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Offline DaBees-Knees

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"Network neutrality" or "network neutering"?
« on: October 08, 2009, 01:03:44 pm »

A long, but interesting comment on the pressures on the internet that are taking place, mainly behind the scenes.

Win the words, win the war? That's the thinking of some network neutrality opponents, who are on a campaign to rebrand the concept as "net neutering."

The Wall Street Journal
The campaign gained traction at the Wall Street Journal last week, where an editorial page writer took a courageous stand against FCC Chairman Julius Genachowski's "net-neut initiative." The editorial, called "Neutering the 'Net," argues that the idea is "perhaps the most talked-about, least-seen bogeyman in the history of bogeymen" because the US has such a competitive marketplace for broadband that ISPs can't "run their systems on any basis other than trying to keep customers maximally happy." Net neutrality, therefore, could do nothing but stifle innovation.

This innovation argument might be easier to accept if the op-ed itself made more sense. But, channelling the spirit of one-time AT&T CEO Ed Whitacre (now running General Motors), the WSJ claims that net neutrality is all about "free riding." Google, Microsoft, Amazon, and others have a deep fear of "having to plumb their deep pockets and offer competing payments to broadband carriers to speed their bits to consumers. They much prefer spending their money to sprinkle server farms around the globe, assuring fast, reliable access for their customers in a way that no newcomer can easily replicate."

What server farms have to do with network neutrality is unclear, except that companies like Google and Microsoft should apparently be spending the cash allocated to data centers by paying ISPs "to speed their bits to consumers." Two fairly obvious problems present themselves here: 1) arguing that Comcast and AT&T should get the money allocated to new data centers and better Internet services sounds like an excellent plan to destroy the very innovation worried about here, and 2) Google, Microsoft, and everyone else already pay for bandwidth.

This latter point has to be made with such depressing frequency that one suspects those most opposed to network neutrality have little grasp of how networks actually operate. Google already pays terrific amounts of money for its Internet connectivity; this traffic is passed from network to network until it arrives at a user's computer and is usually paid for through private, free market mechanisms (peering and transit; read our primer). There's no "free riding" here.

Nor is there "free riding" at the customer's end. The idea that customers are forcing neutrality rules on ISPs and then crushing the poor companies with data is ludicrous; the big players are making massive amounts of cash, and offering Internet service is hugely profitable. The WSJ asserts that companies like Google have built "their business models… on a Web that makes their services appear 'free' to users," but this is ludicrous, as the profit reports show. Customers pay significant monthly fees for Internet access.

The level of confusion in the op-ed can be summed up by a single paragraph at the end. "What if some startup Google sought to achieve the same goal by outsourcing its data management to the telcos, say, by mounting servers in their premises to help deliver Web applications more quickly?" it asks. "This would be a win-win for both parties. Data that travels within a carrier's system is cheaper to deliver than data that must be handed off between two or more carriers. Would such an arrangement be a violation of net neutrality? Google would likely shriek so."

But this hypothetical situation, capped with Google's hypothetical response, simply shows the fact that the WSJ doesn't know what's actually happening. In fact, the Journal itself broke the story late in 2008 about how Google was seeking colocation of its servers within an ISP's network; in other words, Google was getting into the edge-caching business. In describing what it was up to, Google publicly stated that it didn't believe such proposals violated network neutrality so long as the traffic discrimination based on the source of the packets was used in ISP routing gear. It also said that its arrangements with ISPs were non-exclusive, and that other companies were free to do the same thing. So much for likely shrieking.

The Free State Foundation
But the "network neutering" term wasn't coined at the Journal. It appears to come from a think tank called the Free State Foundation, where president Randolph May takes full credit. He's been pushing the term for years, in fact.

"Indeed, I had started to use the term 'net neutering' in the 2004-2005 time frame in opposition to the net neutrality forces," he wrote recently. "At the time, I believe it was the earliest use of the term. In 2005, I published a paper titled, 'Net Neutrality and Net Neutering in a Post-Brand X World: Self Regulation, Policy, Principles and Legal Mandates in the Broadband Marketplace.' And, when I edited a book with my then-colleague Tom Lenard that was published in 2006, I titled it: 'Net Neutrality or Net Neutering: Should Broadband Internet Services Be Regulated?' In 2007, I published a law review titled, 'Net Neutrality Mandates: Neutering the First Amendment in the Digital Age.'"

Paging Dr. Freud! The emasculation talk here is pretty hot and heavy, but at least May knows whereof he speaks. He has written widely on communications policy and was previously an FCC Associate General Counsel. He also recognizes the shaping power of words; when opponents of network neutrality have to argue against "network neutrality," they sound like non-neutral belligerents. But when they argue against "net neutering," they sound like the Internet's saviors.

"It has always seemed to me that we needed to come up with an equally appealing moniker to capture the reality behind the proposed net regulation," May wrote. "For many years, I've thought 'net neutering' was a good such banner."

This is about as likely as the Free Software Foundation winning its battle to relabel DRM as "Digital Restrictions Management." Genachowski and the Obama administration have the bully pulpit on the issue, and network neutrality legislation has been introduced (again) in Congress.

Like the WSJ, May worries about the damage to "innovation" that might result from neutrality mandates. "Such Internet regulation would slow down innovation and investment by removing incentives for Internet service providers to differentiate themselves lest they violate nondiscrimination (neutrality) mandates," he writes—but it's hard to see the truth in this. Verizon, for instance, publicly touts the openness of its FiOS network every chance it can get—the fiber optic connections have so much bandwidth that the company claims to have no problems meeting user demand; as a result, FiOS is hugely popular (where it's available, at least).

Net neutrality won't force ISPs to avoid "differentiating" themselves, it will only put certain ways of doing that out-of-bounds. Price, uptime, advertised topline speeds, actual average speeds, bundled services like wireless, free WiFi hotspot access, the length of contract, the price of hardware—these are all ways to differentiate service.

And the innovation story is complicated. What May cares about is network innovation, but shifting that much cash from Web companies to ISPs can't be great for innovations at the edges of the network.

The Washington Post
Finally, those who argue against "net neutering" appear to believe that there's no danger in not acting, since worries about discrimination are mere fantasies and bogeymen. Again, two points need to be made here: 1) this isn't true, even in the US, and 2) Canada.

The Comcast P2P blocking case in 2008 was the notable US example. In explaining this away, a new Washington Post op-ed describes "one example alluded to by the chairman: Comcast's blocking an application by BitTorrent that would allow peer-to-peer video sharing. Yet that conflict was ultimately resolved by the two companies—without FCC intervention—after Comcast's alleged bad behavior was exposed by a blogger."

Where does one begin here? Comcast was blocking certain BitTorrent connections, but BitTorrent is a protocol as well as a company. Most usage, in fact, has nothing to do with the company. If Comcast chose to block a key protocol used in open source projects and no company could step up to deal with the matter, tough luck! And the idea that companies should be able to do whatever they want until unmasked by a blogger stacks the deck against the public, which faces a classic information asymmetry problem.

But the obvious problem with the entire argument is that it was the FCC's threat of action that clearly prompted Comcast to act and do the BitTorrent deal as a way of avoiding sanction. With no threat of such action, and with limited competition, what you have is… Canada, where most major cable and telco ISPs all admit to throttling particular protocols for half the day. They've disclosed it (which is all that WaPo says should be required), but that hasn't changed any behavior.

Net neutrality actually encourages the sort of innovation that we want in our networks—higher speeds, open access to innovative new applications and uses—the FiOS model. And everyone can profit from it, including the ISPs. Removing even the threat of such action encourages not innovation but modest speeds, high prices, and discriminatory throttling of user connections.

Yet another attempt by big business to screw users in the name of innovation?  8)

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