Net Neutrality and the Tyranny of the ISPs

Part II — DOMESTIC

Published in

Skycoin

17 min readNov 11, 2018

Around the world, Internet Service Providers (ISPs) are exploiting a lack of competition to price gouge consumers, facilitate government surveillance and create profound inequality of internet access.

In the United States, cable companies have spearheaded the repeal of Net Neutrality to the detriment of competition, open pricing, and unrestricted web content access. In the developing nations of Africa, cellular data providers have pushed a new ‘internet colonialism’ through exorbitant pricing models that entrench rural cycles of poverty.

Part I described the global forces breaking apart the internet. Part II describes the ISP monopolies that are depriving citizens of the right to privacy and driving cyberbalkanization at the national level. Faced with the continued erosion of choice and privacy, we examine how people can free themselves from the tyranny of the ISPs by building the infrastructure of a new internet.

Big Cable and the control of the last mile

Since the commercialization of internet provision in the US, the market has consolidated into a smaller number of conglomerate corporations. Enormous fixed costs, regulatory compliance, and economies of scale have all favored this centralization. Today, Comcast and Spectrum (formerly Charter Spectrum) dominate the cable internet market to the detriment of the US internet customer.

Cable companies have conspired to stake out geographical areas in which they agree to not compete for customers. This collusion was unintentionally admitted by the CEO of Verizon on live television, memorably captured in 2014:

“…Both in video and broadband we don’t compete with Time Warner, you have to start with that fundamental point. They’re in New York, we’re in Philadelphia; they’re in LA, we’re in San Francisco…”

Such an anti-competitive strategy benefits corporate ISPs by creating zones of an effective monopoly, immune from negative price pressure that would naturally occur in a free market. Big Cable has fostered their monopolistic control through the regulatory capture of the FCC and other US government agencies by utilizing lobbying and astroturfing tactics which have been most evident in the ongoing debate over Net Neutrality. According to the FCC’s 2015 Internet Access Services report, just 24% of developed areas in America have at least two ISPs offering high-speed internet connections, leaving consumers with no option but to accept the price and quality of service they are offered.

However, the critical factor in corporate ISP dominance is control of the physical infrastructure of internet provision. Cable companies have invested billions of dollars in millions of miles of copper and fiber optics. These cables carry internet bandwidth from internet exchange nodes to the consumer household. This distance is referred to as ‘the last mile,’ the service bottleneck between the high-bandwidth exchange node and the home. By controlling the ‘last mile,’ corporate ISPs control consumer choice and dictate consumer prices.

Consequences of ISP domination in the USA

Price gouging and consumer choice

Consumer price gouging is the most visible and most objectionable consequence of the lack of ISP competition. Corporate ISPs can name the price that consumers must pay, increasing the cost of service year-on-year with no improvement in quality.

Incentives in the current cable internet system are fundamentally misaligned because ISPs are not paid per unit of bandwidth. Since they aren’t paid per bandwidth unit, Big Cable places data caps on their plans, charging users for exceeding their monthly contract limit.

95% of the cost of the internet connection from the exchange node to the house is in the final mile. The problem of the last mile and price gouging will not be resolved as long as ISPs maintain complete control over bandwidth delivery through physical connections.

Loss of Privacy

Beyond extortionary pricing, a lack of ISP competition has insidious implications for personal privacy, both at the corporate and government levels. Recent US legislative changes have opened the door for ISPs to collect data on consumer browsing habits, data that they can then utilize to generate revenue through advertising. Previously proposed regulations would have forced ISPs to gain explicit consent from consumers for selling or sharing sensitive personal browsing data. These regulations never came into effect and have now been shelved, paving the way for Comcast, Verizon and Spectrum to profit from the sale of user data without explicit user permission.

Big Cable protested a purported ‘competitive disadvantage’ enjoyed by web service giants Facebook and Google, who harvest enormous troves of data by consumer opt-in use of their products. The difference is profound with ISP monopolies, as there is no choice for the consumer to opt out of such data harvesting. Imagine the Post Office being permitted to read every letter you send without your consent. All users who aren’t employing privacy-protecting tools like VPNs will be subject to their website browsing history and all unsecured traffic being harvested and sold by their ISP.

ISPs and Surveillance

In addition to corporate spying for profit, the current cable internet model facilitates all-encompassing US-government mandated spying for its citizens. The Communications Assistance for Law Enforcement Act (CALEA) mandates instant law enforcement and intelligence access to calls, websites and VOIP content of all users. When this legislation was enacted in 1994, it was intended to assist agencies in conducting targeted telephone wiretapping of suspected criminal activities. With the rise of the internet, it has since morphed into carte-blanche access to total voice, telephone internet data and metadata of the entire population. The onerous compliance of CALEA has had a centralizing effect on the ISP market, contributing to the rise of the ISP mega-corporations.

Not only are US citizens paying exorbitant fees to corporate ISPs for internet access, they are also paying to have their browsing habits harvested, sent to the central US surveillance apparatus and mined by their ISP for marketing purposes. Consumer choice and price extortion are even more significant in rural areas, owing to the low population density. These problems are inherent in the legacy model of internet provision that relies on physical cables and the select few mega-ISPs administering the infrastructure.

Domestic Cyberbalkanization — the fight for Net Neutrality and an open Web

The final blow to the integrity of the internet in the USA was the repeal of Net Neutrality. Before its abolishment under the guise of free-market deregulation, Net Neutrality regulations prevented ISPs from throttling, or blocking specific types of internet traffic or treating certain types of internet packets differently.

Why would ISPs want to treat traffic differently? Maintaining high-bandwidth capacity infrastructure is costly. By throttling and blocking bandwidth-intensive traffic sources, ISPs reduce costs and improve profit margins. ISPs can throttle data through deep packet inspection of traffic on their networks since the information packets by default are unencrypted. ISPs have a long history of blocking and throttling specific web domains or internet traffic.

In 2007 Comcast was found to be throttling BitTorrent traffic on its network, rendering the BitTorrent unusable for its customers. In 2014, Comcast customers attempting to access Netflix experienced unusably poor speed and service. It was later revealed that Comcast was deliberately throttling Netflix user traffic. Comcast then forced Netflix to pay a premium for their traffic to be unthrottled, a form of toll or charge to gain access to Comcast’s cable customers. Comcast had performed a blatant mafia-style shakedown of its corporate rival, and Netflix had no choice but to comply. Similar throttling tactics have been consistently reported online by users of YouTube — this is tested simply by activating a VPN, which obscures the traffic type and restores video loading speed.

Throttling has set the scene for clashes between corporate titans with opposing interests — Big Cable of Comcast, Verizon & AT&T pitted against content providers and video streaming giants. The resolution of these corporate skirmishes is the formation of ‘paid peering’ agreements and content delivery network arrangements. Such agreements inevitably lead to shortchanging the consumer, as ISPs funnel internet traffic into paid ‘toll lanes,’ creating a stratified, multi-tiered internet where in-demand content is hidden behind expensive paywalls. This is the process of domestic cyberbalkanization, a fractal representation what we are observing globally, as covered in Part I.

The second highly undesirable consequence of the repeal of Net Neutrality is further entrenchment of ISP domination and the status quo. Consumer choice is reduced as access to certain content becomes bottlenecked at specific ISPs. The potential for ISPs to shape the content of the web increases, as they act as gatekeepers to web content, only permitting access to sites that fit with their corporate agenda. We are forced to confront the frightening possibility of a US internet that increasingly resembles China’s firewalled and censored national internet where power is concentrated to a minimal number of corporations.

There are current proposals to increase competition and reduce the monopolistic effect of ISPs. Local loop unbundling is one plan in which physical infrastructure shared among many telecommunications providers could improve consumer choice in metropolitan areas, however this still leaves Big Cable as owners of the physical fiber cables. Municipal broadband schemes face political and bureaucratic hurdles aimed specifically at discouraging competition. The rise of 5G cellular data in the developed world also holds hope for great competition of internet access but suffers from the same centralization and privacy-invading drawbacks of the current wired ISP model.

A diverse range of ISP providers that increase consumer choice might bring the cost of access down, but does nothing to fight domestic cyberbalkanization in the aftermath of the Net Neutrality repeal nor the increasing weaponization of the internet against the people on behalf of corporations and governments.

The repeal of Net Neutrality stands as the crowning achievement of the Big Cable oligarchs in their profit-driven exploitation of the American consumer, the culmination of decades of lobbying and regulatory capture. It will have profoundly negative consequences for average internet users and overwhelmingly favors the established order of entrenching the ISP monopoly and crushing the possibility of change from within the system. It also demonstrates that government regulation is insufficient to defend the rights of the people. The cogs of domestic cyberbalkanization are well in motion and the ground is ripe for an internet revolution that re-asserts the individual right to fair and affordable internet access.

Internet colonialism — An African story of exploitation

Unfortunately, ISP exploitation is not a uniquely Western problem. As a proportion of total income, the weight of the corporate ISP monopoly on the US consumer pales in comparison to the burden of cellular data on citizens in particular developing countries.

In Sub-Saharan Africa, wired telecommunication infrastructure was never constructed at the same scale as Western nations. Africa ‘leapfrogged’ the landline telephone platform straight to cell phone technology.

Today, cell phones play an essential role in the daily life of many African nations and are the chief means for Africans to access the internet. More than any other method, people communicate, connect and conduct commerce through mobile apps such as Facebook and Whatsapp.

Such dependence on mobile technology places African customers at the mercy of cellular data providers. In South Africa, excessive data costs have led to a series of protests and social media campaigns decrying the high cost of this modern human necessity.

Similar to the US and other Western nations, the rural areas of Africa lack the population density required to stimulate a competitive market for cellular data. Where cell phone coverage exists, it is typically provided by a single cellular ISP. The monopoly of cellular ISPs allows them to exploit consumers’ inelastic demand for data, which is often used to communicate with family members who have moved from rural villages to cities in search of work.

In Kenya, impoverished rural villages have been reported to be spending up to 50% of income on cellular data to communicate, at the expense of vital needs including malaria medications, food, and other essentials. As a proportion of their total income, cellular communication data is a hefty and cruel expense.

Technology and communications, therefore, become a battleground for development and human rights in Africa. Without access to reasonably priced cellular data for the most basic communication, cellular ISPs are perpetuating rural cycles of poverty that stunt the growth of the African people and African nations as a whole. If the world is to earnestly strive towards achieving the United Nations Sustainable development goals for Africa, alleviating the blatant injustice of internet profiteering should be a priority.

In addition to the detrimental effects of ISP monopoly on price, Africa also suffers from censorship made possible by centralized internet provision. In Mali, citizens’ access to Facebook and other social media platforms are regularly blocked during election times. In Uganda, the government charges a social media tax for people accessing Facebook as a means to stifle free speech. Both examples demonstrate the desperate need for new internet alternatives.

In the developing African continent, there is little hope of increasing ISP competition for similar reasons as the Western world. Government policy is dictated by corporate profit interests that block, delay and veto any genuine competition that challenges the established monopolies. Mark Zuckerberg’s Free Basics initiative which would give developing African nations free access to the internet through the Facebook mobile app is a thinly-veiled power grab and attempt to bring these nations under its sphere of influence, with the attendant implications for censorship, free speech and control outlined in Part I.

An internet revolution to break the Tyranny of the ISPs

There is no doubt that access to a free and open internet has become a digital human right, yet it is trampled upon daily by ISPs who are exploiting the lack of competition. The common and overwhelming need among these jurisdictions is competition with internet providers and an encrypted, censorship-resistant internet protocol.

On their own these solutions are insufficient. An encrypted alternative running on the current internet might be immune to data snooping, deep packet inspection and throttling, but it does not solve the price gouging problems inherent in a lack of ISP competition.

It is apparent that change is not possible from within the current paradigm. Consumers cannot expect sclerotic and ineffectual government bodies to act against their lobbyists and financial backers. Regulatory action alone offers no hope in providing an internet connection that would be in the interest of the populous.

The overarching solution, therefore, is to generate competition by disintermediating corporate ISPs and decentralizing internet provision. This solution must be built by the people, for the people — a radical act of resistance that is orders of magnitude more potent than tokenistic marches or letters to corrupt government officials.

Only through a decentralized utility, solely owned by the public, will access to information be freed from the stranglehold of authoritarian governments and mega-corporations.

The case for a new internet infrastructure — MESH networks and WISPs

The prospect of overcoming corporate ISPs’ control of the last mile or providing ultra-low cost internet to the developing world with community-owned infrastructure was infeasible until now. Exponential manufacturing advancements have led to an explosion in low-cost, high-performance computers and wireless transmission hardware. Today, community-owned wireless internet is now possible. The two overarching models of community-owned internet are decentralized Wireless Internet Service Providers (WISPs) and wireless MESH networks.

WISPs

WISPs are community ISPs that use wireless technology to relay an internet connection from an exchange node to a small number of houses wirelessly. WISPs are typically community leaders who have pooled resources to provide an internet connection to a small local geographical area. WISPs have traditionally arisen by necessity, usually in rural or remote areas that are underserved by the wired cable companies.

Common WISP arrangements involve a centralized node or hub on the top of a hill or other geographically prominent point that beams an internet connection to members of the community through direct line of sight point-to-point WiFi signals.

WISPs can also use long-range, radio frequencies to provide low-bandwidth internet connections over long distances. The WISP acts similarly to a traditional ISP concerning network topology. A centralized WISP node provides bandwidth to a small number of individual houses or local village within its immediate area.

Wireless MESH networks

A wireless MESH network is one in which households (nodes on the network) connect through directional WiFi signals or other wireless data transfer signals. Once connected, houses can transfer data and internet between each other.

MESH networks have a different network configuration compared to WISPs or traditional ISPs. Each node in a MESH net connects to other nodes, forming a decentralized or distributed web of nodes and resulting in flatter network topology. MESH networks have been under development for military applications for several decades, designed to provide decentralized, highly redundant communications capabilities over short distances.

Civilian deployment of wireless MESH networks in a suburban on metropolitan areas have enormous potential to obsolete the wired cable ISP model by bridging the last mile between the fiber exchange node and the household. The advantages of the wireless MESH network over the centralized ISP model is that users are able to act as both consumers and providers of bandwidth. This enables bidirectional, peer-to-peer bandwidth transmission and creates a market for bandwidth that is redundant and accommodating of local demand fluctuations in real time.

Tailoring the decentralized internet

The suitability of WISPs vs. MESH networks for community-run internet is highly dependent on the unique characteristics of that city, town, village or municipality. The US and African stories discussed in this article are but two examples of the potential for traditional ISP disintermediation across the world and illustrate the differing needs and markets.

In lower resource settings, especially the rural villages in Sub-Saharan Africa, cost, modularity and ease-of-maintenance are most important. The tradeoff between range, cost and bandwidth favor WISPs using cheap hardware like HAM radios to provide villagers with extended range, low-bandwidth connections for basic communication such as text messaging.

In high-resource settings and dense metropolitan areas, high bandwidth low latency connections over small distances are required to compete with current cable offering. This favors more expensive hardware with direct point-to-point WiFi with multiple redundant connections that can be bonded together for higher bandwidth speeds.

Other relevant factors include the regulatory environment, regulatory enforcement, policing of transmission frequencies, geographic topology, and economic status, among others. The new internet for Tel Aviv will be different than regional Louisiana and different again to undeveloped Kenya.

Obstacles to MESH networks and community wireless ISPs

Real-world application of MESH networks and WISPs have faced technical challenges and cost-limitations that have prevented widespread implementation. Wireless technology is a tradeoff between range, data rate, cost, and power. Devices that cover large distances can often do so solely at low data rates. Suffice it to say, the technological hurdles are being overcome rapidly as cost and economic incentives and the consequences of ISP domination mentioned previously drive innovation in this area.

Demands of the new internet infrastructure

Following are some of the necessary features of the new decentralized internet:

Direct bandwidth metering

Direct bandwidth metering is essential in creating financial incentives to join and maintain a community-run internet. Direct bandwidth metering allows a house to buy its internet connection per unit of bandwidth, rather than the arbitrary monthly fee typical of the current cable subscription model. It requires a form of a digital ledger that can record each user’s internet consumption and provision, then deducts or adds a monetary unit based on the difference. Bandwidth metering will require an uncensorable, trustless form of payment that is capable of handling large volumes of microtransactions.

Successfully implemented bandwidth metering is an incredibly powerful tool because it aligns incentives for people to invest in wireless hardware and build the new internet infrastructure themselves. If individuals can earn money by installing and maintaining motorized WiFi antennas, the motivation for acting as a WISP or MESH network node is strengthened. The bandwidth metering challenge is similar to the power metering challenge facing the setup of decentralized power-sharing electricity grids.

Platform agnostic protocol

Ideally, the internet protocol of the WISP or MESH network should be platform agnostic, i.e., bandwidth can run equally well on WiFi as fiber optic cabling, traditional copper telephone wires, cellular 4G, long-range low-frequency radio, li-fi, etc. This would allow the community ISP to interface seamlessly with the current internet infrastructure configuration, and give it the maximal amount of flexibility and adaptability for a range of geographic applications. Along the same lines, the new internet protocol must integrate seamlessly with current internet protocols, and operate in the background, invisible to the user.

Encryption

Traffic on the decentralized internet must be encrypted to prevent its eventual co-option by interested parties. Encrypted traffic is unable to be carved up into multi-tiered fast and slow lanes. Encrypted traffic would enforce Net Neutrality at the protocol level since by necessity each packet is treated equally. It would defeat attempts at throttling, dragnet surveillance, ISP privacy breaches, and deep packet inspection conducted for unending nefarious and privacy-breaching uses of governments, advertising corporations, and hackers.

Affordable and open source

The hardware of the new internet must be affordable enough to be purchased by the community and easily maintained. The rise of the maker movement and falling cost of 3D printing technology can be harnessed to assist people in fabricating the required components themselves if desired. Open source, DIY hardware allows people to escape from surveillance backdoors and deep packet inspection capabilities that are built into routers and other proprietary hardware used by corporate ISPs.

Conclusion

Just as the global internet is balkanizing along national borders, so, too, is access to domestic internet fracturing within countries of the developed and developing world. We face a future of a multi-tiered internet run by corporate ISPs and colluding web service providers that use physical infrastructure monopolies to enforce a digital tyranny and induct people into technological serfdom. From the US to Kenya to Europe, the victims of ISP exploitation and monopoly are fair pricing, freedom from surveillance, data privacy and equality of internet traffic.

Only by building and owning the hardware of a new decentralized internet can people detour the usurious toll roads of Big Cable’s last mile and breach the vast expanses of underserved rural areas.

The keys to this freedom are community-run Wireless Internet Service Providers and MESH networks built on rapidly advancing wireless technology that financially rewards the people who run them, and a new encrypted internet protocol that allows people to communicate without fear of traffic harvesting or traffic throttling based on websites you visit or the city where you reside.

In Part III of the article series, we will examine in greater depth how vulnerabilities in the internet protocol facilitate the cyberbalkanization described in Parts I and II and transform the internet into a tool of censorship and totalitarian control.

This is a four-part series describing the fracturing of the internet and the fundamental need for a new, encrypted, decentralized alternative.

In Part I we explored the damaging global phenomenon of cyber balkanization and its damaging implications for open communication between nations.
In Part II we examined Net Neutrality and the pressing need to dis-intermediate corporate ISPs that are profiteering from exploitation of the people.
In Part III we look at the inadequacy of the current internet protocols and the technological requirements for the internet of tomorrow.
In Part IV we explain how Skywire, the new decentralized internet built on the Skycoin platform, addresses these myriad of issues and holds the greatest hope for preserving censorship-free communication globally.

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