Net Neutrality Debate Wydens

Chances are that the red-hot issue of “network neutrality” won't land in the law books, at least during this Congressional session. (See Google Says No to QOS Fees.)

In its current form, the the House Commerce Committee's "Broadband Internet Transmission Services (BITS)" bill provides a broad retooling of the '96 Telecom Act for the regulatory challenges of the broadband age. But the Commerce Committee's leadership is now seriously considering narrowing the bill's focus to address video franchising and possibly VOIP E911, several sources close to the situation say. (See Wyden Testifies on Neutrality.)

In substance, BITS codifies into law the idea that broadband operators "shall not grant any preference or advantage" to any one broadband service over another. (See Net Neutrality Goes to Washington and Google Plans Video Service.) In practice the law would prohibit cable and telephone companies from blocking or impairing the packet flow of competing services like, say, Google (Nasdaq: GOOG) Video. (See LR Poll: Net 'Squatters' Should Pay.)

But excising the net neutrality language from the bill might remove a potentially fatal sticking point, says Commerce Committee spokesman Terry Lane. "We could introduce the bill with a few narrow issues that we could move through quickly and get enacted this year, rather than trying to push through a broad piece of legislation and inviting a lot of debate," he says.

Committee chairman Rep. Joe Barton (R-Texas) and others, Lane says, might rather get some telecom legislation passed during this session than go for the full Monty and come away empty-handed at the end.

But that hesitancy to cram one bill with several hot issues also opens the door for legislation that's focused on nothing but net neutrality. And sources say Senator Ron Wyden (D-Ore.) will introduce his own bill regarding net neutrality this week.

Wyden, during last month's testimony before the Senate Commerce Committee on net neutrality, said he would shortly introduce a bill that "will make sure all information is made available on the same terms so that no bit is better than another one." [Ed. note: It will remain true, though, that some bits are naughtier than others.]

While Wyden takes aim, the minds behind the BITS bill are changing day to day. "It is a very fluid situation," says Art Brodsky of the Washington-based net neutrality advocacy group Public Knowledge. "In fact even as we speak, in the next day or so, there should be some meetings among the principals in which they'll try to decide something."

Few would be surprised if the committee went with its Plan B -- a slimmed-down BITS bill focusing chiefly on video franchising. The reason? Sources explain that sentiment has soured somewhat on the net neutrality cause in the Capital in recent weeks.

"I’d be less than honest if I told you there was a great deal of sympathy for the net neutrality idea right now," Brodsky told Light Reading Tuesday.

How did net neutrality lose steam? First, the powerful telco and cable lobby mobilized.

"The RBOCs have beaten the [expletive] out of everybody who has gotten in their way, and now the California Internet community is in its way," says Chadbourne and Park LLP attorney Dana Frix from his office in Washington. "The East Coast RBOCs are beating the pants off the California Internet guys on this one." (See Google Goes to Wonkytown.)

Over the past several months, the telephone and cable lobby have argued, effectively, that no such blocking or impairment of Internet services or content has occurred, or ever will occur. In the event that some service was blocked, they argue, the Federal Communications Commission (FCC) could issue a quick smack-down under existing telecom law.

The cable and telephone operators together own 98 percent of the last-mile broadband networks in the U.S., according to the FCC. "The phone companies and the cable companies are up there saying, ‘Why bother? There’s no problem here,' " Public Knowledge's Brodsky says.

The second thing hindering network neutrality is that its strongest advocates have garbled their message to lawmakers.

Lawmakers are still fuzzy on the exact purpose of a net neutrality law. Confusion remains over who such laws are meant to protect -- the consumer or the Internet companies selling content. (See Cerf's Up for Neutrality Debate.)

Neither side of the debate has a problem with consumers choosing from among lower- or higher-bandwidth service tiers. But net neutrality advocates say broadband providers will create a "scarcity of bandwidth" over the last mile so that they can charge content providers carriage or QOS fees. (See Crocodile Tiers.)

That said, the net neutrality camp hasn't offered a clear enough solution for lawmakers. “I think those who want net neutrality are losing because we have failed to be specific, and failed to define exactly what it is that’s necessary,” says a source close to several VOIP companies.

— Mark Sullivan, Reporter, Light Reading

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OldPOTS 12/5/2012 | 4:04:20 AM
re: Net Neutrality Debate Wydens Did any 'net neutral' eyepee purist notice that CSCO, with the new acquisition of Tazz, now enables the carriers to manage QoS and burn net neutrality??

Mark Sullivan 12/5/2012 | 4:04:18 AM
re: Net Neutrality Debate Wydens Some people have strange ideas about the internet being some kind of paradise where freedom and equity is guarenteed. In truth, the internet is a lot of things, but it is certainly, and increasingly, a distribution channel for competing services.

People will eventually see that the internet runs on the same economic principals of any other distribution channel. If the freight you are shipping weighs 500 pounds (or 500 megabytes) you pay the shipping company (whether its UPS or Verizon) a certain amount. If your freight weighs 10 ounces (or 10 kilobytes) you pay a lesser amount. Sure our tax dollars helped build the highways the trucks (bits) move over, and yes the end consumer has paid for the product being shipped, but you still need the trucking companies to haul the freight, and they deserve to be paid too.

The market will have to work this all out; Congress doesn't even get it.
rwelbourn 12/5/2012 | 4:04:16 AM
re: Net Neutrality Debate Wydens Yes -- but the argument is largely over to what extent, and how, the broadband access consumer (you and me) should pay the freight, because pay it we will, one way or another.

Clearly what the telcos and cablecos want is to force the likes of Vonage to pay for QoS, pass on the charges to the consumer and therefore hike their rates so that the telco's own voice services are less competitively exposed. (The same argument applies to video, although less so, because if you're downloading a TV show and not watching it in real time, QoS doesn't matter very much.)

What irks me is that Verizon and their ilk have been pushing the benefits of DSL using TV ads featuring video streaming -- and now they're complaining that their customers are actually wanting to use the service. Even Ivan Seidenberg admits that it's the content providers that have created the market for broadband. Is it their fault that the cablecos and telcos are in a price war to attract customers, and are not making money on their networks?

The real problem here is that the telcos in particular are undercharging for broadband. After discounts have been applied, I pay something like $35 for FiOS for a notional 5MB down and 2MB up -- and it took two techs 12 hours to install the service at my house and one other in the neighborhood. Factoring in the cost of the Optical Network Terminal on the side of my house and the head-end gear, how long will it take to pay off that particular investment?

I can sympathize with the network providers in wanting to make money on their network infrastructure, but I believe the real motivation behind all of this is to protect their own applications businesses (voice, video and gaming), by making it more expensive for competitors.

It's small wonder the telcos and cablecos hate the idea of muni Wifi or other forms of public broadband -- having even B grade alternative roads makes it easier for folks to avoid their toll booths.

Rob W.
American Indian 12/5/2012 | 4:04:14 AM
re: Net Neutrality Debate Wydens
Everyone needs to get from Point A to Point B. Getting there costs money -- lots of money for the fiber infrastructure.

Internet freedom fighters -- if the transport companies can't stay in business how are you going to get from Point A to Point B.

Infrastructure is the horse - keep the issues of the cart behind the horse.

Congress and the FCC should stay out and let the market sort this out. Google is about to experience the lobbying power of the ILECs on matters such as this.

If carriers built "networks" out of colocating boxes and not owning any fiber -- all I can say is nice short term business model but you are now approaching death.

The content companies do not want a toll gateway for the Internet? Why? For years they have raped cable companies on content packages and pricing. An open tiered internet would totally disaggregate their business model cutting out the middlemen in their cheap suits leveraging the cable companies and content talent. The last thing the old content business model wants is ala carte or direct access via the Internet to the talent sources.

Letting the market sort this out will benefit everyone with the exceotion of the old era power brokers.
materialgirl 12/5/2012 | 4:04:10 AM
re: Net Neutrality Debate Wydens Dear Mark:
I agree that "Congress does not get it" and disagree that users need to "pay the freight."

With some 98% of access lines controlled by legacy vendors, one might argue that the market for last mile access is not exactly openly competitive. So, what is the correct price? A monopolist's high-margin dream?

The cost for getting this wrong will be high for the U.S. We are losing jobs to talented folks in other geos. It does not make sense to compete for the opportunity to perform any commodity task from here, versus a geo where folks still live on dirt floors. They will beat us every time.

The U.S. will therefore survive economically only through innovation. Innovation is served by cheap, plentiful communication. On the margin, the most extreme experiment is supported only of communication is the cheapest. It is this "option value" (ala David Reed of Harvard) of the next unknown use of the Internet that is killed by high prices. It kills innovation, the very life blood of our economy.

So, we can pay up for legacy services and lose out in economic growth, or we can leverage cheap bandwidth to create the next GOOG. Make no mistake, the GOOG founders would be dead or in jail of they were Chinese. The chances of RBOCs coming up with the next GOOG are about the same as those monkeys on keyboards coming up with Shakespeare. What is at stake here is the future of our children. Nothing less.
dh44 12/5/2012 | 4:04:09 AM
re: Net Neutrality Debate Wydens Why not compromise and mandate that the SPs have to reserve a TBD minimum percentage of "best effort", "net-neutral" bandwidth in their networks at all times. That way as SPs expand their networks to keep up with demand for premium services, they will also have to maintain a pre-determined level of "free" bandwidth.

I have made this suggestion a few times on other threads. Is this just a silly idea, or would everyone rather ignore possible solutions so they can argue their biased views instead?

fgoldstein 12/5/2012 | 4:04:09 AM
re: Net Neutrality Debate Wydens Indian,

Few people disagree that providers should be paid to haul the bits. This isn't an argument about free transport.

The key issue is similar to, but not quite, common carriage. A common carrier may have an arbitrarily complex set of charges for payload, but it cannot discriminate. In the telecom sense, it means that "bits is bits". That's the model that the Internet was built on -- ISPs are not common carriers, but they use common carriage. The FCC has ruled, however, that common carriage goes away this year. So ISPs are kicked off, and the wire owners (telco/ILEC duopoly) will be the sole broadband ISPs. Thus instead of having a choice of ISPs to guarantee access to content, the telcos, acting as unregulated ISPs with no obligation to let others use their wire, will be the sole arbiters.

This is a very bad model. As I noted in my own column on TMCnet recently, "network neutrality" as an obligation of ISPs is the answer to the wrong question. Competitive provision of Internet service is required. What we have instead is a recognition that Washington is so utterly and completely corrupted by the Bells that we cannot even hope for such primitive, 1980's-style competition, and instead have to beg for restrictions on the ISP monopolists.

What the telcos want to do is charge for their services based on the value of the content, not their cost of delivering it. This involves "deep packet inspection", something that is blatantly illegal for common carriers but tolerated for "information" providers (ISPs). Thus they will demand a take of each e-commerce purchase and a take from "content" providers. They will selectively authorize you to visit web sites of their choice (walled garden -- pay to enter) and read your mail. The IMS model provides tools for this, though it's so hideously complicated that more direct means may be used instead.

The carriers have responded to the outrage that this is engendering by yelling loudly about QoS and priority services. This is like responding to complaints about Abu Ghraib by yelling loudly about 9/11; it distracts the pliant press and moves the debate off point. A content-neutral set of priority bandwidth services is rational. Hell, we designed the whole lot of them for ATM, before the TCP/IP fad washed it away. That's not the real issue. It's letting the Internet continue to exist, with free exchange of packets across the edges, rather than replace it with a set of videotex-like "services" selected by monopoly carriers.
OldPOTS 12/5/2012 | 4:04:08 AM
re: Net Neutrality Debate Wydens MG,

Having been a customer and then a supplier, I expected that there would be QoS and that we would have to pay the freight as the SPs have invested a GREAT deal of money for their networks. They are now in a pricing war to get subs, expecting to make it up by selling services later.

However, like you, I am very concerned about how the legacy vendors will use their control over access lines to their benefit. They have assumed in their business model that like 'yestayear' they can control the access and limit customers to their services where they expect to make up for lost margins.

And darn congress doesn't get it.
I saw something on CSPAN today that indicated that congress will ignore this issue in re-writing a very narrow Telcom Bill!

What a dilemma!
I guess I will soon be switching to satellite like my many neighbors. And I sure don't want a bundle to limit my options later.

I keep wondering if there will be anyone left offering services, after they all loose so much money on irrational business expectations?

fgoldstein 12/5/2012 | 4:04:07 AM
re: Net Neutrality Debate Wydens dh44,

The problem with any such ISP-level neutrality argument is that it prohibits the ISP from performing its necessary functions that are not neutral. For instance, how do you block spam? Many "neutrality" arguments can benefit spammers most of all. (Some spammers could be arguably blocked as "illegal" but the you-CAN-SPAM Act creates a broad safe harbor for spammers who choose to come out of the closet, should it become necessary.)

What about users who want to stream HDTV down the narrow "hobo class" neutral bandwidth that you posit? That would block or severely impair TCP data applications. TCP's dynamics (slow start) are based on everybody going along. Again, today it's taken care of by the free market among ISPs, not by content regulation.
dh44 12/5/2012 | 4:04:06 AM
re: Net Neutrality Debate Wydens fgoldstein,

To me, "net neutral" means the internet as it exists today with whatever provisions are in place for SPAM control, throttling of over-subscription, etc.

Once the internet becomes QOS-based, all I'm suggesting is a way to prevent telcos from being greedy, ie, they have to reserve a certain percentage of the internet bandwidth to operate as it does today.

I realize this is an oversimplification, but it's a conceptual starting point since the principles on either side of this argument are saying the future internet either has to totally neutral, or it has to be based only on QOS.

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