Ars Technica reports on the release of a full suite of open source VOIP software. This has some interesting policy implications. So far, regulators have been focused on getting large, commercial VOIP providers like Vonage to comply with the various tax and regulatory requirements. But as free VOIP solutions become ever more available and accessible, there won’t be anybody to tax and regulate. If I set up VOIP server in my basement, something I can probably do for a few hundred dollars, do I have to register with the FCC and my state regulatory agency as a telecom company? Or am I only required to comply with regulatory requirement if I connect to the PSTN?
Ars has a pretty consistently anti-corporate editorial stance, and I think their conclusion on the implications for net neutrality regulations gets the situation rather backwards:
The unwavering avarice of big telecom has also become an impediment, with at least one major ISP publicly asserting that it will not allow competing VoIP services to operate over its lines. In response to the blatantly anti-competitive sentiment of such ISPs, House Energy and Commerce Committe Chairman Joe Barton has proposed a network neutrality law that will prevent monopolistic pressure from devesting VoIP innovation. VoIP technology is increasingly important in our highly connected world, and the availability of open source VoIP solutions will help popularize the technology in less developed countries where organizations can’t afford the proprietary alternatives.
What the existence of open-source VOIP software means is that it’s going to be increasingly difficult for the Baby Bells to control its use. If it were just Vonage, the Baby Bells would simply need to figure out how to detect and block traffic for that one application. But if there are thousands of geeks tinkering with an free VOIP networking stack, there will be a proliferation of new VOIP applications that circumvent the Bells’ restrictions in different ways. Rather than fighting an arms race with a handful of easy-to-identify software companies, they’ll be fighting it with hundreds of geeks scattered around the world. It’s a battle they’re certain to lose. And that makes network neutrality legislation less, not more, necessary.
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.
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The New Milenium Research Council today released a study on the benefits of broadband, which finds almost $1 trillion in benefits related to elderly and disabled Americans alone. Its a pretty good study, authored by Brooking’s Robert Litan. Overall, a good contribution to the debate, underscoring the importance of this technology. Of course, the number is just an estimate (as Litan himself says), since so many of the benefits of quick and easy Internet access just aren’t quantifiable. For instance, how do you value the innovations that haven’t yet been innovated? The analysis in the paper gives a pretty good sense of this unpredictablity. The report is worth reading and is sure to come up often in broadband policy debates.
Donna Wentworth links to a very long article about how telecom companies are going to destroy the open Internet we now enjoy and replace it with a proprietary network that only allows officially-approved traffic.
The theory is that the telcos want to be able to charge us premium prices for various telecom services like phone calls and video. But they can’t do that on the current Internet, where you get unlimited data access for a flat fee. So, the theory goes, the telcos would dearly like to replace the open, end-to-end Internet with a proprietary network that only allows approved content to be exchanged.
I think the author of the article is wrong. Indeed, with all due respect to the people pushing so-called “network neutrality” regulations (whose arguments I find persuasive on a lot of other issues), I think it’s rather silly. The Internet is a massive, chaotic, fiercely competitive ecosystem. No one carrier owns more than a tiny fraction of its capacity. No one company controls more than a tiny fraction of its content. In short, no one company is ever going to control the Internet.
But can’t telcos phase in restrictions piecemeal, gradually tightening users’s access to services that compete with their own until the open Internet is de facto transformed into a closed system?
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Ars Technica has a great article on the 15th anniversary of the World Wide Web:
In an article published to coincide with the Web’s 15th anniversary, James Boyle, law professor and co-founder of the Center for the Study of the Public Domain, points out that the web developed in a unique fashion, due to conditions unlikely to be repeated today. The idea of hypertext was not invented by Berners-Lee. Vannevar Bush proposed a hypertext-like linking system as early as 1945. A working model was built by the team led by Douglas Engelbart, the inventor of the mouse, in 1968. Computer activist Ted Nelson proposed a much more advanced form of the World Wide Web, called Xanadu, in his seminal work Computer Lib. Even Apple created a non-networked version of hypertext called Hypercard in 1987.
The main difference with Berners-Lee’s creation was that it was based on open standards, such as the TCP/IP networking protocol, and that anyone could create content for the World Wide Web with tools no more complex than a text editor. While most people remember the Web taking off with the initial release of a browser from the commercial company Netscape, the original WWW grew mainly out of academia, where source code was traded freely in the interest of promoting learning. The “View Source” feature, available in all browsers today, grew out of this environment.
What also isn’t commonly remembered today is that major commercial interests were trying their best to promote proprietary, closed-off online networks that the Web eventually replaced. Many of these networks ran on mainframes and had stiff hourly access charges, like CompuServe and GEnie. A graphical version, Prodigy, was run by IBM and Sears, and enjoyed some success with a flat-rate access model. The most popular service was America On-Line, which still exists today, albeit as a shadow of its former self. The days where television programs would advertise their “AOL keyword” are rapidly vanishing; today, almost everyone simply gives a URL instead. Ultimately, the larger range of sites provided by the World Wide Web won out over the more restricted and content-controlled private services.
Exactly right. As I’ve said before, I think that the current crop of proprietary music services (iTunes, Napster, Rhapsody, et al) will look as anachronistic in 15 years as Compuserve and Prodigy do today. Open standards produce vibrant technology ecosystems. Proprietary ones produce sterile, stagnant technology platforms. It’s only a matter of town before some music publisher figures out that releasing music in an open format would be a dramatic competitive advantage over the crippled versions being offered by Apple and company.
On the other hand, I think the article’s final paragraph misses the boat:
The open WWW itself is coming under increasing legal threats. The furor caused by phone companies over technology like Voice-over-IP has developed into proposed legal action, threatening the fundamental principle of Network Neutrality (the idea that the network does not care what bits you send over it) that caused the World Wide Web to surge in popularity in the first place. Will powerful corporate interests end up undoing every digital freedom that has been won? Or will the momentum of the WWW carry its open foundations into a new age?
Broadband ISPs aren’t likely to succeed in shutting down VoIP, as most do face at least one competitor, and it would be quite easy for VoIP software to evade attempts by ISPs to squash them. What
is a threat to the openness of the Internet is FCC regulation in the name of “net neutrality.” Putting the FCC in charge of telling ISPs how they may or may not run their networks is the first step toward politicizing network policies. Although initially the FCC might use that power to do some worthwhile things, in the long run, the FCC is likely to be captured by special interests and do things the Arsians wouldn’t like in the least.
[Cross-posted from the PFF blog]
As Ray noted in his essay last week on Clearwire and VoIP blocking, I have long argued that broadband service providers (BSPs) will eventually will end up price differentiating based on bandwidth usage, in part because of the futility of differentiating based on service bundling or technological applications / usage.
What I mean by this is that most attempts to discriminate against specific websites or applications are likely doomed to fail or end miserably for the carriers. First, with Net surfers getting more sophisticated with each passing day, it will be very difficult to block most activities without them finding ways around the restrictions. Second, attempting to discriminate against certain types of bits is complicated for the carriers and will likely require more effort than it’s worth. Third, even if carriers were able to discriminate against certain bits, if they went overboard it would spark an intense consumer backlash and a likely exodus to an alternative broadband provider. (And if a serious alternative backbone provider was not yet available in that region, excessive blocking / meddling by the incumbent BSP would likely serve as the best incentive for new entrants to enter the market and offer a less-restricted surfing experience.)
But critics claim that I’m full of it and some of them pointed to last week’s front-page story in the
Wall Street Journal as evidence. In their article, “Phone, Cable Firms Rein in Consumers’ Internet Use,” reporters Peter Grant and Jesse Drucker claim that, “Several large telephone and cable companies are starting to make it harder for consumers to use the Internet for phone calls or swapping video files.” The story goes on to note that some BSPs “have begun to closely monitor the uses of their network with an eye toward controlling activity by users who are swapping movies, TV programs, pornography and other video files. Operators say file sharing is growing so quickly, it threatens to sharply slow down other uses.”
What are we to make of this? Are BSPs hell-bent on controlling our web-surfing experiences and even resorting to “discrimination” against certain types of uses or activities? Should that be illegal? Are there other ways of handling this problem?
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So by now all of you have heard that Google’s imperial ambitions will potentially include a telecom / broadband infrastructure component as well. At least for the luckily residents of San Francisco, CA, that is. Google announced this week that it would be entering the competition to create a wi-fi network to provide San Fran consumers with high-speed Internet connections. (Om Malik of Business 2.0 suggests that Google’s ambitions are indeed quite grand and might include a full-blown national broadband network).
Will it work? I don’t know, but any time a company with an $86 billion market cap says it’s going to throw a big wad of their cash at something, you should take it seriously. But what is Google doing playing the infrastructure provider game? Certainly this is outside their “core competency” and does not seem to fit nicely within their overall gameplan of becoming the world’s most well-diversified e-commerce giant. If you look at the world through the prism of the “layers model,” it’s easy to imagine Google as a player in every layer EXCEPT for the physical infrastructure layer. Playing ball in that layer is quite a different game than what Google has thus far developed an expertise in.
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[cross-posted from the PFF Blog]
The House of Representatives’ Energy & Commerce Committee released draft legislation yesterday aimed a cleaning up the nation’s telecom and cable laws. A revision of the Telecom Act of 1996 has been in the works for some time and is very much needed, so most parties welcomed this news.
Here at PFF, of course, we’ve been working hard with a group of respected academics and experts to provide a new framework for communications policy reform. That project is called “DACA,” which stands for Digital Age Communications Act.
One thing we largely left out of DACA effort was any in-depth discussion of video regulation. That is, the extensive “public interest” regulatory regime that currently covers the broadcast sector and to some extent cable and satellite services. There were several reasons we left it out of the DACA project; most importantly, we simply felt that most of these rules could easily be sunset in light of growing competition in the multi-channel video marketplace and the media universe more broadly. Under our DACA framework, any “market power” problems that might develop in the future video / media marketplace would be handled with simple competition policy principles borrowed from antitrust law.
So Much for “Hands Off the Net”
Unfortunately, after looking through the House Commerce Cmmt. draft legislation last night, I realize that not everyone shares our opinion about the growing media market competition alleviating the need for extensive “public interest” regulation of the video marketplace. Specifically, Sec. 304 of the bill (which begins on pg. 41 of the discussion draft) is entitled “Application of Video Regulations to Broadband Service Providers.” Section A which immediately follows is appropriately labeled “Comparable Requirements and Obligations,” and then goes on to not how “each of the following provisions of the 1934 [Communications] Act, and the regulations under each such provision, that apply to a cable operator shall apply to a broadband service provider under this title in accordance with regulations prescribed by the Commission…”
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[cross-posted from the PFF Blog]
Well it seems that the eBay acquisition of Skype is the hot high-tech issue du jour on the PFF blog, so let me add just a few thoughts to what Kyle and Ray have already said. Specifically, I want to pick up right where Ray left off when he ended his essay wondering what ramifications this alliance might have for the debate over ‘net neutrality’ regulation.
But first, let me just say that I can immediately think of a few ways that this deal will benefit consumers. In fact, as an avid eBay-er who has moved his last 4 cars on the site, I can give you a perfect real-world application. When I am selling or looking to buy a car on eBay, I often trade quick e-mails with others to get or send info about the vehicle. But I sometimes think it would be a heck of lot easier to just pick up the phone and call the person to get the job done. Few people, however, want to put their cell or home phone on the site. But what if eBay offered a secure way for buyers and sellers to make auction-specific phone calls? Now that would be very, very cool. With Skype, eBay can now make that happen. For example, I’m about to sell a BMW that I bought on eBay four years ago. As part of that auction, I would love to be able to provide an VoIP phone number just for this specific auction that bidders could use to contact me for more detailed information about the vehicle. That way, when I get a call on that Skype phone number, I know it’s about the specific car I have for sale, not anything else. And when that auction ends, that specific phone number could disappear or perhaps I would use it for a future auction.
Anyway, that’s just one potentially interesting way that eBay might be able to use Skype to augment its already wonderful auction services. I’m sure they will find many other innovative ways to use the service.
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Last week the California Public Utilities Commission supported a statement of policy in favor of “standalone DSL.” Standalone, or “naked” DSL is when DSL service is provided without local phone service. The PUC said it voted to support a policy of “consumer choice.” But when the a la carte preferences of regulators and some consumers conflict with the bundled prerogatives of technology providers and other consumers, which policy should win out?
Policymakers should resist the urge of forcing communication providers to unbundle their products. And while the California PUC’s policy statement has only the force of persuasion, not law, the premise underlying the statement is still wrong. Bundling is clearly a good thing for the vast majority of consumers. It’s not gouging. It’s not unreasonable tying. Instead, it’s just another example of the way that communication products will be packaged in a world where telephone networks compete against cable and wireless networks.
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The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.