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Nuts & Bolts: A User’s Guide to ISP Network Management

by on February 24, 2009 · 16 comments

This is the third in a series of articles about Internet technologies. The first article was about web cookies. The second article explained the network neutrality debate. This article explains network management systems. The goal of this series is to provide a solid technical foundation for the policy debates that new technologies often trigger. No prior knowledge of the technologies involved is assumed.

There has been lots of talk on blogs recently about Cox Communications’ network management trial. Some see this as another nail in Network Neutrality’s coffin, while many users are just hoping for anything that will make their network connection faster.

As I explained previously, the Network Neutrality debate is best understood as a debate about how to best manage traffic on the Internet.

Those who advocate for network neutrality are actually advocating for legislation that would set strict rules for how ISPs manage traffic. They essentially want to re-classify ISPs as common carriers. Those on the other side of the debate believe that the government is unable to set rules for something that changes as rapidly as the Internet. They want ISPs to have complete freedom to experiment with different business models and believe that anything that approaches real discrimination will be swiftly dealt with by market forces. But what both sides seem to ignore is that traffic must be managed. Even if every connection and router on the Internet is built to carry ten times the expected capacity, there will be occasional outages. It is foolish to believe that routers will never become overburdened–they already do. Current routers already have a system for prioritizing packets when they get overburdened; they just drop all packets received after their buffers are full. This system is fair, but it’s not optimized. The network neutrality debate needs to shift to a debate on what should be prioritized and how. One way packets can be prioritized is by the type of data they’re carrying. Applications that require low latency would be prioritized and those that don’t require low latency would not be prioritized.

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Don’t Worry about the Fairness Doctrine. No, Wait, Strike That.

by on February 18, 2009 · 9 comments

Matt Lasar of Ars tells us not to worry about the Fairness Doctrine being revived, only to go on and cite several lawmakers who have said they’d like to revive it. Meanwhile, over at the American Spectator, somebody called “The Prowler” seems to have all sorts of unnamed sources on the Hill telling him the Fairness Doctrine will be revived any day now.

Who knows what to believe. But let’s keep our eye on the real issue here. The danger is not that the Fairness Doctrine gets back on the books in the same form; it’s that versions of it sneak in through the back door via other regulatory initiatives. As Cord Blomquist pointed out here last April, “localism is the new Fairness Doctrine.”  There are a lot of people are running around Washington today insisting that government must intervene in the marketplace to “save media localism” and “strengthen the public interest obligations” of local TV and radio broadcasters.  There’s been an FCC proceeding open on this issue for some time, and everything about it reeks of the Fairness Doctrine in drag.

This effort is being spearheaded by the media reformistas whose short-term goal is to reinvigorate the amorphous “public interest standard” such that the FCC has open-ended powers to regulate everything under the sun going forward. That’s why a key part of the “localism” battle is their effort to breathe new life into “ascertainment rules,” which used to be more formal and required broadcasters to strictly report everything they aired and did in their communities. There’s lots of talk of ensuring more “accountability” from broadcasters regarding how they serve their local communities, and there’s even rumblings of “local community boards” who will sit as mini-free speech Star Chambers and pass judgment on whether local media outlets are doing their job.  Again, it’s all just the Fairness Doctrine by another name. Continue reading →

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Targeted Online Advertising: What’s the Harm & Where Are We Heading?

by on February 13, 2009 · 25 comments

Statue at FTC Headquarters: “Man Controlling Trade” (We’re rooting for the horse!)

Adam Thierer and I have just released a new PFF paper entitled “Targeted Online Advertising: What’s the Harm & Where Are We Heading?” (PDF) about the FTC’s new “Self-Regulatory Principles for Online Behavioral Advertising.”  Adam lampooned some of the attitudes at play in this debate in a great rant yesterday.

But we give the FTC credit for resisting calls to abandon self-regulation, and for its thoughtful consideration of the danger in stifling advertising-the economic engine that has supported a flowering of creative expression and innovation online content and services.  That said, we continue to have our doubts about the FTC’s approach, however-well intentioned:

  1. Where is this approach heading?  Will a good faith effort to suggest best practices eventually morph into outright government regulation of the online advertising marketplace?
  2. What, concretely, is the harm we’re trying to address?  We have asked this question several times before and have yet to see a compelling answer.
  3. What will creeping “co-regulation” mean for the future of “free” Internet services?  Is the mother’s milk of the Internet-advertising-about to be choked off by onerous privacy mandates?

We stand at an important crossroads in the debate over the online marketplace and the future of a “free and open” Internet. Many of those who celebrate that goal focus on concepts like “net neutrality” at the distribution layer, but what really keeps the Internet so “free and open” is the economic engine of online advertising at the applications and content layers. If misguided government regulation chokes off the Internet’s growth or evolution, we would be killing the goose that laid the golden eggs.

The dangers of regulation to the health of the Internet are real, but the ease with which government could disrupt the economic motor of the Internet (advertising) is not widely understood-and therein lies the true danger in this debate.  The advocates of regulation pay lip service to the importance of advertising in funding online content and services but don’t seem to understand that this quid pro quo is a fragile one: Tipping the balance, even slightly, could have major consequences for continued online creativity and innovation.

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Are Gamers Served by More Government Regulation and Spending?

by on January 26, 2009 · 11 comments

The Entertainment Consumers Association (ECA) is a group that does some good things to mobilize gamers to fight misguided regulation of video games. I greatly appreciate their tireless efforts to fight stereotypes and myths about games and gamers, and to specifically counter the hysteria about video games that we sometimes see in the press, and definitely see in political circles on a regular basis.  They’re a great ally in the fight for freedom of speech and artistic expression in this field.

That’s why I was so sorry to see the ECA launch a new campaign that encourages gamers to petition their congressional leaders and encourage them to regulate the high-tech economy more and waste more taxpayer dollars on inefficient universal service programs and subsidies:

Net Neutrality and Universal Broadband are not only great for America; they allow us to play the games we want at high speeds! … ECA believes that Universal Broadband and Net Neutrality are vital for the development of the national infrastructure, and believes that this bill is an important opportunity to let Congress know that you agree.

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The Most Important Number for Technology Policy in 2009

by on January 8, 2009 · 19 comments

Is $1,200,000,000,000.00.  That’s the expected 2009 Federal budget deficit.  Since the current Federal debt is estimated at a “mere” $10.6 trillion, this means that we’re expected to add nearly 9% in a single year to a debt accumulated over 233 years (since 1774).  This number also amounts to more than 8% of the U.S. economy. 

So what does this have to do with technology policy?  To start with, this figure comes from Congressional Budget Office estimates, which “don’t account for the huge economic stimulus bill Obama is expected to propose soon to try to jolt the economy.”  So, while the Obama team has talked about big “public works” and “infrastructure” spending (which used to be called, variously, “make-work,” “pork barrel” and “corporate welfare”), there’s sure to be huge pressure not to waste more taxpayer money on top of this staggering figure.  Whatever blame Bush deserves, Obama probably doesn’t want to go down in history as the man who finally caused the U.S. government to default on its unmanageable debt burden.

One certainly could make an argument that the kind of technology-related “infrastructure” stimulus Obama has talked about (e.g., broadband subsidies) would be less of a waste of money than, say, simply building more bridges (as Japan did in the 1990s, its “lost decade”) or other reflexively Keynesian responses.  But even so, I suspect that the total amount of funding made available for such projects won’t be anywhere near enough to satisfy the technology policy Left.  

This could result in increased pressure on the Administration to increase regulation of the technology sector in order to implement tech-leftist ideas about “protecting” users’ privacy, promoting media diversity or “fairness”, mandating net “neutrality,” “opening up” spectrum, etc.  Such  proposals might seem attractive precisely because they generally wouldn’t require increased Federal expenditures other than the cost of hiring more bureaucrats (which means more government employee union jobs anyway—hardly a bad thing for Democrats)—while the economic consequences of such proposals for companies and consumers will probably surely be trivialized.  For example, if the advocates of government control at the so-called “Free Press” can’t get universal broadband, they’ll probably press that much harder to cripple online advertising and traffic management by ISPs, just to name two popular bogeymen.obamas-new-new-deal

One might think that a sharp economic decline would cause policy-makers to think twice before undermining the business models that have supported IT innovation and real infrastructure investment.  But one has only to look at the policies of FDR’s first two terms to see how even an amiable, soft-spoken president elected on a mantra of change and “uniting” the nation in a time of crisis could consistently choose to place “Reform” (i.e., increased regulation) over “Recovery” (i.e., the health of the economy)—with devastating economic consequences.

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IE’s Browser Market Share Down by 8-10% in 2008

by on January 5, 2009 · 9 comments

Microsoft’s share of the browser market across all versions of Internet Explorer has dropped, by one estimate, dropped from 78.58%  in December 2007 to 68.15% in December 2008 (or by just under 8% in another estimate).

[IE’s] share dropped from 69.77% in November to 68.15% in December. [During the same period,] Firefox gained more than half a point and ended up at 21.34%, Safari approaches the [10%] hurdle with 7.93% and Chrome came in at 1.04%, the first time Google was able to cross the 1% mark.

This is particularly interesting: 

Since IE6 is used primarily within corporations, its market share is much higher during the week than it is on weekends. As a result, all other browsers gain on weekends and especially during a holiday. Because of that circumstance, Net Applications noted that the December numbers should be taken with a grain of salt. However, it is worth the note that IE6 achieved … market share numbers of about 28% during the week and about 21% on weekends in early 2008. In December, these numbers were down to about 20% during the week and 15% on weekends.    

So, Microsoft still has an established base among corporate users, where IT administrators  generally prevent employees from installing new applications (including browsers) and the sysadmins often don’t roll out alternative browsers across a corporate network for any one of several possible reasons, including:

  • They just don’t want to bother having to install, regularly upgrade and support another piece of software;
  • They may overestimate the security vulnerability of such alternative browsers compared to Internet Explorer;
  • The crustier sysadmins may not realize that today’s browsers are not only free for individual users, but also for corporate users–unlike the old Netscape Navigator; and
  • Corporate intranets may be designed for IE, in which case rolling out an alternative browser might cause confusion among less tech-savvy employees.

Microsoft may still have an advantage that could be considered “unfair,” but so what?   Continue reading →

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Lessig on Building a Better Bureaucrat

by on December 24, 2008 · 24 comments

Before commenting on Lawrence Lessig’s latest call to abolish the Federal Communications Commission (he issued a similar call for the FCC’s abolition earlier this year, which I commented on here), let’s recall what Tim Lee posted yesterday about “Real Regulators“:

Too many advocates of regulation seem to have never considered the possibility that the FCC bureaucrats in charge of making these decisions at any point in time might be lazy, incompetent, technically confused, or biased in favor of industry incumbents. That’s often what “real regulators” are like, and it’s important that when policy makers are crafting regulatory scheme, they assume that some of the people administering the law will have these kinds of flaws, rather than imagining that the rules they write will be applied by infallible philosopher-kings.

Ironically, Prof. Lessig — who typically defends many forms of high-tech regulation like Net neutrality and online content labeling — is essentially agreeing with Tim’s critique of bureaucracy. But Lessig seems to ignore the underlying logic of Tim’s critique and instead imagines that we need only reinvent bureaucracy in order to save it. But I’m getting ahead of myself. First, let’s hear what Lessig proposes.

In a Newsweek column this week entitled “Reboot the FCC,” Lessig argues that the FCC is beyond saving because, instead of protecting innovation, the agency has succumb to an “almost irresistible urge to protect the most powerful instead.” Consequently, he continues:

The solution here is not tinkering. You can’t fix DNA. You have to bury it. President Obama should get Congress to shut down the FCC and similar vestigial regulators, which put stability and special interests above the public good. In their place, Congress should create something we could call the Innovation Environment Protection Agency (iEPA), charged with a simple founding mission: “minimal intervention to maximize innovation.” The iEPA’s core purpose would be to protect innovation from its two historical enemies–excessive government favors, and excessive private monopoly power.

As was the case with his earlier call to “blow up the FCC,” I am tickled to hear Lessig call for shutting down an agency that many of us have been fighting against for the last few decades. (Here’s a 1995 blueprint for abolishing the FCC that I contributed to, and here’s PFF’s recent “DACA” project to comprehensively reform and downsize the agency.)

But is Lessig really calling for the same sort of sweeping regulatory reform and downsizing that others have been calling for? And has he identified the real source of the problem that he hopes to correct?  I don’t think so. There are 3 basic problems with the argument Lessig is putting forward in his essay. I will address each in turn.

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Martin Abandons Unconstitutional Filitering Proposal; What About Obama’s Universal Broadband?

by on December 14, 2008 · 22 comments

censored-pornChairman Mao–er… Martin–has canceled (WSJ) the FCC’s December 18 meeting, when the Commission was set to vote on Martin’s proposal to rig an auction to give away a valuable piece of spectrum (“AWS-3”) to M2Z networks.  In exchange for a sweetheart deal on the spectrum, the company would have been required to use a quarter of it to provide a free (but very slow) wireless broadband service.  Martin had initially proposed to require that the service be made porn-free, but eventually suggested that users over 18 would be able to opt-out of network-level filtering.

Two weeks ago, when it became clear that Martin would attempt to ram this proposal through while he still could, I asked how the ascendant Left would respond:

Will the defenders of free expression triumph over those who see ensuring free broadband as a social justice issue?  Or will those on the Left who usually joining us in opposing censorship simply remain silent as the government extends the architecture of censoring the “public airways” onto the Net (where the underlying rationale of traditional broadcast regulation–that parents are powerless–does not apply)?

I’m glad to see that the deathblow to this unconstitutional proposal did indeed come from the political Left–specifically, from Sen. John Rockefeller, (D-W.Va.) and Rep. Henry Waxman, (D-Calif.), who will be responsible for overseeing the FCC in the new Congress.  (The Bush administration had already opposed the proposal, as with so many of Martin’s abuses, had failed to stop it.)

With President-elect Obama having declared that, “Here in the country that invented the Internet, every child should have the chance to get online,” it seems almost certain that the Administration will press ahead with some kind of universal broadband proposal of its own.  But what would such a proposal look like?  If it’s another public broadband utility, would it include network-level filtration like Martin’s proposal?  If so, will the Democratic opponents of government censorship stick by their principles and fight that, too?

I suspect we may find that what’s constitutional is politically impossible (unfiltered free Internet) and what’s politically possible (filtered free Internet) is unconstitutional. Continue reading →

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Media Deconsolidation (Part 24): I Read the News Today, Oh Boy

by on December 11, 2008 · 20 comments

It almost seems pointless for me to continue my ongoing media DE-consolidation series, which has been an ongoing effort to debunk myths about the media marketplace (specifically, the notion that rampant consolidation is taking place and that operators are only growing larger and devouring more and more companies.) After all, even the kookiest of the media reformistas can’t deny the truth anymore: Traditional media operators are struggling to keep their heads above water, and markets are growing more atomistic by the day, not more concentrated.

The New York Times website seems to run a story per day about traditional media giants falling apart as consumers and advertisers disappear. For those of you with short attention spans, you can even follow the death of old media on Twitter now via “The Media is Dying.” If 140 characters per entry is still too much for you to read, here’s the cribbed version: Lots of downsizing, bankruptcies, and closing of doors. The Tribune’s bankruptcy has been the biggest news this week, but few noticed the amazing statement by CBS Corp. Chief Executive Les Moonves that within 10 years he thinks CBS may dump all its affiliated TV stations and just sell programming direct to cable and satellite operators (and the Net, too). Once other networks take that path, that’s pretty much the end of traditional broadcast local affiliates. (I wonder who the FCC will impose those “localism” regulations on then!)

For those working in the business, the news couldn’t be any worse. As Ad Week reported a few days ago:

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Just How Inefficient is Communications Regulation? The USF Case Study

by on December 4, 2008 · 10 comments

One of the reasons that so many of us here take issue with proposals to expand regulation of communications, broadband, and media markets is because we have studied the horrendous inefficiencies of economic regulation in practice. We oppose regulatory proposals not because of a “blind faith” in free markets, but because we understand that even when markets stumble they correct themselves quicker and more efficiently than regulatory systems do. One can profess the supposed theoretical benefits of enlightened “public interest” regulation all they want, but the facts are the facts. And the facts do not support the proposition that government regulation generally enhances consumer welfare.

In that regard, Tim Lee’s new Net neutrality report for Cato does a nice job of surveying some of the past unintended consequences of regulation. Also, even though it is now 10 years old, I highly recommend “Economic Deregulation and Customer Choice” by Jerry Ellig and Robert Crandall. It’s an outstanding overview of why economic regulation of various industries failed consumers so miserably in the past.

But if you want even more shocking proof of how horrendously inefficient communications regulation can be in practice, then you must read my PFF colleague Barbara Esbin’s two essays this week on the Universal Service Fund (USF): “The High Cost of USF Support,” and “More FCC Support Fund Follies.” In these two essays, Esbin walks the reader through various grim reports and statistics that have been released recently documenting the failures of the USF.

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