Wireless Networking: Theft of Service? Somebody needs a clueburger with fries.
Created: 17 November 2001

One particular op-ed piece really hit me. An (alleged) computer columnist in Texas named Scott McCollum write a little number about urban wireless networking.

So, I opened up an E-Mail dialogue with Mr. McCollum, perhaps to try to figure out what brand of crack he smokes and see if there's some way we can get him to change to a less toxic variety. A few e-mails were sent back and forth. The last E-Mail I sent him was the following:

Date: Thu, 18 Oct 2001 04:57:40 +0000 (GMT)
From: C. Sullivan 
To: Scott McCollum 
Subject: Re: Your "article"...



On Wed, 17 Oct 2001, Scott McCollum wrote:

> 
> Mr. Sullivan,
> 
> Most French-style "libertarians" like yourself claim that they can do
> whatever they want because of their rights as a citizen.  "I paid for
> the access so it's my right to do whatever I want with it."  Many in
> this ilk claim that the "last mile costs" are covered by the people
> rather than businesses meaning everyone wins in the end.  Questions
arise: 
> 
> -As a consumer, do you think that you are lowering the price of DSL and
> other high-speed Internet services by splitting the one signal into
> dozens or hundreds for "sharing?"  How exactly are you lowering the cost
> of DSL for hundreds or thousands of consumers by taking away an ISPs
> potential customers?

I am not buying "consumer" grade service.  Therefore, your question is
hyperbole.  As I stated, I am buying business class of service.  

The local telephone company is charging what they feel is a "fair" market
value for their service.  They at no point have placed any restrictions on
what I am permitted to do with it, other than the usual restictions on
launching hack attempts and the like.

If the telephone company is being "harmed", then it is not my moral
obligation to come to their aid.  They entered into an agreement with me
on how many bits per second I was allowed to use: how I use those bits per
second is a matter of contract.  As of this writing, Pacific Bell has
placed no restrictions.  They have the right, as I understand my service
agreement, to further restrict my usage in the future if they so
desire.  No stated desire has been recieved by me.

Further, being as I'm buying a higher class of service than the "loss
leader" consumer service, I don't personally believe they are being
harmed.  In fact, I pay close to 4 times what the "consumer" grade of
service costs (consumer grade ADSL, which is 384/128k, costs around $40
here... the package I'm purchasing [1.544M/384k] costs $200) every
month.  The way I understand the economics of the situation, they are
making tons of money off me compared to a consumer-class DSL
customer.  This is especially true considering I provide my own E-Mail
services (reducing load on their E-Mail servers), outsource to another
company for USEnet feeds, and have _NEVER_ called for customer support of
any kind once my circuit was established.  I also aggressively cache to
reduce my overall network load, operate my own local DNS cache (again, to
reduce load), and have offloaded ingress http traffic to a commercial
webhosting company.  I bet PacBell wishes all their customers were as
considerate of their infrastructure resources... I'm gonna guess that the
kid a block up the street from me that keeps his GNUtella client up all
day isn't as bandwidth conservative as I am.

Lastly, considering that a user of my wireless service needs to be
competing with other users (including me) for service, it is likely
(especially given the fact that the wireless side of the house goes
through a fair-queuing firewall that gives it varying levels of priority
depending on traffic patterns) that any service they get from me will be
inferior than what they could obtain from the local telephone company for
$39.95.  If they're willing to live with what I provide for free,
fine.  Many free wireless providers APs behave similarly.

Strangely enough, that's exactly what Microsoft does.  I've since my first
E-mail read your other rants, and apparently if Microsoft gives something
away that's "fair competition", but if a bored network engineer in the
Upper Haight does it, it's stealing?

I'd love to hear the rationalization behind this.
 
> -Are radio and TV signals "free" because you pick them up through your
>  TV or radio?

No, they are bought and paid for by the commercials that drive the
networks.  Similarly, my network access point is paid for by a
sponsor.. that sponsor is me.  

As a point of order, one of the reasons I run a free access point is
"corporate goodwill".  I have picked up a customer for my commercial web
hosting services as the result of offering this free carrot.  The
promotions for my free AP all state who is running it (feedle.networks).

Pacific Bell wins there, too... because guess what?  It means I'm
upgrading my DSL circuit in the next 30 days to a full T-1 to support my
new customer.

But I guess your mind is already made up.. no point in confusing you with
the facts.  Now you're going to say that by providing this customer web
service I'm stealing money from the poor defenseless telephone company
again.  Boo hoo.

Funny.  That's called "capitalism" where I come from.  If I can take a
service that person A sells, improve upon it, and get money from person B
for my value-add, is that stealing?

Why is it not stealing just because there's a dollar figure attached to
it?  Or, if you think that is stealing, how is that different from what
the telephone company does when it sells me cross-connect into IBM.NET and
Sprint, their value-add being the last mile?


> -Do you honestly think that commercial radio stations and TV networks
>  magically appeared without those radio and TV network corporations
>  paying billions in infrastructure costs to deliver their programming?   

First off, radio developed over a period of two decades.  Commercial radio
started with small operations, run out of the backs of existing small
businesses, many times sponsored by the business in which it was
housed.  The startup costs were not very large.. similar in price to what
it costs a FreeNet'ter to buy a router, a firewall, and a years' worth of
bandwidth now.  

Even today, one can purchase everything one needs to operate a small low
power radio station for around $300 at your local Radio Shack.  License,
of course, not included, but early radio (before the Communications Act of
1934) was not licensed.

Radio networks only became financially viable when there was enough
recievers out there to make it worthwhile.  When the ratio of recievers
was high enough to justify the expense, it didn't take long for them to
happen.

But, David Sarnoff didn't just wake up one day with a check for US$50
million and decide to start a radio network.  It started fairly small: a
few stations on the east coast and leased circuits from the telephone
company.  It may have become a billion dollar industry, but it took
decades to reach that level.

I strongly suggest you brush up on your history, because you apparently
don't understand that it was the pioneering "back room" broadcasters and
early amateur radio operators that paved the way for network
broadcasting.  Strangely enough, many of these same people were the first
employees of the networks, because they were the only ones that understood
the technology well enough to implement it.  Similarly, many of those in
the freenet movement hold jobs in industry, helping to define the
commercial territory.


> -Do you think that the honorable community-building theft you call
> "sharing" is moral when compared to hacking a Dish network satellite
> receiver or splitting a cable TV signal?   

That's simple.  In the contract between me and my cable company, it is
specifically prohibited.  Not to mention the fact, that you are not buying
a connection to a network, technically, but copyrighted programming that
is carried on that network, with it's own Terms of Use that differs
dramatically from the mode of operation of the Internet, where you are not
paying for content.. but paying for a pipeline.

It would be better to describe the situation as sharing a telephone
line.  Is it immoral for me to place a phone outside my apartment with a
sign that says "free use", provided I continue to pay the bill?  Is that
stealing from the phone company?  How?

> -Over $1 billion has been donated to the 9/11 fund to help the victims
> and families of the evil attacks.  If a few hundred thousand of the
>  dollars are diverted to a non-profit organization set up to defend
> hacker Dmitry Sklyarov, what's so bad about that?  The victims will
> still have hundreds of millions, will never miss the money and Sklyarov
> will get better legal representation. 

Hyperbole.  I never brought up Sklyarov, he is irrelevant.  He is getting
pro bono representation now, anyway, from what I understand.

Please stay focused on the argument at hand.  You are assuming that I have
a certain position on Sklyarov.  You may be in error with what you think,
but I have not stated one way or the other.. so it's a red herring at this
point.

> -If stealing one DSL connection and beaming out to non-paying customers
> is the moral equivalent to the First Amendment, what is immoral about
> sending baking powder in an envelope labeled "ANthrRaX" through the mail
> system?  Both are considered ^Ófree speech^Ô and there's nothing illegal
> about sending baking powder through the mail...   

I never brought First Amendment arguments into this.  In fact, 1A has
nothing to do with this.  Hyperbole.

Again, please stay focused on the argument at hand.

> If all the sharing going on is so beneficial, why is there no
> ubiquitious high-speed Internet in SF or anywhere else in the
> world?  Something a libertarian like yourself should hate - regulations.

No.. strangely enough, it's called "no demand."

Ricochet was able to build a broadband wireless network using all Part 15
(that is to say, unlicensed) transmitters.  They went broke.  Why?  They
existed long before 802.11 equipment was on the market, yet they are no
longer continuing as a going concern.  

Where is all this commercial demand that you see us as
"stealing" from?  How can a couple of bored geeks represent any kind of a
threat to an organized effort to provide high-speed reasonable cost
wireless networking?

I for one would LOVE to have the competition.  I loved Ricochet, in fact,
I was one of their first customers.  They're gone.  3G may not ever happen
now (because of events of Sept 11), and the best "competition" I can get
is 56k, barely.

Pacific Bell is one of the largest local exchange carriers on the
planet.  I hope, really, they give me a reason to shut my AP off by
building a network that can allow me to roam with my laptop and still have
200-300k, uncompressed, at a price that's affordable.

But until there's demonstrated demand, shown largely by little freenets
like mine popping up in every corner, there's no concern.  

So how is providing a service that nobody seems to be able to provide
"theft"?

-C. Sullivan

Comments

Why reply when you didn't want to answer any of my questions, Sullivan? I figure why not let you shout "hyperbole!" every eighth sentence and watch you keep digging your own hole.

Speaking of, now you and your ilk are in pretty deep. Ever clue both of your readers in on the fact that because of all this pragmatic "sharing" you and others like you engaged in during the dot-com-bust profits for *all* DSL providers were slashed during that technology's formative years to the point where DSL operators haven't had a profitable business selling DSL access?

The "Financial prospects for DSL" report from Ovum Research--August 2003 notes:

"To date operators have invested heavily in broadband networks in the expectation that revenues will follow. However, there is no evidence to date to show that this simple business case actually works. DSL operators in the US, who had a head start on Europe, are not yet profitable, and operators in Korea who have the biggest DSL penetrations in the world are also struggling."

http://www.ovum.com/go/product/flyer/BVC.htm

Did you ever consider the reasoning (financial and philosophical) behind PacBell parent SBC amending the DSL Terms of Service in 2002 to read: "Offering the service to other individuals on another network, or using wireless technology to broadcast the service to non-Members, strictly violates the SBC DSL Terms of Service that each account holder agrees to during registration"?

Did you ever wonder why the once mighty Bay Area is still losing IT jobs, especially in the telecom and Internet sector, even though plentiful, money saving free-as-in-liberty not free-as-in-beer services are readily available to any business wanting to cut costs rather than cutting jobs?

Strange, I never heard about your apology to me for you being wrong.

For the record, you never answered any of mine. But, since a little bit of apparent egosurfing has found you here, I'll be more than happy to respond to your specific statements here.

1. DSL access is highly profitable for resellers that have a decent business model. I currently work (actually, do contract work for) a WISP that does quite well selling broadband services for less cost than the ILEC does. If DSL services are not profitable for ILECs, it's more likely because they have been ineffectual at marketing their services and had unrealistic expectations of its market penetration, not because some bored network admin is "reselling" their service at a discount. Heck, we are buying huge pipes, and sell it back out on smaller pipes (that's what ISPs.. even the ILECs, do), and pocket the difference. Oh, and we "give it away", too, at hotspot locations in Orange County as a way of promoting our service. Oops. Guess we're stealing from the poor, helpless phone company, aren't we?

2. As I disconnected my Pacific Bell DSL circuit well before that 2002 amendment, I cannot comment on that. If that's what Pacific Bell has chosen to do, that's their right. When we were conversing in late-2001, there was no such clause, so that is irrelevant.

3. The Bay Area is "losing" IT jobs because they had the most to lose. The San Francisco Bay Area is STILL a hotbed of IT activity, and it likely will remain. The vast majority of "losses" in the IT sector were for companies that had no profitable business model and unrealistic expectations of growth.. and were all funded with "dot.com funny money." When the majority of your local economy is IT, losing 5% of IT jobs might represent thousands of workers. In Bakersfield (where I had the privilege of spending some time), 5% of the local tech sector would be.. well, about 10 people.

Almost everybody I know who was in San Francisco working IT in the dot.com days is still working. Many people (like myself) are actually in better positions than we were back then. I've been in IT for 15 years now, and boom-and-bust cycles are part of this business.. and they probably always will be. One can arguably judge "success" in the IT field by how many jobs one has had: some of the most financially successful people I've ever known in IT have averaged about a job a year. Personally, I'm always looking for "new things" to try, so I tend to change jobs at a pretty good clip.. this last year has been about the slowest it's ever been for me (partially because of a move to Arizona), but I've still achieved an acceptable level of employment.

To recap, here are some questions you have never answered, that I feel are important.

1. If I place a phone outside my home with a sign that says "free use", and provided I continue to pay the bill, is that stealing from the phone company because they are losing revenue from the pay station across the street? Is it not stealing because I'm paying the phone bill? What if I used VoIP and/or predictive dialing techniques to avoid toll charges, is it stealing then?

2. Do companies have a RIGHT to make a profit, regardless of how ineffectual they are at bringing their product to market?

3a. Do I deserve to be compensated for a "value-added" service that I may provide by reselling somebody else's service? If not, why?

3b. Explain the difference between giving sodas out of a cooler I legitimately purchased at Smart and Final on my doorstoop and providing Internet services to passers-by. Bonus points awarded if you can put it in a "right of first sale" context.

Until you answer these questions, there's no point in this discussion continuing, becuase you obviously have no interest in really debating the issue.. you just want to mindlessly drool your viewpoint. Until you answer these questions directly, any comments you leave will be deleted.

Hey, it's my website, I can do that. You know, "mine", as in.. "I pay for it" and "I can give away limited access to it if I choose, because I pay for it." Those might be difficult concepts for you to understand, I know.. but try to play along. It's fun.

"DSL access is highly profitable for resellers that have a decent business model"? What part of there's "no evidence to date to show that this simple business case actually works" from the Ovum Research report did you miss? Even if you "disconnected" from PacBell DSL before 2002, it's a fact that it was people like you that forced them to amend their Terms of Service.

You and your ilk aren't helping broadband adoption in the USA and you're not going to jumpstart a tech industry revival by refusing to admit there's a problem at all.

Challenger, Gray & Christmas and the AeA reckons some over 200,000 high tech jobs were lost in Silicon Valley since December 1999. Since the entire metro area of San Fran has 7,182,483 by the most recent population figures you're going to spin this into "oh, the Bay Area hasn't lost THAT many jobs relative to the overall population"? You can throw out that spin but see no hypocrisy in the fact you moved out of the state because there were no IT jobs available to you?

The "free-as-in-beer/free-as-in-liberty" fanboys may fall for that noosphere jingoism, but the reality is that if the Baby Bells aren't making any money off of DSL, the Quixotic quest to "stick it to The Man" by using DSL for free Internet access isn't a business model either -- the fact is it actually damages the DSL and overall broadband industry because it decreases competition.

I figured this out years ago. Steve Steinke at Network Magazine has figured this out recently (http://www.networkmagazine.com/shared/article/showArticle.jhtml?articleId=14400072&classroom=).

Hopefully your employer is a dot-com-bomb multimillionaire on the run from The People's Republic of California tax system that can float a few contractors with his cash, because independent ISPs espousing the ideals of Stallman, Lessig, and Chomsky with free hotspots for the common man and big bets on WISP access don't have much of a chance of being profitable... even in Arizona.

You answered none of my questions.

You are putting words in my mouth that I did not say, and continue to spout such hyperbole as "free beer/free speech" arguments like some samizdat publisher with Tourette's Syndrome.

For the record, my current "employer" is a California-based company, who's wireless service is based in Orange County. What part of "Orange County" did you miss?

As to "jumpstarting" broadband, talk to me sometime about how much fun I had purchasing DSL services in Arizona from Qwest. [BRIEF SUMMARY: after a year and a half of trying to order the service, at much personal expense and effort, it never happened, even though neighbors in my apartment complex had the service.] I say again, and you have done nothing to refute this: that the reason ILECs are failing to make a profit on DSL is because they cannot deliver the product, and because they overestimated demand and underestimated costs. It has, and continues to have, nothing to do with people "giving the service away" because a bunch of disorganized, bored people cannot represent any competition to a billion-dollar company. To state otherwise flies in the face of logic.

You are an idiot, sir. You have not answered any of my questions, either directly or indirectly, and continue to spout your biased research nonsense without adding anything to the discussion. You are a blowhard, and until you answer my questions you are not welcome here.

I moved out of California because I was on a "sabbatical" from the IT industry, mostly because I was overworked and (I believe) underpaid. When I tried re-entering the workforce in AZ about eight months ago, I found that there were no real IT jobs in Arizona, or Colorado, Utah, New Mexico, or Oregon either. If I wanted to take an $8/hour help desk job, yes, those were there... but even those jobs are hard to get when one has 10 years of experience. In fact, the only place I was consistently finding opportunities was..

..in California.

Besides, you obviously know nothing: our WISP is profitable, we have customers, and we're happy with both our business model and the renumeration we recieve as employees of a sucessful company. A California company. Thank you very much.

The problem is simple economics and "penetration." The vast majority of the consumer public does not see the benefit of a $40/month service bringing Internet into their home (assuming that they don't need to upgrade their computer they bought at Wal-Mart for $300 five years ago) when the $9.95 dialup service they have works fine. Those that do have a number of choices, including cable modem (which seems to be doing just fine), DSL CLECs (Covad), satellite providers like Starband and Direcway, and Wireless ISPs. Additionally, they have the choice of not buying Internet service at all, and simply using what they can at work, at airports, and at coffeehouses for free (or at very small costs). I understand TMobile is making a good chunk of change selling hourly service at Starbucks' (which, oddly enough, I subscribe to their service myself because I often find myself in range of one).

The fact of the matter is that DSL costs a lot of money to build. Wireless access costs very little: for example, my company offers a one-time fee service (I believe it's around $500), where you purchase equipment and a year's worth of service to have a HotSpot in your business. We can do this because our equipment costs for getting access to a subscriber is very low, especially compared to an ILEC equipping a CO for DSL. We transport the service over our own 5GHz wireless equipment into a local router which then has a local 802.11b HotSpot. It works, and we can sell it at the price point we're offering because it's cheap.

But that's because we made the right choices on which technology we would embrace, how we would build it out, and the price point we wanted to sell it at.

I'm sorry that the phone companies aren't making money. But that's not my problem. They need to price their service at a price point that's profitable, or get out of the game. If they can't compete on price, well, then they'll have to find another way to compete. That's not my problem, that's theirs.

Ha-HA! It didn't take long for the name-calling the Linux Libertine Left loves so much to start...

...I also love the "oh, MY company is profitable because we stick people with a $500 equipment charge and $40+ a month for spotty wireless Internet service, but the phone companies can't compete with their $30 per month DSL and free self-install because they are EEEEEEEVIL" talk coupled with the listing of struggling Internet providers (Starband=liabilities of $229 million after filing for Chp 11, DirecWay=just recently snapped back to relative profitability from a $129 million loss, Covad=most recent loss of $27.3 million on $92.4 million in revenues) as acceptable choices for consumers -- consumers from Soviet Russia or Communist Cuba, maybe.

Keep digging that hole and firing up the double-talk smokescreen! The kids are lovin' it!

'nuff said. Since you have not subscribed to our service, nor even know the name of our company, you cannot comment on the "quality" of our service. Being as it's what I use myself (I eat my own dog food), "spotty" it isn't. In fact, if you browse around my website, you might find out exactly what machine sits on the other end of a wireless link, and perform some basic bandwidth testing to see how well it works. I live five miles from our office, and I get consistant 768k down, 128k up service.. which is about what I'd get from Pacific/SBC 1 mile out from their CO. I'm about at the "edge" of our comfortable service area.

Consequently, your comment shows exactly how big of an idiot you really are.

You want a secret as to *WHY* we're profitable? Because we charge the right price for our service. Yes, there's an equipment charge (it's not $500, the $500 product is a one-time fee for HotSpot deployment [which has no monthly charges, BTW].. our consumer wireless service is much cheaper on the one-time equipment costs), but that's so we can recover our costs involved with deploying the service.

I'll repeat that.

Yes, we have a one-time equipment "installation" charge, but that's to recover the one-time costs involved with deploying the service.

Maybe if the telephone company stopped playing "free installation" games, they'd be profitable too.

Scott McCollum, you're really an idiot. Not only did you go off topic every two sentences in your posts, but somehow you also decided to make false assumptions of Mr. Sullivan. Also, I suggest you brief up on your history. Did you pass that History class in 8th grade? I bet you had to cheat on that History final exam to pass the class with a "D-". Oh, maybe you should Mr. Sullivan's wireless service to brush up on some online history courses. Here's a good place to start your research:

www.google.com

Good luck!
Anthony

Funny thing. Every time I directly address the issue, and ask for some specific questions to be answered, he goes away for a few months. Odd, very odd.

*shrug*

Found this link while searching Google, thanks

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