Latest Installment in the Net Neutrality Debate

Net neutrality is a principle designed to ensure individuals can access the Internet to get the information and resources they want without discrimination. That's good. As I discuss in great lengths in<a href="http://oreilly.com/catalog/9780596157036/"> my book</a>, unfettered access to the network can spur opportunity, innovation and prosperity for all. It's required to ensure the network can be a sustainable platform for change - with the potential to continue to improve the way we live our lives, conduct our politics, run our businesses, and impact our planet. 

But, as with most things, the devil is in the details and what net neutrality really comes down to is government control and economics. How much control should government have over the running of the Internet? How do operators profit from the investments they make to build out the network? Of course, the intersection of these two questions is central to the debate.

Yesterday, the <a href="http://www.pcworld.com/businesscenter/article/172312/fcc_chairman_calls_for_formal_net_neutrality_rules.html?tk=rel_news">FCC</a> proposed rules that would create more government control over the Internet and force Internet providers (including wireless) to treat all Web traffic equally. This would mean they couldn't block or slow traffic, presumably to prevent providers from treating competitors content differently and to make sure consumers have the freedom to use their computing devices to access any and every service they want.  Again, in principle, that's a good thing. However, it may have unintended consequences. 

The reality is it could end up affecting the experience that we all have on the Internet.  As you have probably heard, traffic on the Internet is doubling every two years (check out <a href="http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-481374_ns827_Networking_Solutions_White_Paper.html">Cisco's Visual Networking Index</a> for some mind-boggling stats on the growth of the network) and it takes investment to make sure that enough broadband is available to support all of that traffic. In many cases, it necessitates adding capacity and upgrading the underlying network, in other scenarios, it is about extending the reach of the existing network to a greater percentage of the population. To date that investment has been primarily taken on by the private sector, namely the Internet providers themselves.
 
These providers have been responsible for building out the infrastructure (from the wires/fiber optic cables to the routers, switches, etc.) and managing the traffic flowing through the network to ensure the experience is predictable and satisfactory. They would like the option to slow or limit the traffic of bandwidth hogging users or applications when they threaten to affect and degrade the access for all. This is becoming a very real problem as more and more users adopt media-rich applications and the providers (particularly on the wireless side) struggle to build out their networks to keep up. Just look at the <a href="http://www.nytimes.com/2009/09/03/technology/companies/03att.html?_r=1&scp=15&sq=network%20security&st=cse">recent New York Times article </a>on the iPhone's affect on AT&T's network.

The problem is that, unless the service providers can identify additional revenue to justify the build out, there will be no incentive for them to do so. Typically, the Internet service providers, which have been regulated by the government,  collect flat monthly fees, from customers for access to the network. The pricing structure may vary based on the type of connection that's available to that customer in that area, but there is no real difference in price between the customer that uses the Internet to send a few e-mails and the customer who spends all their time playing "<a href="http://www.worldofwarcraft.com/index.xml">World of Warcraft</a>." The difference, however, to the provider is distinct - the more customers who adopt these bandwidth-intensive applications, the more capacity and bandwidth they will need to add and that requires identifying revenue streams to justify it.  Now, the proposed plan does not prevent providers from changing their pricing plans or charging high-volume users more for their service. However, we all know that consumers tend to not want to spend more for things they are already getting now (we are fickle that way), so this could be a difficult sell. 

What has started to happen (in regular market conditions) is that the providers have begun to establish relationships with with some content providers (who tend to be on the pro net neutrality side) to make sure user's experiences are satisfactory. We are seeing some revenue sharing that could (for example, <a href="http://www.pcworld.com/article/139810/amazon_kindle_finds_a_new_use_for_3g.html">Amazonand Sprint's deal</a> or <a href="http://www.searchenginejournal.com/yahoo-att-expand-advertising-partnership/6308/">Yahoo! and AT&T's </a>partnership) provide mutual benefit and ongoing incentives to build out the nework. However, these kinds of deals could be at risk depending on the details of net neutrality regulations. 
​
There needs to be a way to protect the connections of everyone, which necessitates managing the flow of the traffic and most likely some prioritization. The irony is that once the network is upgraded to broadband connections, the capacity will be much greater and the need for "favoritism" diminish; but if this favoritism isn't allowed, the networks most likely won't get upgraded or built. And the very thing that network neutrality is intended to prevent - zero-sum discrimination - is the very thing that could result. 

---

Sarah is the author of The Sustainable Network: The Accidental Answer for a Troubled Planet. The Sustainable Network demonstrates how we can tackle challenges, ranging from energy conservation to economic and social innovation, using the global network -- of which the public Internet is just one piece. This book demystifies the power of the network, and issues a strong call to action.