Bill Totten's Weblog

Sunday, September 12, 2010

The Struggle for What We Already Have

by Joe Nocera

The New York Times (September 03 2010)

For something that seems so simple and straightforward, "net neutrality" has sure created one big mess.

Net neutrality, of course, is the principle that Internet service providers should not be allowed to favor some Internet content over other content by delivering it faster.

Really, who could be against such a thing? President Obama came out for net neutrality during his presidential campaign. Julius Genachowski, his former law review colleague and basketball buddy, who helped him arrive at that campaign position, is now the chairman of the Federal Communication Commission ("FCC").

Right-thinking public interest groups, like Public Knowledge ("Fighting for your digital rights in Washington") are fierce, unyielding proponents of net neutrality, viewing its goodness as obvious. Google professes to be a champion of net neutrality. So does Skype. Even the Internet service providers say they favor it.

And yet, here we are, a year and a half into the Obama presidency, and net neutrality is no closer to being encoded in federal regulation than it was when George W Bush was president. Just this week, the FCC asked for comments on two of the issues surrounding net neutrality, issues that have been hashed over for months. It was an obvious effort to push any decision beyond the midterm elections.

The FCC's punt doesn't begin to get at the turmoil. When Google and Verizon, a month ago, put together a well-meaning proposal for enforceable net neutrality rules, the two companies were vilified by the net neutrality purists - because they wanted to exempt wireless. "There was universal condemnation of Google for abandoning its 'don't be evil' ethos", said Art Brodsky, the chief spokesman for Public Knowledge - the very group that was leading said condemnation.

In the wake of the Google-Verizon announcement, the FCC abruptly called off talks among the various parties aimed at coming up with net neutrality rules. The talks have since been restarted, more or less, though without the involvement of the FCC. Yet even if the talks succeed, the resulting framework wouldn't have the force of law, so it is hard to know precisely what they would accomplish.

And last but not least: thanks to a court decision in March - a decision that resulted directly from the FCC's effort to punish one big Internet service provider, Comcast, for violating the principle of net neutrality - the agency's very authority to regulate broadband is in doubt.

Surely, this has to rank as the Mother of All Unintended Consequences: there is an outside chance that in its zeal to make net neutrality the law of the land, the FCC could wind up as a regulator with very little to regulate.

Did I mention that this was a big mess?

"Net neutrality arguments have been reduced to bumper stickers", sighed Craig Moffett of Sanford C Bernstein, Wall Street's premier telecom analyst. Mr Moffett's point is that like most political slogans that wind up on bumper stickers, the issue isn't nearly as simple and straightforward as it might appear to be at first. Net neutrality is, in fact, incredibly complicated.

Data networks, after all, have to be managed. The engineering is complex. The capacity is limited. Inevitably, some form of prioritization is bound to take place. Rules also have to be created that will give companies the incentive they need to spend the billions upon billions of dollars necessary to extend broadband's reach and improve its speed, so we can catch up to, say, South Korea.

Thus, the public interest view that all data traffic on the Internet should be treated the same is unrealistic. This is especially true with wireless Internet, where the rise of such bandwidth hogs as iPhone apps is starting to outstrip the capacity of the network to transport all the data. (That's one reason the AT&T network, the only carrier for iPhone data, seems so substandard. It is being overwhelmed by all those iPhones.)

The complications notwithstanding, net neutrality, broadly speaking, is what exists now. Among the many benefits net neutrality brings is that it fosters innovation. The great fear of the net neutrality purists, however, is that without federal rules, the Internet providers will begin cutting deals with content providers to give certain traffic priority over other traffic. For instance, Verizon could cut a deal with YouTube that allowed its videos to stream faster than, say, a Hulu video. Or it could even block Hulu. Or it could begin charging consumers extra for Netflix movies that were of better quality than ordinary streaming. As Harold Feld, Public Knowledge's legal director, puts it: "Companies do what companies do".

(Which brings up one of the true oddities about the fervor over net neutrality. Cable television distributors make decisions all the time about what people can see and how much they have to pay for it. If special sports-only tiers aren't an example of placing some content over other content, I don't know what is. Yet because it is merely television, and not the sacred Internet, nobody seems to view this practice as a crime against humanity. But I digress.)

Indeed, what touched off the current furor was the revelation two years ago that one Internet service provider, Comcast, was putting some content over other content. It was slowing down downloads through BitTorrent - a service that, I might add, is used largely to illegally download music and movies. Those BitTorrent downloads, in turn, were slowing down traffic for everybody else. This was Comcast's way of dealing with the problem.

I suspect that anyone who lives with an eighteen-year-old movie buff would approve of what Comcast did. Nevertheless, the Open Internet Coalition, as the net neutrality purists call themselves, was outraged. So was the FCC, which was then led by Kevin Martin, a well-known hater of Comcast. Mr Martin's FCC took after the company for violating net neutrality principles - principles that were (as they still are) purely voluntary. Comcast sued.

Two years later, by which time Mr Genachowski had become the chairman of the FCC, the court of appeals in Washington ruled that the agency had no grounds for reprimanding Comcast - because, amazingly, it had no authority over broadband under Title I of the 1996 Telecommunications Act, something the agency had long claimed.

This, of course, created a rather large problem. How was it going to impose net neutrality rules - not to mention universal service, public health and safety rules and other regulations related to broadband service - if it had no jurisdiction?

Since that ruling came down in March, the agency has been going down two tracks at the same time. It has been desperately trying to find a way to re-establish jurisdiction over broadband services, while at the same time continuing to push for net neutrality. It has become a very complicated dance.

In May, for instance, Mr Genachowski proposed that the FCC could use Title II of the Telecommunications Act to re-establish jurisdiction. (Trust me: You don't want to know the details.) But Title II brings with it all sorts of onerous, outmoded regulations better suited to the age of rotary telephones - including price regulation. Although Mr Genachowski vows not to impose such regulation, who is to say that his successor will agree with his "forbearance" approach (as he calls it)?

And no matter how strenuously Mr Genachowski vows not to impose price regulations, the Internet service providers have made it plain that they will sue to prevent the FCC from asserting Title II jurisdiction over broadband. It is not inconceivable that the providers will win. At which point, the FCC might as well close up shop. (Did I mention this was a big mess?)

It is this strange stew - uncertainty over jurisdiction, combined with a campaign pledge to establish net neutrality - that explains the recent Google-Verizon proposal. The truth is, virtually every player involved wants the FCC to have oversight over broadband services. Otherwise, chaos is likely to ensue.

Without the FCC, the Federal Trade Commission would probably wind up serving as the Internet's sheriff, using antitrust law as its guide and bringing tough enforcement actions. Nobody in the industry wants that.

That's why, at the request of the FCC's chief of staff, Edward P Lazarus, representatives from all the sides of the issue, including the Open Internet Coalition, convened to see if they could come up with a framework for net neutrality they could all agree on - and that the FCC could supervise. When those talks bogged down, Google and Verizon decided to come up with their own plan, thinking that they could help lead the others into the light.

Instead, they were slammed. Why? Because even though the framework they came up called for no discrimination of Web sites, for transparency and for all sorts of good things when it came to the kind of broadband that came in through a pipe, it exempted wireless broadband.

Google's rationale - and, without question, Google was the one that compromised - is that wireless was still too new, and the capacity constraints were still too severe, to impose net neutrality, at least at this point. To put it another way, Google was looking at the issue realistically, instead of theologically.

So there we now stand. Net neutrality is in limbo because the public interest purists believe that any compromise is a sellout, and because the FCC so badly shot itself in the foot by pursuing the Comcast case. It is difficult to see how we're ever going to get net neutrality rules.

Then again, maybe the current snarl isn't such a bad thing. "If everybody just walked away, the probability of anything bad happening is quite small", said Mr Moffett. I agree. Consumers have come to expect an open Internet, and companies will violate net neutrality at their peril. That is just the way the Internet has evolved.

But don't spread that around, okay? With so many hours spent on this thing, who really wants to admit that it's much ado about very little?

Bill Totten


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