Network Neutrality Just-So Stories

Julian has some more smart things to say about network neutrality and the Pizza Hut analogy:

Suppose an ISP wants to build out infrastructure to support 100mbps service in an area that doesn’t currently have it. Problem: There are customers who might like that higher speed access for a few purposes, like streaming movies, but not enough who are prepared to pay the premium to upgrade their whole connection, so it’s not cost effective for the ISP to make the investment. One solution might be metering: You let customers pay for the bandwidth they use, paying a bit more for bursts of higher speed needed to access specific sites with a lower flat rate for the majority of the time, when they’re just reading news and checking email. The problem is that consumers seem to have largely rejected metering: People want to pay one rate for their access, and not have to think about their usage level on a day-to-day basis.

The other solution is for the sites the customers are trying to reach, the ones that many people will only find worth using if they connect at very high speeds, to subsidize the infrastructure buildup, then recoup the layout in the form of increased revenue from subscription fees or ads or however else sites convince investors they’ll make a buck. Of course, that only makes sense if the infrastructure buildup doesn’t just result in cheaper and faster across-the-board access for the customers of the ISP in question; the benefits have to be internalized by the company making the payment. Now, in terms of how this was originally framed, once the infrastructure is there, that means “slowing down” any traffic not coming from the favored (paying) companies to lower speeds than the new and improved pipes can accommodate. But in the case I’ve described, of course, that’s not zero sum because the fatter pipes are only there due to the cross-subsidy from the favored companies. This would be more intuitively clear if, say, the companies had subsidized the construction of a physically distinct set of fatter pipes that only carried their traffic—except that’s sort of insane and inefficient, and nobody’s actually going to build a network that way.

This is a just-so story, of course: I’ve described a way that preferential access involving “slowing down” some packets and passing others along at full speed might be optimal. That doesn’t show it’s the most likely use of policy routing. On the other hand, some folks seem incapable of imagining any beneficial use, so it may be worth at least gesturing in the direction of one. And it matters because if there were only downsides to a discriminatory net, then even if the horror-hypotheticals or actual abuses were highly implausible in the first case or highly uncommon in the latter, there would be no harm in regulating. If there are pros and cons, it won’t do to just point out what kinds of bad things might happen. You need to figure out how serious and common they’re going to be relative to the beneficial cases.

I’m skeptical about Julian’s just-so story for reasons I’ve elaborated on before, but his broader point is clearly right: If you want to evaluate the case for banning certain routing policies, you need to look at both sides of the ledger. And to do this meaningfully, you not only have to identify what could happen but also how likely each outcome is. So far, each side has seemed to insist that its worst-case scenario is inevitable if the other side gets its way.

Comments Posted in: Broadband & Neutrality Regulation