This is a very un-republican thing to do, but as another poster mentioned, you could apply a tax/penalty/whatever to companies when their products are accepted into landfill sites. That would get passed on to consumers until it was cheaper to simply keep them out of landfills. Presumably your quality would go up in order to keep more of the profits of selling the units in the first place.
Not sure it would work in reality, but an interesting idea that is actionable by the government.
Apply this to gas grills as well. Spend $500 at Lowes/HomeDepot and you will have a pile of rust a few years later. At least in the grill industry (for now) you can still choose to spend higher $$ to get much better quality. An AOG (http://www.aoggrill.com/) will cost you 3-4x the Lowes grill, but it is 100% stainless steel with a 10yr full warranty. That thing will outlive me. Unfortunately you won't find these at your Big Boxes. You have to go to a smaller specialty grill store.
I bought a $250 grill at Walmart 8 1/2 years ago. I still have that grill but I think I'll only get one more summer out of it.
I have had to replace burners and heat shields twice but it still works. Every part that isn't stainless steel is rusting away but fortunately, the internals can be replaced on the cheap.
This is true that you can buy replacement parts. I did that a couple of times with my previous Lowes grill. I find those parts are a race to the bottom as well though in terms of the metal quality. I just got tired of replacing/rebuilding/etc. I found my AOG on clearance at a local shop for $1k.
I agree with this one. You are never so free as you are between jobs (for whatever reason). Even if you can't afford to take a far away trip, go see family for a week, drive somewhere new, or just goof off all week for a week.
...but yea, also file for unemployment immediately. Your former employer paid for that safety net.
I really agree with this as well. Jumping right into another job at another company can have its draw backs. If you can afford to, take a trip and change your perspective and reflect about what you want next for yourself.
When a potential employer inquires as to a gap in time on your CV just say you went and did some traveling and "recharged your batteries." It is completely respectable and envious thing. Also you will be glad when you are sitting at your desk at your next job working late that you went out and saw some of the world. Likewise you will also be glad when you are sitting on a beach in Southern Thailand somewhere :)
Coming from a failed startup myself, there is probably a bit of debt associated with the company at this point. In our final throws of life, we raised additional capital (angel/VC/etc) via convertible note to sustain the business a bit further. This in addition to back rent, unpaid bills, etc, leaves quite a pile of financial liability that any acquiring company would likely assume. Easier to let the company die and hire the staff as a separate operation.
More evidence as to why the income tax should be replaced with a consumption tax. Just let people make their dammed money already and apply a simple tax when they spend it. Windfalls wouldn't be "dangerous" or punitive in that model, and savers would be rewarded.
--Of course I oversimplify the consumption tax, and safeguard would need to be in place on that to ensure it is not regressive with respect to necessities...
High consumption tax creates an incentive to not spend your money, which is bad.This also means the millionaires and billionaires of the world get to invest their money tax-free to earn even more money, often with rent-seeking, while 95% of America is getting taxed essentially up front on the vas majority of their earnings because it gets spent on stuff like housing, food, and healthcare.
This creates a massively regressive tax system, which is a super shitty thing unless you're a libertarian who can't understand the concept of marginal utility.
So you are content with having a tax system that treats you like a 1%er in the event that you cash in a payday (say $1mil - 35-40%) during a given year, despite the fact that you may have worked your whole life at a middle class level, scraping to save? A consumption tax would allow individuals to actually make choices about how/when they are taxed. Lets be honest, people will still want their "stuff". If they have more money in their pocket, they will spend. That is what America is built on. I would like the opportunity to defer spending at my choice in order to save more in the present without being taxed into oblivion.
And I'm sorry if you didn't read my entire comment. Of course an ignorant consumption tax is regressive. SAFEGUARDS would have to be in place to ensure that the population can acquire necessities without an undue burden being placed on them. Exactly the things you mention: housing (single home), food, healthcare. However, 50"+ 4K TVs do not fall in that category. 30' fishing boats do not fall in that category. Certain items in sales tax heavy states (Texas) already do this is the form of tax free checkout for certain item classes (food at grocery stores).
If I normally make 60k a year and get a one-time payday of $1MM, I'll be paying around 13% more in income tax on that million dollars than I do on my regular income. Even with AMT it isn't a huge deal. This seems pretty reasonable to me. It's not perfect but it's not a reason for completely eliminating income tax. It's a reason for having exemptions, which is exactly what this article is about.
>If they have more money in their pocket, they will spend. That is what America is built on.
This is simply not true for people with millions of dollars. Look at the percentage of income spent for someone making $500k a year, and the percentage spent by Bill Gates or any other billionaire. It's a huge difference, and there's a huge difference between both of those groups and someone making $100k a year who is usually spending almost all of their income. Consumption tax is also completely ignoring the "spend it overseas" and million other loopholes.
I am not convinced any method of consumption tax I've read about, regardless of safeguards, would retain the same level of tax income the government receives while also not increasing the burden on lower and middle income households. The vast majority of tax revenue comes from an extremely small percentage of earners, and you'd be losing the vast majority of that income if you only taxed their spending.
The only way I can see this working is if you almost exclusively taxed things rich people bought. Increase sales tax on homes over $1 million, cars and boats over $200k, private jets, etc. But the tax rate on these would have to be ridiculously high, more than doubling their costs. All the rich people would just buy them overseas.
$60,000 income with std deduction and personal deduction equates to a tax burden of $8,219 or effectively 13.7%.
$1,060,000 income equates to a tax burden of $406,314 or effectively 38.3% (treated as a short term capital gain).
That is money I could have saved and invested BEFORE being taxed an extraordinary rate for it relative to my place in life. I happened into money when I'm typically taxed at <14%, and nearly 40% of it is taken from me. Simply because I earned it over the span of 12 months. What if I built a company over 10 yrs and that is the culmination of that?
>> All the rich people would just buy them overseas.
That is a fair point. That said, if I buy something overseas from Europe right now, I don't pay VAT (coming from US). A large number of vendors compensate for this and keep the prices for US purchasers high and not an exact match to their Euro prices. So I think in practice you would see overseas retailers raising their prices to come close (or match) the US price that includes the consumption tax. That would balance out and lead people to do the easy thing and just buy in the US. Maybe... Maybe not...
> All the rich people would just buy them overseas.
You can't live in a home you buy overseas without living overseas. As for cars, boats, and planes, you pay consumption based taxes when you register them - that's the way state sales tax works on such things in most places today.
Obviously you're being sarcastic - you're right, the money gets spent eventually. But not by the billionaire. It gets spend by his kids, and his kid's kids, and so on, for generations. Meaning money that should have been taxed once in a single year is instead taxed over the course of 200 years and increasingly so on tax-exempt consumption. Meanwhile, that tax-free money is being used to invest in rent-seeking enterprises, meaning the cost of living for everyone else is being driven up. It's essentially a free loan from the US government for decades upon decades.
Totally agree! A consumption tax with a tax prebate (aka basic income guarantee) makes it progressive.
To head off the argument that it's regressive because wealthier people spend a smaller fraction of their income: true for a snapshot in time, but not over the course of their lives. Spending a fraction of your income = saving = spending later. So in retirement they could have an effective >100% income tax rate. Also, switching to this program would be a one-time double-tax on savings which will disproportionately affect those who've saved more; i.e. "progressive". I'm still not positive about intergenerational wealth transfers - that could be a way to avoid paying taxes, but maybe if we charged wealth transfers the same consumption rate, that could solve it.
I'm a big fan of a FairTax-esque approach since it simplifies things dramatically and lays the infrastructure for ramping up the prebate as time goes on, as our nation can afford it.
> Also, switching to this program would be a one-time double-tax on savings which will disproportionately affect those who've saved more; i.e. "progressive".
i.e. "putting retirees out on the street". Such a bill would need to provide a fix for that case, where someone has a fixed amount of savings intended to provide for themselves in retirement and cannot afford a sudden 10% increase in all prices.
For instance, one possible patch would be to look at people's lifetime income (already tracked by the Social Security Administration), and offer a one-time exemption up to a certain threshold, effectively calling the corresponding savings "already taxed" and providing an exemption. The challenge would be doing that without creating massive additional complexity in the tax code after that one-time event.
(This would only apply to people with post-tax retirement savings. The solution for pre-tax retirement savings is much simpler, since it won't get taxed at withdrawal anymore.)
> I'm still not positive about intergenerational wealth transfers
They wouldn't matter anymore, because they're all on the income side, and taxes would all be on the spending side. By taxing when the money gets spent, rather than when the money gets made, you no longer care where the money comes from.
You also no longer care about people who made their money in other jurisdictions, or many other issues. If you live in a country, you'll need to spend money in that country.
> I'm a big fan of a FairTax-esque approach since it simplifies things dramatically
Hopefully, but there's a pile of additional complexity involved in definition, to deal with suppliers and intermediate goods. There's a ridiculous amount of complexity in the definition of VAT; some of that is unnecessary bought-and-paid-for exemptions and adjustments on item types, but even after avoiding that, there's a pile of complexity involved in what "value added" means.
But wouldn't this encourage the rich to spend overseas? They would pay no tax on their income, and then they'd be free to go and spend it abroad in countries where there is an income tax, but no/lower consumer tax.
(I'm assuming you meant "travel and spend", rather than "order for shipment", since the latter is handled by applying sales taxes to imported goods.)
First, if they're traveling that often, they're going to be paying a substantial amount of travel expenses, subject to sales tax. Might also be worth considering if currency conversions should be subject to sales tax.
Second, who can afford to do the majority of their spending in another country, while not actually being a resident of that country instead?
Third, a country would get significant additional tax revenue from visitors and tourists, who don't make income in that country but do spend money in that country.
Fourth, where's the money coming from? The business they derive their income from has to pay sales taxes too.
And finally, a vanishingly small fraction of people could actually do that, and it's not worth making the tax code a hundred times more complicated to target a tiny number of people who will still end up paying a huge amount of tax in other ways. The administration alone isn't worth the additional revenue; you'd spend more administrating the more complex tax code for everyone than you'd have any hope of recouping.
Rather than a consumption tax (i.e. VAT or GST) a better tax would be an asset tax. Of course such a tax would be highly unpopular with the rich so it has zero chance of ever being implemented.
Interestingly, the currently-most-prominent plan in the US for a consumption tax includes a government "prebate", a pre-allocated consumption allowance based on household size, that amounts to a basic income. Under this proposal, every month, the federal government would send you a check for the household's consumption tax rebate (which is typically going to be in the hundreds of dollars).
Which seems highly preferable to a complex system of what to tax and what not to tax. Rather than maintaining an ever-changing list of what should and shouldn't have sales tax applied (with associated busybody politics on various items), just effectively exempt the first $X of purchases, whatever they might be.
I don't know. If I were self employed, and you buy a thing from me, is that your consumption (taxed) or my income (untaxed)? This stuff is complicated.
... thinking about it further: A truly crazy idea would be a consumption tax that is based on the income of the seller, to keep it from being regressive. Things from rich people are more expensive as a result, providing a nice anti-monopoly, anti-inequality balance. Now I want everyone to poke holes in why it would fall apart.
My thought is that this would be problematic in markets with natural monopolies. There aren't a lot of mom-and-pop power companies. (There are plenty of moms and pops selling power, but as I understand they sell it to the power company who resells it to you by burning less coal.)
Interesting idea about a progessive consumption tax. But would it be more costly to collect than income tax? Not to suggest that it isn't worth the cost: consider sales tax vs VAT. VAT is more expensive to collect but harder for businesses to evade.
My "luxury" VC fund features investor meetings three times a day, with meals and drinks provided by top-rated chefs and bartenders. Hell, for a higher "management fee," we'll even let you stay at our "offices".
Coming from 4 years at a startup as emp#1 and looking again in Austin (engineering), if I hear one more time that "they loved you but didn't think you would be a good fit" instead of a real reason for missing the cut, I am going to go nuts.
Not a good fit is PC language. Best way to get along these days apparently. I'll translate.
"They Loved You" (No they were lukewarm at best but they're being polite at this point.)
"Wouldn't be a good fit" (Not their responsibility to point out your flaws, some of which were subtle, some were obvious so keeping it brief and to the point. We know we can find somebody better or already have.)
Yeah, I know the foundation for it. It is just an irritating process (I know, stating the obvious) that should be better. Both the company and applicant invested time/money in exploring a relationship, and candidates shouldn't be left with a brutally ambiguous result. Even if it takes 5 more min in a debrief and some possible hurt feelings, the company should respect candidates enough to spend that time and help them understand the specific reason(s) as to why they aren't getting the job. I really want to know, was it my salary reqs, my quietness, my loudness, I looked wrong at the VP of Eng/CEO?
This applies to onsite interviews obviously, not initial phone screens.
The company defaults to polite silence to avoid legal liability. They can't risk saying anything which might be construed as discrimination against a protected class.
I kind of wonder if "not a culture fit" could be construed that way if you were an underrepresented minority. It's pretty close to existing coded language.
from the other comments you know reasons why they most likely won't debrief you. Occasionally you'll get honest and good feedback, related to a certain skillset missing. I mean if you wanted to try ahead of time, if they ask for an interview, maybe only agree with it if they transparent about XYZ for you. Just keep in mind that not getting a job is always a little ego damage and your ego will likely be seeking some comfort. The best comfort after those losses would be hitting the gym and moving on. Let your endorphins and physical training and progression lead the way. In case you were wondering, alcohol doesn't help and hurts worse in this process.
I wouldn't describe the current treatment of Netflix by numerous service providers as "Fine". I am on AT&T Uverse and I have to route my Netflix traffic through a private VPN service in order to get HD quality video. Why? Because AT&T is holding me hostage, in the interest of negotiating with Netflix on the other side of the table for extortion fees. I pay for a certain level of access to the Internet. I expect to be able to access ANY site or service without the telecom getting in the way of that. I dread the day where I have to pay AT&T additional fees on top of my base internet package to access Netflix fast (call it the AT&T Internet Movie Package). Or alternatively, Netflix charges me a surcharge on my bill because I am an AT&T subscriber.
I really can't believe you are so deluded to think that there is not a problem brewing here that has the potential to ruin the Internet as we know it (both as a consumer and a business owner).
I don't see what's unfair about ISP's charging Netflix when the ISP's are the ones that spent billions building the networks that made Netflix possible in the first place.
Netflix is particularly unsympathetic in my eyes, because its just a middle man. Almost all the real value (the content, and the wires that deliver the content to consumers) is created by other people.
ISP's have tended to charge for a specific speed, not amount of data. By throttling the Netflix connection they're basically saying "We don't really care that you paid us to be able to access anything on the internet at this speed".
And it's worth noting that this is a case where the ISP is in complete control of the speed you get Netflix. There are many cases where the ISP doesn't have a hand in this, the server you're connecting to simply can't pump stuff out fast enough to go as fast as your ISP will let you. But in this case Netflix has more then enough server power (Which they paid for), but the ISP's are specifically slowing down the end connection to you're house to a lower speed then you paid for unless Netflix is willing to fork over more money.
It is almost exactly the same thing as if you were to purchase a 'subscription' to the post office where they guarantee your packages would be delivered in at least 10 days (when possible). But, packages from Netflix are purposely slowed down by the post office and get to you in 14 days instead, and the post office turns around and tell Netflix they need to pay more if they want the package to get to you in 10 days, even though you already paid for that speed.
> ISP's have tended to charge for a specific speed, not amount of data. By throttling the Netflix connection they're basically saying "We don't really care that you paid us to be able to access anything on the internet at this speed".
I think you're reading an "anything on the internet" into your service agreement that isn't there, but even then you have at best a case for false advertising. If ISP's were up front about these practices, would it be OK?
I have 50/5 cable service and I often can't get even 3Mbps to Netflix for a full-HD stream.
I don't know that regulations regarding advertised vs actual speeds are going to do anything to solve the problem, but I do believe that there is a problem when I can't use even 6% of the theoretical bandwidth that I've theoretically paid for.
I understand not getting 100% downloads all day every day from every website on the internet. Not all have fast enough servers or fast enough primary links or whatever. I understand not getting even say 50% downloads all day every day because I know how TCP backoff works; it's exponential and a lot of downloads are short.
I might even understand not being able to use all 25% of my connection 24/7 again because there are things like peak usage where everyone gets home from work and starts doing stuff online at home and the local loops that the cable company has provisioned might be too big to provide everyone with 100% throughput. I'm not necessarily complaining about that as there are realities to life that aren't necessarily pretty but still real.
But what I can't understand is that my ISP which advertises a specific download capability would throttle it at the SOURCE (or the input to their network) when there is enough bandwidth at the last mile to support the connection.
For the vast majority of internet history (admittedly only 25 years or so) the limiting factor was almost always the LAST MILE. We're now finding out that it's not the last mile anymore but still something within the ISP's control and they're not doing much to alleviate the problem.
This to many folks feels like a betrayal because according to a certain "the last mile is always the slowest" mindset, it is! People aren't wrong to think that because that's how it's always been. ISPs are creating a paradigm shift that they're not telling anyone about and are in fact doing a good job to obfuscate.
You might disagree that it is a betrayal but it feels like that to many folks. You can try to tell them they're wrong but I suspect that because of the many years of assumptions people have had about the way the world works you won't have a lot of luck.
I doubt it has that specific wording, yes, and I do know that it has the wording "up to", not guaranteed, so they're not breaking the contract.
But the point still stands, why the heck am I paying for 2 MB/s download speed if my ISP isn't even going to give me that much if I pay for it? IMO, it's simply bull. If they were actually upfront about these practices (instead of just making it look like Netflix's or whoever-else's fault) I can guarantee you their would be a ton more outrage. If my ISP isn't going to actually give me 2 MB/s download when they are completely capable of doing it, and I paid for it, that's just absurd. In any other industry that type of practice would easily be grounds for a lawsuit. It's not even that it's out of their control, they're purposely going against attempting to fulfill what you're paying for.
> If ISP's were up front about these practices, would it be OK?
It certainly doesn't help that the SOP for ISPs in the US is to deflect blame for network issues, even when the blame falls squarely on them (throttling Netflix, their DNS server is down, etc). It's always the user's fault or the remote site's fault. Never the ISP's fault.
You can even see this in the rhetoric that they espouse about Netflix. The ISPs are choosing to throttle Netflix. It's a business decision. Yet, they want people to think that it's Netflix's fault for not "paying up." Regardless of whether or not you think that the ISPs have a right to ask Netflix for this money, it's disingenuous to say it's Netflix's "fault" for deciding not to pay.
The ISPs didn't spend billions building this network, they were handed billions of dollars from the government to build the network
What if it were Comcast charging Sony extra money to deliver their streaming service for Sony produced content?
What if Time Warner wants to charge Hulu extra money to deliver content since it is owned by Comcast?
You can dismiss Netflix for not creating content to a small degree (house of cards, arrested development, orange is the new black all produced by Netflix themselves, I would argue they are a content creator as well but thats beside the point) but if you substitute Netflix for someone else, its obvious that this is anticompetitive.
This is hacker news - Can you imagine trying to start a web based company and being forced to pay monthly fees to every single ISP just to get decent speeds to end users?
What if Comcast decides it wants to start delivering goods so they jack up prices on instacart's monthly fees
Or they want to expand into Taxi services so they throttle uber down to 52 kbps for all their customers
> The ISPs didn't spend billions building this network, they were handed billions of dollars from the government to build the network
This is absolutely false. Almost all the existing cable infrastructure was built with private money.
> Can you imagine trying to start a web based company and being forced to pay monthly fees to every single ISP just to get decent speeds to end users?
So? It's precarious to build a business that depends wholly on someone else's expensive infrastructure. I don't see why web businesses should be different than app businesses in this regard, which have the same problem. If Apple decides to vertically integrate into your market, as an iOS app developer you don't have much recourse.
>Almost all the existing cable infrastructure was built with private money.
[citation needed]
meanwhile, http://en.wikipedia.org/wiki/Internet_in_the_United_States#G... has a great list of numerous government programs and funds that have dispensed billions of dollars into network infrastructure in the US
>I don't see why web businesses should be different than app businesses in this regard
So you see the World Wide Web as an equivalent to the Android Play Store? I find it hard to believe you do not see the gaping difference here.
1. the web was invented by a government agency
2. You pay for access to the web, this includes upload and download bandwidth, there are no restrictions that limit what you are allowed to do with this bandwidth, there is no agreement that you will only use specified port numbers, and not upload more than x amount of data, etc
3. would you say the automobile industry is wholly dependant on someone else's infrastructure? (roads, highways, street lights, electricity, etc)
4. again you pay for access to the web, not the web itself - the internet is not a product that is controlled by anyone, only its access is controlled. This is fundamentally different from an app store that a company wholly owns, and controls all content within
Comcast does not own or control any part of the internet itself, everything on the internet exists on the internet independently of Comcast. The only thing that Comcast provides subscribers is a pipe to and from the internet with an agreed upon speed to the internet
The only projects on that list that have distributed significant money are funded by the Universal Service Fund. That money doesn't come from general taxation, it comes from a specific tax on the telecom industry. Imagine if the government levied a 15% tax on smartphone sales and spent that money to subsidize telephones for the poor. Could you then turn around and say "Apple and Samsung are getting massive government subsidies?" That's basically what you're doing when you point to USF and say public money went into the telecom networks.
Moreover, this debate is mostly about cable, which has historically been a different sphere from "telecom" (i.e. the phone system). The networks we're talking about, Comcast's, TWC's, etc, are cable networks built with private money after deregulation in the 1990's.
> So you see the World Wide Web as an equivalent to the Android Play Store?
The World Wide Web is just a set of protocols that runs mostly on private networks. It's a platform owned by the companies that own those private networks.
> Imagine if the government levied a 15% tax on smartphone sales and spent that money to subsidize telephones for the poor. Could you then turn around and say "Apple and Samsung are getting massive government subsidies?"
Not only can you say that, you should say that. The tax money is ending up in Apple's and Samsung's pockets, routed through poor people (who presumably benefit from the subsidy, of course, and thus putatively benefiting society as a whole as well).
I don't really like the term middle man for this. They repackage and sell a service. They have solved a problem better than anyone else. That is real value.
Just because the product or service is a derivative of something else doesn't mean it doesn't have real value. Fantasy football, for example. Should we look at fantasy football sites because they just repackage NFL stats?
In this situation, we should just let AT&T/Bell dictate all things internet, since they laid the foundation with their lines. I think the point has some weight, but there's a lot more at stake than a simple service fee.
> In this situation, we should just let AT&T/Bell dictate all things internet, since they laid the foundation with their lines.
... at a time when the government guaranteed their profits. I think that's an important point to remember when a business built off of years of government-granted monopoly starts complaining about government regulation.
The monopoly was granted in return for all sorts of regulations (namely, universal service). The monopoly protection is gone now, so presumably should the regulations be gone.
Moreover, how relevant is the pre-1980's POTS infrastructure to this whole debate? How many Netflix customers are on DSL that hasn't been rebuilt since the breakup?
> Moreover, how relevant is the pre-1980's POTS infrastructure to this whole debate?
Very
> How many Netflix customers are on DSL that hasn't been rebuilt since the breakup?
Even if its been rebuilt since the property rights were acquired, the fact that the property rights were acquired when the provider had a monopoly and government backing (and the same thing applies to the cable cos that are ISPs as to the telcos) is a substantial advantage over any new entrant.
> Even if its been rebuilt since the property rights were acquired
Everywhere I've lived, cable companies don't own the rights of way, but instead pay municipalities or power companies to run wire along public easements or power lines.
Consumers are already paying for their internet connection that cost billions for ISPs to roll out. Now ISPs want to charge both parties, and that is wrong.
Do you remember life before Netflix? Incredible you would say they don't bring much value.
ISPs don't really want to charge both parties so much as they want to tax Netflix for competing with VOD services that ISPs (who are generally also digital TV providers) want to provide.
Its not really about getting money from Netflix, its about getting rid of Netflix.
Two parties benefit when you order a movie on Netflix: you, and Netflix. The company that builds the infrastructure should be able to charge both. It's just how public transit infrastructure is often funded by a combination of user fees and increment taxes on the businesses served by the new road or train line.
Indeed, it's a fairly basic principle of the economics of building infrastructure. A free market underinvests in things like train lines because the builders can only capture one aspect of the positive value created by the infrastructure (the value to the user). However, that leaves a large amount of value to the businesses that users use the infrastructure to get to. If builders can't capture that aspect of value, they'll under invest in such infrastructure. There is a whole body of work on this subject.
Netflix pays a company to provide Internet infrastructure to them. (Level 3, I think) If your ISP isn't Level 3, they should not have the economic right to charge Netflix, because your ISP doesn't service them. Customers pay their ISP to deliver things customers want, no more, no less.
Even if Netflix pays someone to get its data to Comcast's or AT&T's network, they benefit enormously from Comcast or AT&T getting that data to the consumer. In theory, both intermediate ISP's should have the right to charge both endpoints.
And in fact, that's how it has traditionally worked on the internet. Netflix would pay it's ISP, and the consumer would pay their ISP, and the ISP's would pay each other to account for any asymmetry in the data transfer between them (peering). These payments would ultimately be reflected in the charges billed to both endpoints, so the ultimate effect was that each intermediate ISP effective billed each endpoint of the connection.
This whole debacle arose because Netflix's ISP (Cogent) wasn't willing to adhere to the traditional peering arrangements. So in the end, Netflix ended up paying to connect directly to Comcast's network.
> Netflix is particularly unsympathetic in my eyes, because its just a middle man. Almost all the real value (the content, and the wires that deliver the content to consumers) is created by other people.
That is a very strange way to look at things. The rate you're going, I can call anything pretty much anything. What is an ISP but a middle man -- they only facilitate content going from one end to another? Why is content the real value -- to me, it's totally formulaic, dull, uninspiring trash these days. See? You must explain more rigorously the criteria with which you're judging things here.
I also think your reduction of Netflix technology is peculiar - creating Netflix is no trivial feat. Reliable and user-friendly streaming technology for the masses, if it were so easy, would have been done earlier by other big companies. Netflix is doing a lot of things right, including making their own content of all varieties (children shows, adult shows, etc.) that seems to be received well by folks.
I'm guessing that you value the fact that ISPs have poured a fair bit of money into setting up the infrastructure. It's a good point, but I think ultimately moot. Lots of companies give it their all and still die. The people's will rules at the end of the day, whether to do business with them, whether to shape law to grant them their livelihood. This time, I'm personally okay with how people are judging ISPs.
There's lots of reliable and user-friendly streaming technology on the internet. Youtube, Hulu, Vimeo, Vudu, BBC, RedBox, Amazon Prime, etc. It's not trivial, sure, but it's much easier than building a modern fiber-coax cable network. As for content, it's valuable because it's hard (and expensive) to make content that appeals to the mass market. I don't think people care whether the streaming technology is Netflix's or Vudu's. I do think they care whether they're watching Warner Bro's "Pacific Rim" versus SyFy's "Atlantic Rim."
You're right that Netflix and Amazon are creating value through their original content businesses. That's kind of orthogonal to this debate. That original content gives them a natural leverage over the ISP's that their role as content middlemen does not.
> when the ISP's are the ones that spent billions building the networks that made Netflix possible in the first place.
Guess who pays for that ISP? The consumer, and the consumer pays by having to be on a shitty network where the operator blackmails the places that are popular, because they are popular. Also, the consumer pays through the nose for this service. And if all this money is going into infrastructure, why don't I see it reflected in my speeds?
Not sure it would work in reality, but an interesting idea that is actionable by the government.
EDIT: typo