Being an outsider to the US Net Neutrality debate, I don’t feel the pain of cable monopoly, or the blight caused by expensive and poor quality broadband. Over here in the UK we hear more about Verizon FiOS and Google Fibre, and mobile investments and megadeals, than we do about coax. In the UK, and increasingly in Europe, our regulators manage markets with perhaps too much diligence.
The usual way regulators deal with monopoly is to encourage or mandate competition. I have been surprised by the number of US states banning muni wifi – though I can understand the argument that common property should not be preferentially available to private interests. In many cases it seems to me that the public interest should clearly override, and that monopoly providers who gained their own wayleaves and easements under different regulatory and technological environments should not be considered adequate provision for the next 20 years. Susan Crawford seems to agree with me (!) according to an article she wrote for the FT this week (Feb, 2014).
Perhaps, though, the problem is as much about what content and services might be available over new competitor access networks, and on what terms, rather than how an incumbent should be obliged to manage their business and network.
Here’s a simple question which illustrates in some ways how difficult the regulation challenge is. Should an aspiring competitor to Netflix or any other content or service provider, which does not yet have the subscribers or the bandwidth requirement of its competitors, be able to force a consumer broadband provider (CBP) to purchase public peering capacity at parity with whatever private arrangements the CBP (I avoid the term ISP deliberately) has made with competitor content or service providers?
If your answer is no, they should not, then you are setting the bar higher for the Internet as an engine of competition and innovation; the new entrant will have to overcome market inertia as well as poor quality of service in order to grow. And that will be true of all networks, not just the problematic incumbents, be they monopolistic or competitive.
The complex balance between colocation, private peering, and public peering seems to me very poorly understood by many content companies – sleepwalking into walled gardens in my opinion – and regulators, who have bought the narrative without looking at the grammar or semantics of what they were sold. It is very well understood by a very small number of highly successful content and services companies, who, not an accidental coincidence, are getting off the public internet as fast as they can.
Whether or not a CBP tweaks its packets in favour of one content or service provider or another could be well covered by fair trade regulations; it could be dealt with completely outside the scope of telecoms regulation. How your CBP connects to the Internet is an entirely different matter, and one that only a telecoms regulator can really be concerned with.
It is very tempting to gravitate towards one lobbying platform or another, and it sure gets a reaction from the crowd if a journalist or lobbyist can work up a good foam. Through my strongly sceptical filter, however, the US Net Neutrality debate looks as much about content and service providers trying to open CBPs to uncompensated private and colocated access, as it does about CBPs trying to use their control of the last mile to extract rents. It’s not as if there is anything to preserve – NN as it seems to be deployed by commentators and lobbyists was never adopted by the broadband industry, but emerged out of the evolution of the technology and business models of telcos, only to retreat as content and service providers became able to influence CBP profitability by stressing their networks.
Framed in those terms, profitability will be a key metric of the relative success of the contestants over ‘connected world’ business models, as will their share price relative to current earnings as the market collectively decides who it thinks is winning. Again, none of this is a regulatory matter, beyond the usual fairness arbitration.
This is not to say that telco regulators have no place. Far from it. If any of this analysis proves apt, regulators need to consider the connectivity and openness of the Internet itself, being how networks connect, who can connect to them, and the capacity, capability and status of that connection vis a vis any other ways that content and services get carried to people.
But that is not neutrality by any ordinary definition of the term. What I think the progressives are saying in this debate is that we should use regulation to create an Internet governance policy which is sustainably open, and which has the capacity and capability to support the innovation and churn we need to remain healthy. This I wholeheartedly would support, but what Comcast or Verizon do to your Netflix or Google packets has no relevance at all to any of it.
Wake up America! Thinking that it is all about whether Verizon throttles Netflix, or whether AT&T has ‘provider pays’ QoS, will just hand more advantage to incumbent content and service providers at the expense of new entrants, as colocation, caching, and private peering dig deeper into the CBPs’ networks. No wonder that the popular content and services companies are bleating about how much they need Net Neutrality; as currently framed it would be a great way to keep out competition.
It is probably too much to ask that CBPs should be obliged to maintain a public Internet at parity, as posited in my simple question above. It’s not too much to ask that between them they maintain an adequate public Internet, even if their customers are blissfully ignorant of whether their 21st Century couch/remote combo ever touches the it on the way through.