Your Neutralness

Andrew Raff
May 4, 2006

Earlier today, a producer from the public radio program Open Source called me to discuss net neutrality. Because they could get actual experts and more interesting speakers, they didn't need me (but it was nice that they got all the way down the list to think of me!)

Open Source: Net Neutrality, May 4, 2006.

After talking briefly and disjointedly about network neutrality, I think I clarified some points in my own mind.

Why not regulate? The case against neutrality regulation:

  1. Regulations may be burdensome-- and may serve to make internet access more expensive, discourage investment and keep the US part of the internet stuck in 2005 while the rest of the world develops.
  2. A discriminatory network allows certain services to have priority. When downloading a file, it doesn't really matter whether the bits arrive at the client in the proper order, so long as they eventually all arrive and end up in the correct order. When using VoIP or streaming a movie, it matters that the bits arrive in the correct order and in a timely fashion. Allowing ISPs to discriminate makes the internet feel faster without having to invest money in expensive bandwidth.
  3. By not regulating internet services, internet service providers are free to develop the most innovative services possible.
  4. A discriminatory internet is excellent for cable and telecom companies. Not requiring neutrality will allow telecom and cable companies to extract the full potential value from their networks. If you were running an ISP, which would you prefer-- all-you-can eat pricing or a system that charges premium prices for premium features?

Why is Net Neutrality Important? The case for neutrality:

  1. Neutrality advances the overall usefulness of the internet quicker. Because broadband internet service providers can compete only on bandwidth, the more bandwidth that is available the more advanced services can be created. Instead of deploying only high-revenue services, broadband providers will have to compete on bandwidth and reliability.
  2. A neutral internet promotes free speech. Publishing to a discriminatory internet could be more like deploying a new cable television network and require negotiating a carriage agreement with all major end-user internet service providers. A non-neutral internet looks more like the mobile phone system, which feels expensive.
  3. A neutral internet is excellent for everyone who sends data over the internet. In a discriminatory internet, publishers (which includes not just Yahoo, Google and Microsoft, but also your local newspaper, the neighborhood association, and state, federal and local governments) have to pay not only to connect to the internet and for bandwidth, but could also need to pay a connection fee (protection money) to be able to send data to each of the major local internet providers.
  4. A neutral internet promotes creativity and free speech. Instead of pigeon-holing services into particular tiers, it allows innovators to develop new services and ways of sharing information.
  5. A neutral internet is cheaper. A preferential, proprietary internet requires more expensive routers that move preferred packets into an HOV lane. As bandwidth gets cheaper and cheaper, it is probably cheaper and more cost effective for the individuals, small businesses and large companies who use the internet to pay for wider information superhighways than adding an HOV lane to the existing networks.
  6. Regulation may be necessary because the broadband internet services market is not a classically free market. Individuals generally have the option of choosing service from their local telephone company or local cable company. Where a market failure exists, regulation prevents entrenched interests from exerting undue market power. See e.g. the entire body of antitrust law.
  7. A non-neutral internet would be more like Minitel than like the internet we know and love today.

Like railroads and shipping lines, the analog telephone system is a common carrier network. One is able to reasonably use the network to call any other person. The common carrier may not deny transmitting a call between two willing participants because of the content of the speech transmitted. The telephone company can not discriminate against a customer who uses the common carrier network to discuss how they dislike the president or the phone company. The telephone company can not discriminate against a customer who uses the network to use a modem to dial a third-party internet service provider or BBS. In a neutral internet, internet service providers must act like common carriers. A non-neutral internet might allow internet providers to prevent users from using encrypted connections to corporate networks or third party VoIP services.

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Comments

"So beautiful.... yet so *neutral*."

Another part of the argument for network neutrality is that the most typical broadband providers - your local cable company and your local telephone company - have a conflict of interest when participating in the decision whether to charge extra for services like VoIP or internet video. Of course they're going to choose to charge extra for those services, because those services are a source of competition for them in arenas where they historically have had a virtual monopoly.

If the ISP market were already competitive, then the market would sort things out, and a company that tried to tier by content would lose customers hand over fist. But that's not how the ISP market is, as you say in #6 above, and so within a particular region, all it takes is for the dominant cable company and the dominant phone company both to tier by content in order to fully screw over the consumer.

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