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Net Neutrality: Think Outside the Box
Posted by: Dale Franks on Friday, April 21, 2006

This month, Congress has been debating the concept of Net Neutrality, and whether the FCC should regulate Net Neutrality as a principle. In general—although not strictly so—Democrats have been in favor of Net Neutrality, while Republicans have been against it.

What is Net Neutrality, and why should we care?What is Net Neutrality, and why should we care? Wikipedia defines net neutrality as a principle of network design that "asserts that, in order to promote innovation, network service providers such as telephone and cable internet companies should not be permitted to dictate how those networks are used (i.e., not permitted to ban certain types of programs, to ban certain types of devices connecting to the network, or to favor carriage of traffic to certain web sites over others)."

Briefly, the pro and con arguments are as follows:


Without Net Neutrality, phone and cable companies will have the ability to:
A) Cut off access to web sites run by competitors, or otherwise control access to content they wish to restrict.
B) Force consumers to use only approved email clients, web browsers, or other software applications, i.e., require users to use Outlook and Internet Explorer, rather than ThunderBird and Firefox.
C) Require companies like Google, Amazon, or Microsoft to pay license fees for unrestricted use of their network.
D) Prevent small companies or home businesses—or private individuals—from operating their own server-based goods and services by preventing them from connecting servers to the network.

In essence, as Doc Searles points out, failing to ensure net neutrality would have the effect of turning the internet into a version of Cable Television, a paid content-delivery system, with big cable and phone companies regulating the available content. The fear is that the end state would be that, if you wanted to read Instapundit, you'd have to be a BellSouth customer, while you'd have to be a Cox Cable customer to read QandO. The "Internet" as we know it, wouldn't exist. Instead, there'd be a number of large, but not universal private networks. It would be like the early 90's, where you could be a Compuserve member, or an AOL member, and your content would, like those old online services, be restricted to what was available on your ISP, or, if you accessed content on a competing network, you'd have to pay extra.

Which model will ensure continued growth, cheaper access and continued innovation? Which is best for consumers? Which is more appropriate for libertarian principles?CON:

Regulating Net Neutrality would have pernicious effects:
A) Regulation would open a Pandora's box as all sorts of unintended consequences would flow from a violation of the principle that government regulation should only be allowed as a last resort.
B) Net neutrality would result in a "tragedy of the commons", where high-bandwidth applications like file-sharing, or hot lesbian porn action video streaming would hork up limited bandwidth that is needed for more important business and personal communications, and would create a substantial free-rider problem.
C) Allowing each network provider to compete against the others and, for example, "charge more for its own email service and block, say, Gmail," would allow network providers to use the money to improve services and invest in new innovations.
D) The network is the property of the Phone Company or cable provider, and regulation is a violation of their property rights.

Moreover, opponents say that the scare stories about restricted network access is a fantasy. Network providers that discriminate too overtly against other networks will lose customers, so while some peripheral discrimination against high-bandwidth usage might be necessary, market forces will prevent network providers from building insular networks.

Maybe, but proponents shoot back that some of the "scare stories" are, in fact, a scary reality.

Part of the problem is that the two sides have different definitions of what the internet is. Is the internet a paid content-delivery system? Or is the Net a platform for developing content, goods, and services? How you answer that question is the best predictor of whether you are, respectively, against or for Net Neutrality.

And both sides make compelling arguments.

Lawrence Lessig:
[A]s scholars and network theorists have extensively documented, the innovation and explosive growth of the Internet is directly linked to its particular architectural design. It was in large part because the network respected what Saltzer, Clark and Reed called "the 'end-to-end' principle" that the explosive growth of the Internet happened. If this Committee wants to preserve that growth and innovation, it should take steps to protect this fundamental design.
Kyle McSlarrow:
Keeping the Internet free of regulation has helped to spur tremendous investment and competition in broadband networks and services. Left free to create new business opportunities and services, broadband providers (including cable operators, DSL, satellite and wireless operators) have invested billions of dollars to bring high-speed Internet access services to consumers across the nation. With bandwidth usage growing at a rapid pace, continued investment will be needed to keep broadband services robust.
(Having said that, not all the arguments the Telcom companies throw up are that good. A lot are just plain dishonest.)

It seems like a pretty hard choice. Which model will ensure continued growth, cheaper access and continued innovation? Which is best for consumers? Which is more appropriate for libertarian principles?

In short, where should we come down in this issue? What side do we choose?

Maybe the answer is...neither.

Maybe the real answer is to think outside of the box. In actuality, the real issue is not—or, at least, not completely—the issue of whether or not to regulate that network providers enforce the end-to-end model. The problem is not how to build some future regulatory regime. The real problem is that the current regulatory regime is faulty. What we need isn't a regulatory scheme to add on top of what we have. What we need is an entirely different regulatory model.

At the moment, the internet is not unregulated, because carriage is regulated. You want cable broadband? Your only choice is the local cable provider. You want DSL? You're tied to your phone service provider. And the big problem with this is that cable and phone providers, because the have always viewed their role as deliverers of content, have provided asymmetrical delivery of web services. Everyone has a big pipe going into their homes to receive content, but the upstream pipe, for uploading files, etc., is always a much narrower pipe. That makes it impossible for the average user to provide web-based goods or services on their own. It is a barrier to entry for the consumer to become a provider of content as well. As long as cable and phone companies see their role as nothing more than a paid content delivery service, that's all the average consumer is going to have, too.

The real issue is not—or, at least, not completely—the issue of whether or not to regulate that network providers enforce the end-to-end model.The stark fact, though, is that " the colossal success the Net has enjoyed, including all the good it has done for business and culture around the world, owes everything to the neutral nature of its end-to-end architecture and nothing to paid content delivery."

But, because carriage is regulated, your choice of bandwidth providers is limited to providers who believe in the content-delivery model, not the end-to-end model. And, under the current system of telecom regulation, consumers are restricted to what are, in effect, a number of local, government-sanctioned, monopolies. But why regulate carriage at all? What about, as Doc Searles suggests, a trade-off?
Let's think seriously about this. What would happen if we de-regulated carriage at the federal level and encouraged it at other levels? How about if we opened up more spectrum as well? (Including TV Channels 2-13, which are due to be liberated by 2009 in the US?) Wouldn't we like to see the carriers get some real competition? Why should your neighborhood be limited to a choice of one cable and one phone provider? Why not drop the definitions of both and let everybody carry whatever they want?

By a similar (though not the same) token, how about regulating Net Neutrality—insisting on it, essentially—while de-regulating everything else? Can we characterize Net Neutrality as a modern equivalent of a market incentive to universal coverage?

I lean toward insisting on Net Neutrality, because I know what the big carriers are up to, and it creeps the crap out of me. But I also lean toward de-regulating telecom to let carriers new and old come into the market and fight to build the best possible infrastructure for the fully neutral Net—one that includes symmetrical and unrestricted service to every end in the whole end-to-end system.

Symmetricality has to be on the table, or Net Neutrality is largely meaningless. Asymmetricality is the non-neutrality we already have. Getting rid of it will open the market to countless new businesses and business opportunities for everybody.
Let a million flowers bloom! Let a hundred schools of thought contend!

The best answer is to eliminate carriage regulation. Let Cox provide phone service and AT&T provide cable service. Dissolve the artificial distinction between all telecom companies, and let them all compete for every cable, phone, and ISP customer in the country.

At the same time, let's treat the network infrastructure as a basic infrastructure system like roads or power lines. Let's make the network an end-to-end platform for content—both consumption and delivery—with symmetrical access by everyone, and make the providers fight for customers. That way, the only regulation is a mandate for end-to-end architecture, while the cable/phone/ISP/broadband companies fight it out in an open market.

That way, we replace carriage regulation with what would be a mainly technical regulation of the architecture of the network backbone, treating it like a common carrier. As long as the telcoms maintained the end-to-end architecture, they could do whatever they liked in terms of opening new markets, pricing, changing the mix of services, limiting customer bandwidth, etc.

Regulate the network. Deregulate everything else.
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Previous Comments to this Post 

Agreed, that is the commonsense solution. Hence its prospects for being adopted are slim. Fortunately this problem will probably dissolve for most people once wireless becomes ubiquitous in highly populated areas.

(BTW, the callout boxes don’t play well with the RSS feed. It makes it look like you’re repeating yourself.)
Written By: Matt McIntosh
I think I did define it as a network architecture that provides end-to-end bandwidth symetricallity for all users.
Written By: Dale Franks
Well, with due respect because I like your exploration here, that’s a desired outcome, not a definition. What would the law say? If a network provider offers 2mb down they must offer 2mb up, otherwise they are breaking the law? If I misunderstand what you mean by symmetricality, let me know.

As Martin Geddes says here, we can’t legislate network performance into existence. We can provide incentives for building and more importantly, let the customer decide what’s important. Symmetricality may or may not be what the citizens are asking for. Higher reliability — the proverbial fast lane — might be. I think we are best served to let every experiment be tried.
Written By: Matt S
URL: http://
Having solved all of the other problems the fed is supposed to, they think they can work on this?

These kindergardeners should solve the basics first before regulating the net - besides, it is not their bag.
Written By: newc
URL: http://
BTW, the callout boxes don’t play well with the RSS feed. It makes it look like you’re repeating yourself.
Well, that’s unfortunate, but the blogs style isn’t meant to cater to RSS Subscribers. The point of the stylistic conventions is to make the web site look attractive. It is, afetr all, a web site we’re running here, and a web site that consists of a large mass of unbroken text looks boring.
Written By: Dale Franks
It seems to me that the only way to enforce symetricality would be to make lawsuits easy to prove. That way its enforced by the purchasers. When I say easy, I mean if there is actual injury.
Written By: kyle N
I have no time for this today. Family matters.

BUT and HOWEVER — anybody seriously wanting to study the economics and "network effects" of such matters in a comtemporary context ought to look at the current regulation of Mexican Railroad corporations, here in the 21st century.
Written By: pouncer
URL: http://
I certainly see the argument — both economic and libertarian — for deregulation of providers. More of a free market in access provision would be beneficial to everybody.

I can also see the economic argument for net neutrality, but I’m having trouble seeing how it’s consistent with libertarianism. Maybe I’m missing some basic fact here, but are you really arguing that we should pass legislation dictating how ISPs muct provide service? If a private company wants to provide restricted service, how is it my place to tell them they may or may not do so.

In fact, such a paradigm might be a good market opportunity. You could have an ISP that provides access only to an approved kind of site that meets some kind of value metric. For example, religious folks could sign up with COL (Christians OnLine) which would only let them (and their children) access sites consistent with their values. Porn addicts could sign up with a service that only serves up porn. Parents could sign up with a site that restricts access to sites potentially dangerous to children. Etc.

And finally, the rest of us could sign up with a service provider that does not and will not restrict access at all. And there will be a market for that. As soon as providers start restricting access, all a company has to do is promise not to restrict access and they’ll skim dissatisfied users from other companies left and right.

At the end of the day, though, why should we favor legislation telling ACME how they must do business?
Written By: Jon Henke
I’m not clear on all the details of Dale’s argument. I appreciate the principle of compensating for Net Regulation by deregulating carriage and letting competition ’bloom’ admist providers, aka. telecos and cable companies, but frankly, I’m skeptical. Regardless of regulation and/or government involvement, industries that have natural barriers to entry made of up very high infrastructure entrance costs, almost always devolve into cartels and oligopolies. In other words, no one’s going to bother devoting 500 billion dollars to duplicate the phone networks, with or without regulation - and a lack of net neutrality will make that doubly certain, because Verizon exclusive sites will be available only at punitive costs to outsiders, and Verizon will seek to acquire every single mass-popularity site.

As for Jon, it’s quite easy to reconcile regulated net neutrality with libertarianism. Here’s how it goes:

libertarianism is about giving individuals as many choices as possible and leaving them alone to pursue them. without dictating what chices they should pursue via either coercion or a particular value system.

Free markets are a frequently useful tool for creating this outcome, but they are not the outcome itself. In fact, businesses and industries often find it quite useful and profitable to destroy and eliminate choices and coercively strangle consumer options that would otherwise undermine their priviledged business position. A free-marketer would claim that the market always makes that sort of action impossible, but an empirical libertarian would hold no pre-established position on the issue, but simply come out against such behavior when it occured. A true libertarian would not wave away real-life evidence of businesses trying to strangle consumer choice by waiting indefinitely for the market to fix things - he would instead ask, "is this problem being fixed, right now, or is it being exacerbated?" - and if it wasn’t, he would look for solutions - even regulatory solutions.

I’m sure that people on here find their skin crawling whenever they have to appear non-hostile to any form of regulation, but that’s just a telltale indicator of cognitive dissonance.
Written By: glasnost
URL: http://
Jon, I have addressed your comment as an update to the body of my post.
Written By: Dale Franks
"You want cable broadband? Your only choice is the local cable provider. You want DSL? You’re tied to your phone service provider."

So my neck of the woods (Iowa) is an anomaly? I can get cable broadband from the traditional cable tv provider and one of the two local telcos (ditto cable TV). Both telcos also offer DSL and traditional phone service. Of course I can also go VOIP for my phone service too, or just go cellular. Finally, I can get high speed internet access via satellite and of course television comes this way too. I expect many people around the country have these sorts of options; it’s hard to believe Iowa could be at the forefront.

Written By: Unknown
URL: http://
Yes, Iowa is an apparent anomaly. Other areas are not set up that way.

I don’t think it matters much in the long run. In the short run, it would be a hindrance, but the Internet is, after all, a set of INTERconnected NETworks. My home network is no different, in theory, from GM’s network, other than the amount of connections, redundancy and bandwidth it employs. If one of the networks doesn’t play nice, you don’t connect to it. Let me back up.

In the beginning (well, in 1987, when I first got on the Internet, anyway), the Internet worked like this:

- sites A, B, C, D, and E would have networks
- site A would want to reach sites B and C, and would perhaps want a redundant connection, and so would also connect to site D, which in turn had lots of connections to other sites (think uunet)
- site A would then lease a dedicated line to site D, and let’s say site B
- if site A had traffic for site C, it could then route (automatically, per the protocols) through either D or B to get to C
- site A might not know about, or ever need to connect, to site E, but if D connected to E, and E connected to B, then if the AB connection was down, traffic could still get to B via ADEB without site A even (necessarily) realizing that was the path being taken

The protocols are still set up to do this, but what ended up happening is that the various networks began to protect their networks with firewalls and DMZs and the like, and to not route traffic through their networks to their other network connections. That is, site E is now no longer available to publicly route the Internet’s traffic, so there are fewer connections. In practice, the network collapsed into a set of large backbone providers, supplying local ISPs (in some cases run by the backbone providers and in some cases not) and users and corporate networks connect to the backbone providers either directly (in the case of large companies) or through the local ISPs (in the case of everyone else).

So what happens if preferential treatment of connections starts up? Well, the first thing that will happen is that companies will seek alternatives. Why would, say, GM, accept limited access or vastly increased charges to connect to its suppliers or to key Internet resources when it could just buy a direct connection to them? But GM wouldn’t route for ordinary people, so what do they do? Some of us could and would buy a couple of direct connections to get around the backbone providers. But more likely for most people, they would start shopping for ISPs that routed around the backbone providers. (I would almost certainly start up an ISP for exactly that purpose, providing wireless connectivity to my customers, and using high-speed lines to key services like Google or Yahoo, who would themselves be connecting to important nodes that could take them around the backbone providers.)

In other words, within 2-3 years of such a move, provided that government made clear it wasn’t going to interfere (so that people didn’t delay action based on the hope of government intervention), the backbone providers would themselves be marginalized, or would have changed their business model.

You’ve heard the saying that the Internet routes around damage, and that censorship is damage? This is what that means.
Written By: Jeff Medcalf
So my neck of the woods (Iowa) is an anomaly?
Apparently. I live in San Diego County and my choice is DSL through Pac Bell or a cable modem with Cox. Perhaps Iowa isn’t as heavily regulated as California.
Written By: Dale Franks
"Perhaps Iowa isn’t as heavily regulated as California."

Is anywhere in the US as heavily regulated as California?!

Written By: Unknown
URL: http://
PS. It’s the only state I’m aware of where the seller of a house is legally required to disclose if the neighbors have barking dogs. California is over the top of the top.
Written By: Unknown
URL: http://
"And finally, the rest of us could sign up with a service provider that does not and will not restrict access at all. And there will be a market for that. As soon as providers start restricting access, all a company has to do is promise not to restrict access and they’ll skim dissatisfied users from other companies left and right."
that’s assuming that the censored ISP’s haven’t taken over the market in the area where you live...if ISP’s are to be set up per market your example:
For example, religious folks could sign up with COL (Christians OnLine) which would only let them (and their children) access sites consistent with their values.
what would happen to the Muslim who lives in a predominantly Christian neighborhood? it’s more profitable for ISP’s to be as your example (Christian’s Online) so there is no profit in starting a competing "unrestricted ISP"

having ISP’s regulate what is veiwable on the internet is applying old fashion thinking to a modern issue.

so then maybe only sony televisions can access channels owned by viacom... sounds as american as Apple Pie Inc.
Written By: bob
URL: http://
Regulate the network. Deregulate everything else.
Sooo... what if we don’t regulate the network either?

Written By: Peter Jackson

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