View Full Version : Appeals Court Strikes Down FCC Internet 'Neutrality' rules -

01-14-2014, 03:11 PM
this could have some insidious side-effects ... from

(snip)"WASHINGTON—A federal appeals court on Tuesday opened the way for broadband providers to charge content companies for faster speeds, striking down federal rules that had required equal treatment of Internet traffic.

The ruling threw into turmoil a top priority of the Federal Communications Commission during the Obama administration and suggested that if the FCC wanted to revive its rules, it might have to regulate broadband Internet like it has long regulated phone companies. ***

Verizon wants the ability to charge content companies for faster connections with their end users. The ruling could cause headaches for companies like Netflix Inc., which doesn't want to pay broadband providers extra to deliver its popular movie-streaming service to consumers. ***

Tuesday's ruling marked the second time the appeals court has taken issue with the FCC's net neutrality efforts. The court in 2010 ruled the FCC exceeded its authority when it sanctioned Comcast Corp. for slowing Web traffic to some customers who were downloading large files on peer-to-peer file sharing services."(snip)

The take-away from this ( second ) Appeals Court Ruling is that earlier FCC rules which forced internet backbone / access providers to charge customers the same price within the same service 'class', regardless of the total bandwidth being used and regardless of average data transfer speeds, are no longer 'legal'. As pointed out in the news blurb, this is likely to result in Netflix and its customers now being charged a higher price by internet service providers than 'average' internet users ... being charged the higher prices because they typically wind up using much higher total bandwidth, thus far above average data transfer speeds ( based on many more continuous hours of high bandwidth data transfer ), than 'typical' internet service customers.

The side-effect, of course, is that HD webcam streaming camgirls and HD webcam customers are typically using even MORE total bandwidth, thus even higher average data transfer speeds, than Netflix !!! Thus, if Verizon, Comcast, and other internet service providers are now allowed to reduce average data transfer speeds, are allowed to cut off data transfer after a certain monthly bandwidth threshold has been reached, etc., this may translate into camgirls and webcam customers having to pay higher monthly prices for a higher 'class' of internet service to continue transmitting and receiving high bandwidth HD webcam streams for extended periods.

01-14-2014, 03:40 PM

01-14-2014, 04:11 PM
Do we really want federal regulation?

01-15-2014, 09:06 AM
When it comes to Net Neutrality laws yes we do. Companies will use this to monetize services and traffic people are already paying for. They can also go in and restrict traffic like reducing people using Vonage phone services instead of the local carrier's voice services.

01-15-2014, 03:22 PM
^^^ where Stripperweb readers are concerned, what really matters about this is that the legal precedent carries the strong possibility that, like Netflix or Vonage, webcam host sites may also receive MASSIVE increases in their monthly internet bandwidth costs, increases which will wind up being paid for by camgirls and webcam customers by one means or another.

Also, it will be possible for the Comcasts, Verizons etc. to slap bandwidth caps or speed limitations on high bandwidth usage individual customers like camgirls and webcam customers, which would in turn force those camgirls and webcam customers into a higher 'class' of internet service at a significantly higher monthly rate if they want to continue to use the bandwidth and speeds they presently do in the future.

To help with understanding, when a Comcast or Verizon promises 10 meg internet speeds to a customer, there is a huge difference in costs incurred by Comcast or Verizon if the customer uses the 10 meg internet speed for 2 hours a couple of days per month, versus the customer using the 10 meg internet speed 8 hours per day 20+ days per month. The former only uses about 2.5% as much total bandwidth as the latter, thus Comcast's or Verizon's fiber optic backbone can fit 40 of the former type of customer on their backbone for every one of the latter type of customer ... but both presently pay the same monthly rate, thanks to the just 'shot down' FCC rule. Or, in terms of analogy, the FCC rule essentially dictated that toll road operators must charge drivers the same toll to travel the same number of miles regardless of whether they are driving a motorcycle, a minivan, or an 18 wheeler.

This court ruling will make it possible for the Comcasts and Verizons to more accurately correlate the internet backbone bandwidth costs created by individual customers with the amount of monthly charge they are required to pay. This will tend to eliminate the 'overcharges' currently being charged to 'average' internet service customers which Comcast and Verizon presently use to 'subsidize' the losses created by the very high bandwidth using internet service customers. Or, in terms of the toll road analogy, drivers of motorcycles, minivans, and 18 wheelers will be charged very different tolls to drive the same number of miles, based on the amount of 'load' their vehicle places on the toll road.

Unfortunately, lots of internet 'business models' have developed which are heavily reliant on 'subsidized' internet bandwidth prices to be profitable ... 'subsidized' low prices which are now in danger of disappearing due to the court ruling.

01-23-2014, 03:37 PM
Here's some nuts and bolts analysis from Karl Denninger at

Keep in mind that, in terms of business model analogy, Netflix is analogous to Webcam Hosts, and Netflix customers are analogous to camgirls and cam customers.

(snip)" This sort of thing is worth nothing more than a laugh from those who actually know anything about how this technology works:

In a worst-case scenario, Netflix imagines a situation in which it would have to pay fees to ISPs to stop that degradation, but it sounds like the company wouldn't just sit back and let that situation happen. "Were this draconian scenario to unfold with some ISP," Netflix writes, "we would vigorously protest and encourage our members to demand the open internet they are paying their ISP to deliver."

There's a problem with that -- the customer is not paying for it.

I know, you think you are. You're not.

My authority on this?

I've done these studies going back to the late 1980s and early 1990s and I used to run an ISP during which I was continually analyzing exactly these sorts of metrics, because it was utterly essential to understanding the future of the business.

You think you're paying $40 or $50 a month for "unlimited" broadband Internet access and footing the entire bill for it, but that's not true. The truth is that you're being cross-subsidized by all the people with addressable cable boxes.

The wire, the split-format (up/down asymmetry) delivery, the repeaters, the head end gear, you're not paying for anywhere near all of it. A huge part of the cost is paid by the people who are paying $60, 70 even $100/month for cable TV and then pay-per-view movies on top of it.

As a consumer this is relatively neutral to you and the cable company provided you buy both services. That is, if you buy both the addressable cable service and the Internet service then you are covering the sunk costs of providing the entire network, as are your neighbors.

But if you cut the addressable cable, or don't buy the PPVs, and replace your purchase of the addressable service with Internet-sourced content like Netflix you are arbitraging the cable company which on an individual basis now loses money selling to you and is effectively paying Netflix to sell you service!

Netflix has built its entire company around you ****ing the cable company and forcing them to pay Netflix for the sunk and continuing costs of delivery of their content. If there was no cable TV and you had to pay for the entire sunk and recurring cost your Internet bill would be double or more what it is now.

Hastings is great with the threats he makes, but in point of fact you're a winner only so long as a few of you win, because in aggregate you can't all win at the cable company's expense. If you do they go out of business. Long before that happens prices will go up on the Internet side -- a lot. If the government forces action then the immediate response will be to jack prices -- equally, for everyone, on the Internet side.

If you want to know what unsubsidized high-speed data costs look at what commercial customers are charged for similar performance levels to what you're buying, because there zero assumption exists that said commercial customer is also going to buy addressable cable TV along with pay-per-view movies.

Hint: It's double or more what you're paying now -- everywhere and every time.

Netflix may sound like a good deal at $7.99, but the actual imputed cost is $50/month, not $8. The other $42 is in your addressable cable bill and the shifting of watching that TV from one to the other doesn't matter to the cable company provided you keep both services.

The moment you don't it does matter.

The common law of business balance says that it's impossible for you to get a free lunch. You can exploit others as a small percentage of the whole and get away with it, but as soon as any meaningful percentage of the whole do what you're doing the entire house of cards comes down on your head and that cost is recovered from you one way or another, because it must be in order for everyone involved to remain in business.

Hastings is full of ****, in short, and it literally doesn't matter that he's 30%+ of network traffic in prime time. That's just frosting on the cake. The real problem is that irrespective of the mix of traffic if addressable cable service becomes uneconomic because people cancel it and move to the Internet the cost of Internet service over the same facility will rise to absorb the sunk cost that can no longer be recovered from people buying the addressable cable service.

It's nothing more complicated than that, and anyone arguing otherwise knows exactly zero about how the underlying technology works -- or is paid for.

How many subs does Netflix have at $50/month?

That's what I thought."(snip)

01-29-2014, 08:57 AM
I do not for a second buy any of the logic in that post.

I do not use netflix[the low frame rate drives me nuts] and consider internet delivered content a pretty inefficient way of doing things BUT

do not cry for the cable companies, they are doing just fine. If the cost of running their service rise, they will raise their prices, and there is nothing we can do about it. WE already pay the highest prices for internet and they just want more money. they want to sell me phone service and block skype.

The cost of running their internet business is not and never has been the point.

They want to get in the content business and want to be able to have an insurmountable financial advantage.

This is not about supposed subsidies, it is about blocking content and selling their alternative.

What will stop this?


Maybe Google will spread their free wifi service, using the thousands of miles of unused fiber they have.

01-29-2014, 10:28 AM
two words, oldster .... Crony Capitalism !!!