Should There Be A General Internet Tax? – An Exploration

I will first start by acknowledging those that I have already lost, due to the title of this entry alone. Though I understand your strong feelings, this post isn’t meant to conform to the dichotomy options (one side being the people (aptly represented by the graphic above), and the other being the big (primarily) corporate ISPs of the world. As with most other things, there is almost always more to consider than just the window dressing of a single side.

The goal of this piece is to try and look between the lines. While I admit that the problems outlined may seem partisan, I encourage you to look beyond that, to the bigger picture. Though one side may have a history of corner cutting and crying wolf, in the grand scheme, they do have a point. Even if it’s often burried in self serving rhetoric. I encourage you to explore the problem with some depth before making a flash judgement based solely on one word. 

On to the meat & potatoes.

Though this topic has crossed my mind at times in the past, it was brought back into light again today. Partially by a conversation (well, comment) about free speech written on another blog, and partially by a commercial I seen on TV.

The free speech thing was me revisiting what needs to happen (in my humble opinion!) for there to be TRUE free speech online. Spoiler alert! It likely will not be free, as compared to the portals were used to using for free today.  It would involve circumventing the ready made platforms of today (and the problems with them, stemming from ad revenue and idiots), for something private and totally independent.

You would need to program your own source material, unless you can obtain licencing for something prefabricated (which will likely cost you). You would need to obtain your own servers and hardware, along with upgrades as necessary. There is electricity to run (and cool!) The server’s. Air-conditioning may add a huge expense depending on location. And then there is the broadband that makes the site come to life.

Though past experience has done a great job in teaching people that almost everything on the internet is free (to the dismay of the intellectual property industry, though I think they are starting to gain headway again), there is always hidden cost. That cost used to lie primarily in user privacy concerns (platforms could show ads and otherwise monetize user inputs to keep the lights on).

Though a problem for individual users (whether or not they were aware of it or not), for the most part, ISPs (Internet Service Providers) didn’t see many issues of caused by usage. I’m sure there are anecdotes, but being that most technology was relatively bandwidth lite (by todays standards), a majority of users didn’t cause much extra burden (in terms of saturation of ISP load capacity).

P2P (or peer to peer) started to change that by the late 1990’s to early 2000’s. Though loads generated by early P2P protocols were not of much consequence to most operators (due to mainly small and compressed files being transmitted), Bit torrent would become a whole new headache.

A protocol designed specifically for the smooth transmission of large and bulky files, this new flood of traffic would not only start to cramp important prime usage hours for networks (between 7pm and 11pm), but also times of historically lesser usage. Being that most internet connections were close to inactive when residents are not home (in the past), the network as a whole was less loaded. But when people figured out that leaving large downloads to times of digital dormancy (out and about, or sleeping) left their use of the connection unaffected, these soon became  problematic times as well.

Cable subscribers would notice this traffic the most (at any time of day, mind you), having whole neighborhoods connected to a single neighborhood node. Even a few heavy downloaders allowing the programs to utilize their full connection capacity for long periods of time would cause degradation for everyone (the reason why I never let such programs run at over 200kb down at a time, even when not doing anything online). DSL users are relatively sheltered from their neighbors by the direct connection to the office, but don’t let the telephone company rep fool you. You could still run into user generated backlogs, even if its further up the tree. If memory serves, most DSL subscribers are separated into groups called Clusters. Get in a crowded one, and you may have similar problems as your cable subscribing neighbor (though I’ve read that at times one can be moved to another cluster. Something unavailable on a cable network).

But technical mumbo jumbo aside, you can more less get the drift that I am trying to get across. As IT technology advances, so to does the average bandwidth footprint of the average internet user.

Which brings me back to the commercial I seen on TV today. It was for a company called Comwave, which offers deeply discounted home phone rates (compared to any of the big guys). Indeed, the $16 a month IS cheaper than the $37 I pay. But one wonders, how can they low ball so much?

First off, I assume they (like Vonage, Magic Jack and others) run a VOIP (voice over Internet Protocol, or IP) network infrastructure. Which necessitates a reliable broadband connection. For me, that connection (minimum required speed s) is $65 monthly. Which would mean $80 monthly for  phone if I didn’t use the internet. Savings for most, not at all for some.

But how can they make money by low balling so much? Simple. Minimum investment in infrastructure.

To be a typical landline operator, you first have all sorts of  infrastructure to operate and maintain. Literally hundreds of miles of cable. Backbone equipment. Personnel at all levels of operation (sales, maintenance, tech support, etc).

Whereas, all a small VOIP operation needs is some switching equipment, a skeleton staff, and a commercial broadband connection. No maintenance of external infrastructure, because it’s deferred to another party. That party often being the very same companies from which they are often poaching the customers from.

The same goes for digital competitors of the cable television industry. Online streaming services of all kinds can easily low ball prices, in comparison to their infrastructure heavy cable and phone company competition.

While this may come across as partisan to some (*gasp*, I am siding with big Cable\Telephone!), hear me out.

The more people that cut the cord to traditional television and telephones in favor of online based alternatives, the more general traffic flow that ISPs are going to have to cope with. And as with any medium handling increased volume (like a normal roadway), more maintenance will be needed. Not to mention upgrades to keep up with demand.

Which brings us to the tricky part. As consumers of telecommunications and television content switch sources, traditional providers will likley only see losses. You can toggle with broadband prices in an attempt to keep pace, but it is likley to prove to be a losing battle. Not to memention that it could introduce an unconsidered form of unfairness in cost.

First off, I understand the resentment and at times desire to tell the local (often nationalized) telecommunications empires to stick it. They have been alpha dog a long time, and don’t go out of their way to even pretend to care anymore. Makes me glad my communities 2ed choice is a cooperative. They are a breath of fresh air to the even regional competition (soon to be part of a national Telco, if the shareholders get their way). But either way, no matter how much we love to hate the telephone/cable company, and as much as they love to overstate the cocompetitions effects, there is a problem. The problem of increasing volume of traffic combined with decreased revenues in other areas.

Though average consumers may not recognize a problem, its effects on them ultimately  depends how service providers handle the burden. I’ve seen some (like Telus, in their broadband footprint) start to meter usage, similar to how they (and others) meter mobile data usage (monthly capped plans with overage charges, or tiered usage prices tailored to your usage in a time period). This methodology I can agree with, to a point (of which I will get to later).

Now, a BAD way to handle this problem would be to institute a general price increase across the board (for ALL subscribers). It’s the wrong move due to the fact that it is essentially punishing the entire subscriber base for the usage of what almost certainly constitutes a minority of the majority. The number of heavy users will be greater in proportion to the   footprint of the service network. But they should still be a minimum of the entire base. 

In all honesty, both of the ideas floated above are not all that great. Stop gap measures at best. And in a sense, both are unfairly punishing people for simplicity utilizing a service. Though the metered usage idea is arguably the fairest of the stop gaps (assuming proper metering, which can be problematic by the looks of posts in tech forums by subscribers of  various North American ISPs), even it could be seen as discriminatory in a sense.

Big ISPs (well, most any ISP really) seem to like to look down on the biggest users. Certainly publicly, when discussing the problem of bandwidth shortages. And at times, one can see the point. If a single user is paying for a minimum residential subscription fee monthly, yet using the equivalent bandwidth of 100 average users, it’s no wonder that caps would seem a good deterrent. Such usage could also hinder other users, which could lead to complaints (the biggest concern of ISPs, often times calling this type of activity abuse). But that said, depending where the limitations are set, it’s often not hard for even the  average user to blow away the limit, just because of the nature of technology today.

The average user today would easily be a moderate to heavy user of even, 5 or 6 years ago. Such is the evolution of technology. Not only has the number of bandwidth intensive services increased, so has the number of end points of usage. Whilst a single home computer has a fairly predictable and fixed rate of bandwidth usage, a home with laptops, tablets, gaming systems, streaming boxes and other wifi connected hardware (VOiP equipment?) does not.

This is where I have to stand aside of the whole debate, and take it all in. When it comes to the consumer perspective, assuming their usage patterns are not beyond ridiculous, it’s not right to penalize them for simply utilizing current technology. And on the other side, it’s also not unreasonable for an increasingly utilized service to ask for a bit more revenue to cover increased costs of traffic increases.

In a sense, it would be akin to a nation state that conducted an enormous amount of trade with another nation state, but didn’t have a direct link due to geographical restrictions. Though Canada and Mexico could work, the European Union seems a better example for this scenario.

Lets say that Poland and Italy form a close trade relationship, and so huge amounts of freight will be exchanged indefinitely. Air is expensive, and European air corridors are already clogged, so truck is the most economical option. However, in order for the businesses to access their collective markets, they need to go through (and utilize the infrastructure of) at least 2 other nations enroute. The nature of the trade agreement would see a HUGE spike in thru traffic in the middle points, causing congestion (despite the middle point nations having a much lower volume of traffic as compared to either trade partner), and more need for infrastructure spending. But despite taking a financial beating on account to this trade deal, these nations see none of the benefits.

In such a scenario, one can understand why the middle nations would eventually get fed up and start demanding monetary funding to at least partially cover repairs and maintenance. And of course, to look for a permanent solution to the problem. Possibly a pricey (but direct) raised link road between the 2  nations, getting rid of the traffic problem altogether.

In reality, the European Union has smoothed a lot of this stuff out. But in the digital world, no such middle man organization exists in the context of the internet, despite having a similar problem.

In this context, various digital content providers online are trading partners. Consumers are their trading partners. And ISPs are the middle nations in between. 

Your homes residents find themselves more drawn to offerings of the trading partners than closer markets, and so they spend their money as such. Though some nations only trade  a small amount of freight (hardly noticeable), others trade a HUGE amount of freight. Which causes traffic chaos in between.

The various mitigation solutions the ISPs have tried so far (all ultimately self serving) have so far been arguably just as retarding for online technical development as the traffic problems themselves.

First off, metering usage. It helps on their end, but still ultimately punishes the consumer unfairly. 

Then came the net neutrality debacle of the United States. The ISPs tried to gain permission to implement a multi-tiered internet, wherein your platforms load time to the end user was proportional to how much you were willing to pay. An incredibly stupid stop gap measure, being that not only was it targeting even minor traffic generaters, but it could have served as a loose form of censorship. Though information is not actively suppressed, many passive \ chance visitors (search engine guided?)  will leave the site (never to return!) if the material does not load fast enough. As such, a slow process will be just as effective as active censorship.

Not to mention the ill intent. Not only will you have every ISP in the nation presumably asking every platform for dime, but consumers also will likely not see any improvement in either price structure OR service. Particularly in America (home of some of the largest  ISP monopolies, many leading in the worst service and performance category).

Though that bill was ultimately shot down by self interested big money corporations (big online platforms that could  likley afford to pay the toll, but choose to side with the people, due to financial reasons). Fortunately, big monetary influence worked in our favor.

But as terrible as the idea of allowing the private sector gatekeepers of the internet to be its toll keepers as well, they are arguably on to something with the structure. As biased as their argumentation is, there is a point to their concerns.

First off, I am not worried about lost revenues in other provider services (phone and television). Technology changes with time, as does consumer behavior. Not to mention that the past behavier of many of these big telecom’s has made their new precarious position in the world as, rather  amusing to many. And judging by behaviour of many even in recent times, they STILL don’t seem to get it. Though, such is the way of business I suppose. It took years for the intellectual property industry to stop primarily fighting the digital content shift, and embrace it instead. Though digital piracy has not (and will never!) stop, there is now revenue being generated from it (as opposed to only loses).

Having acknowledged the obvious, there are still going to be problems ahead that are beyond anyone’s control. Consumers will continue to embrace and utilize online technology. As this usage goes up, so to will average bandwidth usage. Given typical private sector response so far, these problems will result in further chaos (in terms of bottle necks within ISP infrastructure) down the line. In terms of the  big picture, expect retardation of the embrace of technical growth and innovation, and possibly even a ceiling on the general economy. When compared to nations that spend the money and resources necessary to embrace the digital world.

Which is where something like an international European Union-esk type tax and organization comes in to play.

Consumers should be free to embrace new innovations without undue burden. Content providers should be free to be in business without undue burden. And ISPs should not endure undue burdens due to technical circumstances and consumer behavior outside of their control.

Having an international co-operative of sorts tasked with simply keeping the traffic flowing smoothly internationally (or possibly inter-continentally, like how IP address allocation is handled) should help to smooth out the transition into a higher bandwidth world. The fund should be paid into by everyone (users, ISPs, content providers). That pool can be used for everything from upgrades of infrastructure wherever required (including within private ISP networks), to adding infrastructure to bring people living in the rural fringes of civilization into the broadband world. 

The fund\body could also oversee various (potentially mandated) actions to ensure that no content provider(s) cause undue disruption of traffic anywhere on the Internet in the course of their regular operation. For example, though most of the noticeable bottle necks of digital congestion happen within ISP infrastructure, such congestion also can happen even further up the stream. Also increasing the number of people impacted. 

A traffic governing body could mandate the biggest producers of traffic congestion (video/audio streaming platforms, VOiP service providers?)  have direct (or semi-direct) connections with the biggest ISPs under their supervision. It would not be a tiared connection (for use in advertising, or otherwise for ISP benefit). Rather, simply a permanent solution to keep general internet traffic flow smooth by taking the heaviest loads right off the general backbones of the internet. 

Which brings me to the close. 

Though new taxes tend to ignite fiery debates, if the overall benefits outweigh the money saved, is it not a good investment?

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