Although moves to enshrine the notion of network neutrality (click) in US law have for the moment been rebuffed and ignored both in the House and Senate (in draft legislation sponsored respectively by Representative Ed Markey and Senator Ted Stevens), the debate continues to hot up. At the beginning of this month the ‘no bit discrimination, save the Internet’ lobby, in the form of Markey and co-sponsors Rep. Rick Boucher, Rep. Anna Eshoo and Rep. Jay Inslee, rebounded with the introduction of the Network Neutrality Act of 2006.

“Broadband networks, Mr. Speaker, are the lifeblood of our emerging digital economy. These broadband networks also hold the promise of promoting innovation in various markets and technologies, creating jobs, and furthering education. The world-wide leadership that the US provides in high technology is directly related to the government-driven policies over decades which have ensured that telecommunications networks are open to all lawful uses and all users. The Internet, which is accessible to more and more Americans with every day that goes by on such broadband networks, was also founded upon an open architecture protocol and as a result it has provided low barriers to entry for web-based content, applications, and services,” said Markey.

“Recent decisions by the Federal Communications Commission (FCC) and court interpretations, however, put these aspects of broadband networks and the Internet in jeopardy. The corrosion of historic policies of nondiscrimination by the imposition of bottlenecks by broadband network owners endanger economic growth, innovation, job creation, and First Amendment freedom of expression on such networks. Broadband network owners should not be able to determine who can and who cannot offer services over broadband networks or over the Internet. The detrimental effect to the digital economy would be quite severe if such conduct were permitted and became widespread.”

The proposed network neutrality bill has three parts. “The first part articulates overall broadband and network neutrality goals for the country, and spells out exactly what network neutrality means and puts it into the statute so that it will possess the force of law. The second part embodies reasonable exceptions to the general rules, such as to route emergency communications or offer consumer protection features, such as spam blocking technology. And the final part of the bill features an expedited complaint process to deal with grievances and violations within thirty days,” continued Markey.

Two of the network owners, who as a group are generally in favour of having the freedom to levy additional tariffs on bandwidth-intensive users of their facilities to fund further broadband expansion – or at least to be able to prioritise different applications – were not slow in stating their hostility to such legislation.

Train wreck?
According to a statement released by BellSouth, in recent weeks Markey, along with Rep. Nancy Pelosi (another net neutrality fan) and the MoveOn.org political action group that is petitioning its member to lobby lawmakers to preserve the status quo, have “…attempted to wrap themselves in the flag of ‘net neutrality’.”

“Such rhetoric should be recognised for exactly what it is: an attempt to impose highly restrictive regulatory rules on broadband Internet service offerings that would be anything but ‘neutral’. If Nancy Pelosi, Ed Markey, and MoveOn.org had their way, the Internet would be ‘neutered’, leaving the government to regulate the Internet, and the Congress, rather than the marketplace, picking winners and losers” contended BellSouth.

The BellSouth view is that the proposed Communications Promotion and Enhancement (COPE) Act of 2006 more than adequately protects the neutrality of the Internet, with the FCC, although not given the power of rule making, able to adjudicate any complaint alleging discrimination and obliged to resolve any such complaint with 90 days. Again, points out BellSouth, the FCC is given the authority to use any of its enforcement powers to remedy violations, and the COPE Act increases the maximum penalty to US$500,000 for each violation.

“What additional net neutrality rules Do Nancy Pelosi, Ed Markey, and MoveOn.org want?” rhetorically asked BellSouth. “Not satisfied with ensuring an open Internet, Nancy Pelosi, Ed Markey, and MoveOn.org want restrictive net neutrality rules that would prevent broadband network providers from offering innovative, differentiated services. For example, under some new service offerings being contemplated – but that restrictive net neutrality advocates seek to squash – broadband network providers could provide quality of service guarantees for video offerings and VoIP telephony, which are extremely sensitive to packet loss and latency. Likewise, under some new models being  contemplated – but that are being challenged by restrictive net neutrality advocates – broadband network providers could: (a) engage  in freely negotiated agreements with content providers by which end  users accessing that content provider’s website would enjoy faster  download speeds or other enhanced service; or (b) offer tiered  Internet service plans to consumers that would offer lower prices to  those consumers who use their broadband connections less intensively and higher prices to those consumers whose heavy use of the network  generates a hugely disproportionate share of network costs and congestion.”

“There is nothing evil or anticompetitive about exploring or implementing new business models. Rather, it is patently obvious that there are numerous pro-competitive benefits from increased network investments and new Internet service offerings,” continued BellSouth. “As an MIT working group consisting of academics and representatives of British Telecom, Cisco, Comcast, Deutsche Telecom/T-Mobile, Intel, Motorola, Nokia and Nortel recently warned: ‘The broadband value chain is headed for a train wreck’. With broadband intensive applications continuing to grow, the MIT working group recognised that business models need to evolve as the Internet evolves in order to ensure that network operators maintain incentives to invest in additional capacity.”  

Tough Tauke
Next up to the plate was Verizon’s executive vice president of public affairs, policy and communications Tom Tauke. Speaking at Pike & Fischer’s ‘Broadband Policy Summit 2006: Charting the Road’, Tauke said Verizon and other network providers had made great strides in deploying high-speed fibre optic networks. But, he stated, there was much left to be done, and that public policy should help, not hinder, broadband deployment.

“The plain truth is that today’s access and backbone networks simply do not have the capacity to deliver all that customers expect,” claimed Tauke. “Next-generation Web services will require a next-generation architecture. Building out America’s Internet and broadband infrastructure will require billions more in private capital investment. There are also looming policy issues that could advance or hinder broadband’s future.”

While welcoming the US reform of the monopoly-era video franchising laws (click), Tauke warned, launching into foodstuffs analogies, that net neutrality legislation “…could stall or derail this good news in broadband,” despite the fact that legislators and industry experts cannot even agree on its definition. “It seems we now have more versions of net neutrality than Baskin-Robbins has flavours,” he said.

Taking aim at those in the industry who have asserted that broadband network providers may deny consumers access to what they want on the Internet, he reasoned that doing so would be “…akin to Starbucks hatching a plan to secretly serve customers Folgers crystals – on paper it makes them more money; in reality it puts them out of business.”

The Verizon executive then asserted that industry participants seeking new government regulation of the Internet in the name of net neutrality were seeking ‘a security blanket’ because they “…fear a future driven by consumers, markets, competition and innovation. We, on the other hand, see opportunities for the marketplace, for consumers and any number of ‘garage innovators’ working on the next ‘killer app.’”

Tauke said Verizon was committed to ensuring full access to the Internet at speeds and prices that met consumers’ needs. But, he concluded, sound policies and a better policy debate were needed. “There is a legitimate discussion to be had about broadband networks and their reliability and accessibility,” he said. “But that isn’t what we are having right now. Instead, we have heated rhetoric, fuelled by unfounded fear that overlooks the success of the market and forgets the consumer. We should not fear the capabilities of new networks or doubt the ability of consumers operating in a free market to get it right.”

What is readily apparent in all of this is that the neutrality preservers – the likes of Google, eBay and Yahoo! - and the ‘network-must-change’ telcos are singing from the same song sheet in terms of justifying their respective stances. Both groups claim to be acting in the public good, fostering innovation, bolstering the US economy, and having history on their side. Nor has it escaped notice that the neutrality defenders are not averse to intervening in the functioning of the Internet when it suits their purpose – as for example in the various proposals to charge for the delivery of enterprise-to-consumer e-mail.

As we’ve said before, ‘having cake’ and ‘eating it’ may spring to mind here. But either way the neutrality debate looks set to run and run.
John Williamson