Net Neutrality Goes to Washington

As Internet distributed video poses a threat to telco and cable TV, lobbyists are working hard to reframe the "net neutrality" discussion among lawmakers and regulators in the nation's capital. (See Yahoo Unveils Go TV and Dave.tv Adds IPTV Service.)

In fact, the Senate Commerce, Science, and Transportation Committee will discuss the issue in a hearing February 7.

What's the big deal?

Briefly, it all comes down to money and power.

IP applications like Google (Nasdaq: GOOG) video and Vonage VOIP ride "best effort" broadband networks of telcos and cable companies to reach consumers. But RBOCs and cable broadband providers are pushing their own IP voice and video services, and there's a growing fear they may provide a better quality of service (QOS) for their own applications at the expense of everyone else’s. (See Google Plans Video Service and Vonage Hits ISP Resistance.)

Instead of threatening to block competing TV or VOIP services, the RBOCs and their lobbyists are espousing a more passive, less defensive approach. Following BellSouth Corp. (NYSE: BLS)’s lead, they will more likely sell Internet companies like Google a higher tier of service to ensure the smooth delivery of their IP services. (See Google Goes to Wonkytown.)

Three of the four U.S. RBOCs -- BellSouth, Verizon Communications Inc. (NYSE: VZ), and AT&T Inc. (NYSE: T) -- have now made public statements in favor of that approach.

Federal Communications Commission (FCC) chairman Kevin Martin is no purist when it comes to net neutrality. He has said publicly that the commission would never allow a network operator to block a given Internet service, but he says “limiting” or reducing the speed of a service is a completely different issue.

No existing laws define the responsibilities of the network operators with regard to carriage of competing IP services, says Washington-based telecom attorney Dana Frix of Chadbourne and Park LLP. So the market has been left to determine how much net neutrality is enough. (See FCC Clears Megamergers.)

Frix believes large players like Google will have no problem making QOS arrangements with the network operators, but smaller players may not be as fortunate.

“The Internet is being regulated by the market right now, and the market is not doing a very good job,” Frix says. “Because market forces can’t work appropriately: The small, the petite, will always be harmed.”

Ragi Kamal, who oversees VOIP development at Time Warner Inc. (NYSE: TWX)'s AOL division, contrasts the U.S. regulatory environment to that of Europe. “If you look at the whole European sphere and what the telcos have to do, and what people can do over the top, it’s so much more of an open regulatory environment,” he says. “And I think the concern is -- and not just from the new product development perspective -- will the U.S. fall behind as a result of a regulatory climate that isn’t quite as encouraging?” (See We're #16!)

Frix believes the FCC should take a stand on net neutrality and dictate how the principle should apply to network operators like the RBOCs. He believes only the FCC, not Congress, has the sensitivity to the industry needed to impose such rules.

“But until there is that thoughtfulness about what issues are being raised, there should be complete net neutrality," Frix says.

Broadly defined, “net neutrality” means that Internet consumers paying for an Internet connection have access to everything on the Internet. But net neutrality, in the real world, may be a relative term.

SBC (now AT&T) CEO Ed Whitacre raised eyebrows last year when he said that allowing competing video content run unfettered over SBC networks is “nuts.” Verizon CEO Ivan Seidenberg said during his Consumer Electronics Show keynote last week: "We have to make sure they [services] don't sit on our network and chew up our capacity."

Sources say the telco lobby may be anticipating new regulation on the issue. The FCC, for its part, isn't likely to act until net neutrality is being discussed routinely in the courtroom.

— Mark Sullivan, Reporter, Light Reading

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Peter Heywood 12/5/2012 | 4:09:27 AM
re: Net Neutrality Goes to Washington

Take the poll and find out how other readers answer these questions:

1. Should broadband providers ask for a "QOS fee" from content providers that want to ensure the smooth delivery of video and other content?

2. Do you think RBOCs will degrade VOIP services that compete with their own VOIP and landline voice services?

3. Should the FCC get involved and block broadband providers from charging different prices for different levels of service?
stolsma 12/5/2012 | 4:09:26 AM
re: Net Neutrality Goes to Washington Sorry, clicked to fast.

What I was trying to write is that I miss the distinction between the Access line capacity(QOS) and the services(QOS) delivered over that access line and that you can't get a high QOS access (1-4 times overbooked) for the same price as a 40-100x overbooked ADSL access line...

stolsma 12/5/2012 | 4:09:26 AM
re: Net Neutrality Goes to Washington I'm missing one key question, something like:
Do you want to pay more (about 2-3 times more) for a higher QOS Internet Access Line to get access to QOS needed internet applications like Google Video ??

In this kind of discussions I alway's miss the distinction between the access to 'the Internet' backbone network and the in capacity restricted access line (where the real problem is).

chinook_7 12/5/2012 | 4:09:25 AM
re: Net Neutrality Goes to Washington The question shouldn't read: "Do you think RBOCs will degrade VOIP services that compete with their own VOIP and landline voice services?"

But rather: "As oversubscribed networks become more and more congested as higher and higher bandwidth consuming applications proliferate on the internet (aka video), do you think RBOCS should be forced to upgrade the QOS provided to 3rd party VOIP service providers without charging them?"

What might work reasonably well over today's best effort networks (e.g., best-effort VOIP), may not fair so well in tommorrows best effort network (e.g., one where there's lots of video congesting the pipes.)

What I think most people don't understand is how dramatically access networks are over-subscribed. I once did a calculation for one carrier's access network and found that if all subscribers tried to simultaneously access the net, the sustained rate each could achieve (assuming equal/fair access) was about ~35kbps. And this was for a DSL service offering megabit service to customers.

Of course this was a completely reasonable design given the traffic patterns -- most users are inactive most of the time, and active users have bursty traffic (web-browsing, email, chat). For this kind of traffic model, statistical multiplexing and massive over-subscription works just fine.

Throw things like video in though and the traffic model changes dramatically. Imagine everyone going to Google video each evening to pick out the show they want to watch on the IP-enabled TV. Statistical multiplexing goes out the window. OK, that's an extreme example, but you get the idea. If video takes off even half as much as people are suggesting, networks are going to get a lot more congested, and best-effort forwarding ain't going to cut it for real-time voice traffic.

vinay 12/5/2012 | 4:09:13 AM
re: Net Neutrality Goes to Washington Peter,

What does QoS mean on a best effort internet service? Does it mean

A) That they will employ different QoS queues for various traffic flows

B) Or will they delay/drop competing VoIP and video traffic even when there is no congestion?

Currently, my VoIP traffic on the DSL is going best effort and the service I get is reasonably good for the price that I pay. I also see my VoIP traffic get hits when there is congestion in the traffic. In fact lots of VoIP customers are happy with this model.

So how are the RBOCs planning to change this model without violating my DSL agreement?

My feeling is that we will start seeing something new "less than Best Effort" class of service. Which means, I (the RBOC) drop your traffic even when there is no congestion on the network!

Option B is what will happen in my opinion.

Vinay Bannai
ozip 12/5/2012 | 4:09:11 AM
re: Net Neutrality Goes to Washington I for one hope that the FCC steps in. Thanks to the innovation of so many entrepreneurs, Broadband Service Providers who deliver no content, enjoyed revenues exceeding $60B last year. If Broadband providers are permitted to select which services are delivered preferentially, the new entrepreneurs will be forced to expend their efforts developing services that operate in this reduced bandwidth environment, ultimately impacting innovation and the very operators who delivery broadband services.

I purchase Broadband Internet Access service and I dont want my operator choosing which services get preferential treatment at the expense of the services that I choose to use. No operator has mentioned that they will provision more bandwidth at no charge to me to accomodate this preferential treatment.

paulej 12/5/2012 | 4:09:11 AM
re: Net Neutrality Goes to Washington While reading chinook_7's posting, I was reminded of words from a few telcos. The opinion of some access providers is that VoIP companies, for example, are using their acess networks for free. They feel that those VoIP companies should pay for those access lines.

That kind of thinking is not only wrong, its silly.

The access providers should remember: your subscriber's VoIP company is not using your access lines. Your subscriber is using your access lines!

There is no doubt that high bandwidth media feeds might have a huge impact on network engineering and equipment costs. But, is it not expected that bandwidth usage will increase? If bandwidth usage increases, do we not believe we can address this issue?

I believe that we can and we will. What kind of connection did you have 10 years ago? Just as processors become bigger and faster, bandwidth utilization will increase similarly. At the same time, prices will fall in line with demand as they have in the past.

So, don't worry about it. Just go build better networks.

Now, since chinook_7 did bring to our attention that oversubscription rates could result in my VoIP calls not working the next time that everybody gathers in front of the PC to watch President Bush (no, just kidding... but imagine something important), it might be good if the access providers did offer a level of service that gave preferential treatment to users (not content providers) willing to pay more for better service.
chinook_7 12/5/2012 | 4:09:10 AM
re: Net Neutrality Goes to Washington You make a good point.

If service providers provide a QOS enabled network, then set prices for different levels of QOS, they effictively have a knob that can control the economics of various classes of service. Crank the price on Video-level QOS and it suddenly gets prohibitive for 3rd parties to offer it, and so on.

There's definitely opportunity for abuse there unless there exists a force to prevent it ... either competition or regulation.

Good point.
rwelbourn 12/5/2012 | 4:08:43 AM
re: Net Neutrality Goes to Washington There's a fundamental conflict in the messages we're getting from the broadband access providers: on the one hand, they're touting the speed of their access lines, and on the other hand complaining that their customers want to use that bandwidth to access third party services.

Comcast slags off Verizon for its DSL speeds (notwithstanding the fact that my cable modem service slowed to a crawl at the weekends); Verizon comes along and one-ups Comcast with FiOS. And what do they show on their TV adverts? Downloading video clips.

Notwithstanding the small print (I'm sure there's a get-out clause somewhere that says your speeds may vary), the broadband providers have created an expectation that we're in download heaven. Now they want us to pay for it twice. As you sow, so shall you reap.

abracada 12/5/2012 | 4:02:08 AM
re: Net Neutrality Goes to Washington If you are happy with the basic service for your VoIP packet, do you really believe that the RBOC will do a deep packet analysis of ALL basic service packets just to extract a few voice packets, just to make you unhappy without having any financial interest as you will be so upset that you will change your DSL provider.
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