Re: Cyber-Rights position on ISP charges


Richard Moore

3/09/96, Andy Oram wrote:
>The issues I've seen discussed on the net are:
>        1. The suggestion that ISPs pay more for their connections
>           would radically change an emerging industry with great
>           significance.  Therefore, steps should be taken cautiously
>           and with a view toward what is best for the public, not
>           what benefits or hurts one particular vendor.
>        2. No one can judge what portion of Internet traffic is
>           audio, and although it is theoretically possible to check
>           traffic and charge differently for audio, it would be
>           extremely intrusive.
>        3. The Internet may prove to be an excellent medium for
>           telephone conversations, and the national goal should be to
>           develop this technology rather than put economic barriers
>           in its way.
and Mark Jamison was quoted:
>So the real solution probably isn't to regulate internet calls, but to
>rationalize the interconnection pricing system, which the Act at least opens
>the door for.
and Craig Johnson said:
  >We were cautioned, notified, and warned.  Now we discover that the FCC
  >has, with lightning-like speed, set a date for comments on the ACTA
  >petiton to regulate phone calls on the Net.
  >Once again  the Internet community is being asked to "do something*
  >-- and fast!!  Internet users and providers should flood the FCC
  >with comments on this action.

        Fair enough, but I'm wondering just what comments it would be
appropriate to flood the FCC with?   Andy generously collated some
positions, above, but I find them wanting... (1) is an appeal for sympathy,
(2) simply says "it's too much trouble", and (3) is a plea to a
not-to-be-found-in-Washington public conscience.

        I submit that if our pleading/lobbying is to be most effective, it
should be based on some sound economic thinking, that takes into account
the new realities of circuit-switched broadband networking.  We _do_ need a
rationalized pricing scheme.  Perhaps Craig has addressed these matters in
his Wired article, and would post an appropriate excerpt.

        I'd like to briefly present an analysis that was posted to
roundtable and telecomreg many moons ago, and was met with some agreement
and reinforcement.  The basic idea is that we should encourage pricing of
communciations to be based as much as possible on provider costs.  We need
not fear that this will encourage use of obsolete equipment -- there are
too many independent forces ensuring that the cyber-enabling upgrades will
be deployed.

        Why would this be a winning strategic policy for "us"?  Simply
because text-based transmissions -- the lifeblood of this Internet Valhalla
of democratic verbal discourse -- consume so few kilobytes, while
to-be-deployed video services take orders of magnitude more bandwidth.

        The best-possible world for us would be a flat, incremental charge
for all communications transmissions, based on bandwidth-used, plus a
surcharge for sychronous delivery.  And this best-world would also charge
all users equally, without vertical-monopoly under-the-table discounts.
Under such an ideal scheme (probably beyond achieving politically), and
assuming video transmissions would be affordable to the masses, we'd be
able to follow on the price-curve coattails and have _very_ affordable
messaging connectivity (provided CDA allows us to say anything).

        What we'd want to oppose would be minimum charges on message
traffic.  Even if such were initially small, insider-lobbying could soon
jack them up to prohibitive levels.

        In other words: _We_ benefit from a level-playing field, commodity-
communications transport infrastructure, with flat incremental usage
charges, and no minimums for small transmissions.

        Fortunately, it seems to me, we can make a strong case for such a
pricing paradigm based entirely on neo-liberal, competition-loving,
economic principles.  If so, we might have more success than appealing to
conscience or sympathy.

        In the short term, it might appear we'd be giving up ground, since
(for example) "flat-rate local calls with unlimited connect time" doesn't
really fit into the proposed strategic formula of incremental usage

        Here's a case -- just like that of the personal computer
marketplace -- where the "free market" really can work in our favor.  If we
have a defensible economic model, a sensitive presentation, and an
understanding of what we get out of it, we might be able to mount a
coalition of co-sponsors and have some influence in the legislative

        The ACTA petition, if I understand correctly, arises out of a
complex system of cross-subsidies and non-market-driven settlement schemes,
which would presumably evaporate under a system where everyone charges for
the bandwidth they provide, employing a mark-up that maximizes
profitability while remaining competitive in their markets.

        This may all be too simple-minded, but I hope it at least
encourages more enlightened analyses to be posted.

In Solidarity,

 Posted by Richard K. Moore  -  •••@••.•••  -  Wexford, Ireland
       Cyberlib:  www | ftp -->
 Materials may be reposted in their _entirety_ for non-commercial use.