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Net Neutrality: What are we fighting for? 09/10/2009

Posted by Paul Daigle in Uncategorized.
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STIMost Internet users  know enough about Net Neutrality to know they support it. But if we take a detailed look into this debate, the battles being waged, and language being propagated, precisely what it is we’re working to protect can seem a little fuzzy. Has the Net Neutrality movement identified a position and agenda that can ensure we protect the Internet’s most basic and essential value propositions?

For the sake of exploring this issue, lets begin by recognizing the Internet as an on-demand network for distributed data, media and communication. Within this network our data and activities all compete for bandwidth. The ISP, Cable and Phone Companies that make up the Broadband industry are charged with managing the flow of this data. The issue of Net Neutrality arose when broadband companies became interested in managing the flow of Internet traffic more “fairly” and deliberately.

Net Neutrality opposes giving broadband companies any degree of control over the management of the Internet’s flow of data. Net Neutrality also opposes any system used by broadband providers to prioritize online data, applications, websites or technologies. Net Neutrality is as much a way for naming the fear of losing the Internet we have today as it is an effort to prevent large companies from changing the rules for online distribution.

So what exactly is Net Neutrality working to protect? Here are a few perspectives:

Net Neutrality simply means no discrimination. Net Neutrality prevents Internet providers from blocking, speeding up or slowing down Web content based on its source, ownership or destination. With Net Neutrality, the network’s only job is to move data — not to choose which data to privilege with higher quality service. -The Free Press

Network neutrality is the principle that Internet users should be in control of what content they view and what applications they use on the Internet. In our view, the broadband carriers should not be permitted to use their market power to discriminate against competing applications or content. Just as telephone companies are not permitted to tell consumers who they can call or what they can say, broadband carriers should not be allowed to use their market power to control activity online. – Google

Network neutrality is a principle proposed for residential broadband networks. A neutral broadband network is one that is free of restrictions on content, sites, or platforms, on the kinds of equipment that may be attached, and on the modes of communication allowed, as well as one where communication is not unreasonably degraded by other communication streams. The principle states that if a given user pays for a certain level of internet access, and another user pays for a given level of access, that the two users should be able to connect to each other at that given rate of access. – Wikipedia

Is Net Neutrality fighting to:

  1. Protect our right to go to whatever websites, use whichever web apps and download whatever content we choose?
  2. Ensure that every user experiences the same quality of service, speed and access?
  3. Ensure that every website, application and data file experiences the same quality of service, speed and access?
  4. Or all the above?

Are broadband (BB) companies trying to game the system to create market advantages for the few, or are they working to uncover the business models that can help them operate more competitively? Here’s an excerpt from a statement on the National Cable & Telecommunications Association’s website:

Those who call for regulation of the Internet in the name of “network neutrality” are offering a solution in search of a problem since there is no evidence of a market failure justifying the imposition of common carrier-like regulation on broadband services. “One size fits all” Internet Regulation would replace the workings of the marketplace with government regulation, and choose today what business models are, and are not, permissible. By contrast, in the current market-driven environment, companies have the freedom to experiment with multiple business models, producing more choices and competition in content and providers for consumers, and more innovation than ever before.

Is market failure a prerequisite for seeking regulations that can protect such a vital communications channel?  And shouldn’t we understand the types of business models broadband companies are able to pursue to ensure stability and transparency?

The Net Neutrality movement seems to believe that the way data moves through the system is already fair and equitable. The BB industry, on the other hand, is stating quite openly that they, as system operators, are better equipped to manage, prioritize and price the Internet to keep it fair and equitable. These opposing views, rigid as they are,  don’t lay ground for a constructive debate.

Al Gore was correct when he referred to the web as an information super highway. Like any large highway systems, or energy grid for that matter, the Internet will have to grow to accommodate the growing demands placed on the system. In the highway analogy we’re talking about more cars and more trucks carrying heavier loads. With the power grid analogy we’re talking about more consumers using more electricity for more and more activities. Online we have more users moving larger and larger qualities of data and consuming richer and richer streams of media. Each of these systems also contend with tricky peak usage periods: rush hour traffic for highways, hot summer days for power grids, peak usage hours and seasons for the Internet.

Is managing this growth using egalitarian principles to produce a consistent and uniform experience really feasible, sustainable or fair? The Wikipedia definition above states that “A neutral broadband network is one where communication is not unreasonably degraded by other communication streams.”  Yet, when traffic is heavy and capacity is filled to the point of congestion, BB companies are forced to manage which packets take priority, in effect choosing whose communication is degraded. Demand and capacity are market forces that companies leverage to build more reliable and competitive offerings. If profits aren’t a driver behind addressing the skyrocketing demand for broadband capacity, then where do incentives to increase capacity come from? The “neutral network” is an ideal. It requires models to sustain it. Without those models it becomes nothing more than wishful thinking.

I think most of us can at least agree that we’ve uncovered a dangerous lack of standards for managing Internet data at the dawn of broadband’s ubiquity. We as consumers need to make sure that our best interests are served. We must also understand the challenges in meeting the increasing demand for capacity as we pursue important rules and regulations that govern how capacity is doled out.  Most importantly, we  must clearly communicate our priorities for establishing those rules. The Net Neutrality movement hasn’t accomplished this. Instead this movement has worked to protect the status quo: a market tied to idealistic constraints and disconnected from the market forces that can fund innovation.

If we want the industry to deliver an Internet where a single price of admission provides unfettered access to every app, page, file and silo, with the ability to stream as much content and download or share as much data as we’d like, with the assurance that everyone’s data will remain equal and uniform in both speed and accessibility, then perhaps we need to ask where we have seen this kind of market work?

To shed some light on the challenges that Broadband companies, let’s look at a single broadband provider, and how their fundamentals changed overnight with the launch of a single new streaming destination.

In December of 2007 England’s BBC launched its very successful iPlayer. From this single launch a leading British broadband provider was able to record a 5% growth in total average usage, a 66% growth in the volume of streaming  traffic, a 2% growth in the number of customers using their connection for streaming, a 72% growth in the number of customers using over 250MB of streaming in a month, a 100% growth in the number of customers using over 1GB of streaming in a month, and an increased cost of carrying streaming traffic from £17,233 to £51,700 per month.

Just yesterday at BB World Forum Europe, broadband providers called for help in understanding what the rules and regulations will be in building and operating what they call the Next-Generation Network (NGN). Net Neutrality proponents need to answer this call with clarity of purpose and with a true understanding of the challenges these companies face in meeting tomorrow’s demand for broadband.

Regulators need to go early and they need to go fast – there’s a long deployment cycle for some of what we’re talking about. Can you imagine if I called up an investor and said, ‘hey, how do you feel about investing in our fibre-to-the-home project, oh by the way, we don’t know what the rules are. -Scott Alcott, Executive VP, service delivery platforms at Belgacom.

The good news is that broadband usage has finally come into its own. Peer-to-peer file sharing, streaming video, audio, gaming and other rich media experiences are now integrated into the way we use the medium.  Tomorrow’s users will experience a far richer Internet than we have today. The question of what business models can enable broadband providers to continue scaling capacity to deliver tomorrow’s experiences is an important one. Our goal should be to define consumer rights, protect the Internet’s unique value propositions, and provide the BB industry with clear options for leveraging demand.

Where are we willing to allow market forces to exist? What are we absolutely committed to protecting?

When it comes to leveraging market forces, I believe users should have more responsibility for the capacity they use, and that broadband providers should be free to experiment with pricing models that leverage high speed and high capacity.

The Google statement above makes the point that “telephone companies are not permitted to tell consumers who they can call or what they can say.” True enough. But if I call Austria or China the phone company has every right to pass the higher cost of the call on to me. By reserving the right to do so they protect customers from added costs or lower quality of service because of my unusual demands on the system. You might think that our roads and highways are free, and the web is like a system of roads, so why can’t it operate in the same way. The fact is there are tolls for roads, bridges and highways all over the world that help ensure those assets are maintained for the people who use them.

Today some consumers already willingly pay extra for higher speed connections. The NGN will deliver an improved “ultra broadband”. The industry should charge a premium for NGN speeds while educating consumers on the cost/benefit equation of enhanced connections. We as consumers will receive more and more of our consumable entertainment, personal communication and 3rd party services from our broadband connections; and all of those offerings will continue to get richer and more dynamic.

The industry should also be allowed to place reasonable restraints on the bandwidth capacity user can access with basic service. Users involved in ultra-high capacity activities like peer-to-peer file sharing should pay for the increased demands they place on the system. We should encourage the Broadband Industry to experiment with pricing that leverages a range of reasonable connection speeds and capacity allowances to discover what the market will bear. We should also ensure that local and regional markets give the consumer a healthy amount of choices among  BB service providers to spur competition.

Why should we do this? Because the costs associated with delivering data over the Internet continues to decrease year after year, even as usage skyrockets. Allowing BB companies to prioritize data by user contract will not drive up rates. In fact, it could lower rates for average users. And it can give the BB industry a framework for managing capacity and leveraging market forces, ensuring that the way data is managed online remains fare and transparent.

TV, radio, print, mobile communications, energy, you name it… just about every form of media, communication format and utility has succumb to some form of tiered pricing based on usage. This has helped communication, media and technology companies produce products for a wider variety of markets (Cable, Satellite Radio, Online Subscriptions). Tiered pricing is a proven model for keeping markets competitive, selection rich, and quality high.

My allowing the BB industry to pursue pricing models based on usage, the Net Neutrality movement can ensure that we protect the web’s most vital value proposition.

Not too long ago distribution channels were scarce. The enormous difficulties inherent in reaching out to mass audiences with communication, information or products was the single largest factor in determining what most of us bought, read, watched and, often times, thought. That world is gone because the Internet has created a marketplace where barriers are low and distribution is cheap. We must focus on ensuring that big business can never leverage market conditions to reclaim those old advantages around distribution. Prioritization, which will always be an important part of a transparent and fair Internet, should always be determined by our contracted relationships with our broadband providers. If I’m paying for a specified broadband speed and capacity, I should expect that my connection to the entire Internet universe, and all my online activities, will occur at that contracted rate. Broadband companies should never have the right to prioritize the speed or accessibility of a given website, technology, service or company based on their relationship, or lack thereof, with that company. The BB industry should be allowed to prioritize packets by the users within their networks, and not by the data, technology or content being consumed by those users.

At yesterday’s BBWF Europe summit industry executives struggled openly with the challenges of delivering broadband services over mobile platforms.

…prioritization of services will be an issue on mobile networks, particularly as they start transporting healthcare and other services. For example, an instant heart-read or a diabetes feedback is certainly more important than YouTube. Prioritization does matter. – Steve Pusey, CTO of Vodefone

What if the YouTube stream I’m viewing is showing me how to help my friend, who’s gone into diabetic shock? Industry prioritization by content is dangerous for too many reasons. We as users should get the Internet that we choose, at the speed and capacity that we pay for. Net Neutrality should redefine or refine its position to allow the BB industry to explore new business models through direct relationships with its customers, and the marketplace. Net Neutrality advocates should refocus on protecting an equal playing field for content. This compromise can help ensure that we will all experience the same high value Internet on a higher performance Internet infrastructure in the years to come.