not turning back. That's why BianRosa wants the FCC to require ISPs to manage their networks transparently, rather than using comparatively blunt tools to interdict traffic secretly. He also wants ISPs, content providers and distributors such as Vuze to work together on the capacity challenges that high-resolution video presents, rather than playing a "cat-and-mouse game" over file-sharing. Vuze and similarly oriented file-sharing firms (e.g., BitTorrent Inc.) could become the entertainment industry's best anti-piracy allies, using file sharing to generate revenue for studios instead of cease-and-desist letters or lawsuits. But they can't play that role if ISPs like Comcast take a binary approach to network management, interfering with BitTorrent traffic indiscriminately to keep their pipelines clear.


Comcast tries p2p throttling

I guess this is the entertainment industry's vision of the future: ISPs that interdict file-sharing. Bravo to the AP's Peter Svensson for a troubling bit of investigation that produced two pieces today, one on Comcast's practice of sending bogus reset messages to p2p users in the act of uploading, and a sidebar suggesting how Comcast was doing it.

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AT&T drops Pearl Jam's call

Pearl_jam In a prominent nod to one of the festival's lead sponsors, the logo for this year's Lollapalooza concerts in Chicago includes the tag line, "delivered by AT&T." But Sunday's headliner Pearl Jam complained that AT&T delivered less than the band's full performance during its Lollapalooza webcast. The powerhouse telco turned off the audio during the song "Daughter" while singer Eddie Vedder was railing against President George Bush. That bit of censorship -- which AT&T says was a mistake -- gave a bit of fuel to the forces arguing for "Net neutrality" regulations.

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Whose Hands Off the Net?

The rallying cry du jour of the anti-Net neutrality forces is, "Don’t regulate the Internet." Nice thought, but it’s a bit like saying "Don’t regulate the Pacific Coast Highway." The Net is already regulated in a host of ways by a variety of bodies. At one extreme are states like China, which try to dictate where users go in cyberspace, and which use the Net as a convenient place to gather evidence against disfavored people. At the other extreme is Sealand, a former oil rig in the North Sea that claims (with some success) to be a sovereign state. HavenCo, a hosting operation based at Sealand, holds itself out as a free zone to violate copyrights, patents, libel laws and other restrictions on speech (snuff films, perhaps?). But even HavenCo says it does not welcome spammers, hackers or child pornographers.

And no matter where you are, you can’t put up a Web site whose name ends in .xxx. The Internet Corporation for Assigned Names and Numbers doesn’t recognize that domain, so ISPs won’t, either.

In the U.S. of A., there are all sorts of things you can’t do online, at least not legally. The Federal Communications Commission stopped a telco-owned ISP from blocking a competitor’s VOIP service. The Federal Trade Commission has gone after spammers and Web-based scammers. The Justice Department has prosecuted warez groups, online copyright infringers and hackers. RIAA and MPAA have sued thousands of people for sharing copyrighted songs and movies on P2P networks.

The operative question on Net Neutrality isn’t whether to regulate the Internet. That one’s been decided. The issue today is how much to regulate.

That’s a long preamble to a comment about the Washington Post’s editorial today on Net neutrality. The Post’s editorial board urged Congress not to burden the Net with "preemptive regulation." I agree, but it doesn’t mean all regulation is going to burden network operators or stifle their innovation. The middle ground here, IMHO, is to allow network operators to prioritize traffic for a fee without discriminating unfairly among competitors, or against users who don’t pay for prioritization. If they want to charge $X per kilobyte to prioritize streaming video, they should be able to do so as long as everyone who streams video can access the service for the same price, and those who don’t pay aren’t penalized. That way the market, not network operators, will pick winners and losers online. I’d also argue for eliminating these rules as soon as you had four or more broadband networks in a community competing for residential customers.

The photo of FCC Chairman Kevin Martin floating the background of this post is courtesy of the FCC.


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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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