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Summary:

The FCC is proposing new rules that would govern cable networks and other carriers — rules it says will protect the open internet. But critics say the regulator is going to cripple net neutrality and introduce a pay-to-play internet. Here’s what you need to know.

Google's Lame Defense of its Net Neutrality Pact

The issue of net neutrality is back in the news again, thanks to some proposed rule changes by the Federal Communications Commission, changes that the regulator says are aimed at protecting a “free and open internet.” A chorus of critics, however, say the commission is trying to eat its cake and have it too — by pretending to create rules that will protect net-neutrality, while actually implementing what amounts to a pay-to-play version of the internet, one that favors large incumbents.

It’s a complicated topic, and one that is prone to a certain amount of hysteria and hyperbole. So what follows is a breakdown of what you need to know, and what some legal experts, technology insiders and advocacy groups are saying about it:

Why is the FCC changing its rules?

The regulator’s ability to monitor and punish breaches of net neutrality was thrown into limbo by a court ruling in January, which said that the commission didn’t have the authority to crack down on certain kinds of behavior because it hadn’t defined cable networks as “common carriers,” the way phone networks are. Since that ruling, the FCC has been trying to find a way to repair those abilities.

The commission has said that it remains committed to upholding the principles of net neutrality, and that under the new rules “behavior harmful to consumers or competition by limiting the openness of the Internet will not be permitted,” but others have a less charitable view of what it is up to, and say it is betraying the promises President Obama made to uphold net neutrality.

Why are the changes controversial?

According to a report in the Wall Street Journal on Thursday, among the changes that the FCC is considering are rules that would permit networks and carriers to create “fast lanes,” in which certain content providers who pay for the privilege are given preferential treatment. This, many critics argue — including our own Stacey Higginbotham — would be a direct violation of the principle of net neutrality that the FCC is supposed to be upholding.

In a post at the New Yorker site, Tim Wu — the Columbia Law School professor who is credited with inventing the term “net neutrality” — said that the kinds of loopholes the FCC appears to be considering are exactly what cable providers have wanted for a decade or more: namely, the right to speed up or slow down certain kinds of traffic. But the outcome could be disastrous, he says:

“This is what one might call a net-discrimination rule, and, if enacted, it will profoundly change the Internet as a platform for free speech and small-scale innovation. It threatens to make the Internet just like everything else in American society: unequal in a way that deeply threatens our long-term prosperity.”

Veteran technology writer Dan Gillmor says that the FCC is trying to “axe murder” net neutrality, and that while pretending to fix the problem it is “actually letting it get worse, by providing a so-called ‘fast lane’ for carriers to hike fees on sites trying to reach customers like you and me.” Gillmor called the FCC’s moves “a potentially tragic turning point in American politics.” Instapaper creator Marco Arment said:

“This is not building anything new — it’s discriminating and restricting what we already have. This is not making anything faster — it’s allowing ISPs to selectively slow down traffic that they don’t strategically or financially benefit from, and only permit traffic from their partners to run at the speeds that everything runs at today.”

In the WSJ story, BitTorrent CEO Eric Klinker says that “For technologists and entrepreneurs alike this is a worst-case scenario. Creating a fast lane for those that can afford it is by its very definition discrimination.”

Traffic

What does the FCC think it is doing?

In response to the stories in the Wall Street Journal and New York Times, FCC chairman Tom Wheeler published a statement that said the reports about the regulator’s plans were filled with “misinformation.” Wheeler said that under the new rules, the commission would continue to ensure that ISPs and networks “do not act in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity.”

For at least some critics of the commission’s approach, this statement still leaves holes you could drive a fleet of cable trucks through — including the definition of what is “commercially unreasonable,” and the question of whether the regulator will care if a network or provider favors certain kinds of traffic, provided that traffic doesn’t come from an “affiliated entity.” As Stacey put it, the FCC might not want to kill net neutrality, but it might end up doing so anyway.

“Whether or not you think this is a good idea, inserting any sort of commercial relationship into delivering last mile web content – outside of what the end-consumer pays the ISP — is not network neutrality. So let’s stop calling it that. The FCC should man up and say exactly what it is doing here: It is implementing a double-sided market for the internet that could allow businesses to enter into commercial relationships with ISPs — who do not operate in a competitive market in the U.S. — for faster delivery of their content”

What is net neutrality?

Net neutrality is a principle which states that networks should not discriminate when it comes to the content that flows through their pipes — that they should not give certain kinds of content or certain providers preferential treatment in return for money. In other words, one bit should be treated like any other bit. As former Wired writer Ryan Singel put it in explanatory piece at Medium:

“Net Neutrality is the simple concept that the company that provides you internet access on your phone and at your house should be a utility — like a phone company. It should deliver you the information you ask for at the speed you are promised without playing favorites or blocking or degrading services.”

networks

Why is net neutrality important?

Technology-industry advocates and open web supporters argue that if networks start to charge content providers for special treatment, then only those who can afford to pay these extra charges will be able to reach the end user. That would be fine for existing content companies, but could disadvantage smaller competitors and thus lead to a decline in internet-related innovation. As Stacey says:

“The idea that we would let ISPs make decisions that could lead to ISPs setting commercial terms that would impose taxes on startups and existing companies all without ensuring any sort of lowered price for consumers or network upgrades from the ISPs, is ridiculous. Broadband networks are not a public utility, but they are the foundation for our economy.”

One recent example of a deal that caused a lot of consternation among net neutrality advocates is the one that Netflix cut with Comcast, which gave Netflix preferential access to Comcast’s customers. Although this deal is actually more about what the industry calls “peering arrangements” than it is about true net neutrality, it brings up many of the same issues around discriminatory access to content. In a statement it posted on its website Thursday, Netflix said:

“In sum, Comcast is not charging Netflix for transit service. It is charging Netflix for access to its subscribers. Comcast also charges its subscribers for access to Internet content providers like Netflix. In this way, Comcast is double dipping by getting both its subscribers and Internet content providers to pay for access to each other.”

In a response, Comcast suggested that Netflix’s argument was disingenuous, and that the content company itself chose to make the deal with Comcast willingly in order to “improve its business model.” The cable network said that it remains committed to an open internet, and supports “appropriate FCC rules” to ensure consumers’ access to the internet is protected “in a legally enforceable way.”

civic tech

What should the FCC do?

Net neutrality advocates argue that the simplest and most effective route for the regulator to take is to declare unilaterally that cable networks like Comcast are “common carriers” in the same way that phone networks are, a door that the January court decision left open to it. Under that system, networks would be more like utilities than anything else — dedicated to carrying content without discriminating between different types. As Ryan Singel puts it:

“The FCC has a very simple way to create simple, fair and enforceable rules to protect innovation, free speech and commerce. It lacks the courage and (perhaps) political capital to re-grant itself this power. Lacking this power, [it] is relying on a small loophole given to it by the courts [and] that loophole requires the FCC to allow Verizon, Comcast and AT&T to create slow and fast lanes. The FCC wants to call this ‘net neutrality.’ It’s nothing of the sort and the proposal needs to be killed. It’s a bargain that will kill innovation on the net.”

Some critics of this kind of move, including Andreessen Horowitz founder Marc Andreessen, have argued that turning cable networks into utilities could make them less likely to devote the kind of resources to improving the internet, and that this kind of investment is required if we are to have the kind of broadband innovation America needs to support its economic future.

What happens next?

The FCC’s proposed changes will be opened up for comment and then voted on, and then the regulator will enshrine some or all of them in legislation — and hope that what it has implemented doesn’t run afoul of the law, the way the previous version did. As Stacey describes it:

“The agency’s hope is to have new rules in place by the end of this year, and it plans to release a public document called a Notice of Proposed Rule Making (NPRM) outlining its thinking and asking questions about the new rules. It plans to release this NPRM in three weeks at its May 15 open meeting. Once the documents are released, the public will have a chance to comment on them.”

In the meantime, lobby groups dedicated to the open internet and net neutrality will be mounting a campaign aimed at convincing legislators that they need to take action to ensure that net neutrality remains in force. Craig Aaron of the non-profit advocacy group Free Press said in a post that such pay-for-priority schemes “would be a disaster for startups, nonprofits, independent content creators and everyday Internet users who wouldn’t be able to pay these unnecessary tolls. And the stifling of future competitors and disruptive innovators would be a fringe benefit for the big ISPs as they line their pockets.”

Todd O’Boyle of Common Cause’s Media and Democracy Reform Initiative, told the New York Times that “If it goes forward, this capitulation will represent Washington at its worst. Americans were promised, and deserve, an Internet that is free of toll roads, fast lanes and censorship — corporate or governmental.” The Electronic Frontier Foundation said that a pay-to-play model would be “profoundly dangerous for competition. New innovators often cannot afford to pay to reach consumers at the same speeds as well-established web companies [and] that means ISPs could effectively become gatekeepers to their subscribers.”

Post and thumbnail images courtesy of Thinkstock/ Chuyu

  1. Jack N Fran Farrell Thursday, April 24, 2014

    Why not stop: horseless carriages only for the wealthy, computers only for those who want to buy them, information for those willing to pay for it. Let’s provide high speed internet to the Luddites they don’t want it or needed it but they are entitled to all the stuff info-junkies pay for.

    No! net neutrality has not died, it never was. What’s happening now is a unicorn funeral.

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  2. The internet has always been “pay to play.” If Netflix wants to send 100 Mbps over the Internet, it needs to buy a 100 Mbps connection to the Internet, just like anyone else.

    The problem with this model is just because Netflix has bought a 100 Mbps connection to “the Internet,” does not mean they can actually deliver 100 Mbps to anywhere on the Internet. E.g., it would not be possible to deliver 100 Mbps to a computer on a dial-up modem in Timbuktu. What Netflix has actually bought is a connection to a private network, which itself has some connections to other private networks, that may or may not have enough capacity to reach the destinations Netflix wants to deliver it’s 100 Mbps to.

    So, here are already fast lanes and slow lanes on the Internet, depending on how congested these various networks are. The problem is you can only find out what is fast and slow by trial and error and you can only switch lanes by switching providers. This is incredibly clumsy and inefficient, and the provider who is fast lane for some destinations may be slow lane for others.

    RIght now, the only content providers who can escape this reality are businesses like Apple, Google, and now Netflix, who are large enough to operate their own networks and enter into direct peering agreements with the networks they want to reach. Getting rid of the network neutrality nonsense will open the door to more efficient “virtual” peering agreements, so that everyone can buy at small scale what the big players are now able to achieve with physical peering.

    The part of Net Neutrality that needs to remain is that agreements must be blind to the contents of packets. They should be able to charge by volume, latency, distance, etc., but a content provider should not find themselves facing a large toll just because they are sending unusually valuable data. This is where Netflix has really tried to muddy the water. They should expect a big bandwidth bill if they are consuming 30% of the bandwidth on the network. That’s got nothing to do with Network Neutrality.

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  3. Tim, sorry, but you clearly have no clue what the internet is..

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    1. See Bill’s comment below for a more concise version of what I was trying to say.

      Or, think of it this way. Suppose the entire Internet was operated by Comcast. Then few people would dispute the idea that if Netflix wants to send 100 Mbps into the network, it needs to buy 100 Mbps connection from Comcast. If they buy a 10 Mbps connection, then their customers get a slow lane to their content. If they buy a 500 Mbps connection, their customers get a fast lane. This is how the Internet works and how it has always worked. It only gets a little more complicated because it is a collection of multiple autonomous networks. So, Netflix might buy it’s 100 Mbps connection from some other network, who itself buys a 100 Mbps connection to Comcast. But, there is nothing sacred about having this intermediary. In fact, in Netflix case, that arrangement was breaking down, because their intermediary, Cogent, did not actually have the capacity to deliver the volume of data they were accepting from Netflix to its finally destination. So, they entered into a direct agreement with Comcast.

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  4. Bill Raduchel Friday, April 25, 2014

    The Internet is a packet-switched network so network neutrality as postulated here is just impossible or economically unaffordable. All networks that sell to consumers should be required to sell peering connections on standard terms and conditions including pricing to third-parties. Full stop. That is what the FCC is trying to do, it appears. This bolsters “net neutrality.” So much is made of Netflix paying Comcast. They were paying Cogent before and Cogent supplied the connection to Comcast. They apparently got a better deal with Comcast. Does any of this matter for net neutrality? What is Akamai or any content distribution network but a fast lane? The dream that all traffic would flow though MAE-East or MAE-West died long ago. If net neutrality means that every ISP should provide unbiased routing to and from MAE-East/West, that if fine but irrelevant. Netflix would die in that situation.

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    1. Exactly. Netflix has been try to muddy the waters to reduce their bandwidth bills, which have nothing to do with network neutrality.

      I guess there was some notion that passing data through aggregate carriers like Cogent or Akamai would hide the originating source and prevent discrimination or favoritism. But, in fact, that approach did not satisfy the needs of the Netflix business or their customers, and no real guarantee what kind of neutrality it would provide. The answer is as you say in your second sentence.

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  5. John Christman Friday, April 25, 2014

    Here’s a real-world example that I’m worried about. I do my home telephony via the internet using a third party, not Comcast. If Comcast sees those packets as competing against its own telephone service, what’s to stop them from slowing down these packets to make it unusable?

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    1. That’s a great question, John.

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    2. Cormac Foster Friday, April 25, 2014

      Excellent point, John. If Comcast were only in the business of providing Internet access, packets would just be packets, and we wouldn’t have an issue. But they’re not. There are other industries with a smattering of the overlap we have here (e.g., the USPS providing last-mile delivery for FedEx in remote locations), but those cases are anomalies, while this applies to everyone. And comparatively, there’s also not a whole lot of innovation going on in the domestic shipping market. If Comcast / Charter / etc. can charge what they want based on the content or origin of data, we’ve just put decisions about the survival of any IP-based application in the hands of a half-dozen providers.

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    3. I think the more timely question is what happens if Comcast’s network is too congested with Netflix traffic to deliver a viable voice service. The only way Comcast can control the amount of traffic on its network is to limit capacity at the inbound ports, which is exactly what it and all networks do. When Netflix paid to enlarge those ports, Comcast had the revenue to upgrade their network to handle the additional volume. Preventing these kind of commercial relationships is not going to improve the quality or capacity of our networks.

      You raise a great question in principle, but it’s a red herring in practice. What we need from the Internet is faster and more widely deployed broadband, not cheaper voice, which is increasingly handled by wireless devices anyway.

      The reason so many people have only 1 choice for broadband access is because there is not enough incentive to build out competing networks, if the operators of those networks will be prevented from profiting.

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      1. I strongly suspect that the reason so many people have only one choice for broadband access is that large players stifle competition through government regulation (how many local cable monopolies were created under the premise that they got the monopoly in exchange for investing in the network). A lot of money changed hands to purchase these monopolies. After endless consolidation with little regard for consumers, we end up in this place.
        Given the history, why would these monopolists change their behavior and not leverage these rules for competitive advantage? Why do these firms want these new rules so badly?
        Finally, I find it interesting that in nations where large ISP’s are treated as utilities that access speeds are faster and prices are lower.

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  6. Daniel Phelan Friday, April 25, 2014

    If Netflicks is 30% of bandwidth on a given network. Then Netflicks has created value in that network. Netflicks creates demand for internet services and faster connections. The ISP follow by charging the end user for faster connections.

    The Internet is a telecommunications service. ISP’s are utilities just like telephone companies.

    Net neutrality is a policy designed to prevent Internet providers from being able to discriminate among content – whether on political grounds or financial advantage. It is a cornerstone of an open Internet.

    Actually, Internet traffic is almost exactly like telephone traffic. The user dials a number (or an IP address) to communicate with a specific person or business. Telephone numbers look like, 510.555.1234. IP addresses look like 192.168.123.123. It is that simple. Just because the equipment for Internet traffic is a little different, isn’t a reason to disqualify internet traffic as any different than any other FCC regulated communication methods. Internet traffic is user initiated communication that uses routers and switches to construct a connection to IP assigned webpages. We literally dial a connection to a website. It is up to the website operators to have the equipment required to handle the load of all the users who visit their website.

    This decision means that major telecom companies (Verizon, AT&T, Comcast and Time-Warner Cable) will be able to decide which websites live or die. Major telecom can now sell the advantage of a better connection to the highest bidder. These companies already have enough power. The internet how it was had a way of leveling the playing field for communication. Anyone who wanted to write a blog or host an online radio program or even sell an innovative product could become just as influential as the mainstream corporations. It’s a shame to see that power threatened by those who want to dominate the points of view and the products that Americans are allowed to see.

    Just like everything else in this world, it’s all about greed. “potentially innovative services may be lost” Yea right! Sounds like the ISP’s are full of themselves. The ISP’s didn’t create the internet. The only “innovation” the ISP’s are interested in is innovating better ways to profit. Last time I checked emergency medical devices reporting over the Internet aren’t sucking bandwidth.

    The FCC needed to classify the ISP’s as common carriers, but alas it seems the FCC has sold out and is playing the fool or they just are fools who think they are innovators.

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    1. Your logic is backwards. Traffic volume is an expense, not a value. Few people would argue that Netflix constitutes 30% of the total value provided by the Internet. In fact, it is probably near to the lowest value per bit ratio of anything happening on the Internet.

      Also, your idea that data recipients, e.g., Netflix viewers, have paid for the data transmission is broken. If there were no gating at the sending end, Netflix could use their current market popularity to drive away competing network traffic, simply by saturating every viewer’s connection with additional content, whether the recipient wants it or not. They could deliver trailers, etc., but the real aim would simply be to the clog the neighborhood pipes, so a neighbor who tried to tune in to a competing service would get crummy service. The current model where senders “pay to play” insures that content providers try to deliver only what people want, as efficiently as possible.

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  7. Matthew Wichman Friday, April 25, 2014

    These deals do not slow down traffic as we know it today or give priority based tagging to Netflix and those that follow. It allows ISPs to sell bigger connections closer to edge routers for a premium. If this was a phone company it would be co-location. The NASDAQ or NYSE do this for trading companies. The implications of not allowing businesses to do this necessitates third party internet aggregators that would slow it down further and just do the same thing from farther away. Networking 101 people.

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  8. always good to see how the rules are used to, as always “protect private enterprise”… clearly the corperate network engineers and network economic gate keepers have now fiqured out that they have no “economic span of control” over traffic on the network (surprised?) … what do you do? ..
    I know get the governing body …you know the ones that only represent us (the people) when they are running for office..
    get them to create new rules (something they are good at) that allow for “traffic segregation” yeah thats the ticket …metering didnt work… equipment is getting cheaper..then there those google guys making us compete and build faster networks not to mention Netflix and of course theres Aereo..”spoiler alert” everyone pays to be on the internet ..(yes including )Netflix et.al (DUH) classic example of “looking beyond the obvous
    Oh whats a boy to do?..
    I know get the Head governing guy (one of us) …to create new rules and along the way tell everyone … “they wouldnt understand” the movie Blankman comes to mind ….

    When all along, you are doing what you always do for “private enterprise” continuing our “unfair advantage” and making people think you are doing it for their own good..how smart our we? (you know us the guys that contribute ) lobby and are the only interest/people who matter “REALLY”?

    Wake up folks we are being hoodwinked… lead astray .They think we all are stupid thats why they are so blatant they dont have to care… the “rule makers” do the heavy lifting when it comes to (NOT) caring about the people’s interest However and maybe more alarming is they think/believe they are not
    “STUPID”….the term (quisleing) comes to mind

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  9. Reblogged this on Briskin, Cross & Sanford – Technology Law and commented:
    This is a good primer on Net Neutrality and why it maters. Give it a read!

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  10. Talk of “fast” and “slow” lanes takes me back to the days when people talked about the “Information Highway.” Is this analogy really helpful? I asked an engineer friend of mine what happens with a carrier decides to speed, slow or in any other way segment, segregate (or I guess discriminate against traffic. His explanation: it’s a matter of buying immunity to packet dropping:

    “When carriers talk of “segregating” certain traffic, they usually mean this in the logical sense. Bandwidth is managed on the Internet and within carriers largely by selectively dropping packets. And thus there are ways to “mark” packets to tell routers how to treat them relative to packet-dropping policies. You can mark packets at the Ethernet level (VLAN tags), at the IP level (type-of-service field in the IPv4 header), or by inserting MPLS tags.”

    “So, if you are Comcast and you want to have excellent quality of service for your residential VoIP service, you mark these packets accordingly, thus telling your routers to “lay off them” when it needs to decide which packets to drop. If Netflix is driving you [meaning the carrier] crazy and consuming too much of your bandwidth, you mark packets as they come from the Netflix content servers with a tag telling your routers “free game to drop these.” Conversely, if you make a business deal with Netflix to give them priority service, they have a tag that makes them more immune to packet dropping than other packets.”

    “Now, pretty much everything uses one of two transport protocols atop IP: TCP and UDP. When TCP packets get dropped, TCP recovers and sends again. So if you are watching a streaming video and you see the screen freeze or pixelization on the screen, you are seeing slowness because of TCP retries. VoIP most often uses UDP. UDP cannot recover from dropped packets, but application protocols atop UDP can, and this is what SIP does. So a drop of an occasional UDP packet carrying SIP goes unnoticed, other than the delay. VoIP audio is also carried over UDP, and when you hear bad quality audio, you are basically suffering from missing packets.”

    Note: I’m not taking sides on net neutrality here. Just trying for a simple explanation of what currently happens with network traffic segregation — and will likely continue whatever comes of the FCC’s coming NPRM. I found this quite helpful, but if wrong I’d appreciate input from others.

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