Blog Post

How Neutral Should Wireless Networks Be?

As more of us hop on our 3G-connected smartphones or netbooks, and future 4G connections offer the promise of wired-like speeds via wireless networks, Ars Technica has posted a great article on how regulators in Canada are weighing the issue of network neutrality over wireless networks. Some of the practices described in the article seem egregious, such as carriers charging higher fees to access certain web sites or trying to charge more to send texts with advertising in them.

These clearly violate the assumptions of net neutrality, exactly like Verizon’s (s VZ) refusal to run politically minded text messages did. However, much like legislators use the awful specter of child porn to demand tougher rules about tracking online users, showcasing such examples of interference on wireless networks obscures a cold, hard truth: Wireless network neutrality may not be as practical as advocates might like.

The most common excuse offered by carriers to engage in non-neutral behavior is that they need to manage their network to ensure a quality experience for all subscribers. This isn’t always complete BS. ISPs do have some network constraints and regularly engage in spam-blocking and other practices to keep users happy. However, network management can also be used as an excuse to block services that might be competitive to the ISP, such as Comcast (s cmcsa) blocking P2P traffic, and may also indicate an unwillingness to upgrade capacity to meet actual demand.

However, for wireless networks, the ability to upgrade capacity is limited by all sorts of technical and regulatory hurdles, such as spectrum ownership and the ability to get more towers in place. So Canada isn’t the only place where consumers, carriers and web site owners need to talk about network neutrality on wireless networks. It’s an issue we should start exploring here as well. I’d like to hear what our readers think.

11 Responses to “How Neutral Should Wireless Networks Be?”

  1. I just stumbled on a research paper which applies the Nash Theorem to the problem of network resource allocation. Very interesting read. The basic idea is that competing players can maximize everyone’s overall utility by making strategic compromises. Conversely, “selfish” players ultimately obtain far lower utility than they would by compromising. The highest overall utility curve for all players is known as the Nash Equilibrium. The article is at:

    • Great article … the research now needs to add commodity principles to the resource. Bandwidth at certain times, days, and months has different demands and value. IE wanting 1mbps during the window 3pm to 11pm has much more demand and value for limited resources, as compared to 1am to 9am.

      By allowing variable costing based on resources and demands, we actually can optimize total resource allocation and ROI better than current fixed price unlimited use network billing.

  2. Stacey Higginbotham

    Brian, you may be confusing me with Om on the iPhone. I love my BlackBerry, although I can see the appeal of the iPhone on a certain CDMA network I happen to like. But would they cripple the Wi-Fi? Sorry, for the digression. I appreciate your take. I do think if other efforts to make money off app stores or different services fail, then we could see efforts to charge content providers for preferred access on wireless networks. If all networks were fairly equal I think we’d see more of a competitive barrier to that sort of thing, but the quality differences in certain regions will act as a limit for people who want to use their phones for voice AND data.

  3. Spoiler / Disclaimer: I work for a wireless carrier
    Spoiler / Disclaimer, part deux: I often disagree with Stacey on matters of devices, particularly the iPhone, because, quite frankly, my company is not allowed to sell it and *I* believe it is a phone for the lemmings. (reminds me of the must have Sony Discman days – that should incite some colorful comments :-) )

    To set up the commentary, let’s establish these principles:
    * as you say, wireless spectrum is a fixed resource. Once you acquire it, bandwidth is limited by coding principles and protocols
    * Towers and NIMBY (not in my backyard) – in order to get greater throughput, spectrum reuse is needed (i.e. cell splits for us in the industry) and as local regulations become more onerous, tower camo and the NIMBY effect, enhancing capacity becomes more difficult, hence the rise in femoto’s
    * Compared to the wireline world, fiber bandwidth, when compared to wireless, is a non-topic of discussion. Adding a 2nd wave using wave division multiplexing to a cable pedestal or DSLAM, not a trivial expense by any means, but, greatly enhances capacity at a lower expense.
    * Further, acquiring or deploying more spectrum in a existing fiber does not require governmental interaction or licensing.

    I agree with “wirelessly tethered” that in new spectrum blocks, newer regulations could be imposed due to newer business models that are constructed when considering to bid a block and build a network.

    However, existing deployments should be free to compete amongst themselves unencumbered by neutral regulations. If the customer finds them not palatable, by all means, pick a new carrier or new wireless service offering. Unless government is willing to make concessions on backhaul tariffs and local tower approval processes (which won’t happen), but would easily allow carriers to expand capacity, imposing net neutrality regulations, will create, by definition, a regulated service offering, which, will result in increased prices to the end consumer and lower product innovation. History has shown, with wireline, under regulations, complacency in technology innovation / deployment becomes the norm (ISDN was extremely expensive to the consumer; xDSL- think HDSL – sat on the shelves for years, before ADSL was deployed and xDSL deployments did not take off until they were deemed deregulated to compete against cable co’s).

    If I, as a carrier, know I must be neutral, then I begin to look for ways to provide the least amount of service at the lowest cost possible. Then, I begin to look outside my window, to merge with another provider, to lower my cost, my backhaul expense (via volume purchase agreements), base station expense (through standardization) and viola, a duopoly is born. And under this scenario, a gentlemen’s agreement between the two carriers, nod nod, wink wink, don’t rock the boat in lowering prices and I won’t either. (we are starting to see this again with airlines under consolidation – think of all those new fees you have).

    I don’t believe carriers would be so bold as to bill YouTube for disproportionate traffic usage, as it would surely create dereg suicide, but heck I have been wrong before. Further, I do believe wireless carriers will have to raise the “unlimited” 5Gig cap in the next couple of years, based on the trends I have seen. Let’s keep in mind, that with the accession of exclusive devices (G1, iPhone, Palm) these OEMs are picking the carrier that offers the best business model and are, in a perverse nature, forcing a limited amount of neutrality in their carrier of choice, so long as an exclusivity agreement exists. When the device is available, absent exclusivity, the best carrier wins…Think iPhone on a CDMA network…

  4. WirelesslyTethered

    Wireless 101. The MNOs spent a fortune in acquiring spectrum. Its not just about managing it, as you pointed. It remains in their interest to monetize any bits and bytes that flow in it. Be it bit-pipe models or creative service based, thats a part of the business model. Wireless neutrality on ‘owned’ spectrum is thus not in their interest. If certain spectrum such as the 700 Mhz white spaces is made for public use then its a separate discussion.