The Death Of The Internet

How Industry Intends To Kill The 'Net As We Know It

By Jeff Chester

(Chester is executive director of the Center for Digital Democracy)

The Internet's promise as a new medium -- where text,
audio, video and data can be freely exchanged -- is under
attack by the corporations that control the public's access
to the 'Net, as they see opportunities to monitor and
charge for the content people seek and send. The
industry's vision is the online equivalent of seizing the
taxpayer-owned airways, as radio and television
conglomerates did over the course of the 20th century. To achieve this, the cable industry, which sells Internet
access to most Americans, is pursuing multiple
strategies to closely monitor and tightly control
subscribers and their use of the net. One element can be
seen in industry lobbying for new use-based pricing
schemes, which has been widely reported in trade press.
Related to this is the industry's new public relations
campaign, which seeks to introduce a new "menace" into
the pricing debate and boost their case, the so-called
"bandwidth hog."

But beyond political and press circles are another equally
important development: new technologies being developed
and embraced that can, in practice, transform today's
open Internet into a new industry-regulated system that
will prevent or discourage people from using the net for
file-sharing, internet radio and video, and peer-to-peer
communications. These are not merely the most popular
cutting-edge applications used by young people; they also
are the tools for fundamental new ways of conducting
business and politics.

These goals and objectives are visible to anyone who
cares to look at the arcane world of telecommunications
policy and planning, either in the industry trade press or
government documents. The bottom line is the industry
want to kill the Internet as we know it.

Take a minute and wade through this bit of arcana -- and
ponder its implications.

"The IP Service Control System from Ellacoya Networks
gives the Broadband Operator 'Total Service Control' to
closely monitor and tightly control its subscribers,
network and offerings." So reads the Web site of
Ellacoya.com, a relatively new firm, describing the
business-to-business service that it is selling to large
Internet service providers.

Ellacoya is backed by Wall Street investment
powerhouse, Goldman Sachs, which sees a major
opportunity to turn around the red ink-plagued broadband
sector. Continuing, the website explains, "Establishing
Total Service control enables operators ! to better manage
traffic on the network, [and] easily introduce a range of
tiered and usage based service plans... Talkative
applications, especially peer-to-peer programs like KaZaA
and Morpheus, tend to fill all of the available bandwidth...
The IP Service Control System allows operators to
identify, limit and report on these aggressive applications."

The fundamental character of the Internet today is that it
lacks precisely these kinds of tolls, barriers and
gatekeepers. But technology like Ellacoya's hardware and
software is not just an enticing idea; it's more of a silver
bullet for beleaguered telecom executives. It's being
tested in industry trials and points to the kind of Internet
the industry would like to develop over the next few years.
The way telecom corporations get from today's
open-access Internet to their version of the future starts by
changing how people pay for the net.

Industry's New Business Plan

Most people now pay a flat fee for online access. But
the big media companies offering Internet service;
Comcast, ATT, AOL -- would like to change that, and
already have in a few test locations.

The broadband industry's plans to institute tiered pricing
have been widely reported in its trade press. There are
numerous articles about replacing today's open 'Net
environment with industry-self-described versions of
"walled gardens" or "Internet Lite." (See "Cable Operators
Seek to Corral Bandwidth Hogs", Cable Datacom News,
10/01/02) The central feature of these proposals is much
like telephone companies; there's a price plan for
everyone.

To make the case to regulators that such pricing is fair
and overdue, cable operators have begun a PR effort,
spinning that a small percent of users account for a
disproportionately large amount of bandwidth used on
broadband networks. They've created and embraced the
p! ejorative term, "bandwidth hog," to describe those --
such as music-obsessed college students -- who find
robust uses for high-speed connections. Already major
news sources, such as the BBC, and technology
journalists are using the term in their reports.

To deal with this "problem," the companies are
considering a variety of approaches to ensure they remain
in full control of their bandwidth -- unless consumers can
afford to pay the hefty access fees. Under a typical plan,
a user would be allotted a limited amount of bandwidth per
month, and would be charged extra fees for going over this
amount. This approach isn't very different from the
software industry, where the free versions of an application
are intended to frustrate and prompt people to buy the
'better' version.

Bandwidth caps have already been implemented in
Canada by major Internet service provider Sympatico, Inc.,
and observers have been quick to note t! hat the limit -- 5
GB per month -- would effectively restrict regular use of
emerging applications such as Internet radio, streaming
media and video-on-demand.

Consider this excerpt from an article about Sympatico's
bandwidth caps in the May 6 edition of Toronto Globe and
Mail by reporter Jack Kapica:

"A classic conflict has arisen over streaming
media, especially of radio. In a recent
letter to globetechnology.com, Andrew
Cole, manager of media relations for Bell
Sympatico, defended the 5GB bit cap,
saying that 'In my experience, Internet
radio stations usually transmit at
approximately 20 Kbps. This equates to
1.2MB per minute, or 72MB per hour. At
this rate, a HSE customer could enjoy 70
hours of Internet Radio per month and
remain within the bandwidth usage plan.'

But a 20-Kbps stream is considered poor
quality by many people who tune into
Internet-based radio stations for such things
as clas! sical music concerts. For these
people, audio quality streamed at 20 Kbps
has been described as 'pathetic at best,
somewhat akin to AM radio' by Tony Petrilli
of Level Platforms Inc. of Ottawa.

'Decent audio quality starts at 56 Kbps to
64 Kbps, and really gets acceptable only
around 100 Kbps,' he said. This alone,
continued Mr. Petrilli, 'will blow the cap, let
alone any other form of surfing, such as
looking at movie trailers or even reading
Web-based news. Heaven forbid that
someone listens to 90 minutes a day of
quality Internet radio. That way we'd blow
the cap in 20 days.' "

When you consider the fact that the largest American
telecommunications firms are often part of the same
mega-corporation with music, video or movie-producing
entertainment divisions -- such as AOL-Time Warner --
you can see how an industry-regulated Internet would
handily end music and movie industry worries about
Napster-like fi! le swapping by people who don't want to
pay industry-monopolized retail prices for content.

Thus, the strategic and technically feasible solutions
embodied by companies such as Ellacoya is obviously
why Goldman-Sachs was keen to invest in the firm -- as it
offers the actual means to monetize the net and turn
around the revenue-poor broadband sector.

According to Ellacoya's technical datasheet, operators
can create "up to 51,000 unique policies that can be
combined to generate limitless numbers of subscriber
policies." Such rules, they explain, can either permit,
deny, priority queues, address lock, rate limit or redirect
access. The same technology also poses new concerns
over privacy, since Ellacoya's technology "collects usage
statistics for subscribers and applications, capturing
service events, session details, and byte counts....
Operators can 'stamp' the subscribers identity on all
records."

The Industry Spin

The cable industry will argue that such ubiquitous
control systems and restrictive pricing structures are
necessary to resolve bandwidth backups. But the fact
is, this cannot be the case, because cable systems are
constructed to avoid bandwidth shortages. But don't
take my word for it.

Mike LaJoie, vice president for advanced technology at
AOL-Time Warner told MultiChannel News, "The way that
the HFC (hybrid fiber coaxial) architecture works, we never
run out of bandwidth," LaJoie said. "We can always split
or do other things that will give us the bandwidth that we
want, so it really ends up being a desire to provide the
best and highest experience for our customers." (See "HD
on VOD Searches for Resolution", Multichannel News,
09/30/02) What these statements make clear is that the
cable industry's goal for broadband is to monetize
bandwidth. By charging a toll for every bit, the industry
can simultaneou! sly extract great profits from the new
applications that it allows on its networks, as well as
restrict access to those that it finds problematic, i.e.
those that compete with its own content offerings. In
short, the industry finally sees a way to make money
online.

Of course, these calculations are utterly self-serving,
ignoring the fact that the net was developed with tax
dollars and has been an incubator for an array of
innovations that extend far beyond creating new profit
centers for big media companies. The envisioned control
structures will inhibit robust Internet use by early
broadband adopters, and discourage development of new
high-speed applications such as Internet-based telephone
and video-on-demand, thus slowing overall broadband
growth.

Worse, this business model will erect high economic and
technical barriers to entry for non-commercial and public
interest uses of the high-speed Internet, threate! ning civic
discourse, artistic expression and non-profit
communications. In moving to implement this highly
centralized vision for broadband, the cable industry does
not simply ignore the democratic and competitive history
of the Internet -- it is actively hostile to it.

Consumption-based pricing and other restrictive access
controls contradict the spirit of openness and innovation
that built the Internet in the first place, and will do
irreparable harm to its future as a medium for small
business initiatives, non-commercial users and
democratic discourse. New threats to privacy are also
clear, given the intrusive nature of the technology to
closely monitor all online use. If you think spam is bad
now...