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Summary:

A report published today in the UK labels arguments against network neutrality as “myths” — and suggests that attempts by broadband providers to manage online traffic will end up doing long-term damage to the entire Internet industry.

Income tax Monopoly board

Income tax Monopoly boardThe technology industry is renowned for its vicious arguments over points of principle: just look at any thread about open systems versus closed ones — say Google versus Apple — and you’ll that quickly discover a vehemence that borders on religious warfare.

But in a world of schisms, few arguments are as vicious as those around network neutrality. Telecoms firms around the world have spent millions lobbying lawmakers and arguing that they deserve the right to meddle with bandwidth-hungry services. Content providers and open Internet advocates, on the other hand, say this unfairly punishes successful Web companies and promotes monopolistic behavior among broadband providers.

Both sides have been locked in battle for years, but the fight often comes down to a series of he-said, she-said battles based on assumptions rather than facts. A new report published today in the U.K, however, has tackled many of the arguments head on — and it has come to a forceful conclusion.

In a paper titled “The open internet – a platform for growth”, London-based consultancy Plum says that many of the arguments put forward by telcos are “myths”. And far from bandwidth-heavy services being problematic for broadband providers, it says, the reality is that actually require services in order to keep growing — which means network neutrality is vital.

Some network access providers have claimed that the open internet model should now be changed.

They argue that growing demand for content and applications is a problem… We conclude that there is no reason to believe that a
departure from the open internet norm would be economically efficient – rather, we find a departure from this model would risk irreversible harm.

The conclusion is, perhaps, unsurprising — particularly given that the report was commissioned by a consortium of content and software companies: the BBC and Channel 4 (traditional broadcasters with heavy interests in online video), video-on-demand company Blinkbox, as well as Yahoo and Skype.

But its findings are backed up with numbers. Residential service providers voice concerns that too much data is being used by customers, putting them in a dangerous position — but the reality is that the broadband industry across Europe is worth €155 billion, and that value is growing as broadband demand increases. Indeed, while fixed-line providers complain about data use, mobile networks say data is an important revenue driver for them.

Can these both be true? Not really, the report suggests. For fixed-line providers, the cost of delivering increasing traffic is only one small part of the whole picture and is often wildly misrepresented. In mobile, meanwhile, increased traffic has a more direct impact on costs — and yet the income generated still outstrips the money spent by the provider. “Costs are not ballooning,” it concludes.

The report also takes that another common argument — that applications and services are parasites which profit from the investment made by telcos — and labels it a canard. Without applications, it says, demand for services would be low and telcos wouldn’t make money. Plus it’s not as if everybody wants to max out people’s connections: in fact, it’s in the best interests of software companies to minimize download speeds to make services better (which is why they invest in their own infrastructure as well as using the existing broadband network).

The report certainly makes for a strong piece of reading, but its provenance means it is likely to be dismissed by telecoms firms as a piece of propaganda — a harum scarum work that invokes the ghost of network discrimination when all telcos really want to do is prevent abuse of their networks. However the report points out that even though European governments have taken some steps towards enshrining network neutrality, there are increasing examples of online discrimination, such as:

  • Moves by the UK’s biggest internet provider, BT, which introduced a policy in 2009 that capped many users’ video streaming at a maximum rate of 896 kbps between the hours of 5pm and midnight.
  • Restrictions brought in by Orange, a pan-European mobile and Internet provider, to prevent bandwidth being used for “non-Orange based Internet streaming services, voice or video over the Internet, peer to peer filesharing, non-Orange based Internet video.”
  • Charges introduced by the British arm of Vodafone, requiring mobile users to pay an extra £15 ($23) each month for the right to use VoIP services.
  • Plans by Dutch telco KPN to charge premiums for access to VoIP, video streaming and IM.

These are all incidents that show net neutrality is not just a theoretical battlefield, and requires careful examination from all parties.

It will be interesting to watch this one shake out. In a post on the BBC website, the corporation’s director of strategy, John Tate, argues that it is vital to look at the reality of cause-and-effect, rather than the rhetoric.

The report considers some of the telcos’ main arguments for introducing more traffic management… and says that, in practice, great content from providers such as the BBC drives demand for broadband connectivity, which in turn has driven fixed and mobile broadband revenues of approximately €155 billion in Europe in 2010.

He concludes by saying that Plum’s report “makes a useful contribution to the debate”.

I find that hard to argue with.

Image courtesy of Flickr user alancleaver_2000

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  1. Richard Bennett Thursday, October 6, 2011

    You must be having a laugh, as this white paper is apparently aimed at toddlers or those with toddler-esque IQs. Consider this attempt at myth rebuttal:

    “Costs are not ballooning because of data growth. For fixed access they are low and declining on a unit cost basis, whilst for mobile access they are higher but nevertheless declining on a unit cost basis.”

    The statement that unit costs are declining (cost per bit) is beside the point when volume is increasing at a faster rate than the decline in unit pricing. Apple says the iPhone increase mobile packet traffic 8000% in three years. I can assure you that the unit cost decline is not nearly steep enough to cover that kind of increase.

    The white paper is not a “useful contribution to the debate,” it’s a complete load of crap.

  2. Politics Matters Saturday, October 8, 2011

    On the subject of net neutrality, Bob Gibson, Executive Director of the University of Virginia’s Sorensen Institute for Political Leadership, recently said: “It’s a debate that is going on in the Congress, and it’s really: Is the Internet going to be something that everyone has free and open access to, or, is it going to be something that is sort of controlled? What we don’t need is a lot of government control in the businesses of the internet. I think what we need is more of what we have with National Public Radio, which is a really true and balanced set of reporting that unfortunately has become politicized. What we are seeing is a shift from “anything goes” on the Internet to a shift where major corporations are shaping the news outlets and buying up more and more of the news outlets and putting them under corporate control and one set of a small number of hands…. We need freeware, we need shareware, and we need open access. People need to be able to trust sources that they can find on the internet, rather than have them controlled in a small number of hands or by the government.” (Gibson appeared on the Charlottesville, VA, politics interview program Politics Matters with host and producer Jan Madeleine Paynter discussing journalism http://bit.ly/pm-gibson)

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