Hands Off the Net!

by on December 29, 2005 · 16 comments

I’m rather confused about what exactly the network neutrality folks want. Because it’s hard to believe they’re really looking for what they seem to want in this article.

The draft bill, floated recently by Republicans on the House Energy and Commerce Committee, contains “network neutrality” provisions intended to prohibit telecom and cable companies from blocking or impeding competitors on their high-speed networks. But the draft makes an exception for companies to offer multiple tiers, resulting in potentially faster transmission rates for them and slower speeds for competitors.

Comcast, Time Warner and other major cable providers oppose all mandatory neutrality restrictions but abide by voluntary guidelines. “Network neutrality is a solution in search of a problem,” said Brian Dietz, spokesman for the National Cable and Telecommunications Association.

Those stances are drawing fire from Amazon.com, eBay, Google, Microsoft, Yahoo and other Internet players that fear the carriers will serve as gatekeepers. “Do you want the Internet … of the last 10 years, or do you want it to look like a cable system?” asked Gerry Waldron, an attorney representing a coalition of Internet companies.

“They’re fooling around with the basic DNA of the Internet here,” added Art Brodsky, a spokesman for Public Knowledge. “What they’re trying to do is make it their Internet.”

The coalition members said they recognize that communications carriers have a right to manage their networks to carry bandwidth-hungry video without interruption. “We don’t want to take them out of [that] business,” a source privately said, but added that carriers should not “pick and choose” who provides Internet video.

Now from a technical perspective, I sympathize with these guys. The layered, end-to-end nature of the Internet is an important design principle that deserves to be defended. But what they’re trying to do strikes me as more sweeping than merely ensuring that consumers have unfettered access to content on the web. The next-generation fiber networks being built by the Baby Bells are expensive, and if they want to set aside some portion of their bandwidth to provide premium services, that seems like a perfectly reasonable idea. Now, I suspect that from a business perspective, they’ll find that consumer will pay more for unfettered high-speed Internet access, especially once there are thousands of Internet-based TV channels not available through their IPTV service. But the fact is that without the investments the Baby Bells are making, those Internet TV channels might not even be possible.


Moreover, I think the net neutrality folks are extremely naive about how regulations like this work out in practice. It’s easy to argue, in the abstract, that ISPs should not “discriminate” among Internet-based services. But the devil is likely to be in the details, and the details are made in a convoluted regulatory process that isn’t necessarily in the best interests of consumers. The last time we went this route was with the FCC’s “local loop unbundling” regulations in the late 1990s. Those turned out to be a disaster, providing tons of work for lawyers and discouraging investment in new infrastructure while doing little to increase competition in local phone service.

“Network neutrality” regulation is a bigger danger. So far, the higher layers of the Internet’s protocols (the IP layer and above) have been completely free of government regulation. That has meant that technical decisions get made by computer geeks, not lawyers and legislators. Those of us who care about high-tech innovation should be fighting to keep things that way as long as possible. Putting network design decisions into the political process can’t possibly make the process work better.

That’s especially true since, at least until now, the concerns about violations of network neutrality have been massively overblown. Way back in 1999, Larry Lessig warned in his first book, Code, that corporate interests would soon be re-writing the Internet’s architecture to undermine its open nature. As far as I can tell, we’re no closer to that point than we were then. Indeed, I would argue we’re further away from his nightmare scenario. The Baby Bells have made a few abortive and ineffectual attempts to limit VoIP, but that’s about it–I can still access pretty much any Internet service I want, without any interference from my ISP. Meanwhile, the ownership of the Internet’s backbone is more decentralized, the Internet is a lot more international, and there are dozens of major Internet companies like Google and Yahoo! with a stake in keeping the ‘net open. In short, the odds of Lessig’s nightmare scenario coming true have been steadily diminishing as the ‘net has diversified.

So Mr. Dietz is right: network neutrality is a solution in search of a problem. If, a few years from now, I’m proved wrong and broadband ISPs start restricting its customers’ access to the end-to-end Internet, then it will make sense to have a debate about the best regulatory response. But it’s extraordinarily premature to give the FCC authority over the Internet to deal with a purely hypothetical threat. I don’t want the Internet politicized, even for a good cause.

  • dmarti

    It’s hard to believe Google is seriously worried about this issue. If carriers threaten to discriminate in customer access to Google, Google could just give AdSense-using sites free use of a Coral-like CDN. That would (1) make it market suicide to throttle Google, and (2) give Google another non-money offering that it can use to fight the advertising price war. The more that Google can pay its AdWords sites in software or services instead of money, the better it does.

  • http://zgp.org/~dmarti/ Don Marti

    It’s hard to believe Google is seriously worried about this issue. If carriers threaten to discriminate in customer access to Google, Google could just give AdSense-using sites free use of a Coral-like CDN. That would (1) make it market suicide to throttle Google, and (2) give Google another non-money offering that it can use to fight the advertising price war. The more that Google can pay its AdWords sites in software or services instead of money, the better it does.

  • jack

    I’m as against getting the politicos involved in net regulation as the next guy, but I do fear the telcos and their lust for creating new revenue streams at the expense of technology and innovation.

    Your mention of IPTV evokes one of the most likely of nightmare scenarios: 1) thousands of IPTV channels become available from diverse sources (perhaps some evolved from Google Video, perhaps many 100s of others from independent sources), 2) cable companies see IPTV as a direct threat, 3) cable companies cut out IPTV from their internet offerings through filtering, or force users to pay extra fees to receive these IPTV channels.

    Nothing like this has happened yet, but why wouldn’t it? I would claim that the only real barrier is the presence of mutiple means of receiving broadband (cable, dsl, satellite). If one of these three carriers becomes dominant, why wouldn’t they use their position to bolster their existing business models or to maximize profits?

  • jack

    I’m as against getting the politicos involved in net regulation as the next guy, but I do fear the telcos and their lust for creating new revenue streams at the expense of technology and innovation.

    Your mention of IPTV evokes one of the most likely of nightmare scenarios: 1) thousands of IPTV channels become available from diverse sources (perhaps some evolved from Google Video, perhaps many 100s of others from independent sources), 2) cable companies see IPTV as a direct threat, 3) cable companies cut out IPTV from their internet offerings through filtering, or force users to pay extra fees to receive these IPTV channels.

    Nothing like this has happened yet, but why wouldn’t it? I would claim that the only real barrier is the presence of mutiple means of receiving broadband (cable, dsl, satellite). If one of these three carriers becomes dominant, why wouldn’t they use their position to bolster their existing business models or to maximize profits?

  • http://www.binarybits.org/ Tim

    Jack,

    If one of them were to become dominant, I agree that would be a cause for concern. But right now, things are trending in the opposite direction. The Baby Bells are rolling out new fiber capacity, and there are wireless technologies on the way that might give consumers a third or fourth alternative within the next decade.

    Moreover, I think that once IPTV really takes off, its advantages over traditional cable will be so enormous that trying to block consumer access to it would be financial suicide. Every jurisdiction will have satellite service for the foreseeable future, and many will have at least a DSL alternative, if not fiber. Those underdogs would have every reason to give their customers unfettered access to IPTV services as a way to differentiate themselves from the cable monopoly. And once consumer realize how much they’re missing out on in their cable sandbox, they’ll begin to defect unless cable gives them unfettered access as well.

    Finally, as I’ve argued before, blocking some Internet applications while allowing access to others is likely to be much more difficult than net-neutrality advocates seem to assume. Broadband ISPs are already finding this out with VOIP. The Baby Bells have talked a big game about charging consumers extra for VOIP service, but as far as I know, none have had much luck actually blocking VOIP services.

  • http://www.binarybits.org/ Tim

    Jack,

    If one of them were to become dominant, I agree that would be a cause for concern. But right now, things are trending in the opposite direction. The Baby Bells are rolling out new fiber capacity, and there are wireless technologies on the way that might give consumers a third or fourth alternative within the next decade.

    Moreover, I think that once IPTV really takes off, its advantages over traditional cable will be so enormous that trying to block consumer access to it would be financial suicide. Every jurisdiction will have satellite service for the foreseeable future, and many will have at least a DSL alternative, if not fiber. Those underdogs would have every reason to give their customers unfettered access to IPTV services as a way to differentiate themselves from the cable monopoly. And once consumer realize how much they’re missing out on in their cable sandbox, they’ll begin to defect unless cable gives them unfettered access as well.

    Finally, as I’ve argued before, blocking some Internet applications while allowing access to others is likely to be much more difficult than net-neutrality advocates seem to assume. Broadband ISPs are already finding this out with VOIP. The Baby Bells have talked a big game about charging consumers extra for VOIP service, but as far as I know, none have had much luck actually blocking VOIP services.

  • http://www.cato.org/people/harper.html Jim Harper

    I don’t think dominance is a cause for concern. I would like to see some dominance by (let’s say) cable. From the moment cable started to reap excess profits (due to bandwidth shaping or whatever else), this would stand as an open invitation to competitors (Bells, satellite, WiMax, whatever provider or technology) to build something even better and go after those dollars.

    Humans walk by falling forward off the planted foot and catching their fall with the other foot. Markets walk by letting one competitor get ahead and then letting it be overtaken by new investment in new competitors.

  • http://www.cato.org/people/harper.html Jim Harper

    I don’t think dominance is a cause for concern. I would like to see some dominance by (let’s say) cable. From the moment cable started to reap excess profits (due to bandwidth shaping or whatever else), this would stand as an open invitation to competitors (Bells, satellite, WiMax, whatever provider or technology) to build something even better and go after those dollars.

    Humans walk by falling forward off the planted foot and catching their fall with the other foot. Markets walk by letting one competitor get ahead and then letting it be overtaken by new investment in new competitors.

  • RG

    There was an interesting read in today’s Miami Herald.

    http://www.miami.com/mld/miamiherald/news/opini

    From the column:

    Various existing government requirements on telecommunications providers are not only unnecessary but counterproductive. We need to streamline or otherwise eliminate unnecessary red-tape imposed by state and local governments in deciding whether an otherwise qualified company should be permitted to get into the phone or cable business. ”Mother, may I” is truly bad policy in this technologically dynamic era.

  • RG

    There was an interesting read in today’s Miami Herald.

    http://www.miami.com/mld/miamiherald/news/opinion/13553457.htm

    From the column:

    Various existing government requirements on telecommunications providers are not only unnecessary but counterproductive. We need to streamline or otherwise eliminate unnecessary red-tape imposed by state and local governments in deciding whether an otherwise qualified company should be permitted to get into the phone or cable business. ”Mother, may I” is truly bad policy in this technologically dynamic era.

  • Raphael

    I thought I’d pivot this discussion in another direction. I read this editorial in the Ft Wayne Journal and wanted to throw this out to the forum for discussion. There are some positives and some negatives with this bill — lower takes, good; government unnecessarily meddling, bad.

    http://www.fortwayne.com/mld/journalgazette/new

  • Raphael

    I thought I’d pivot this discussion in another direction. I read this editorial in the Ft Wayne Journal and wanted to throw this out to the forum for discussion. There are some positives and some negatives with this bill — lower takes, good; government unnecessarily meddling, bad.

    http://www.fortwayne.com/mld/journalgazette/news/editorial/13583631.htm

  • Raphael

    Sorry – that should be “taxes,” not “takes.” The point is that this Indiana bill looks like a mixed bag to me: the tax benefits would be an obvious positive, but stripping municipalities of their franchising authority begs the question of whether state governments need to meddle with home rule and local control.

  • Raphael

    Sorry – that should be “taxes,” not “takes.” The point is that this Indiana bill looks like a mixed bag to me: the tax benefits would be an obvious positive, but stripping municipalities of their franchising authority begs the question of whether state governments need to meddle with home rule and local control.

  • Glenn

    As IPTV takes off, and gets presented to the consumers as a Triple Play package, what tax structure will likely follow this? What regulation will dominate its operation?

  • Glenn

    As IPTV takes off, and gets presented to the consumers as a Triple Play package, what tax structure will likely follow this? What regulation will dominate its operation?

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