In Defense of Broadband Fast Lanes

by on May 12, 2014 · 12 comments

The outrage over the FCC’s attempt to write new open Internet rules has caught many by surprise, and probably Chairman Wheeler as well. The rumored possibility of the FCC authorizing broadband “fast lanes” draws most complaints and animus. Gus Hurwitz points out that the FCC’s actions this week have nothing to do with fast lanes and Larry Downes reminds us that this week’s rules don’t authorize anything. There’s a tremendous amount of misinformation because few understand how administrative law works. Yet many net neutrality proponents fear the worst from the proposed rules because Wheeler takes the consensus position that broadband provision is a two-sided market and prioritized traffic could be pro-consumer.

Fast lanes have been permitted by the FCC for years and they can benefit consumers. Some broadband services–like video and voice over Internet protocol (VoIP)–need to be transmitted faster or with better quality than static webpages, email, and file syncs. Don’t take my word for it. The 2010 Open Internet NPRM, which led to the recently struck-down rules, stated,

As rapid innovation in Internet-related services continues, we recognize that there are and will continue to be Internet-Protocol-based offerings (including voice and subscription video services, and certain business services provided to enterprise customers), often provided over the same networks used for broadband Internet access service, that have not been classified by the Commission. We use the term “managed” or “specialized” services to describe these types of offerings. The existence of these services may provide consumer benefits, including greater competition among voice and subscription video providers, and may lead to increased deployment of broadband networks.

I have no special knowledge about what ISPs will or won’t do. I wouldn’t predict in the short term the widespread development of prioritized traffic under even minimal regulation. I think the carriers haven’t looked too closely at additional services because net neutrality regulations have precariously hung over them for a decade. But some of net neutrality proponents’ talking points (like insinuating or predicting ISPs will block political speech they disagree with) are not based in reality.

We run a serious risk of derailing research and development into broadband services if the FCC is cowed by uninformed and extreme net neutrality views. As Adam eloquently said, “Living in constant fear of hypothetical worst-case scenarios — and premising public policy upon them — means that best-case scenarios will never come about.” Many net neutrality proponents would like to smear all priority traffic as unjust and exploitative. This is unfortunate and a bit ironic because one of the most transformative communications developments, cable VoIP, is a prioritized IP service.

There are other IP services that are only economically feasible if jitter, latency, and slow speed are minimized. Prioritized traffic takes several forms, but it could enhance these services:

VoIP. This prioritized service has actually been around for several years and has completely revolutionized the phone industry. Something unthinkable for decades–facilities-based local telephone service–became commonplace in the last few years and undermined much of the careful industrial planning in the 1996 Telecom Act. If you subscribe to voice service from your cable provider, you are benefiting from fast lane treatment. Your “phone” service is carried over your broadband cable, segregated from your television and Internet streams. Smaller ISPs could conceivably make their phone service more attractive by pairing up with a Skype- or Vonage-type voice provider, and there are other possibilities that make local phone service more competitive.

Cloud-hosted virtual desktops. This is not a new idea, but it’s possible to have most or all of your computing done in a secure cloud, not on your PC, via a prioritized data stream. With a virtual desktop, your laptop or desktop PC functions mainly as a dumb portal. No more annoying software updates. Fewer security risks. IT and security departments everywhere would rejoice. Google Chromebooks are a stripped-down version of this but truly functional virtual desktops would be valued by corporations, reporters, or government agencies that don’t want sensitive data saved on a bunch of laptops in their organization that they can’t constantly monitor. Virtual desktops could also transform the device market, putting the focus on a great cloud and (priority) broadband service and less on the power and speed of the device. Unfortunately, at present, virtual desktops are not in widespread use because even small lag frustrates users.

TV. The future of TV is IP-based and the distinction between “TV” and “the Internet” is increasingly blurring, with Netflix leading the way. In a fast lane future, you could imagine ISPs launching pared-down TV bundles–say, Netflix, HBO Go, and some sports channels–over a broadband connection. Most ISPs wouldn’t do it, but an over-the-top package might interest smaller ISPs who find acquiring TV content and bundling their own cable packages time-consuming and expensive.

Gaming. Computer gamers hate jitter and latency. (My experience with a roommate who had unprintable outbursts when Diablo III or World of Warcraft lagged is not uncommon.) Game lag means you die quite frequently because of your data connection and this depresses your interest in a game. There might be gaming companies out there who would like to partner with ISPs and other network operators to ensure smooth gameplay. Priority gaming services could also lead the way to more realistic, beautiful, and graphics-intensive games.

Teleconferencing, telemedicine, teleteaching, etc. Any real-time, video-based service could reach critical mass of subscribers and become economical with priority treatment. Any lag absolutely kills consumer interest in these video-based applications. By favoring applications like telemedicine, providing remote services could become attractive to enough people for ISPS to offer stand-alone broadband products.

This is just a sampling of the possible consumer benefits of pay-for-priority IP services we possibly sacrifice in the name of strict neutrality enforcement. There are other services we can’t even conceive of yet that will never develop. Generally, net neutrality proponents don’t admit these possible benefits and are trying to poison the well against all priority deals, including many of these services.

Most troubling, net neutrality turns the regulatory process on its head. Rather than identify a market failure and then take steps to correct the failure, the FCC may prevent commercial agreements that would be unobjectionable in nearly any other industry. The FCC has many experts who are familiar with the possible benefits of broadband fast lanes, which is why the FCC has consistently blessed priority treatment in some circumstances.

Unfortunately, the orchestrated reaction in recent weeks might leave us with onerous rules, delaying or making impossible new broadband services. Hopefully, in the ensuing months, reason wins out and FCC staff are persuaded by competitive analysis and possible innovations, not t-shirt slogans.

  • Justin Collery

    None of the arguments above provide good reasons for an internet ‘fast lane’.

    The fact is that each side of the transaction are already paying for the service they wish to provide or consume.

    As a consumer I pay my internet provider for connectivity. If I pay for 20Mbps, I expect to get close to that. What services I wish to access using that 20Mpbs is my choice.

    As an online service provider, I am also paying for connectivity through someone like Level 1 or Amazon. If I wish to stream TV at 1Gbps to many users, I pay my provider for that 1Gbps connection.

    So each side already pays.

    The danger in the proposal, and your arguments, is that they stifle innovation by taking choice away from the consumer, giving that choice to the ISP.

    The ISP becomes the gatekeeper to its customers. It can decide which services must pay more.

    An ISP that has a streaming service may seek to extract as much money as possible from rival streaming services so as to make them less competitive.

    An ISP that provides voice may seek to extract money from 3rd party VoIP providers for transit on its network.

    These are not hypothetical worst case scenario’s, but the logic of competition. It is in the ISPs interest to harm a competitor if that is in their power.

    This gives the ISP the power to subsidize its own services from the pocket of competing service providers. It is this that will stifle innovation to the detriment of consumers.

    It is deeply wrong, facilitates oligarchies, is injurious to the future of innovation and works against what the internet promises to deliver in the future.

    I sincerely hope all traffic continue to be treated equally on the internet.

  • KCStymie

    Brent could have simply said, “The Internet” for his short list of VoIP, Cloud-hosted virtual desktops, TV (Video streaming), Gaming Teleconferencing, telemedicine, teleteaching, etc. He left out stock trades, banking, online auctions which clearly have performance requirements. The headaches begin when someone else determines that YOUR packets are not worthy of the FAST lane. I get to decide that priority, not the ISP.

  • Matthew Levinson

    Wow. Really? So we have an oligopoly provided embarrassment of a national broadband infrastructure and service that provides among the worst available speed and pricing of developed nations. The answer is to double down, protect oligopoly profits on economy draggingly poor product by allowing them to charge even more so that some modern services that actually require fast speeds don’t totally break? Typical conservative BS. How can we extract JUST as many rents as we can without totally destroying the system and engendering enough backlash that the government supported rent extraction is crushed.

    You know what a better solution might be? How about treating internet like a utility and making affordable symmetric 1Gbps connections available to everyone like they do in Sweden (with the same population density as the US). Not so worried about needing to over-pay even more so your VOIP magically works on that 1.5 Mbps connection you have (for which you pay what would get you a general connection 10-100 times as fast in any other developed country), now are you?

  • RDS

    Brent don’t feel bad. The internet was never neutral. Go look at DIFSERV. 802.11 priority bits in Ethernet. Multi Protocol Label Switching [MPLS] . Oh yes SIP .. something I do know about. Do you want your 911 call interrupted by jitter because your neighbor is pirating the latest season of Game of Thrones. This issues is not about the Network or Neutrality its about money and the structure of Television distribution. King Kong (telecos) vs Godzilla (content providers) Classic DC regulatory fight where Netflix wants the FCC to validate and enforce their unique business mode.

  • Fred Steffen

    Emergency voip calls is one of the only times I think packets should be prioritized. But it is. Despite voice traffic being minuscule anyway, the reason Net Neutrality has come up is because of the Netflix fiasco. We pay our isp’s to get us access to the internet at a reasonable bitrate. Comcast has decided that one content provider is being accessed too much by their customers, and they want them to pay. Netflix has purchased massive amounts of bandwidth from all backbone providers, and Comcast has deliberately degraded access so that Netflix has to pay twice to get to Comcasts customers.

    We pay ISPs for access to the internet. If they can’t make money providing our service, charge us more, but extorting money from a content provider this way is wrong.

    Unfortunately most customers are sheeple and won’t vote with their money. In many areas (especially where this is happening) customers only have one serious choice for internet.

  • Fred Steffen

    In my opinion, the issue here is “is it okay for ISP’s to extort money from content providers”.

    Netflix purchases massive amounts of bandwidth from all backbone providers they can to meet the requests of their customers. Us as customers pay our ISP’s for a certain level of internet service. Comcast is breaking that contract, in order to extort money from content providers. We don’t pay for 30mb/s down to specific sites. We pay for 30mb/s down from any site that’ll give it to us.

    Comcast has decreed that we aren’t going to get that 30mb/s from specific sites, unless those sites pay them.

    If I’m a hardcore gamer, it might be worth it to pay for low ping service, or a guaranteed connection speed. And that would be fine. However, right now I just pay for internet at 30mb/s. I didn’t purchase that for all Google sites. I purchase it for access to the internet, as fast as I can get it, up to and including 30mb/s. To artificially limit traffic from specific providers is wrong.

  • JosephRatliff

    Since I’m not an expert on the under pinnings of the Internet itself, I might be off base here…

    But why don’t we just pay one (fair) price for the fastest speed possible, and everyone (EVERY ENTITY) get the fastest delivery of their “packets” possible in all cases?

    Is there a shortage of bandwidth?

    I suppose another way of asking this is “Is there a reason for prioritizing anything?” or “Don’t we have the infrastructure to provide equivalent speed for everything to everyone for every purpose?”

    I don’t pay my electric bill and get “partial” service on some days, I get power all the time (generally, except for disruptions).

    Why is access to and using the Internet any different?

    But in short, to me there is no defense of Broadband Fast Lanes, because all “lanes” should travel at the same speed anyhow (I think).

  • MickeyD

    Money, money, money…Comcast thinks they are going to be able to extort Netflix because they have paid off the key politicians…

  • zeke

    The author did not distinguish IP networks from the “internet”. Many service providers use an IP backbone to support many services, as the author has mentioned. Internet access happened to be one of them; however, other services, e.g. VOIP, IPTV, tele-medicine, etc, are not really internet services, or necessarily even connected to the ubiquitous “internet”. If they are, there would be a whole other range of ethical and regulatory issues to solve.

    Service providers already employ traffic engineering to ensure proper quality of service for these IP services. This practice is orthogonal to the principle of net neutrality, which only deals with “internet” traffic, i.e. information exchanged among a community of internet users. The idea is that all the users are treated equally.

    Even if we solve all the ethical, regulatory, privacy, security, etc issues associated with using the internet to provide the services that the author claimed are hampered by net neutrality, it is unfair for the internet community to be burdened by the overhead of traffic engineering so that the service providers can benefit from enabling these services. There is already infrastructures in place for most, if not all of these services that are not part of the internet. There are also other ways to enable these services while still observing net neutrality: i.e. adequate capacity. Traffic engineering is simply a compromise: to sacrifice some traffic in favor of another. It’s plain and simple.

    The whole thing comes down to money. The service providers in this country wants to make the minimal investment while maximize their profit. They are entitled to do this, but not at our expense.

  • bskorup

    I intentionally didn’t call these services Internet services because of the distinction you note. The FCC distinguishes “broadband Internet access service” (BIAS) from “managed services.” But, anyways, it’s a distinction without a difference. Many net neutrality proponents, of the few who know of the issue, regard the managed services exemption from the rules as a loophole and a sham.

    Are Netflix and YouTube part of BIAS if they have a private distribution networks that never touch the public backbone? If, say, TWC outsourced its VoIP management to Skype as an exclusive, would that violate NN? The FCC’s Open Internet Advisory Committee (before the rules were struck down) were considering questions like this. It’s essentially arguing about metaphysics whether something is BIAS or managed. It’s an interesting discussion but the FCC invented the distinction in the net neutrality proceedings and during the Comcast-NBCU merger. I didn’t want to explore it here because there’s little benefit.

    “The service providers in this country wants to make the minimal investment while maximize their profit. They are entitled to do this, but not at our expense.”

    Okay, but that tells us nothing about how costs should be apportioned. Netflix and Google want the same thing.

  • Luis Gutierrez

    The problem has never been to allow ISPs to discriminate between type of traffic, but within types of traffic.
    An internet where MSNBCMurdochCorp is allowed a faster lane than JoeBlogger is a bad outcome for democracy and equality.

  • fgoodwin

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