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Issue No. 03 - May/June (2006 vol. 10)
ISSN: 1089-7801
pp: 4-6
Ted Dunning, chief scientist of Veoh Networks, an Internet video delivery start-up, has been involved in the telecommunications industry long enough to know that buzz words and abridged arguments might serve well as elementary introductions to the Net-neutrality issue, but that cogent decisions must rest on foundations far more firm than what often meets the public eye. Recent comments from telecommunications executives — mentioning the possibility that they might start charging providers of bandwidth-intensive services to transport their content — have raised objections from those companies, as well as from some lawmakers. However, Dunning sees the debate as a bit of a sideshow.
"The Internet is not neutral now and never has been, on the larger scale," Dunning says. "Veoh has to pay for our bandwidth connectivity, AOL [America Online] does not. If I want a bigger pipe, I have to pay more."
However, Vint Cerf, chief Internet evangelist at Google, says Dunning's assertion is wrong.
"Even in peering situations, the peers have to pay for the capacity to inter-connect themselves to various peers at various access points, public or private. There is a cost to achieving full connectivity purely by peering, and some ISPs will mix peering with transit to achieve a reasonable cost profile. Interconnection has a cost and the choice of achieving it is a business decision."
However passionate the public discussion might be, bandwidth providers and content providers will be dancing an elaborate minuet to maximize both camps' market opportunities. "The tier-one guys have to have local points-of-presence down to the last mile," Dunning says. "Cable companies will have a very different motive, but face pressure from telecommunications companies who will be doing loss-leader sorts of offers. It's very odd but interesting; the game is way more complex than somebody just trying to screw consumers."
The Silent Majority
Be that as it may, one voice markedly silent in the debate is that of the broadband service consumer, whether those services are for entertainment, private email, or small office/home office (SOHO) business uses. The absence of end users in the discussion might have short- and long-term ramifications at multiple levels. Short-term consequences include which application-level service providers survive based on unilateral decisions by incumbent carriers. Long-term issues include the global competitive standing of the US broadband infrastructure, which currently features a largely two-way battle between cable television and regional Bell companies (RBOCs).
The debate has yielded a high enough profile that the US Senate Committee on Science, Commerce, and Transportation held hearings on the matter in February 2006 to gather testimony from industry executives, as well as technical and legal luminaries of the Internet such as Cerf and Lawrence Lessig, law professor at Stanford Law School ( hearings/witnesslist.cfm?id=1705). "To oppose access-tiering, however, is not to oppose all tiering," Lessig testified. "I believe, for example, that consumer tiering should be encouraged. Network providers need incentives to build better broadband services. Consumer-tiering would provide those incentives."
The RBOCs already offer consumer tiering, but in their promotional material, they often tout data rates that aren't uniformly available. For example, AT&T's basic DSL service advertises download speeds of "up to 1.5 megabits per second (Mbps)" in introductory advertising; in slightly more detailed product information, that service is described as being from 384 kilobits per second (Kbps) to 1.5 Mbps downstream and 128 to 384 Kbps upstream. But in one suburban SOHO, the incoming data rate has never gone above 384 Kbps in a two-year period. (AT&T executives didn't respond to requests for comment for this story).
Double Dip for the Man in the Middle?
Although the actual data rates — as opposed to those promoted — might seem to be a minor detail for applications such as email and static Web surfing, many of the bandwidth-intensive uses upon which the Net-neutrality debate is centered require more than a 384 Kbps rate to be of optimum quality. In theory, at least, a carrier allowed to charge a high-bandwidth content provider a surcharge for carrying those packets might then be able to "recommend" to end users that they upgrade their service — in effect, compelling end users to pay more for data rates they were led to believe they were receiving in the first place — a "double dip" of additional revenue from both ends of the network.
Whether or not this would lead to a consumer backlash is, of course, speculation at this point. With most areas of the US served at most by two broadband providers — what Lessig labels an "effective duopoly" — how effective that backlash might be is also unknown. However, Pat Hurley, director of research for analyst firm Telechoice, says policymakers should be cognizant of the possible ramifications of ill-served customers.
"That is a concern," Hurley says. "From the carrier perspective, they're spending tons of money on their IPTV [Internet Protocol television] systems, and it's fast for them but slow compared to the speed at which the consumer electronics business introduces new technology. There are a gazillion content choices going over the top of the network and bypassing them totally, and they don't know what to do about that. So they're striking out with these public statements. I think they're just feeling out the reaction they get. But, aside from the reaction in the industry, compare the number of dollars a US-based customer spends per megabit with other countries, and it's not that good in the US."
Hurley isn't alone in lamenting the state of the US broadband infrastructure. In his testimony before the Senate committee, Gary Bachula, vice president of Internet2, enumerated yet another new broadband project in Europe — Vienna's plans to install a 1-Gbit symmetrical fiber network, with equal access to established service providers, as well as pioneering ventures in areas such as healthcare ( pdf/bachula-020706.pdf).
Alarm Bells for Global Competition
The most compelling part of the Vienna announcement might be its intention to make its fiber network symmetric, letting new services flourish from any machine at any location on the network.
In comparison, the debate in the US is still centered on content delivery to a mainly passive consumer base with asymmetric connectivity. The debate's parameters have opened some interesting opportunities for companies such as Veoh, which plans to deliver entire videos to its members, and Itiva, which relies on a modified streaming peer-to-peer (P2P) network.
However, veteran industry observer Doc Searls, senior editor of Linux Journal, says failing to envision every user as a possible provider of services is a long-term strategic loser. In his SuitWatch newsletter, Searls calls for the extension of "Net neutrality" beyond the current widely publicized borders of well-known content providers versus carriers.
"Symmetricality has to be on the table, or Net neutrality is largely meaningless," he says. "Asymmetricality is the non-neutrality we already have. Getting rid of it will open the market to countless new businesses and business opportunities for everybody."
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