What Is Net Neutrality? Who Wants It?Wednesday, September 30, 2009
Julius Genachowski, the new FCC Chairman, gave a speech at the Brookings Institute last week in which he outlined actions he believes are needed to preserve the “Free and Open Internet.” “The Internet is an extraordinary platform for innovation, job creation, investment, and opportunity. It has unleashed the potential of entrepreneurs and enabled the launch and growth of small businesses across America,” stated Genachowski. “It is vital that we safeguard the free and open Internet.”
He went on to say that the FCC needs to begin the process of codifying the Commission’s four Open Internet Principles, along with two additional principles, through a Notice of Proposed Rulemaking (NPRM) at the October meeting. The Open Internet Principles adopted in 2005 are:
- Consumers are entitled to access the lawful Internet content of their choice
- Consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement
- Consumers are entitled to connect their choice of legal devices that do not harm the network
- Consumers are entitled to competition among network providers, application and service providers, and content providers
These four principles were not adopted as rules, but as guidelines for the future, and when Cingular and AT&T merged, the wireline portion of the company was required to stipulate that it would adhere to all four of these principles.
- This principle is one of non-discrimination, stating that broadband providers cannot discriminate against particular Internet content or applications
- This is a transparency principle, stating that providers of broadband Internet access must be transparent about their network management practices
Okay, now we know six principles Genachowski wants to incorporate into rules. He also stated that the rules should be the same no matter how the Internet is accessed:
“Even though each form of Internet access has unique technical characteristics, they all are different roads to the same place. It is essential that the Internet itself remain open, however users reach it. The principles I’ve been speaking about apply to the Internet however accessed, and I will ask my fellow Commissioners to join me in confirming this.”
“Of course, how the principles apply may differ depending on the access platform or technology. The rulemaking process will enable the Commission to analyze fully the implications of the principles for mobile network architectures and practices — and how, as a practical matter, they can be fairly and appropriately implemented. As we tackle these complex questions involving different technologies used for Internet access, let me be clear that we will be focused on formulating policies that will maximize innovation and investment, consumer choice, and greater competition.”
It is clear from these statements that this includes wireless broadband and that in his mind both wired and wireless access must have the same safeguards. At one point, he mentioned that networks also need to be managed. He did not elaborate on that point, though in many articles I have read it appears other writers got more out of the comment than I did. The wireless community should be forewarned that as the FCC moves for one set of rules to be equally enforced, there will be a strong push from the Internet side. We need to make ourselves heard and make sure the FCC understands our needs.
Genachowski also mentioned that with the advent of broadband access there are fewer Internet access players than when there were dial-up access companies such as AOL, EarthLink, and many others. He may be correct that there aren’t as many choices as there were, but there are still plenty choices available, especially in urban environments, and more on the way. This gets back to the issue of how many providers can be sustained by a given area. If left alone, the market will determine the appropriate number of competitors. When the economics and technologies moved beyond dial-up, EarthLink, you might recall, tried broadband reselling, satellite access, DSL reselling, and Muni-Wi-Fi systems but could not make it on the thinner margins.
The Panel Discussion
Following Genachowski’s speech, a panel of experts responded and commented. The panel was moderated by Cecilia Kang of the Washington Post, and included a panelist from the Brookings Institute, the Free Press, Skype Technologies, and Verizon. The content was predictable. The President of Skype started out by saying there is only one Internet, and Ben Scott from the Free Press basically said that access to the Internet is an inalienable right, so the Internet side did not deviate from its usual comments and beliefs that wireless providers are ripping us all off and are stifling innovation by limiting the amount of bandwidth by setting monthly limits at various prices.
Verizon’s David Young asked the panel to define the problem they thought needed to be solved with new rules. That was an easy answer for Josh Silverman, CEO of Skype, because his services are not permitted on a number of wireless networks today. Verizon does allow Skype on its network and Silverman acknowledged that, but beyond that one point, there didn’t seem to be any answers to Young’s question.
Young maintained that innovation is alive and well in the United States and that Verizon and other operators have already opened up their networks and are actively working with the developer community to ensure that this activity continues. Silverman’s answer to that did give me pause—he stated that when we was looking for venture funding for Skype, the venture funds were all very concerned that he would need the concurrence of the wireless operators in order to make his business a success, and therefore it took him longer to raise his capital than it would have if the networks had no choice but to run his application. That is a valid point, to be sure, but I am not sure we need a complex set of rules that will apparently treat wired and wirelesses access the same.
The title of the Chairman’s speech, “The FREE and Open Internet,” was also problematical to me. I know he meant free access, but I’m sure some within the Internet community interpreted “free” differently. This misconception is driving a division between wired and wireless interests in the United States. Access to the Internet is NOT free in the wired world and NOT in the wireless world. We pay for DSL, cable, or fiber. We might use a wireless access point that is free of charge to us, but someone is paying for the backhaul and connection to the Internet. It is NOT free access.
And if you compare DSL, cable, and fiber access pricing with wireless broadband access pricing, you won’t find much of a difference, especially when you compare fixed to mobile access and consider the differences in the operators’ costs. You will find a difference in the amount of data allotted within a given period of time due to bandwidth constraints with wireless, but monthly pricing is similar.
One of the most compelling points made by David Young of Verizon was that if you are serving a population area over a wired network you know where people are. They do not move so you know where demand is highest and can plan for it. With a wireless network, you never know where a large group of people may materialize and all want access to the same services within the same cell site or cell sector. Yes, you can plan for stadiums, and perhaps even airports, but you cannot plan and design every cell site for an inrush of people, all of whom want to use their smartphones, notebooks, and netbooks to access the Internet.
This makes the case for being able to manage a network, but it is unclear whether the FCC understands that wireless networks need to be managed more effectively than wired networks. Or that capacity expansion for wireless networks is not about pulling more wire, cable, or fiber, it is about the amount of spectrum that is available and the time it takes to add cell sites where they are needed.
No one mentioned, or seemed to understand, that the wired Internet will have to be managed better in the future. The Chairman did say that bandwidth demand was doubling every two years (I think even faster), but I don’t see any of the wired infrastructure players rushing to build more back-end capacity. One might ask why they should. Since they have been relegated to being dumb pipes, they aren’t making money on the Internet except by hauling bits from one place to another. Where is their incentive to build more capacity? The Internet community, which seems to believe that wireless access should be just like wired access, open and free, needs to start thinking about what will happen as capacity continues to tighten. They are against structured pricing to manage capacity and it takes money to build more.
Even so, several cable systems have begun trying to manage their networks because of data hogs and have been told by the FCC that they cannot do this, so now they are trying to work with the individual offenders. To me, net neutrality means I have as much access to the Internet as my neighbor—no more, no less. If I am on a shared bandwidth network such as cable (or wireless) and the average data rate is usually 2 Mbps, when it gets busy and the data rate falls to less than 1 Mbps, it falls to the same level for all of us. That is net neutrality at work. We all take a hit because we share the bandwidth in a given area. However, if the first one on a cable system or in a cell sector is permitted to hog most of the bandwidth so those who come on later don’t have usable speeds, that is wrong. The ONLY way to assure this does not happen is to MANAGE the network so every customer is treated equally.
It also surprises me that the Net Neutrality folks have nothing to say about satellite providers that have long been “rationing” uplink data speeds. You might start out at 786 Kbps, but if you are sending a LOT of data, your speed automatically decreases and your service slows so you are not impacting other customers. After you have not used your system for some period of time, you are once again permitted access to the maximum data rate available. How does that square with net neutrality?
The Bottom Line
We won’t know what these new rules will be until after the NPRM is drafted, comments are received, and the FCC works out the final version. But we do know this will be a hotly debated topic. There will be many comments filed and many visits to the FCC by those who are for and against these rules. At issue for me is that it appears as though the Internet community has established some serious clout in Washington while the wireless community has not done well in combating the mistaken impression that it wears black hats and the Internet community wears white hats.
Two things are imperative as this process unfolds. The first is to make sure that the wireless community does not simply respond to what the Internet community says. In other words, it is time for us to take the offensive and make our case over and over again.
The second thing that is sorely needed is education—for the Commissioners, the Internet community, and for those who take up the cause of FREE and Open Internet. These people need to understand the significant differences between wired and wireless and they need an understanding that net neutrality, if it is to be, has to be crafted differently for the wireless community and be just as effective.
I feel compelled to close this Commentary with David Young’s question: What is the problem we are trying to fix?
Andrew M. Seybold