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Comcast allegedly demanded more money from a high internet video provider, or threatened to disconnect its customers. The move marks a bold assault on net neutrality.  (Source: CFC Oklahoma)
Legislation may stop the "toll booth" practice, though

Comcast is no stranger to controversy, with a penchant for aggressive cost saving measures.  It ran afoul of the U.S. Federal Communications Commission when it began throttling users' traffic, such as torrents or peer-to-peer connections (with regard for their legality).

Now Comcast appears to have landed itself in another mess with Level 3 Communications' Chief Legal Officer, Thomas Stortz, accusing it of demanding money in order to continue to allow Comcast customers to access Level 3's high speed video.  In essence, if true, that would represent Comcast spitting in the face of the net neutrality movement, and making a bold move towards a "toll booth" web as Level 3 puts it.

Mr. Stortz writes:

On November 19, 2010, Comcast informed Level 3 that, for the first time, it will demand a recurring fee from Level 3 to transmit Internet online movies and other content to Comcast’s customers who request such content. By taking this action, Comcast is effectively putting up a toll booth at the borders of its broadband Internet access network, enabling it to unilaterally decide how much to charge for content which competes with its own cable TV and Xfinity delivered content. This action by Comcast threatens the open Internet and is a clear abuse of the dominant control that Comcast exerts in broadband access markets as the nation’s largest cable provider.
On November 22, after being informed by Comcast that its demand for payment was ‘take it or leave it,’ Level 3 agreed to the terms, under protest, in order to ensure customers did not experience any disruptions.
Level 3 operates one of several broadband backbone networks, which are part of the Internet and which independent providers of online content use to transmit movies, sports, games and other entertainment to consumers. When a Comcast customer requests such content, for example an online movie or game, Level 3 transmits the content to Comcast for delivery to consumers.
Level 3 believes Comcast’s current position violates the spirit and letter of the FCC’s proposed Internet Policy principles and other regulations and statutes, as well as Comcast’s previous public statements about favoring an open Internet.
While the network neutrality debate in Washington has focused on what actions a broadband access provider might take to filter, prioritize or manage content requested by its subscribers, Comcast’s decision goes well beyond this. With this action, Comcast is preventing competing content from ever being delivered to Comcast’s subscribers at all, unless Comcast’s unilaterally-determined toll is paid – even though Comcast’s subscribers requested the content. With this action, Comcast demonstrates the risk of a ‘closed’ Internet, where a retail broadband Internet access provider decides whether and how their subscribers interact with content.
It is our hope that Comcast’s senior management, for whom we have great respect, will closely consider their position on this issue and adopt an approach that will better serve Comcast and Comcast’s customers.
While Comcast’s position is regrettable, Level 3 remains open and willing to work through these issues with Comcast. However, Level 3 does not seek any ‘special deals’ or arrangements not generally available to other Internet backbone companies.
Given Comcast’s currently stated position, we are approaching regulators and policy makers and asking them to take quick action to ensure that a fair, open and innovative Internet does not become a closed network controlled by a few institutions with dominant market power that have the means, motive and opportunity to economically discriminate between favored and disfavored content.

Comcast is America's largest cable internet provider, so if Level 3's claims are indeed legitimate, net neutrality advocates -- including corporations like Google -- should be very concerned.  After all, other cable providers will likely follow in Comcast's lead.

If Comcast indeed succeeds in this bid, it would likely mean that the cost of internet services for users would greatly increase.  Advertising would no longer be enough to sustain sites like YouTube or Facebook, and they would have to switch to subscription fees.

The U.S. Congress and the FCC are working on legislation to prevent this kind of "pay to play" practice.  The pending legislation has generally enjoyed bipartisan support, though it has a few vocal critics, including Senator John McCain (R-Ariz.).



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Barriers to Entry and Competition
By allometry on 11/30/2010 10:43:58 AM , Rating: 2
Comcast has the country by the balls.

I'm screaming for more competition, but I think there's an even bigger problem than Comcast: the high barriers to entry. Until these market barriers start to come down, we'll get to see more of Comcast swinging their weight with little consequence.




RE: Barriers to Entry and Competition
By Shig on 11/30/2010 10:55:23 AM , Rating: 2
I love how they use the excuse of high infrastructure costs too.

'Meanwhile, once companies have installed the lines, their costs are far below prices. “At that point, it becomes pure profit,” Greenstein says. A company might spend around $100 per year to “maintain and service” the connection, but people are paying nearly that amount every other month. Greenstein says that it is not surprising that prices were high during the buildout phase in the early and mid-2000s, since the firms were trying to recover their costs. “However, we are approaching the end of the first buildout, so competitive pressures should have led to price drops by now, if there are any. Like many observers, I expected to see prices drop by now, and I am surprised they have not.”'

http://insight.kellogg.northwestern.edu/index.php/...

That's a published article from the business school at Northwestern University.


RE: Barriers to Entry and Competition
By allometry on 11/30/2010 11:10:44 AM , Rating: 2
Absolutely.

The cost of initial cabling infrastructure is a barrier. The thing that will bring down the cost of initial infrastructure is WiMax mesh. It's a way you can compete against these guys on a small business end.


RE: Barriers to Entry and Competition
By theArchMichael on 11/30/2010 11:34:25 AM , Rating: 3
This is exactly why I think this should have been government commissioned infrastructure built/serviced by contractors but owned by the people and leased to firms for servicing customers.
This would be the same as if I-95 was owned and built by a private company 120 years ago. In 1900 when automobile ownership and transportation were not so pervasive it wouldn't be a big deal. But, nowadays, that would have been a huge barrier to interstate commerce and development of rural areas.


RE: Barriers to Entry and Competition
By Spivonious on 11/30/2010 1:58:43 PM , Rating: 2
So you're saying that high speed internet lines should be built by private companies, funded by the public, and then leased to telcos? How is that a better deal than having the telcos build it themselves?

And building interstate highways today would be a barrier to interstate commerce and rural development? I don't follow you.


RE: Barriers to Entry and Competition
By zxern on 11/30/2010 2:43:54 PM , Rating: 2
I think you missed his key point. Yes built by private companies, but owned by the public. And that would be better as the teleco's no longer own said infrastructure.


By tastyratz on 11/30/2010 3:22:10 PM , Rating: 2
I agree and think that is an excellent idea. I would love to see the DPW pick up the infrastructure and maintain the information highway just like a regular highway. This could be considered a utility just like water, etc. I do not think they should be in the business of end user distribution/advertising/etc. but sell directly to isp's who control anything after the poll.


RE: Barriers to Entry and Competition
By zixin on 11/30/2010 4:07:45 PM , Rating: 2
No, he is saying that the internet lines should have been built, owned, and operated, and maintained by the government, thne leased to the various private companies for use.

He is also saying that if the interstate highway system is a private sector job than the cost of building a new stretch of highway to compete with the existing highway would be very expensive.


By rburnham on 11/30/2010 7:21:15 PM , Rating: 2
The idea being that none of it is owned by any one company or organization.


RE: Barriers to Entry and Competition
By theArchMichael on 11/30/2010 4:53:18 PM , Rating: 2
To explain further my analogy, I was saying that the interstate highway system is owned by the people but many private contractors working for the government typically maintain/expand the highways.

It was good for America in the past because rural areas and less developed states now had much faster access to goods, services and developers had more access to resources. So even though the interstate highway system is a pretty expensive social infrastructure program I think that noone would disagree that it provided and continues to provide enormous advantages to our economy and quality of life.

If the interstate highway system were owned by a private company, I think this would not be true. Think 'Standard Oil' and the railroad tycoons of the 19th century. Because Standard Oil owned the railroads they had almost complete control of the development of rural America in which they controlled access. Their modus operandi of forcing competing oil developers and business to pay exorbitant shipping fees was stifling competition, innovation and development.

It think it shouldn't really be a partisan issue because even the most fervent Republicans and Teapartyers would agree that government-funded infrastructure has typically been a boon to the American economy and our quality of life.


RE: Barriers to Entry and Competition
By Reclaimer77 on 11/30/10, Rating: 0
By JediJeb on 11/30/2010 6:35:15 PM , Rating: 2
I agree with both sides to some extent. What should have happened was the government put up the poles, cabling tunnels, ect then leased them to anyone wanting to string their wires/fiber through them. That is what keeps competition down now, if Comcast build all the cable runs out and a new company wants to run a competing line into the same town, they have to lease the poles from Comcast because it would be difficult to get permission to run a second set of poles right beside the old ones, or similar circumstances to that if you get my meaning. If the government had set the poles and let everyone who wanted to use them rent space on them for the same price then we would see more competition.

The government did enact something with utilities like this where competing power companies can now service the same area, but how many places are going to allow two sets of power lines to be run through the same neighborhood? It is like where I live AT&T had a falling out with the local power company and now they run the phone lines on a separate set of poles on the opposite side of the road from the electric lines. Looks rather stupid to have them separate now, but apparently it was cheaper for them to set their own poles than to continue to lease them from the power company.


By cmdrdredd on 11/30/2010 10:24:03 PM , Rating: 2
quote:
So you're saying that high speed internet lines should be built by private companies, funded by the public, and then leased to telcos? How is that a better deal than having the telcos build it themselves? And building interstate highways today would be a barrier to interstate commerce and rural development? I don't follow you.


Having private companies build the network so to speak and the public owning the lines, the government could lease the usage of these to any company who wants to use them. So you could have 30 different ISPs with various pricing plans and special features offering internet access on the infrastructure. The private company generates revenue from monthly access fees for tv programming and internet and the government generates some revenue from the lease of the lines. It would lead to far lower prices and better services offered. As it is, Comcast and others operate a monopoly on service in a given area. A take it or leave it approach where you can use them or have nothing (satellite internet doesn't count IMO). They also have zero incentive to upgrade the infrastructure.

About the highways it would be like this. I-95 is public, there is no tolls and you can use it as you please. If a private company owned it and put the squeeze on it charging ridiculous tolls what would you do? In some cases there is no alternative highway to get you to your destination in a timely manner so you're stuck paying for something and they can also begin to tell you what vehicles are allowed and which are not if they say so. They might say no trucks because they produce more exhaust fumes or some such nonsense.


RE: Barriers to Entry and Competition
By mcnabney on 11/30/2010 11:55:44 AM , Rating: 2
WiMaxx has high latency and limited bandwidth, making it unsuitable for non-mobile uses.


RE: Barriers to Entry and Competition
By zephyrxero on 11/30/2010 1:29:54 PM , Rating: 2
LTE Advanced, once it comes out, won't have those problems ;)


By MGSsancho on 11/30/2010 2:55:09 PM , Rating: 2
Says the people who have never worked for a wireless ISP, that stuff is similar to satellite, good download but terrible upload speeds, unless your on a point-to-point wireless system, it all sucks


RE: Barriers to Entry and Competition
By Gungel on 11/30/2010 11:48:52 AM , Rating: 2
You forget the deals Comcast cuts with municipalities for the exclusive right to provide cable service with kick-backs to the city. In our city the only option for cable is Comcast. Several attempts by residents had been made to change that, but the additional money the city gets from this deal keeps it in place. Our monthly service charges are $5 more for internet and $10-$15 more for TV than cities with competition in place.


RE: Barriers to Entry and Competition
By mcnabney on 11/30/2010 11:57:38 AM , Rating: 2
Sucks to be you.

Have you voted the idiots who created the exploitative monopoly out of office yet?

/cut cable TV
//I like the $2000/year better than the non-Hulu channels


RE: Barriers to Entry and Competition
By Klinky1984 on 11/30/2010 2:05:12 PM , Rating: 3
Mmm, well I love smug people who think that the Internet comes from magic pixie dust and don't believe that some people don't have any other option than Comcast as their ISP.


RE: Barriers to Entry and Competition
By Reclaimer77 on 11/30/10, Rating: 0
RE: Barriers to Entry and Competition
By cmdrdredd on 11/30/2010 10:28:43 PM , Rating: 2
quote:
If the Internet is a life and death issue for you, and Comcast really is destroying life as you know it, then move or something. Don't drag me down with you.


This is the worst argument someone can use. "just move"

We've owned our home for 29 years. 2 Kids grew up here and have been employed with the same company for near 30 years. How can someone just get up and move? They can't. To use this as your argument is extremely narrow minded.


RE: Barriers to Entry and Competition
By Kurz on 12/1/10, Rating: -1
By Reclaimer77 on 11/30/2010 5:38:22 PM , Rating: 2
quote:
That's a published article from the business school at Northwestern University.


No wonder it made no sense. Universities, that figures.

Why would I drop the price on my services if people have shown that they are willing to pay the current fee? That's just poor business sense. Especially when there isn't really competition.

There's really nothing "surprising" about this at all Mr. Shane. Ask any businessman what a good price is, he'll tell you 'it's a price the customer is willing to pay'.


By gorehound on 11/30/2010 4:57:51 PM , Rating: 1
Do what you can if possible to completely drop comcast from your life.
assholes are what they are.................
greedy bastards and no we do not want to have a poor mans internet and a rich mans internet


Level 3, You Bastards!
By NaughtyGeek on 11/30/2010 11:26:18 AM , Rating: 2
Am I the only one who thinks Level3 is putting on a show? Why oh why didn't they tell Comcast to pound sand? Sure, customers wouldn't get what they were trying to on the net, but guess who would take the heat, Comcast. By refusing to pay the fee that Comcast was demanding they would have created a huge backlash from Comcast subscribers being denied content by their provider. Level3 would not look like a bad guy to consumers, Comcast would. This looks like nothing more than a clever PR campaign designed by Level3 and Comcast to satisfy the plebes.




RE: Level 3, You Bastards!
By kattanna on 11/30/2010 11:47:21 AM , Rating: 2
http://mediadecoder.blogs.nytimes.com/2010/11/29/n...

quote:
Comcast on Monday rebuffed the notion that the new fees were related to Netflix by saying that the type of traffic distributed by Level 3 was irrelevant. Joe Waz, a senior vice president at Comcast, says it has had a peering agreement with Level 3 to swap traffic fairly evenly. Now Level 3 is sharply increasing its traffic, he said, while resisting a commercial agreement to pay for that


now while i can completely believe comcast could be at fault for simple greed, this time they might be in the right, if the above info is correct.

if level 3 is truly exceeding its peering agreement, then comcast is in its rights to be compensated.


RE: Level 3, You Bastards!
By hotel77 on 11/30/2010 1:46:03 PM , Rating: 2
agreed, here's another article.

It sounds like level 3 even asked the same of other companies when level 3 was in Comcast's position....

http://gigaom.com/2010/11/29/level-3-comcast-in-a-...


RE: Level 3, You Bastards!
By rett448 on 11/30/2010 11:41:14 PM , Rating: 2
http://arstechnica.com/tech-policy/news/2010/11/ho...

quote:

Several Ars staffers have experience in maintaining peering and transit connections both in the US and Europe, and each agreed that the situation here is unusual. That's because most "transit" deals, the ones where money was exchanged, historically focused on data that was simply traversing one network on its way someplace else. Why should one network operator bear the costs of building and maintaining a network just so that some other network operator could route all of his traffic over it for free? Peering, or direct network interconnection, generally took place when each network sent similar amounts of traffic to the other and it wasn't worth the expense or hassle of trying to account for every bit.

But the CDN traffic from Level 3 isn't in "transit" anywhere; it's going to the Comcast customers who want to watch Netflix movies. Level 3 is, in one sense, doing Comcast a favor by making a key Internet service better; it's not simply taking advantage of Comcast's network to get its own traffic somewhere else. That's what Werbach means when he talks about a "terminating access monopoly"; Comcast has a lock on its customers and can try to extract rents from anyone trying to send them data, even if it's data they requested.


RE: Level 3, You Bastards!
By Kary on 11/30/2010 1:53:33 PM , Rating: 2
I'm still confused, if Comcast customers are asking for more bandwidth from Level3's network, why isn't Comcast paying more?


RE: Level 3, You Bastards!
By hotel77 on 11/30/2010 3:04:31 PM , Rating: 2
I'm not well versed in this at all...but the concept to me is comcast is to level 3, as you/me are to netflix.

Comcast is providing service to you/me, level 3 is providing service to netflix. Thus, the "peering" concept between comcast/level 3.

Level 3 wants to send X amount of data over the comcast network, while allowing Y amount of comcast's data to flow through level 3's network.

Comcast is saying the discrepancy between X and Y is large enough, where they feel they should receive compensation.

Comcast is also saying, that level 3 did the same thing to other peers they have worked with, when the tables were turned and level 3 was in the situation comcast is in now.

Whether that's true or not, I don't know. It's just what they're saying.

Also, my understanding could be completely wrong.


RE: Level 3, You Bastards!
By lolmuly on 11/30/2010 7:58:42 PM , Rating: 2
quote:
Why oh why didn't they tell Comcast to pound sand?


umm... because that would ruin their business??

no mo customers = no mo money?


Comcast just wants MORE money
By Shadowmaster625 on 11/30/2010 10:47:50 AM , Rating: 2
Bandwidth is already capped at 250GB per month. If your service costs $65 per month, that is roughly 25 cents per GB, minimum. That means 25 cents per GB is the minimum price comcast charges. If you only consume 65GB in a month then you are actually paying $1 per GB per month. And somehow that is not enough for comcast? Bull. That's $2 per netflix movie. Yes that is seriously how much comcast ALREADY makes as your ISP. Maybe less if you get the stripped down service or a digital cable/voice package or you just happen to download a LOT of stuff (even 4+ hrs a day of porn would not violate the 250GB cap). But that is just more money for them.

Note that 8-12 hours of 360p youtube is roughly equal to one netflix movie. So what is to stop comcast from going after google? Why dont they just charge a flat rate? They actually already do. That rate is 25 cents per GB per month, minimum. But you have to hit the cap to get that rate. If you use half your cap, you pay 50 cents per GB. If you use 10% of your cap, you pay $2.50 per GB. If that is not enough then comcast should declare bankruptcy.




RE: Comcast just wants MORE money
By hotel77 on 11/30/2010 11:42:12 AM , Rating: 2
FWIW...I go over my 250gb cap by about 50-150gb every other month, and I have never received any communication from Comcast complaining about it.

I don't use torrents or any P2P though...I think that's why they ignore me. It's been my experience that if you are using little to none of your upload bandwidth, they will ignore the cap.

Not that I'm supporting the actions in this article...that's scary to me.


RE: Comcast just wants MORE money
By SandmanWN on 11/30/2010 12:41:27 PM , Rating: 3
I got my call at just over 500GB


RE: Comcast just wants MORE money
By Shadowmaster625 on 11/30/2010 2:07:52 PM , Rating: 2
sheesh what were you downloading? 500GB is 30 straight days of watching 1600 kbps video 24/7. Netflix on autoplay?


RE: Comcast just wants MORE money
By hotel77 on 11/30/10, Rating: -1
RE: Comcast just wants MORE money
By SandmanWN on 12/1/2010 10:20:26 AM , Rating: 3
Comp died. Local backups were corrupt. I had to download everything from my online backup vault. Glad I put everything there. I told Comcast it was a one time deal.

I had a 25Mb line. 500GB only translates to 1.5Mb for a month. I was well within the limits of what I paid for for so many years. I told the guy to go screw himself.


Love the pic
By Integral9 on 11/30/2010 12:06:15 PM , Rating: 3
Mugger <Comcast>: Gimme da cash!
-5th Element




RE: Love the pic
By priusone on 12/1/2010 11:17:08 AM , Rating: 2
Do you think L3 can convince the mugger, Comcast, that it's gun, demand for money, is on safe, full of hot air? Only time will tell.


RE: Love the pic
By Integral9 on 12/2/2010 9:07:04 AM , Rating: 2
I think this move is preemptive to the FCC's upcoming ruling on Net Neutrality to secure, by contract, payment from content providers. And no, I don't think Comcast was bluffing.


Lobbying
By wallijonn on 11/30/2010 1:17:28 PM , Rating: 2
quote:
The U.S. Congress and the FCC are working on legislation to prevent this kind of "pay to play" practice. The pending legislation has generally enjoyed bipartisan support, though it has a few vocal critics, including Senator John McCain (R-Ariz.).


Don't believe it for a second. Comcast's lobbyists are probably lining the politicos' pocket every chance they get - so that any regulatory legislation is defeated. They, of course, are using the subscriber's money to bribe the politicians, and they will of course increase their rates to cover the bribes.




RE: Lobbying
By cmdrdredd on 11/30/2010 10:34:38 PM , Rating: 2
It doesn't help that one of the older congressmen who can't even operate a computer (he admitted this) is trying to block legislation to protect the internet and it's users. That's beyond ironic if you ask me. It's sort of like me not knowing how to drive a truck but I play traffic police and tell you how you're supposed to do things.


What are they thinking?
By bug77 on 11/30/2010 10:40:33 AM , Rating: 2
quote:
It is our hope that Comcast’s senior management, for whom we have great respect, will closely consider their position on this issue and adopt an approach that will better serve Comcast and Comcast’s customers.


Who do they think has demanded payment in the first place? A rogue clerk?




I see a Mass Exodus
By Flunk on 11/30/2010 12:07:32 PM , Rating: 2
My previous ISP (Rogers Cable) did something similar recently (Lowered bandwidth caps to 60GB/month) and it was the final straw for me.

In my house we have 2 gamers which means Steam/Live and WoW. Add on some streaming shows watched online (legally) and we went over the cap every single month. Add the possibility of Netfliks and we'd end up paying about $150 a month for internet access. So of course I switched to another provider and now have no bandwidth cap, the same level of service for $5 less per month.

Cable companies need to look forward and evolve, not backwards and constrict. Otherwise they're going to annoy their customers into changing ISPs and the cable business will die anyway leaving them holding the bag like Blockbuster.




By Homerboy on 11/30/2010 3:26:32 PM , Rating: 2
Read the real reasoning and what is going on via the ATOT thread on this topic:

http://forums.anandtech.com/showthread.php?p=30842...

Stop spreading BS rumors and fear mongering.




Ha!
By rburnham on 11/30/2010 7:18:34 PM , Rating: 2
You guys at DT have been really on your game lately with the funny pictures.




Municipal Broadband
By 2tweeked on 11/30/2010 11:16:50 PM , Rating: 2
This is why municipal broadband is so important. These corporate monopolies squelch progress and censor or restrict on multiple levels. I would like to see fiber to home. I would like a private company such as Bell, Comcast or some other provider manage and service the system based on a annual contract. This way if you get inferior service, you can fire them. Many may cry fowl to this but it does work. The city of Monticello, Minnesota is a example.

http://monticellofiber.com/home




FCC to vote on December 21st
By HueyD on 12/1/2010 8:44:15 AM , Rating: 2
http://www.tvnewscheck.com/link/2010/12/01/47385/g...

Maybe Comcast has some inside information???




Comcast:
By inperfectdarkness on 11/30/2010 10:26:58 AM , Rating: 1
"The Fail is strong with this one."




Biased enough, Mick?
By bill4 on 11/30/10, Rating: 0
McCain
By Spivonious on 11/30/10, Rating: -1
RE: McCain
By Exodite on 11/30/2010 11:01:54 AM , Rating: 2
...while keeping it wide open for regulation by private, for-profit, enterprises.

Cue this article.

Like it or not the Internet as we know it need government control and regulation to continue to exist. Personally I find this irrational fear of government involvement both sad and amusing. Then again, as a Swede, it might just be my 'socialist' upbringing and values shining through. *shrug*

Seeing as I pay ~$9 a month for my phone, plan and usage total, and ~$10 a month for uncapped 100/100 Ethernet right up to the wall socket something is clearly working.


RE: McCain
By bitterman0 on 11/30/2010 1:06:40 PM , Rating: 2
$10/mo for full-duplex Fast Ethernet internet access? That's great! And 60% income tax rate has nothing to do with it, I'm sure.


RE: McCain
By namechamps on 11/30/2010 2:42:26 PM , Rating: 5
Your being scammed. US doesn't have much lower taxes we just get far less.

Now your marginal income tax rate might only be 25% but I bet most people have a state income tax too, and most also have a state sales tax. Of course lets not forget the hidden "FICA" tax which is actually 18% (your employer pays half don't think that doesn't affect your salary). You pay real estate taxes too either directly or via higher rent. Then you add on gas tax, telecom excise tax, duties & tariffs (like on sugar and corn to protect farmers in US), various fees that are essentially taxes in another name (storm water fee, DMV fee, gun license, pet license, etc.

Now 100% of those might not apply to you personally but the point is the US has a rather high level of OVERALL taxation. We simply get very little for it. It is essentially the cost of socialism without any benefit.

Of course we do have the largest military in the world (3x rest of worlds military spending combined), 45% of the worlds nuclear weapons to protect 2% of the worlds landmass (Russia has the other 50%, and entire rest of world has 5%), the largest corporate welfare system in the world, one of the most corrupt govt in the developed world, and a giant do nothing govt bureaucracy. Money well spent.. er maybe not?


RE: McCain
By Spivonious on 11/30/2010 4:01:25 PM , Rating: 2
FICA isn't a tax, it goes into your social security account, which is repaid to you in installments upon retirement. I'd love to see it made optional, but it's not a tax in the classic sense.

For me:
federal income tax: 25%
state income tax: 3%
county income tax: 1%
real estate tax: 4.8 mils, ~0.5%
sales tax: 6%

Far, far less than the top tax bracket of 56% in Sweden. And don't forget their 25% VAT on items, 12% VAT on food, 6% on transportation.

Sure they get lots of stuff free or discounted, but to say taxes in the U.S. are even in the same universe as Sweden is ridiculous.


RE: McCain
By Kurz on 12/1/2010 10:24:45 AM , Rating: 2
FICA is a tax when in actuality is a Pyramid Scheme.
It is only surviving because the Federal Reserve is fiancing its obligations.

Its not like a bank account it goes into a pool with all the rest of everyone's money. To pay for the current baby boomers.

The Privatation of social security is going to make sure its your money. And gives you the potiential retiree more say on your retirement.


RE: McCain
By Kurz on 12/1/2010 10:33:58 AM , Rating: 2
Actually... Ponzi Scheme is more accurate than Pyramid Scheme.


RE: McCain
By Exodite on 11/30/2010 3:32:47 PM , Rating: 2
You really don't want to go into the taxation debate, trust me on that.

If you really were to argue that I'd have to bring out free health care, free education (even at university level), government-mandated 5 weeks of paid vacation, ~$12.50/hour minimum wage, government-funded health and unemployment insurances etc. and eventually we'd move far and beyond the scope of this article just for the sake of your need to disagree.

That said I feel you've more or less made my point for me - no amount of taxation would improve network accessibility as long as it lies solely in the hands of geo-monopolistic private enterprises.


RE: McCain
By bitterman0 on 12/1/2010 3:03:21 AM , Rating: 2
Repeat after me: "if I pay for it with my tax money, it is not free". Whoever told you it was free was making a (bad) joke, and you are going around repeating it with a serious face.

quote:
That said I feel you've more or less made my point for me - no amount of taxation would improve network accessibility as long as it lies solely in the hands of geo-monopolistic private enterprises.


This makes no sense.

And you are also missing the point here. Actually, two points. First off, the seemingly low-cost internet connection is paid for - by you - with your tax money. Not to mention that the same tax money pay for internet connections of other people who don't have a job and don't pay any taxes.

And the second point is that there's no need for connections this fast - there's no content that requires it, or will require it within the next few years. By the time we have content, the US will have the corresponding infrastructure in place, all made and paid for by private enterprises, not the government.


RE: McCain
By Exodite on 12/1/2010 8:43:40 AM , Rating: 2
Let me reformulate what you wrote into the context of the point I'm making, and has already been done by others.

Everyone pays for everything, whether it be through taxes or through goods bought or services rendered.

Granted, it's likely true that a larger part of the cost of network infrastructure is paid through government funds in Sweden than in the US.

That's only relevant if you can prove that increases cost for the individual however, meaning that the median Swede would have a lower standard of living and less disposable income than the median US citizen.

And that's the argument you really don't want to make.


RE: McCain
By Kurz on 12/1/2010 10:54:20 AM , Rating: 2
So you believe in the notion that Government is more efficient than Private industry?

Why not just socialize everything to make society more efficient. Have the government run it.

Look at history whenever government has gotten too big to support itself on the backs of the people it decays and enters a period of decline.

The question is incentives, Private industry has every reason to more efficient, develope better technologies, in all is the prime reason we have a higher standard of living today rather than yesterday. Every Economic problem we have is usually a consequence Govnerment intervention.


RE: McCain
By Exodite on 12/1/2010 11:25:40 AM , Rating: 3
quote:
So you believe in the notion that Government is more efficient than Private industry?

Not necessarily, no.

It's more a question of accountability. Governments are held accountable by the people they govern, which you perfectly illustrated yourself, while companies are only accountable to their shareholders.

If I wanted to efficiently make money, short-term, I'd definitely turn to private enterprise. If I wanted to assure the quality and accessibility of a particular service or set of goods however, I'd definitely turn to the government.

That's not to say that everything must be government-run, merely that a framework for regulation must be in place.

Private industry have no reason to be more efficient or develop better technologies unless it improves their bottom line. The governments job is to foster a climate, or dictate terms, that prevents monopolies, oligopolies, price-fixing conglomerates or every other trend that would allow the private industry to sit on their asses while increasing prices.

Earlier I mentioned that I found the fear of government regulation both sad and amusing. The amusing part being that the people who fear government involvement are so willing to believe that the private industry have our best interest at heart.

It's a combination of, not entirely unfounded, paranoia and childish naiveté that goes very poorly together.


RE: McCain
By Kurz on 12/1/2010 2:42:59 PM , Rating: 2
quote:
It's more a question of accountability. Governments are held accountable by the people they govern, which you perfectly illustrated yourself, while companies are only accountable to their shareholders.


Businesses are Accountable to everything from government Regulation, Customers, and Shareholders. They have to please everyone in order to have a successful business. They have more accountablity than the government.

quote:
If I wanted to efficiently make money, short-term, I'd definitely turn to private enterprise. If I wanted to assure the quality and accessibility of a particular service or set of goods however, I'd definitely turn to the government.


Actually I perfer Private enterprise since expectations constantly change and they get instant feedback from their customers to improve their service, become cheaper, more efficient.

quote:
Private industry have no reason to be more efficient or develop better technologies unless it improves their bottom line. The governments job is to foster a climate, or dictate terms, that prevents monopolies, oligopolies, price-fixing conglomerates or every other trend that would allow the private industry to sit on their asses while increasing prices.


Private industry always has a reason to become more efficient. The only time they don't have an incentive is when their marketshare is protected by the government.
More Efficiency means using less resources for the same output. So Businesses are always striving to be more efficient. You made a logical fallacy.

What If I told you most monopolies throughout history were protected in one way or the other by the government. Then when the government decidied it was politicaly sound to break it up they came in and did it. Alcoa is the only monopoly I can think of that was a natural monopoly. However, it was because the rest of the world hasn't perfected the process to make Aluminium. Though at the same time they had to compete against other products like steel. So they couldn't charge high prices since people can go for subsitutes, steel, copper, etc.

Private industry will go for whatever the people want.
If they don't have the people's interest in heart they wont get business its that simple.


RE: McCain
By Reclaimer77 on 12/1/10, Rating: -1
RE: McCain
By cmdrdredd on 11/30/2010 10:38:07 PM , Rating: 1
quote:
Seeing as I pay ~$9 a month for my phone, plan and usage total, and ~$10 a month for uncapped 100/100 Ethernet right up to the wall socket something is clearly working.


And I bet you pay a Tv tax, a computer tax, a phone tax etc.

Or your service might seem good to you, but you're limited to atrocious speeds and limitations...

I'll gladly pay more to get more which I do.


RE: McCain
By Exodite on 12/1/2010 8:51:47 AM , Rating: 2
Did you even stop to read what I wrote while composing that knee-jerk response?

I have the choice of 10Mbit, full-duplex, Ethernet access for free or choosing between a number of different upgrade packages from various ISPs. I chose the cheapest 100Mbit upgrade option, which ends up costing me ~$10 a month.

In either case there's no traffic cap or artificial limitation imposed upon the service.

The reason I can enjoy this service is because the government, mostly through the universities, have built a strong networking backbone and my city has taken upon itself to extend this to all residents.

This network is then leased to independent operators, ISPs, that get to compete on price and level of service to the end consumer - me.

What I'm trying to point out here is that you're not paying more to get more, you're paying more to get less because there's nothing to keep the corporate greed in check.


RE: McCain
By Reclaimer77 on 12/1/10, Rating: -1
RE: McCain
By Exodite on 12/1/2010 11:06:50 AM , Rating: 2
Don't blame me for taking it off-topic, I cautioned against using the 'taxes' argument once someone saw fit to take an offside remark from my post and decided that disagreeing with it were more important than the subject at hand.

If you had bothered to read my initial post you might have noticed that was about the need for government regulation to keep the Internet as we know it functional and how the irrational fear of such involvement goes contrary to what lies in the public interest.

Personally, though I admit the evidence is purely coincidental, I think you're just having issues with someone of opinions the polar opposite of yours offering something to the discussion that's hard to refute. *shrug*


RE: McCain
By Reclaimer77 on 12/1/10, Rating: -1
RE: McCain
By Darkefire on 11/30/2010 11:04:27 AM , Rating: 3
Yeah, because that worked so well for the finance industry. Wall Street has proven that if you let big business run free it will do what any large predator will do in an environment where it's bigger than anything else (read: eat itself silly and stomp out any competition). Net neutrality by definition is going to have to involve government intervention, since the corporate world has demonstrated time and time again that they are incapable of playing nice with consumers or each other.


RE: McCain
By superPC on 11/30/2010 11:34:51 AM , Rating: 2
that's exactly right. when adam smith first think of how capitalism and corporation works the dutch east india company and the british east india companies were the only megacorporation and multinational corporation out there. and both of those companies were in decline at the time he was alive. he wouldn't think the predatory nature of those company would be sustainable and in the end market forces would be in balance and brings benefit to all. guess what? it took hundreds of years for those two megacorporation to go bankrupt. and that's without goverment oversight, with numerous goverment bailout and caused innumerable suffering of millions of people.

large multinational firms are doing what VOC and british east india company did hundreds of years ago. they prey on the week, illinformed, and with limited choices (or sometimes no choice at all). do we really want to see history repeated?


RE: McCain
By Kurz on 11/30/2010 1:46:49 PM , Rating: 2
You are missing something, they are being protected by the government in some fashion be it subsides, contracts, tax breaks etc.


RE: McCain
By straycat74 on 11/30/2010 11:57:57 AM , Rating: 2
You would be correct if your assumptions were correct. We all know government has purposely allowed no competition in the cable market place locally.
Do you really not know how bad loans were encouraged by the government? It used to be not too long ago you had to have 20% down to own a home. Why do you think the houses we grew up in were so much smaller? Who bought all of these bad bundled loans? Fannie and Freddie. Do you think banks would loan money to high risk people without a place to unload them? Do you think the government didn't know what was happening?
Don't do the wall street is evil thing. Look to the government for why things were allowed and encouraged.


RE: McCain
By jhie on 11/30/2010 12:18:33 PM , Rating: 2
Actually it is Wall Street (GS in particular) as Matt Talibai explains very clearly in his new book Griftopia. They are behind most of the government part too.


RE: McCain
By SandmanWN on 11/30/2010 1:33:17 PM , Rating: 2
Actually it was government, I read a book about it (haha). Gov demanded corporations to make these loans or lose funding and they did the best they could with a bad situation. (the book told me so)

So you read a book that points in one direction. Doesn't make it so. High risk loans aren't even close to a good business decision and there is enough history to show that banks never pursued this area of home loans for good reason. The only reason you ever consider to take on these loans would be because someones sticking a knife in your back and forcing you to do so. If you are a lender you don't push for zero interest time periods, adjustable apr's, no down payments, etc etc. You want money up front, down payments, credit checks, set rates... C'mon man.


RE: McCain
By zxern on 11/30/2010 1:55:24 PM , Rating: 2
Pff.

Why do people keep removing the human element from these discussions?

High risk loans aren't good for the business as a whole, but the guy writing your loan isn't the business, he's the loan officer looking at a big bonus at the end of the year depending on how many loans he makes. What does he care if the loan is good or bad?

There is no need for a knife just a lack of oversight and common sense.


RE: McCain
By SandmanWN on 12/1/2010 10:33:34 AM , Rating: 3
The loan officer... Really???

The loan officer is one of the lowest guys on the totem pole. The loan officer is given a set of guidelines to work with. Thats all they can do. They are nobody employees doing what the people above tell them to do.

You aren't even in the right ballpark on this discussion.


RE: McCain
By Kurz on 12/1/2010 11:04:26 AM , Rating: 1
Exactly... usually the loan officer is just the face man.
Collecting information for the approval Board.

Its up to the Board to decide if they want to take on the loan. And Lying to the board will cost you your job and further job opportunties.


RE: McCain
By jhie on 11/30/2010 3:25:02 PM , Rating: 2
There is ample evidence in where the b/trillions of dollars ended up. Talibai's book just does a very good job of discussing it. High risk loans are indeed a bad business decision -- except Wall Street (GS in particular) gamed the system through the derivative markets to where high risk loans were extremely lucrative to them. Until the ultimate meltdown. They got to keep the money. In fact they were paid extra through the bailouts. This was not a free market dynamic, it was corruption of the system.


RE: McCain
By SandmanWN on 12/1/2010 10:28:31 AM , Rating: 3
except Wall Street doesn't give out loans. They just bet for or against the company doing so. What you are saying has no relevance to the bad decision making that lead to banks giving out these loans to begin with.

You are looking at step 2 of the downfall and trying to point fingers. At that point finger pointing is irrelevant because the market is doing whatever it can to make good of a bad situation that is out of their control.


RE: McCain
By jhie on 12/1/2010 11:52:37 AM , Rating: 2
Wall Street created a huge market for garbage mortgages through their wack derivatives. The lenders didn’t care because they were immediately unloading the mortgages through Wall Street’s (GS particularly) securitized bundles. The lenders could sell any mortgage no matter how bad or fake it was, so the dynamic was rack n stack. Wall Street didn’t care because they covered all the bad mortgage securities through AIG credit default swaps. When it all melted down, the federal government decided it was better to cover all of their bad investments than to have the entire economy melt down (that was their decision anyway). Lack of oversight and fair audit allowed this to go to Ponzi scheme levels. All you have to do to verify this is look at who made the b/trillions of dollars in “profits” and bonuses and who ended up in debt to pay for it. The WS banks made a killing on grifted mortgage bundles and credit default swaps – and then made one again on the bailout. All you have to do is look at the fantastic scale of the dollar amounts involved to recognize WS's central (and ongoing) role.


RE: McCain
By bitterman0 on 11/30/2010 1:14:52 PM , Rating: 2
I strongly agree. Free market economy can balance itself on its own; it is government's meddling what creates great imbalances.


RE: McCain
By zxern on 11/30/2010 1:49:53 PM , Rating: 2
It sure will just like the real estate markets and the stock markets eventually correct themselves. Just ignore all the suffering that happens in the meantime. How long do want to suffer with a closed off internet before these companies collapse under their own weight? Are you really eager to go back to the days of aol and compuserve?

I'm not and I'll happily take some government regulations over decades of a closed internet.

Free market just like Communism would work great if everyone were content with what they had. But people aren't, they lie cheat and steal. Thats why communism doesn't work and thats why a free market doesn't work.


RE: McCain
By bitterman0 on 12/1/2010 3:14:12 AM , Rating: 2
quote:
It sure will just like the real estate markets and the stock markets eventually correct themselves. Just ignore all the suffering that happens in the meantime.


We were talking about government meddling affecting real estate markets by encouraging private enterprises (banks) to relax loan requirements via Freddy Mac and Fannie Mae (feds) buying/underwriting risky loans.

If the government was not meddling that much in the first place, the real estate bubble would have never happened to the extent we had it.

Stop thinking that the government has all the answers. It doesn't.


RE: McCain
By The Insolent One on 11/30/2010 2:15:11 PM , Rating: 3
Just like free market energy provided by companies like, Enron?

Just like all the ma bell companies?

Just like all the newly minted cable companies?

What do all of these have in common? HUGE barriers to entry like government funded infrastructure that was essentially given to the companies to "free market." They were also given a "franchise" to operate in a given place with little/no competition.

The free market only routinely works on businesses where the barriers to entry are low (under millions of dollars). When markets and barriers reach epic numbers, the number of players is severely limited and they have little to no motivation to keep prices in check.


RE: McCain
By Exodite on 11/30/2010 3:43:55 PM , Rating: 2
Zxern said pretty much all I wanted on the topic already but to add to that it's probably good to keep in mind that the ideal state of affairs under a completely free market, for a company that is, is commonly known as 'a monopoly'.

It's far better to be the only provider of a particular set of goods or services than forced to compete with others on quality and price.

Companies knows this, that's why we get oligopolies and price fixing when they can't niche themselves comfortable into a monopoly.

The 'free market' needs government oversight and regulation to function, believing otherwise is as naive as believing in a plan economy. Likely more so.


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