What Happened to Net Neutrality Yesterday? A Reply.

Posted By on Jan 15, 2014 | 0 comments

This morning, Re/code published a piece on yesterday’s appellate ruling striking down the FCC’s “Net Neutrality” rules, asking the questions:

What’s Net Neutrality?
What Happened to Net Neutrality Yesterday?
What Happens Next?

and providing answers in the form of an interview with net neutrality advocate, Susan Crawford.  While those answers reflect a very clear bias, and some significant misinformation, I give Re/code and interviewer Peter Kafka credit for acknowledging the bias upfront, and presenting a much less alarmist tone than many others.  Nonetheless, an alternative perspective is warranted, and this article is intended as a reply.

First a note on my own biases.  I am deeply skeptical of most popularly-advanced policy proposals related to net neutrality, and frankly, I am skeptical that most of the people advancing those policy proposals understand the actual business dynamics, market dynamics, and in many cases, technological dynamics.  I spent the better part of the last decade and a half working for a major cable operator, and my perspective is undoubtedly influenced by that.  While many may presume that means I can’t be objective (and surely I do have some biases from that experience), in reality, what it means more significantly is that I actually do understand the business dynamics, the market dynamics and the technology issues involved.

At the same time, I also was an internet user, and was affiliated with EFF, before the web existed and before most people had ever heard of the internet.  I do not believe that ISPs should have the right to simply do anything they please.  I believe that it is an appropriate policy goal to ensure that Internet access is open and fair.  But that is not the same as saying that there are no legitimate bases for discriminating among services.

What’s Net Neutrality?

In the Re/code article, Ms. Crawford described the basic idea by saying that ISPs should not choose winners and losers.  Who could disagree?

Actually, a lot of people do disagree—over what “net neutrality” means.  Many advocates started out saying that it meant ISPs shouldn’t block, impair or slow down specific services.  Then some advocates moved on to say that it meant that ISPs shouldn’t speed up specific services, because that could have a domino effect of slowing down other services.  Some go even further, believing that net neutrality should preclude any services from being sped up, even if there were no risk of slowing down other services.  For a long time, net neutrality advocates were focused on the notion of “protocol-neutral” management of networks.  And when AT&T announced its Sponsored Data plan last week, most vocal net neutrality advocates denounced the plan, declaring that allowing a company to pay for delivery of their data, so that users on a metered plan wouldn’t have to, should be forbidden under net neutrality principles—because they fundamentally oppose metering, in the first place!

Accordingly, an accurate description of “net neutrality” would make clear that it has come to mean different things to different people, and for a substantial subset of “net neutrality” advocates who are particularly vocal, it has come to be used to express a general opposition to the exercise of any commercial interest, whatsoever, by ISPs.

What Happened to Net Neutrality Yesterday?

The actual “net neutrality” rules adopted by the FCC (the Open Internet Rules) were much more limited, of course.  They are much more reasonable, in fact, than most of the sweeping policy proposals that are put forward by advocates.  But they are not without problems.  And what’s more, they were adopted in the absence of any actual problem to solve.

Popular assertions to the contrary notwithstanding, there has actually been just one documented example of an ISP maliciously interfering with a third-party service, with anti-competitive intent.  In 2005, a very small telco in North Carolina—Madison River Communications, with less than 40,000 DSL customers—blocked some customers from accessing third-party voice provider, Vonage.  Vonage filed a complaint with the FCC, and Madison River agreed to a fine and a consent decree not to block voice services.

That’s all there is.

Net neutrality advocates invariably cite Comcast blocking BitTorrent in 2007 as another example—an assertion Ms. Crawford repeats in the Re/code article—but the fact is that Comcast was not intentionally blocking BitTorrent, and certainly wasn’t acting with anti-competitive intent.  (Even the reports at the time contradicted characterizations of “systematic blocking,” inasmuch as users and those investigating the complaints found that connections sometimes worked and sometimes did not.)

What Comcast did was a ham-fisted implementation of a fundamentally reasonable network management technique to limit the detrimental impact of BitTorrent.  That technique, when implemented properly, actually aligned quite well with consumer interests, by ensuring good performance for customers’ primary internet activities, while creating relatively little disruption to BitTorrent. In fact, Comcast was actually attempting to optimize its customers’ experience—something that certainly should be within their legitimate purview as a service provider.

The fact is, applications (or protocols) like BitTorrent (so-called “p2p” protocols, generally) really demand management, because they are what is known, technically, as “greedy,” in that they intentionally consume as much bandwidth as they can.  And like an invasive species, without intervention, they would routinely out-compete all other services.  The fundamental truth is, not all protocols are neutral, so the notion that only protocol-neutral management is legitimate, is fundamentally misguided.

(It ‘s beyond the scope of this article, but in fact, there were also a lot of other issues surrounding p2p protocols that amply justified specialized management—and that’s not a reference to the issue of piracy.  Much of the “kerfuffle” around protocol-neutral management was actually at odds with real-world consumer and policy interests, but the ISP industry, as a whole, was too afraid of the politics to make the case, and try to educate consumers and policy-makers on the issues.)

Comcast pretty quickly fixed their implementation problems—actually they modified their management techniques to become “protocol-neutral”—in response to public pressure.

These two examples—one, an isolated and tiny example in 2005 of a truly rogue operator, and the other a fundamentally mischaracterized example from 2007—both quickly resolved, in the absence of broad regulations, with no lasting negative effects, became the justification for enacting broad regulations in 2010.

What happened yesterday was that those regulations were struck down.

What Happens Next?

The many alarmist declarations of an imminent end to the Internet as we know it notwithstanding, from a consumer perspective, probably very little changes.  Certainly, there won’t be any immediate changes visible to consumers.

And if we base our expectations on facts and rational analysis, even without new regulations, probably no detrimental impact for consumers in the longer term, either.  The fact is, Internet access was happily open and fair for decades prior to the enactment of the rules struck down yesterday, and we can expect Internet access to continue to be open and fair going forward.

Claims that ISPs will devolve to walled garden services are entirely without basis.  The ISPs that exist today never were walled garden services.  In general, they succeeded by displacing walled garden services such as AOL, and even the traditional walled garden services ultimately adopted an open Internet access model.

Consumers have come to expect that, and ISPs have a fundamental interest in meeting their customers’ expectations. Competition among mobile broadband providers is robust, which will ensure that mobile providers continue to supply the open access consumers want.  Competition among landline ISPs is less robust; however, the large ISPs that serve the vast majority of consumers all have robust competition in at least some of their footprint, and with the introduction of FiOS and U-Verse, competition among landline ISPs is significantly more robust today than it was prior to the Open Internet Rules’ adoption.

Finally, the hammer of potential future governmental intervention—quite possibly in the form of broad regulation—if there should be malicious abuse, or even if well-intended actions produce detrimental results, will ensure that ISPs act cautiously.

That threat of intervention is an important tool in the policy toolbox.  What net neutrality advocates don’t seem to appreciate is that it’s a tool that, in all likelihood, is sufficient to achieve the policy goals we should have.

New FCC Chair Tom Wheeler seems to have right view, recognizing that the prescriptive telecommunications policy-making approach of decades and centuries past is more likely to do harm than good in the rapidly-evolving world of today.  A much better approach is to watch how things unfold, and intervene only if and when an actual problem requiring intervention—not merely a predicted problem—appears, and then with a response commensurate to the actual problem.

Thought this piece was interesting?  You might also be interested by our recent stories Why the Comcast-TWC Merger is NOT About Broadband and Are ISPs Gouging US Broadband Users?, or by our other coverage of net neutrality issues.