PeerFlow

Where the Money Leaving Music Sales is Really Going

Charles Arthur did a little research:

But the reality is that nowadays, one can choose between a game costing £40 that will last weeks, or a £10 CD with two great tracks and eight dud ones. I think a lot of people are choosing the game - and downloading the two tracks. That's real discretion in spending. It's hurting the music industry, sure. But let's not cloud the argument with false claims about downloads.

Or keep making such claims and keep electing Pirate Party members the the EU Parliament. Either way such claims have a limited life span.

Movie King of the Internet: Bad Idea

Andrew Odlyzko asks what if the duopoly gets its way and completely does away with net neutrality:

But what if they do get their wish, net neutrality is consigned to the dustbin, and they do build their new services, but nobody uses them? If the networks that are built are the ones that are publicly discussed, that is a likely prospect. What service providers publicly promise to do, if they are given complete control of their networks, is to build special facilities for streaming movies. But there are two fatal defects to that promise. One is that movies are unlikely to offer all that much revenue. The other is that delivering movies in real-time streaming mode is the wrong solution, expensive and unnecessary. If service providers are to derive significant revenues and profits by exploiting freedom from net neutrality limitations, they will need to engage in much more intrusive control of traffic than just provision of special channels for streaming movies.

— The delusions of net neutrality, Andrew Odlyzko, School of Mathematics, University of Minnesota Minneapolis, MN 55455, USA odlyzko@umn.edu http://www.dtc.umn.edu/odlyzko Revised version, August 17, 2008

Why is that?

But video, and more generally content (defined as material prepared by professionals for wide distribution, such as movies, music, newscasts, and so on), is not king, and has never been king. While content has frequently dominated in terms of volume of traffic, connectivity has almost universally been valued much more highly and brought much higher revenues. Movies cannot be counted on to bring in anywhere near as much in revenues as voice services do today.

The Internet isn't about Sarnoff's Law (broadcast content like TV, radio, and newspapers) or even about Metcalfe's Law (1-n connectivity, like telephone or VoIP): it's about Reed's law, 2n-n connectivity, such as blogs, P2P, and facebook). That's my interpretation; Odlyzko probably wouldn't agree.

Anyway, that video content such as movies is king is one of the primary delusions Odlyzko addresses in this paper. The other is that movies need to be streamed in realtime. It is mysterious why people continue to believe that in the face of the massive evidence BitTorrent and other P2P services that deliver big content in chunks faster than realtime. I can only attribute this second delusion to a bellhead mindset that still thinks in terms of telephone, which was realtime because nobody knew any other way to do it back in the analog-copper-wire-connection day.

As Odlyzko sums it up:

The general conclusion is that the story presented by service providers, that they need to block net neutrality in order to be able to afford to construct special features in their networks for streaming movies, is simply not credible. If lack of net neutrality requirements is to be exploited, it will have to be done through other, much more intrusive means.

So why let the duopoly force a policy on everyone else that won't even work to the advantage of the duopoly?

One way to get net neutrality would be to let the duopoly have its way, and wait for it to implode. However, given that for streaming video to have any chance of succeeding, the duopoly would have to clamp down on everything else to eliminate any competition, I shudder to think what this would mean. The Internet as a source of real news and opinion would go away. Given that the vestigial traditional news media in the U.S. (TV, radio, newspapers) provide so little news, there's a very good chance that most people in the U.S. wouldn't even know how bad they had it as the country sped its slide into parochialism and irrelevance. How many people even know now that the U.S. has slid from #1 to #23 or whatever the latest number is in broadband uptake? If the duopoly is given its head, even fewer would know.

If we let King Kong Telco and T Rex Cableco battle it out to be Movie King of the Internet, where does that leave poor Fay Wray Public?

FCC, FTC, Congress, executive, and courts, not to mention the public, should all read Odlyzko's paper, and should all refuse the duopoly's demand for special privileges that won't even produce profits for the duopoly. Then all of above should legislate, enforce, and maintain net neutrality so we will all profit and benefit. Yes, even the duopoly can win with this.

-jsq

Kevin Martin's Bottle: Weak Ruling Against Comcast Guarantees Court Challenges

The FCC recently ruled that Comcast has to stop throttling P2P. On the surface, that's a good thing. That Kevin Martin wanted it makes me wonder.

For once I agree with a net neutrality opponent:

By instituting this weird, weak, and barely legal regulation, Kevin Martin will get ‘net neutrality regulation bottled up in the courts for - what - the next five years?

— Game, Set, and Match: Martin! by Jim Harper, Technology Liberation Front, 6 Aug 2008

Harper goes on to predict that meanwhile real competition could develop. And pigs could fly, but that's not the point.

This is the point:

The paragraph prior to the provocative line suggesting regulation of universities contains this sentence: “Allowing some Internet service providers to manage P2P traffic - much less to engage in complete blocking of P2P traffic - while prohibiting others from doing so would be arbitrary and capricious.” This is an administrative-law term of art - “arbitrary and capricious.” The use of it tells us that NCTA or Comcast will challenge the FCC’s decision to regulate only one provider of Internet access without regulating all similarly situated.

But Comcast is under a different regulatory regime!, says Harold and the others. Not in an enforcement of this “broad policy statement” thing-y. The FCC is claming free rein to regulate - not authority based firmly in statute - and if it can throw that rein over cable ISPs, it can throw that rein over universities, over Starbucks, and over the open wi-fi node in Harold’s house.

Now, given the free rein that the FCC is asserting, there is a darn good argument that it’s arbitrary (and “capricious”) to regulate only cable ISPs or commercial ISPs in this way. The FCC has to regulate the whole damn Internet this way if it’s going to regulate Comcast.

This is not just theoretical. Fox News recently refused to pay an FCC-imposed fine, saying it was "arbitrary and capricious". Fox cited a previous case in which a federal court slapped down the FCC for fining a show for swearing, saying it was "arbitrary and capricious".

All that plus if a court rules the FCC's recent decision is "arbitrary and capricious", that will be used as a precedent to require universities to regulate content on their networks in favor of big copyright holders, as elements in Congress have been trying to do for about a year now.

I think net neutrality advocates underestimate Kevin Martin at their (and our) peril.

-jsq

Boehner's Latest Crying Jag

Boo hoo:

At least one lawmaker is already crying foul over Friday's expected Federal Communications Commission's censure of Comcast for faking internet traffic to limit its customers' peer-to-peer file sharing.

Republican minority leader Rep. John Boehner said the FCC would be "essentially regulating the internet."

— Lawmaker Cries Foul Ahead of FCC Net-Neutrality Decision, By David Kravets, ThreatLevel, July 31, 2008 | 7:02:45 PM

This is rather like crying foul because courts regulate contracts. I wonder how the free market would operate without them? The Internet free market in applications and services wouldn't operate very well without net neutrality.

I don't recall Boehner crying foul when Congress voted to regulate the Internet to require ISPs to hand over every bit (every email, phone call, web page, video, etc.) to the NSA and to legalize them having already done it when it was illegal. No free market talk from him then. Guess he didn't think the Fourth Amendment was worth crying over, unlike Anna Nicole Smith.

And back in 1995, it was the duopoly ISPs demanding regulation from the FCC, because they wanted to squelch VoIP.

Now they want to squelch everybody else's P2P and especially online video, except what they get a cut of. They think they can get away with it if the FCC stays out of the way, so now they are against regulation.

Their principles flip-flop kind of like Boehner's, don't they? Bunch of cry babies.

-jsq

PlusNet: Honest Prioritization

Unlike Comcast and Cox, PlusNet in the U.K. says what it is doing:

The principles of PlusNet's network management policies

• To make sure that time-critical applications like VoIP and gaming are always prioritised
• To protect interactive applications like web-browsing and VPN from non-time sensitive download traffic
• To flex the network under demand to cope with normal peaks and troughs from day to day and month to month
• To flex the network more gracefully than other ISPs in the event of unusual demands in traffic or disaster situations such as a network failure
• To provide a service relative to the amount each customer pays in terms of usage and experience
• Provides a 'quality of service' effect, meaning multiple applications running on the same line interact with each other effectively, and use of high demand protocols like Peer-to-Peer doesn't swamp time-sensitive traffic such as online gaming or a VoIP call.

— Traffic Prioritisation, PlusNet, accessed 26 Nov 2007

Interestingly, this list does not cite video as the most-favored application, instead it lists VoIP and gaming, which are participatory services. However, scan down to their table of types of traffic, and VoIP and gaming are Titanium, while video-on-demand is the highest level, Platinum.

Obama Catches up with Edwards on Net Neutrality

Back in June, John Edwards wrote a letter to the FCC back in June about the 700Mhz auction, in which he got it about the Internet and participation and opportunity.

Now Barack Obama answers a question from a former AT&T engineer, Joe Niederberger, that made it to the top of a video contest:

Would you make it a priority in your first year of office to re-instate Net Neutrality as the law of the land? And would you pledge to only appoint FCC commissioners that support open Internet principles like Net Neutrality?"

— Net Neutrality becomes issue in presidential race, Extra Technology News, 29 October 2007

Part of Obama's answer:

Facebook, MySpace and Google might not have been started if you did not have a level playing field for whoever has the best idea. And I want to maintain that basic principle in how the Internet functions. As president I’m going to make sure that [net neutrality] is the principle that my FCC commissioners are applying as we move forward.

Here's the question and answer on video.

-jsq

Content Protect v. Internet Freedom

Here's another view of what the telcos and cablecos have in mind for us, or, rather, what they want in our minds: approved content. This is substantially different from the Internet freedom we have today to look at whatever we want to and to publish our own content.

Remember:

AT&T Inc. has joined Hollywood studios and recording companies in trying to keep pirated films, music and other content off its network — the first major carrier of Internet traffic to do so.

Get ready for the Amazon Channel or settle for Internet Base Service.

NYTimes Sets Itself Free

Two years ago the New York Times made its best marketing estimate of how to derive income from the web, and put many of its back stories beyond a paywall called TimeSelect, at $49.95/year or $7.95/month. Times change:

In addition to opening the entire site to all readers, The Times will also make available its archives from 1987 to the present without charge, as well as those from 1851 to 1922, which are in the public domain. There will be charges for some material from the period 1923 to 1986, and some will be free.

The Times said the project had met expectations, drawing 227,000 paying subscribers — out of 787,000 over all — and generating about $10 million a year in revenue.

“But our projections for growth on that paid subscriber base were low, compared to the growth of online advertising,” said Vivian L. Schiller, senior vice president and general manager of the site, NYTimes.com.

What changed, The Times said, was that many more readers started coming to the site from search engines and links on other sites instead of coming directly to NYTimes.com. These indirect readers, unable to get access to articles behind the pay wall and less likely to pay subscription fees than the more loyal direct users, were seen as opportunities for more page views and increased advertising revenue.

“What wasn’t anticipated was the explosion in how much of our traffic would be generated by Google, by Yahoo and some others,” Ms. Schiller said.

— Times to Stop Charging for Parts of Its Web Site, By RICHARD PÉREZ-PEÑA, New York Times, September 18, 2007

This is why it's a bad idea to let the telcos and cablecos determine what we can see or do on the web. Nobody can predict what will work best, especially for deriving revenue.

Hm, this would also mean that the duopoly's insistence on TV as the future of Internet revenue could be just as wrong for them as it is for the rest of us.

-jsq

PS: Seen on BoingBoing.

Back to the ITU Future

I should have expected the International Telecommunications Union (ITU) to be involved in this:

Another document came out last week that ties this all together. It's from the ITU, and it's called "Trends in Telecommunication Reform 2007: The Road to Next-Generation Networks (NGN)."

The ITU defines "NGN" as a network that provides quality-of-service-enabled transport technologies. The idea is that packet transport will be "enriched with Multi Protocol Label Switching (MPLS) to ensure Quality of Service (QoS)."

Translation, as far as I can tell: packet transport becomes the same as circuit-switched transport. Prioritization is controlled; it's a network optimized on billing.

— Tying things together, by Susan Crawford, Susan Crawford blog, Mon 10 Sep 2007 08:05 PM ED

This takes us back to the bad old days when national telephone companies sold you data service by the byte, through their preferred protocol, X.25. The advantage of circuit switching was supposed to be fully provisioned copper wires or other resources all the way through between two parties. The disadvantages were that you sometimes couldn't get a connection and the high price, which got even higher between countries. It seems the telcos have settled on MPLS as their modern equivalent of X.25.

-jsq

Warp Speed From Behind

As we've mentioned before Japan has Internet connections much faster than those in the U.S. This point is getting more mainstream media play:

Broadband service here is eight to 30 times as fast as in the United States -- and considerably cheaper. Japan has the world's fastest Internet connections, delivering more data at a lower cost than anywhere else, recent studies show.

Accelerating broadband speed in this country -- as well as in South Korea and much of Europe -- is pushing open doors to Internet innovation that are likely to remain closed for years to come in much of the United States.

The speed advantage allows the Japanese to watch broadcast-quality, full-screen television over the Internet, an experience that mocks the grainy, wallet-size images Americans endure.

— Japan's Warp-Speed Ride to Internet Future, By Blaine Harden, Washington Post Foreign Service, Wednesday, August 29, 2007; Page A01

So is it just for video? If so, maybe we'd better let the telcos have their way.

Facebook as PicturePhone

Jeff Pulver has an interesting point that orty years later it's an Internet company that delivers what a telco long ago promised:

During the past couple of weeks I have come to appreciate just how simple and easy it has become to send Video Messages to friends on Facebook. While the concept of a video phone dates back to the work of AT&T and their demonstrations at the 1964 World’s Fair, it has taken the advent of the Video application on Facebook and it’s general ease of use to get me to take the time and use it as part of my daily (Internet) life. While I have discovered how the Facebook video application can be used in various ways, my favorite is to send a personal video message to a friend.

— My Favorite Facebook Application: Video, Jeff Pulver, Jeff Pulver blog, August 27, 2007

While a telco did invent or at least publicize the videophone, forty years later it's an Internet application that delivers something like it on a mass scale. And maybe one reason the Facebook version of it is popular is that it isn't quite like what AT&T predicted: it isn't interactive television. Experience indicates people don't necessarily want to be seen live any old time regardless of their state of dress or coffee.

And more obviously, there's no fancy equipment to buy, so the worldwide clientele is already there on the Internet. It's the difference between distributed participation and being sold a centralized service.

-jsq

Pearl Jam Censored by AT&T?

Photo: AP Photo/Magnus Johansson-MaanIm

Political censorship?

After concluding our Sunday night show at Lollapalooza, fans informed us that portions of that performance were missing and may have been censored by AT&T during the "Blue Room" Live Lollapalooza Webcast.

When asked about the missing performance, AT&T informed Lollapalooza that portions of the show were in fact missing from the webcast, and that their content monitor had made a mistake in cutting them.

— LOLLAPALOOZA WEBCAST: SPONSORED/CENSORED BY AT&T? News, PearlJam.com, 7 August 2007

So, "a mistake".

Uhuh.

But it gets better.

The Internet As a Market: Al Gore and Reasoned Discourse

So I've been wondering what to say about Al Gore's book, The Assault on Reason. A story in The Economist helped me out. After lauding Gore for calling Mr. Bush's risky schemes well before most people, for denouncing the invasion of Iraq back in 2002, for his Oscar, and for being "the man who changed the climate of opinion climate change", it then ridicules the book's core thesis:

But he does not stop there. He worries about America's money-saturated politics. He lambasts television for infantilising the electorate.

...

He sometimes comes across as eccentric—as when he lambasts television for killing public discourse, then celebrates the internet as its potential saviour. A few minutes online, reading the zealots on either the right or the left, should have been enough to explode that illusion.

— Gore in the balance, From The Economist print edition, May 31st 2007

That last would appear to be the sort of trivialized, perhaps even infantilized, reaction Gore is lamenting. The big advantage of the Internet is you get not just a few zealots at extreme ends of an arbitrary spectrum: you get all the shadings and colors and depth you can absorb. And you can weave your own strands in this home-made tapestry.

Giant Beasts Gently Swatting

Susan Crawford pithily describes the current Internet access market:

The duopoly is something like Shamu and Godzilla on hire for televised wrestling – giant beasts gently swatting at one another for the cameras. They aren’t competing, these giants. There is a clear failure in the market for highspeed internet access in this country.

— Moving Slowly in the Fast Lane by Susan Crawford, Susan Crawford blog, Tue 19 Jun 2007 10:29 PM EDT

What is to be done?

Incumbents Preparing

Cringely gets pessimistic:

In the end the ISPs are going to win this battle, you know. The only thing that will keep them from doing that is competition, something it is difficult to see coming along anytime soon, rather like that lemonade-powered sports car.

— Beyond Net Neutrality: If at first you don't succeed, change the game. I, Cringely, Pulpit, April 6, 2007

Is he just whining?

Eerily Familiar

The Pentagon video and blogging ban is circumventable primarily due to multiple Internet providers in Iraq:

Deployed troops can still post their videos to YouTube, despite the recently announced Pentagon ban against accessing that site and ten others from government computers. The trick, says Rear Admiral Elizabeth Hight, is to use your own internet access or visit one of the rec center internet cafes, which plug into separate, commercial networks. The ban, she says, applies only to the 5 million computers worldwide connected to the official Department of Defense intranet.

— Getting Around the YouTube Blockade, David Axe, DangerRoom, 17 May 2007

I suppose we could resort to going to the local Internet cafe to get around such bans if they occur stateside.

Control to Pay for Capacity?

Save the Internet found a recent quote by new AT&T CEO Randall Stephenson

We’re going to control the video on our network. The content guys will have to make a deal with us.”

— AT&T’s New Boss Wants Your World Delivered to Him, Save the Internet, 27 April 2007

Some say this is necessary to pay for infrastructure.

Ramping Capacity

Hands Off the Internet notes that all major TV networks suddenly (since last year) stream programs over the net, and concludes:

But it’s also a timely reminder of how these deals are placing unprecedented strain on the web’s capacity. Internet traffic growth surged past capacity growth last year. Average traffic was up 75 percent while capacity grew only 47 percent, according to the folks at TeleGeography.

— Katie Couric, Expensive Date, Hands Off the Internet, April 20, 2007 at 12:55 pm

Poor telcos and cablecos; straining to keep up.

AT&T's Internet Predictions from 1993

In 1993, several years after the commercial Internet was started by non-telco ISPs, AT&T produced the video "AT&T's vision for the Internet":

Picture phones on the ground and on airplanes. That's in part 1 of Paleo-Future's six part (OK, 9 part) series showing clips from the AT&T video. Watch the rest for a voice-actuated video-still-CAD phone tablet, plenty of virtual reality, and online shopping. In other words, a sort of visual AOL. Plus artificially intelligent agents and real-time voice translation with subtitles.

Outside the Crass Duopoly

As usual, Bruce Sterling says it more colorfully:

(((I've been doing a lot of video blogging on BEYOND THE BEYOND lately, which must be annoying to readers who don't have broadband. But look: outside the crass duopoly of the USA's pitifully inadequate broadband, digital video is gushing right through the cracks. There's just no getting away from it. There is so much broadband, so cheap and so widespread, that the video pirates are going out of business. I used to walk around Belgrade and there wasn't a street-corner where some guy wasn't hawking pirated plastic disks. Those crooks and hucksters are going away, their customers are all on YouTube or LimeWire...)))

((("Vernacular video," folks. It isn't just for theorists any more.)))

— WIRED Blogs: Listening Post, by Bruce Sterling, in Beyond the Beyond, 23 March 2007

Yes, he said Belgrade. Serbia: former Yugoslavia. They have broadband that makes the pokey speeds and availability in the U.S. look like horse and buggy days. But, then, so do many other countries.

The U.S. could, too, if it wanted to.

-jsq