Centerfield

Everything You Wanted to Know About Network Neutrality

The Problem

So what's all the ruckus about passing legislation to ensure Internet fairness? Well, it's very complicated, so I guess I'd better try to explain.

What seems to have triggered the ruckus was BellSouth's assertion that it should be able to charge Google for the high amounts of bandwidth consumed between their users and Google. It sounds fair, because it's their wires that they spent money to build, but that's just their spin, lacking context. The truth is that actors in the business they're in here - Internet Service Provision - are expected to and generally do operate otherwise. They've probably already signed contracts saying they'll operate otherwise that they're blithely ignoring.

BellSouth appears to be supported by a handful of monopoly broadband ISPs, inxluding the cable provider Comcast, AT&T, though their rhetoric has been less direct, and certain others who've already taken action:

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 labor dispute.

Shaw, a big Canadian cable TV company, is charging an extra $10 a month to subscribers in order to "enhance" competing Internet telephone services.

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.

The monopolists have hired lobbyists and PR firms to bring their point of view to the media and Congress.

So what's so bad about this? Don't they deserve recompense for services delivered? Can't people just switch ISPs if they think they're being treated badly? My answer comes in the form of the name I'm giving them: in the rest of this post: monopolists. I believe they are trying to take advantage of their monopoly power to act in bad-faith manner for an ISP, both to make more money by limiting consumer choice and to perpetuate said power beyond the telco world.

Best-Effort Traffic

Most Internet traffic operates with a deliberately simple charging model. You pay a single fee to your ISP solely depending on how much stuff you're sending and receiving. This is where all broadband ISPs are paid for their users' Google traffic. So, really, BellSouth wants to be paid twice. The Internet operates on that kind of simple charging model so that small Web businesses don't have to negotiate and pay bandwidth charges to half the ISPs on the net, an activity that would put many out of business.

There are other, more complicated, arrangements for paying ISPs for traffic that just goes through the ISP. Pretty much no traffic goes anywhere without money being made from it.

The monopolists also say that increasing demand for multimedia places increasing demand on their equipment, and they should be able to be recompensed appropriately. They talk about how multimedia means potentially high bandwidth uses, and thus that model is no good, and Congress should allow them to break their contracts to collect on that basis. Well, the rest of this post explains wny they're wrong. Basically, it's because the Internet allready has a multimedia model, and it does, in fact, already state different terms for the multimedia exception, but it's not the point here. None of the traffic they're talking about comes under that exception.

That traffic charging model described above operates on what's called a best effort model. Best effort means that individual low-level IP data packets will go through so long as there is enough bandwidth to do so. If there isn't the packet is deliberately dropped where the bandwidth bottleneck is and doesn't make it through. That apparently bloodthirsty model actual works very well because those low-level packets are sent by a higher-level network protocol like TCP that either expects lost packets or resends them, and adjusts bandwidth use to fit. All Web traffic, like Google's search services, is in that model.

Multimedia Traffic Models

There is another model for multimedia that the user wants to be reliably good. Under this model, conversations start with a request to each router between sender and receiver for access to guaranteed bandwidth. If the guarantee is granted, the network guarantees not to throw out for overcapacity reasons any amount of data up to the guarantee. Most network traffic, like the Web, doesn't do this because it's a pain to set up, and its streaming-bandwidth model corresponds poorly to most network uses. You have to be sending multimedia or something else more-or-less constant-rate for it to make any sense.

It's probably more reasonable for intermediate ISPs to charge extra for this model, because it does demand extra resources and bandwidth from their routers. So far, I believe the custom is not to charge. So far, though, this model has only taken off sporadically outside academia. It's unclear if that's because of ISP willies or sporadic router implementation or because they aren't really needed for most things, not even for most audio or video.

Now, because people wanted to use multimedia before guaranteed models were available everywhere, and also because people wanted to see how far they could push things without guarantees, theguaranteed-bandwidth model is astonishingly rarely used. Internet telephony doesn't use it. Most streaming video doesn't use it either, at a cost in having to wait longer before starting a video and a reduction in reception quality. For casual purposes it works pretty well.

Why the Monopolists Are Wrong

So, does the wide use of multimedia within best-effort service mean the monopolists are right that should be paid extra? Well, of course they're right. But they're already being paid extra, by broadband ISP customers paying for broadband. High-volume broadband users are often charged extra beyond that. So users paying more for good service is already in the model. No, this is solely about the wish to violate the nondiscriminatory rules for best-effort service.

Above I claimed that the monopolists were trying to abuse monopoly power to extend their powers beyond what they were given. Remember that companies are given a monopolies with the expectation they will serve the public. For a monopoly to refuse to or charge extra to pass internet phone traffic to subscribers who only have one broadband service, or even another one that's worse, strikes me as being about preserving an old-service monopoly and/or seeking to extend to a monopoly over internet phone service that did not previously exist. Similarly, attempts to get Internet companies to have to pay for user access is an attempt to use a monopoly power to extend ISP access to the Internet. It's alot less relevant where choice exists, because then customers denied good Google access can easily switch. Telus blocking access to critics is using monopoly...enough, you see the pattern now.

Proposed Remedies

So why's the government needed here? Because bandwidth is nothing like a free market. I've seen many capitalist bloggers miss this crucial point. I'am alot less concerned over AOL's behavior, mentioned above. It's evil, for sure, but AOL has plenty of competition, and AFAIK the users in question can switch. The decidedly monopolistic Baby Bells still own most of the bandwidth. 15-30% of the country operates in an area where there's an effective broadband monopoly by either a Baby Bell or a cable company.

But even many of the rest have very lazy competition. It takes three competitors to have a healthy market, and amazingly few people have three or more competitors for broadband services. It's because wireless is only competitive where it competes with just one at least slightly lazy monopoly.

Legislation has been introduced in both the House and Senate. Unfortunately, I couldn't find a copy of Markey's proposed House bill on the subject. The Senate Internet Non-Discrimination Act of 2006 mandates ISP network neutrality. It places a duty to enforce on the FCC.

I did notice a bug in the bill: it should allow ISPs to deny service to malicious users such as spammers and spyware vendors.

A better remedy would be to end exclusive franchises to build networks. 100 years ago, the Bell monopoly probably made sense, because the nation was stretched to build even ONE nationwide phone network. This nation is vastly richer now, and we now understand big network construction and management. I think we could afford to have multiple phone networks now. In fact, because that would let the machinery of capitalism work, I think we'd SAVE money. We'd certainly get much better service and faster upgrades.

Disclaimer: Telecommunication and Internet companies have a long history of disagreement. I am strongly on the Internet side. From my point of view this looks very like an attempt by monopolists to extract Danegeld from pockets enriched by the services they only wanted to see happen slowly, under their direct control.

I feel a little bad for having delayed so long on explaining this issue. I've been reluctant to post on this issue because it seems too much like work somehow. But it's gotta be done, I think.