Transcript Mapping the Broadband Ecosystem - Personal.psu.edu

Mapping the Broadband
Ecosystem
A Presentation at:
Faceoff: A Fact-Based Debate on U.S. Internet Policy
and Access Networks
Organized by The Internet Ecosystem Economics Task Force
Congressional Internet Caucus Advisory Committee
June 7, 2013
Rob Frieden, Pioneers Chair and Professor of Telecommunications and Law
Penn State University
[email protected]
Web site : http://www.personal.psu.edu/faculty/r/m/rmf5/ (contains this presentation)
Blog site: http://telefrieden.blogspot.com/
Objectives of this Unsponsored Presentation

Decode the various analogies used to explain the how the
Internet works.

Identify the components in the Internet ecosystem that link
content and applications with consumers.

Explain the interconnection process from both a
technological and financial (compensation) perspective.

Use case studies to identify recent and likely future disputes.

Assess whether and how commercial negotiations can
resolve interconnection disputes.
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Analogies Used to Explain How the Internet Works

Several analogies and models provide a frame of reference for
understanding how the Internet works.
It’s a cloud:
It’s a network of networks:
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Analogies Used to Explain How the Internet Works

It’s a series of tubes:
It’s part of a broadband communications supply chain:
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Analogies Used to Explain How the Internet Works

It’s a hierarchy of protocols:
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A Working Definition

Consider the Internet as the product of seamless interconnection between
servers, routers and broadband subscribers using the telecommunications
transmission networks of many, often-unaffiliated operators.

We should concentrate on the network links of these operators that go by
several different names: Internet Service Provider (Tier-1, Tier-2, retail)
Content Distribution Network, Peer, Transit Lessee, etc.
Source: George Ou, http://www.digitalsociety.org/2009/11/fcc-nprm-ban-on-paid-peering-harms-new-innovators/
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Source: George Ou, Digital Society, http://www.digitalsociety.org/2010/12/division-of-laborbetween-broadband-and-cdn/
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Four Phases in Internet Development
1) Incubation--government administration, first through the United States
Defense Department and later through the United States National Science
Foundation and research institutes throughout the world (1980s-1995);
2) Privatization--governments eliminate financial subsidies obligating
contractors to assess whether and how to operate commercially (1995-1998);
3) Commercialization—private networks proliferate as do ventures creating
software applications and content that traverse the Internet. The “dotcom
boom” triggers irrational, excessive investment and overcapacity (19982001); and
4) Diversification—after the dotcom bust and market re-entrenchment, Internet
survivors and market entrants expand the array of available services and ISPs
offer diversified terms, conditions and rates, including price and quality of
service discrimination needed by “mission critical” traffic having high
bandwidth requirements, e.g., full motion video content. ISPs and even
content providers can use deep packet inspection to identify traffic for “better
than best efforts,” and other forms of prioritization at one extreme and
blockage/throttling at the other.
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Many Interconnection Models Work
in the Current Phase
Until its privatization and commercialization the Internet carriers
typically used a zero charge, “peering” process that assumed a “rough
justice” balance of traffic; even if traffic flows weren’t equal,
governments rather than the carriers usually paid.
Carriers operating in the now fully commercialized Internet pay close
attention to traffic flows and now limit peering to equals in terms of
bandwidth capacity, locations served, subscriber population, etc.
Smaller ISPs now pay for “transit.”
As the nature and type of ISPs proliferate so have interconnection
models; for example a Content Distribution Network will have lots of
traffic to deliver downstream, and possibly very little to handle
upstream. Traffic imbalances can trigger interconnection compensation
disputes.
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Many Interconnection Models Work
in the Current Phase

ISPs consider price and QOS discrimination essential for
generating new profit centers; the Internet largely shifts from
“best efforts,” “one size fits all” into a largely differentiated
medium.

Content providers increasingly trade off maximum market
penetration for smaller shares of paying customers; without
firewalls and effective authentication, premium content won’t be
offered.

Even end users want “better than best efforts” routing of
“mission critical” bitstreams, e.g., movies, pay per view, full
motion video.

But ISPs are tempted to act on their incentives and abilities to
discriminate in anticompetitive ways.
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New Incentives Risk Network Balkanization
and Challenges to the Goal of Ubiquitous Access
Level 3-Comcast Dispute
In late 2010 Comcast imposed a traffic delivery surcharge when Level 3 became the
primary CDN for Netflix.
Level 3 characterized the surcharge as a discriminatory toll while Comcast framed the
matter as a commercial peering dispute.
Comcast is correct if one narrowly focuses on downstream traffic termination.
But more broadly the dispute raises questions about the scope of duties Comcast owes its
broadband subscribers and whether Level 3 is entitled to a good faith effort by Comcast
to abate the traffic imbalances with upstream traffic.
It also raises questions about the flow of compensation due participating carriers
downstream from gigantic sources of traffic.
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Misconceptions (or Misrepresentations)
in the Level 3-Comcast Dispute
Retail ISPs providing the “last mile” delivery of traffic do not directly receive
compensation from upstream sources of content such as Google, Netflix, YouTube
and Hulu.
The peering process traditionally involves directly interconnecting carriers. This
means Netflix has the responsibility of securing the services of a CDN, such as
Level 3, but Level 3 bears the direct interconnection burden with retail ISPs such as
Comcast.
It is untrue to assert that hyper giant sources of traffic, do not pay for delivery of
their content. Comcast enjoys the ability to charge twice in what economists term a
double-sided market: 1) monthly retail broadband subscriptions, now tiered by
transmission speed and amount of content downloaded; and 2) peering/transit with
upstream ISPs and CDNs such as Level 3.
Note that Comcast successfully imposed a surcharge on its peering partner Level-3
when Netflix traffic upset the balance of traffic flows.
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The Cablevision-Fox Dispute
For added leverage in a content retransmission dispute Fox used
deep packet inspection to identify Cablevision subscribers seeking
access to Fox content available to anyone via the Hulu intermediary
web site. Fox denied Cablevision subscribers access and instead
sent this message:
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Good News and Bad News in Dispute Resolution
The Good News: Commercial negotiations can resolve most disputes with limited, if any harm to consumers
and without regulator intervention.
The Bad News: Broadband access has become a near essential. Any access dispute resulting in network
balkanization or blockage can cause significant harm to consumers.
Currently the FCC has no direct statutory authority and questionable ancillary jurisdiction even to remedy
Internet interconnection complaints it receives.
The FCC has invoked promotional obligations in the Telecommunications Act of 1996 , e.g., Sec. 706. But the
Comcast case (no statutory support for open Internet initiatives) casts doubt whether the FCC can intervene even
if empirical evidence shows consumer harms.
Unclear how far the Commission can go with “quasi-common carrier” duties affirmed in two recent courts
cases:
1)
Cellco (affirming the FCC’s decision to require wireless carriers to provide compulsory data
roaming) and
2)
Arlington (affirming FCC identification of reasonable deadlines for state and local authorities to
act on wireless tower applications).
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Developing Trends
Heretofore private carrier negotiations (peering, transit, retransmission consent) have reached
closure, albeit not always on a timely basis, even as subscribers continue to pay during
negotiations. Expect consumers/voters to complain vigorously if interconnection disputes
don’t get resolved quickly.
Interconnection negotiations may bog down or harm consumers, particularly if compensation
and conduit neutrality issues are triggered. Broadband and telephone subscribers expect their
subscriptions to guarantee ubiquitous, high quality and reliable access not conditioned on
multiple interconnection agreements with upstream carriers.
ISPs and content providers regularly try new interconnection options, e.g., Netflix may install
a large hard drive on subscriber premises; Google and other major content sources have
secured their own Autonomous System identifiers and will pursue direct (and cheaper)
interconnections; interconnection has become less hierarchical.
Regulation arbitrage or avoidance can affect interconnection strategies, e.g., Comcast’s
invoking the FCC’s “specialized network” exception to open access rules when it offered
video on demand via X-Box without debiting an otherwise applicable download allocation.
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