Broadband & Neutrality Regulation

Is Comcast a monopolist? You’d think so, given the tone of much of the coverage of the firm’s BitTorrent affair. And supporters of neutrality regulation often scoff at the idea that competition, not regulation, is the best way to prevent market abuses. But competition may be livelier than most people assume. This was evidenced by the “other” Comcast story in the news today — the release of its third quarter financials. The results, which were — according to most reports — disappointing. Of particular note was the drop in new subscribers for high-speed Internet access, coming in at 450,000, down from 538,000 a year ago.

The reason: competition.

“So what’s going on here?” ZDNet asks, and then answers: “Two words, Verizon and AT&T.” In an article posted today, ” ZDNet’s Larry Dignon indicates that Comcast has been losing ground as its rivals have been gaining subscribers.

Yes, as argued by the Washington Post’s Rob Pegoraro, more competition is always needed. But the competition that exists now is more than a kerfluffle.

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The WP’s Rob Pegoraro has a pretty good take on the Comcast-BitTorrent situation in an online article posted today. Comcast, he says, “would like to be seen as a crossing guard who sometimes must step into a busy intersection to keep pedestrians (customers who just want to get their e-mail) from being mowed down by jerks in speeding SUVs (a few intensive peer-to-peer users).” And that shouldn’t necessarily bother anyone, except that the firm should have been upfront about what it was doing.

The bottom line, according the Pegoraro: “Customers ought to have a simple remedy in these cases. When a telecom company has a problem communicating with them, they should take their business elsewhere,” adding a caveat that there should be a lot more competition.

All in all, a fairly reasonable — and clearly-written — explanation of the whole kerfuffle.

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More good stuff from Ed Felten on the Comcast dispute:

Pretend that you’re the net neutrality czar, with authority to punish ISPs for harmful interference with neutrality, and you have to decide whether to punish Comcast. You’re suspicious of Comcast, because you can see their incentive to bolster their cable-TV monopoly power, and because their actions don’t look like a good match for the legitimate network management goals that they claim motivate their behavior. But networks are complicated, and there are many things you don’t know about what’s happening inside Comcast’s network, so you can’t be sure they’re just trying to undermine BitTorrent. And of course it’s possible that they have mixed motives, needing to manage their network but choosing a method that had the extra bonus feature of hurting BitTorrent. You can ask them to justify their actions, but you can expect to get a lawyerly, self-serving answer, and to expend great effort separating truth from spin in that answer. Are you confident that you, as net neutrality czar, would make the right decision? Are you confident that your successor as net neutrality czar, who would be chosen by the usual political process, would also make the right decision? Even without a regulatory czar, wheels are turning to punish Comcast for what they’ve done. Customers are unhappy and are putting pressure on Comcast. If they deceived their customers, they’ll face lawsuits. We don’t know yet how things will come out, but it seems likely Comcast will regret their actions, and especially their lack of transparency.

That final point is important. The alternative we face is not regulation or letting companies do whatever they want. The alternative is regulation vs. a variety of other mechanisms—bad PR, lawsuits, customer defections—that can punish Comcast for bad behavior.

But the market process, like the regulatory process, is a process, and processes take time. In an otherwise excellent piece on Comcast’s dubious explanations for its routing policies, my Ars colleague Eric Bangeman included the a sub-heading “when the market can’t sort things out.” It’s seems to be true that the market hasn’t set things straight yet. But that shouldn’t surprise us. It’s been barely a week since the story broke in the mainstream media.

After all, imagine if the shoe were on the other foot: supposed we had passed Snowe-Dorgan last year and network neutrality were the law of the land. How would the FCC have reacted? Well, Snowe-Dorgan envisions a complaint process with a 90-day response period. So somebody would have had to have filed a complaint (it’s possible this could have been done in late August when the story first hit the tech press), and then the FCC would have needed to investigate and hand down a ruling. That ruling may or may not have gone against Comcast, and if it did go against Comcast it likely would have been challenged in court, delaying compliance by months if not years. So it’s hardly an indictment of the market process that it hasn’t magically made Comcast behave itself after barely a week of negative publicity. If Comcast emerges unscathed in a few months (i.e. few customer defections, no successful lawsuits, and no significant changes in policy) then the “market failure” narrative will be a lot more compelling.

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Ed Felten isn’t impressed with Comcast’s traffic shaping techniques:

Comcast is using an unusual and nonstandard form of blocking. There are well-established mechanisms for dealing with traffic congestion on the Internet. Networks are supposed to respond to congestion by dropping packets; endpoint computers notice that their packets are being dropped and respond by slowing their transmissions, thus relieving the congestion. The idea sounds simple, but getting the details right, so that the endpoints slow down just enough but not too much, and the network responds quickly to changes in traffic level but doesn’t overreact, required some very clever, subtle engineering. What Comcast is doing instead is to cut off connections by sending forged TCP Reset packets to the endpoints. Reset packets are supposed to be used by one endpoint to tell the other endpoint that an unexplained, unrecoverable error has occurred and therefore communication cannot continue. Comcast’s equipment (apparently made by a company called Sandvine) seems to send both endpoints a Reset packet, purporting to come from the other endpoint, which causes both endpoints to break the connection. Doing this is a violation of the TCP protocol, which has at least two ill effects: it bypasses TCP’s well-engineered mechanisms for handling congestion, and it erodes the usefulness of Reset packets as true indicators of error.

This brings to mind a question: as I understand it, TCP relies to some extent on clients being well-behaved and voluntarily backing off when faced with congestion problems. Is it possible that part of the reason that Comcast chose to target P2P applications specifically is that these aren’t “well-behaved” applications in this sense? Richard seems to be implying that this is the case. Is he right?

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While Comcast scrambles to explain itself, and those better versed in the technical issues debate the merits (see the comments) of what they surmise Comcast to be doing, I think it’s important to focus on another angle.

Look at the press and consumer reaction to the allegation that Comcast defied the public’s expectations. For example, Rob Pegoraro of the Washington Post has announced that he is investigating the issue for his column on Thursday, and has asked the public to help inform his thinking.

A mass of Comcast customers are weighing in, fairly or unfairly heaping a wide array of Internet woes on this ISP. And here’s a key quote from one commenter: “I got rid of comcast the second that Verizon FIOS was available in my neighborhood . . . .”

Are consumers helpless against the predation, real or imagined, of this ISP? No they are not. The market forces playing out before us right now are bringing Comcast sharply to heel – and other ISPs too: they are watching with keen interest – nevermind whether Comcast has done anything wrong from a technical or “neutrality” standpoint.

The challenge again is for proponents of broadband regulation to show how law, regulation, and a regulatory agency could do a better job than the collective brainpower and energy of the Internet community.

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Brad Stone of the New York Times has a good post on the Bits Blog regarding the Comcast kerfuffle (Jim, Why are we calling it that, again?). The gist:

It seems unlikely that Comcast has a secret agenda to shut down file-sharing applications and combat piracy on its network. But the company is clearly trying to have it both ways. It claims it is a neutral Internet service provider that treats all packets equally, not blocking or “shaping” its Internet traffic. Meanwhile it also positions itself as the champion of average Internet users whose speeds are being slowed by file-sharing. The problem Comcast may now be facing is that in the absence of a plain explanation about what the company does to disadvantage certain applications in the name of managing traffic on its network, anecdotal reports and conspiracy theories fill the vacuum.

I have no doubt that Comcast’s practices stem from trying to provide a good, quality service for the majority of their customers. The problem their actions pose for those of us who advocate against unnecessary regulation, however, is that they’re not being completely clear about what they’re doing (although they’re trying).

For example, if the problem is one percent of users who tend to be bandwidth hogs, why not address the users instead of a protocol? AOL dial-up and T-Mobile wireless are able to meter customer use above a certain allotment without any negative privacy implications. It seems like Comcast does in fact target bandwidth hogs, although it doesn’t publish what the limit is. These sort of unknowns stir up the conspiracy theories Stone mentions. That makes explaining to folks that there’s nothing nefarious here pretty tough.

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Comcast was kind enough to invite me to a conference call between one of their engineers and some think tank folks. They feel their policies have been mischaracterized in the press. While I found some of the information they shared helpful, I frankly don’t think they helped their case very much.

While he didn’t say so explicitly, the Comcast guy seemed to implicitly concede that the basic allegations are true. He emphasized that they were not blocking any traffic, but that in high-congestion situations they did “delay” peer-to-peer traffic to ease the load. Apparently the Lotus Notes thing was a bug that they’re working to fix. He refused to go into much detail about exactly how this “delay” was accomplished, but presumably if the AP’s story about TCP resets were inaccurate, he would have said so.

To be fair, most of the people on the call were lawyers or economists, not technologists, so it’s possible he just didn’t think anyone other than me would care about these details. Still, it seems like part of the the point of having an engineer on the call would be to answer engineering-type questions. He also made a couple of points that I found a little patronizing. For example, he emphasized that most users wouldn’t even be able to detect the traffic-shaping activities they use without special equipment and training. Which is true, I guess, but rather beside the point.

If you haven’t read it yet, I recommend the discussion in response to Jerry’s post. I don’t know enough about the internals of cable modem protocols to know for sure who’s right, but Tom seems to me to make a good point when he says that forging reset packets is a wasteful and disruptive way to accomplish traffic shaping. The TCP/IP protocol stack is layered for a reason, and I can’t see any reason for routers to be mucking around at the TCP layer, when throttling can perfectly well be accomplished in a protocol-neutral manner at the IP layer.

Someone asked why Comcast didn’t throttle on a user-by-user basis rather than a protocol-by-protocol basis, and he said they were concerned with the privacy implications of that approach. That doesn’t make a lot of sense to me. Very few users are going to consider the number of bits they’ve transferred in a given time period to be confidential information.

We also asked about why there wasn’t more transparency about what throttling methods were being used and against which protocols. Apparently, Comcast feels that disclosing those sorts of details will make it easier for users to circumvent their throttling efforts. That doesn’t strike me as terribly persuasive; customers are entitled to know what they’re getting for their money, and people are going to figure it out sooner or later anyway. All secrecy accomplishes is to make them look bad when someone discovers it and reports it to the press.

With all that said, I’m not sure I see an obvious policy response. It seems to me that regardless of what the law says, there’s always going to be a certain amount of cat-and-mouse between ISPs and the heaviest network users. As Don Marti has pointed out, workarounds are easy to find. Add in a healthy dose of negative publicity, and it seems to me that while Comcast’s behavior is far from laudable, it’s far from obvious it’s a serious enough problem to justify giving the FCC the opportunity to second-guess every ISP’s routing policies.

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As Jerry wrote up briefly over the weekend, Comcast is alleged to have been “shaping” traffic over its network. Proponents of broadband regulation have already gotten a bit conclusory, even triumphal, expecting that this makes the case for public utility regulation of broadband service.

But I expect that we’ll soon learn more about the situation, and the conclusions to be drawn from it will be less obvious. There might be legitimate security reasons for what Comcast has done. We’ll see. We should expect full disclosure from Comcast.

My take: If Comcast is “shaping” traffic inconsistent with their terms of service, for non-network-security reasons such as copyright protection or surreptitious usage control, they shouldn’t be doing that.

More important is the meta-point: Independent testers found what they believe to be an impropriety in Comcast’s provision of broadband. They called it out, and interested parties among advocacy organizations and the media swarmed all over it. Comcast has to answer the charge, whether meritorious or not.

These are market processes working their will, and the outcome will be reached in short order – whether Comcast backs away from an improper practice, whether we learn that Comcast was not acting badly, or whether Comcast amends its terms to reflect what it thinks serves customers best.

This doesn’t conclude the discussion of whether there should be regulation. It allows us to refine the discussion: The proponents of regulation should now be challenged to write the regulation that would suss out this kind of (still alleged) misbehavior, distinguish it from appropriate network management, and ban it – without wrapping provision of Internet service in red tape or creating regulatory capture that suppresses competition. Good luck with that!

Obviously, more to come.

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