Transcript THE U.S. TELECOMS MELTDOWN: REASONS AND SOLUTIONS

Assessing the Merits of Network Neutrality
Obligations at
Low, Medium and High Network Layers
Rob Frieden, Pioneers Chair and Professor
Penn State University
email: [email protected]; web site: http://www.personal.psu.edu/faculty/r/m/rmf5
blog site: http://telefrieden.blogspot.com/
Explaining the Concepts—
Network Neutrality
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Internet Service Providers (“ISPs”) want to diversify services, increase revenues
and engage in price and quality of service discrimination downstream among end
users and upstream among content providers.
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Deep Packet Inspection (“sniffing”) and other innovations make it efficient and
economical for ISPs to operate non-neutral networks offering “better than best
efforts” traffic routing, variable quality of service, Digital Rights Management, and
all kinds of “traffic shaping.”
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Advocates for network neutrality want a non-discrimination/transparency mandate,
but explicit common carrier regulatory authority does not exist.
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Opponents of net neutrality claim ISPs have no incentive to block, delay, or
otherwise thwart the delivery of content in violation of consumers’ reasonable
expectation of an open and free Internet.
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How this debate plays out will have a major impact on the scope of lawful Internet
regulation as well as the accessibility and affordability of Internet-delivered content.
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How does this threat to Internet freedom affect you?
Small businesses—The little guy will be left in the "slow lane" with inferior Internet service, unable to compete.
Innovators with the next big idea—Startups and entrepreneurs will be muscled out of the marketplace by big corporations that pay Internet providers for the top
spots on the Web.
Bloggers—Costs will skyrocket to post and share video and audio clips—silencing citizen journalists and putting more power in the hands of a few corporate-owned
media outlets.
Google users—Another search engine could pay dominant Internet providers like AT&T to guarantee another search engine opens faster than Google on your
computer.
Ipod listeners—A company like Comcast could slow access to iTunes, steering you to a higher-priced music service it owns.
Online shoppers—Companies could pay Internet providers to guarantee their online sales process faster than competitors with lower prices—distorting your choices as
a consumer.
Telecommuters—When Internet companies like AT&T favor their own services, you won't be able to choose more affordable providers for online video,
teleconferencing, Internet phone calls, and software that connects your home computer to your office.
Parents and retirees—Your choices as a consumer could be controlled by your Internet provider, steering you to their preferred services for online banking, health
care information, sending photos, planning vacations, etc.
Political groups—Political organizing could be slowed by a handful of dominant Internet providers who ask advocacy groups to pay "protection money" for their Web
sites and online features to work correctly.
Nonprofits—A charity's website could open at snail-like speeds, and online contributions could grind to a halt if nonprofits don't pay Internet providers for access to
"the fast lane."
What They've Got Planned
The threat to an open internet isn't just speculation -- we've seen what happens when the Internet's gatekeepers get too much control. These companies, even, have
said as much about their plans to discriminate online.
Ed Whitacre of AT&T told BusinessWeek in late 2005:
Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So
there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?
It's Already Happening
Such corporate control of the Web would reduce your choices and stifle the spread of innovative and independent ideas that we've come to expect online. It would
throw the digital revolution into reverse. Internet gatekeepers are already discriminating against Web sites and services they don't like:
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In 2004, North Carolina ISP Madison River blocked their DSL customers from using any rival Web-based phone service.
In 2005, Canada's telephone giant Telus blocked customers from visiting a Web site sympathetic to the Telecommunications Workers Union during a
contentious labor dispute.
Shaw, a major Canadian cable, internet, and telephone service company, intentionally downgrades the "quality and reliability" of competing Internet-phone
services that their customers might choose -- driving customers to their own phone services not through better services, but by rigging the marketplace.
In April, Time Warner's AOL blocked all emails that mentioned www.dearaol.com -- an advocacy campaign opposing the company's pay-to-send e-mail scheme.
This is just the beginning. Cable and telco giants want to eliminate the Internet's open road in favor of a tollway that protects their status quo while stifling
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new ideas and innovation. If they get their way, they'll shut down the free flow of information and dictate how you use the Internet.
A Recent “Smoking Gun”?
For added leverage in a dispute over compensation for
retransmission of broadcast content, Fox temporarily blocked
access to specific web sites by all Cablevision customers,
including broadband-only subscribers. Network Neutrality
concerns have focused on ISP access issues, but in this case
the content provider targeted and blocked end user access.
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Stakes and Mistakes
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Converging and concentrating information, communications and
entertainment (“ICE”) markets raise questions about the viability of selfregulation and an unfettered marketplace of ideas.
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ICE technologies defy compartmentalization, yet mutually exclusive
definitions apply and trigger different regulatory treatment.
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Technological and marketplace convergence means that three screens (TVs,
computer monitors and wireless devices) can display the same content on
demand.
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The FCC seems unable to apply more than one model to a single venture
even when it delivers “triple play” services. Creative statutory
interpretation and stretched jurisdiction recently rejected by an appellate
court.
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Despite the view that the Internet qualifies for limited regulation, the FCC
has intervened extensively.
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The FCC has issued a consultative document that outlines a proposal to
establish enforceable rule designed to promote nondiscrimination and
consumer freedom.
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The Convergence Quandary
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ISPs combine conduit and content.
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ISPs may have First Amendment speaker rights, but unlike cable
television operators ISPs want the option of toggling between
serving as a content distributor/packager, and operating as a neutral
conduit.
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ISPs gladly abandon editorial control to qualify for “safe harbor”
exemption from tort and copyright infringement liability, but they
also use such control to create “walled gardens” of content.
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Current media models, such as print, cable television and telephony,
do not fully work for the Internet.
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Network neutrality seeks to preserve an open and free marketplace
of ideas, but how can ISPs lawfully manage their networks and
afford to make costly upgrades?
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The Convergence Quandary (cont.)
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When ISPs combine conduit and content, they vertically integrate
and operate across several different layers of functions.
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Main Conclusions in the Article
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The Network Neutrality debate has not considered Internet access in the context of
low, medium and higher layers in the OSI “protocol stack.”
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Such a more granular approach would suggest no need for regulation at higher
levels, predominated by content, software and applications. They ride “over the
top” of network transmission and management layers; the FCC has no statutory
basis for regulation and a robustly competitive marketplace exists.
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Middle layers may require limited regulation to provide remedies to specific
complaints. Software at these layers can appropriately manage networks, e.g.,
TCP/IP, or provide packet inspection opportunities for ISPs to identify and
block/delay traffic that provides a cheaper alternative, e.g., Netflix video streaming
vs. cable television video on demand. Fox could identify Cablevision subscribers
by IP address and block access to both Fox content and third party providers or
platforms to content created by Fox and others.
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Lower layers may require regulation to prevent anticompetitive and discriminatory
conduct, e.g., sending commands to reset and resend traffic thereby preventing
delivery of P2P files, including ones that do not pirate copyrighted movies.
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Main Conclusions in the Article (cont.)
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Absent new legislation, the FCC has limited jurisdictional basis to regulate any layer of
Internet access.
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American Library Ass’n v. FCC, 406 F.3d 689 (D.C. Cir. 2005) prevents the FCC from
leveraging statutory authority over broadcasting to include regulation over what viewers
do with content once received.
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Comcast v. F.C.C., 600 F. 3d 642 (D.C. Cir. 2010) rejected the FCC’s attempt to stretch
its “ancillary jurisdiction” to regulate any wire or radio service, including information
services. ISPs qualify for a deregulated “safe harbor” and the FCC failed to show a
linkage between explicit statutory responsibilities and the need for ISP regulation.
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Despite the Comcast holding, even some network neutrality opponents agree that the
FCC needs explicit statutory authority to remedy anticompetitive abuses, which can
most likely occur at the bottom and middle layers of the OSI stack.
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Ideally Congress should legislate. Absent explicit authority the FCC has to find a direct,
existing statutory linkage as it did for regulation of Voice over the Internet Protocol
telephone services.
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The FCC’s 4 +2 Network Freedoms/Proposed Rules
In 2005 the FCC articulated four Internet “principles”:
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(1) consumers are entitled to access the lawful Internet content of their
choice;
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(2) consumers are entitled to run applications and services of their choice,
subject to the needs of law enforcement;
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(3) consumers are entitled to connect their choice of legal devices that do
not harm the network; and
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(4) consumers are entitled to competition among network providers,
application and service providers, and content providers.
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In November, 2009 the FCC proposed to codify as rules the 4 Network
Freedoms plus require Nondiscrimination and Transparency for both wired
and wireless networks. Google and Verizon have proposed less robust
requirements not applicable to wireless and managed networks.
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Conclusions and Recommendations
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The next generation Internet will no longer offer a one size fits all
“network of networks.” Flexibility in pricing, service provisioning
and quality of service options can make economic sense. But the
FCC should act when ISPs engage in anticompetitive practices, e.g.,
exploiting the telecommunications links to the Internet cloud to
favor affiliated content providers.
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The information service safe harbor does not prevent the FCC from
remedying deliberate blocking, degrading traffic with no legitimate
network management objective, billing irregularities.
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Better than best efforts is not a contradiction, nor does it always
constitute unlawful discrimination.
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ISPs should fully disclose terms and conditions as well as report on
network usage. Requiring transparency does not foreclose net
flexibility, but it can prevent Enron-type gaming and induced
congestion.
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Additional Research Questions
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Is Net Neutrality a solution in search of a problem? What potential
exists for anticompetitive practices in switching and routing content?
Does a bottleneck, or market failure exist in first or last mile access to
the Internet, or farther upstream?
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Would Google have any problems finding alternative ISPs to carry its
traffic if AT&T refused? Would start-up ventures have the same
opportunities?
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Would net neutrality rules create disincentives for investment in next
generation networks?
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Can non-sector specific regulators and the courts remedy any actual
abuses in lieu of ex ante regulation?
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What is the scope of permissible jurisdiction over ISPs that fits within
existing legislative authority and does not violate freedom of speech
rights?
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Consider These Two “Real World” Scenarios
SCENARIO A
Thanks to digital recording technology, one can easily record and store in a user friendly format the stunning come from
behind football victory of the Nittany Lions over perennial powerhouse Ohio State University. Broadband networks
coupled with Peer-to-Peer (“P2P”) software make it possible to share the game file.
Abby would like to share the file with her husband Bob stationed in Iraq. Unlike perhaps much of the content sharing
facilitated by the P2P software BitTorrent, the fair use doctrine allows Abby to share the file and expedite its delivery to
Iraq, a necessity in light of the fact that Bob has to share Internet connections with many others.
As she has done in numerous instances, Abby established a link with Bob using her cable modem, Internet access
connection. However something has prevented the file from arriving in its entirety at the remote computer in Iraq.
After repeated denials, Abby’s cable television service provider, Vision Cable, has admitted that it used Deep Packet
Inspection techniques to locate P2P traffic and disable its transmission through the issuance of reset commands.
Abby feels that Vision Cable has violated her privacy by sniffing out her traffic and interfered with her subscriber rights.
She believes the FCC should enforce Network Neutrality rules to prevent Vision Cable from interfering with her traffic
in light of the fact that she is not a heavy user of the Vision Cable network, the company never demonstrated that
network management requirements, such as congestion, required intervention, and her P2P use did not involve
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copyright piracy.
SCENARIO B
Thanks to the combination of digital and broadband technologies, the Internet can serve as a medium for the real time
“streaming” of video content. Converging markets and technologies make it possible for three different screens (television,
computer monitors and wireless handsets) to offer the same content on demand instead of by appointment.
Among the many ventures that seek to exploit Internet Protocol Television (“IPTV”), CBS and Victoria’s Secret have used
“better than best efforts” traffic routing opportunities to deliver “mission critical” video bits to consumers’ screens. CBS
delivers live basketball tournament game broadcasts and Victoria’s Secret “webcasts” fashion shows. If these companies
relied on conventional “best efforts” routing, the Internet probably would not provide all viewers with full motion video free
of blurring, drop outs and the dreaded blue screen of death.
One of the key principles in Network Neutrality would require Internet Service Providers to treat all content, software, and
applications equally. In Scenario A, Vision Cable wanted to treat P2P traffic in a discriminatory, possibly anticompetitive
manner. Yet in this Scenario, CBS, Victoria’s Secret and their web viewers want ISPs to prioritize traffic streams to ensure a
reliable stream of packets.
Can you square the two Scenarios and formulate a set of Network Neutrality rules that prevent only harmful kinds of
discrimination? Put another way, how can the Federal Communications Commission or Congress create rules that require
transparency and nondiscrimination, but allows ISPs to accommodate higher Quality of Service and other requirements of
both end users and content providers?
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