We all have heard the Internet described as a “network of networks” but we generally give little thought to the remarkable logistics involved.  For the Internet to operate, thousands of networks – small and large, wireless and wireline, urban and rural, domestic and global – must establish arrangements to govern how they interconnect and exchange traffic.  While there are different types of providers (backbone, content delivery network (CDN), etc.) and different types of arrangements (settlement-free peering, paid transit) – see this White Paper for a good explanation – the key point is that these myriad of arrangements have developed over time, in the marketplace, without any legislative or regulatory intervention.  That the Internet works at all is amazing; that it works 24/7 to bring consumers content from around the world at lightning speed borders on the miraculous.

The FCC consistently has taken a “hands off” approach to these arrangements. It has not imposed any form of regulation on these arrangements, nor has it intervened in the periodic disputes that occur between backbone providers, like Level 3’s dispute with Cogent in 2005 – in which Level 3 insisted that Cogent pay a fee for transmitting content on Level 3’s network rather than peering on a settlement-free basis. Moreover, while the FCC has been considering net neutrality regulations for some time, it has never suggested that it was considering any change in the regulatory treatment of backbone and CDN providers. (Indeed, even the most fervent net neutrality advocates, like Free Press, have recognized the legitimacy of these commercial arrangements; see note 8 on pg. 17 in these comments).

So is there anything unusual about the dispute between Comcast and Level 3 that should cause the Commission to reassess its hands off approach to these types of arrangements?  No.  While some of the initial commentary, reacting solely to Level 3’s press statement, reflected a knee-jerk reaction that any dispute involving the Internet implicates net neutrality; as the day wore on, cooler heads seem to be prevailing, with most observers, including some net neutrality advocates, recognizing that this was nothing more than one party to a commercial negotiation trying to use the regulatory process to gain negotiating leverage (Also see this article from Multichannel News).

Nor can Level 3 credibly claim to be surprised by Comcast’s approach.  Comcast’s policy on settlement-free peering – including its expectation that any peering partner “maintain a traffic scale between its network and Comcast that enables a general balance of inbound versus outbound traffic” – is posted right on its website. When Level 3 approached Comcast and asked for a significant change in the parties’ physical interconnection arrangement, it should have fully expected that Comcast would seek a corresponding change in the parties’ business arrangement, consistent with the general practice across the industry.

Under the circumstances, Level 3’s plea for government intervention in this commercial negotiation is entirely unwarranted.

John Eggerton of Multichannel News and Broadcasting & Cable wrote an overview of the FCC meeting and the  day’s happenings.

We issued a statement from NCTA President & CEO Kyle McSlarrow:

“Over the past decade, broadband deployment in America has been an unparalleled success story. That success has been greatly aided by the farsighted judgment of prior Democratic and Republican Commissions to promote innovation and investment in new networks through the exercise of regulatory restraint. As we revisit this question with the start of today’s inquiry, we see little benefit to changing course and great danger in attempting to shoehorn modern broadband services into a Depression-era regulatory regime without serious collateral effects to investment, employment, and innovation.

“We appreciate that Chairman Genachowski is seeking comment on alternatives to a Title II approach. We also very much appreciate and agree with the Chairman’s statement of support for legislative efforts to provide much needed certainty. We believe that is the right next step, and we can preserve our ability to protect consumers, maintain an open Internet, and encourage continued investment and innovation through carefully targeted legislation.”

Comcast also issued a statement from EVP David Cohen.

Here are just a few stories following the FCC’s vote:

• New round in FCC broadband fight
• FCC Advances Internet Plan Backed by Google, Amazon
• FCC Formally Launches ‘Third Way’ Process, Asks for Comments
• FCC seeks comment on broadband reclassification

Opposing view on ‘Net neutrality’: Providers back Web freedom

By Kyle McSlarrow

On Tuesday, a federal court struck down a Federal Communications Commission order enforcing a rule that the agency hadn’t ever actually adopted. The court’s decision does not call into question an Internet policy adopted unanimously by the FCC in 2005 — endorsed by all broadband providers — promoting a free and open Internet. Thus, the decision has no effect on the Internet experience that consumers enjoy, and it doesn’t alter the government’s existing authorities to protect consumers or to police anti-competitive conduct.

Today, 65% of American households subscribe to services provided by a number of competing broadband companies to access a growing number of exciting applications that have changed the way we all communicate, conduct business, gather news and information and consume entertainment.

But there are still gaps. Not every community has broadband, and not every household that has access subscribes. Here, too, nothing in this week’s court decision affects our collective ability to implement the vision of a connected nation.

Broadband providers agree that consumers should have the freedom to navigate the Internet and access any legal content or application of their choice. That isn’t at issue. But fears of what broadband providers “could” do have prompted the usual and predictable calls for more — and, in some instances, incredibly far-reaching — government regulation of a marketplace that has been an American success story.

Why? In precisely two instances — and one of them is debatable — out of trillions of transactions over the past decade, has anyone even been able to point to a specific problem. Contrast that with the overwhelming evidence of hundreds of billions of investment to build and expand networks and the incredible array of new applications and sites flourishing because of a bipartisan policy of regulatory restraint.

We fully intend to work with the FCC and other policymakers to preserve the open Internet that is a reality today. But it is a massive overreaction to suggest that we should impose decades-old regulatory regimes designed for the days of Ma Bell and a government-sanctioned monopoly on the Internet.

“The Court correctly ruled that a specific order by the previous FCC was wrong.  We cannot state strongly enough that this decision will change nothing about the cable industry’s longstanding commitment to provide consumers the best possible broadband experience.  Nor does the ruling alter the government’s current ability to protect consumers.  We continue to embrace a free and open Internet as the right policy and will continue to work with the Commission and other policymakers and stakeholders to find a sound way of preserving that goal.”

There are plenty of freedom-loving Americans who love the Constitution. Some of them even carry around copies of that document. And yet, even among these hardcore fans, there is often a misunderstanding of the First Amendment to the U.S. Constitution.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

There are many circumstances under which individuals may claim a violation of their First Amendment rights. Someone may lose employment after saying something in the press. A person may not be allowed to appear on a television broadcast. A student might be suspended for something written in the newspaper of a private college. These might be unjust situations, but they are not governed by the First Amendment, which says that the government may not abridge freedom of speech.  What the First Amendment guarantees is that the government doesn’t get to decide who gets to speak and who doesn’t.

In his speech, Kyle McSlarrow says:

…urging the government to impose rules that supposedly promote First Amendment values is too often used to justify regulations that instead threaten First Amendment rights.   By its plain terms and history, the First Amendment is a limitation on government power, not an empowerment of government.  Making these arguments is, ironically, almost proof that First Amendment rights are being implicated.

It’s also important to note that there are many who seem to think that the cable industry is a special case. They argue that cable’s infrastructure was built with government funding and is therefore a public utility and subject to common carrier regulation. All of these assertions are factually incorrect. To quote a previous post:

To be sure, our video services are subject to government regulation – at the federal, state and local levels – but we aren’t like telephone companies (which built their systems with captive ratepayers and a government-guaranteed rate of return) or even radio and television broadcasters (who were given public airwaves for free, but in return had to adhere to certain “public interest” requirements).  Our industry had no government-guaranteed return or government-granted public airwaves – to the extent we used any public resources, we paid for our rights-of-way with local franchise fees. Indeed, the cable industry built analog networks, our new digital networks, our cable modem and digital phone services with private risk capital with no assured return.

Some might argue that, because the FCC has previously regulated speech on the broadcast networks, such an approach would be appropriate in the Internet Age. But note what Kyle said in his address:

…in this case, the FCC is not engaged in the allocation of the public airwaves.  The bandwidth we’re talking about is capacity on private transmission facilities constructed by ISPs.  Imposing regulations that prevent providers from using “too much” capacity for speech-related services not even associated with Internet access should cause all sorts of First Amendment and Fifth Amendment Takings alarm bells to go off.

Finally, it’s not just the cable operators that would be affected. The other concern about the government deciding to involve itself in these debates – which should properly been seen as technology discussions – is that we don’t know what future applications might be developed or how they might need the network to be structured in order to work most effectively.

To quote from Kyle’s speech:

Not all content providers may need the same speed, prioritization of data and quality of service as, say, providers of high-definition video, or maybe 3D video or who-knows-what-else may be invented by application providers.  But ISPs can’t prioritize all content, due to the physical limitations of their systems.  And it may be entirely too costly (as well as unnecessary and inefficient) to offer the same quality of service that a video game service requires to every single content provider.  And so the effect of such a rule would be simply to prevent the offering of the services consumers might want that require such special treatment.

Or to quote one of my earlier blog posts:

If you want a dumb pipe, with every bit treated the same, that will significantly affect telemedicine and other advanced services which may require priority treatment. If creating some method of optimized delivery was such a terrible thing, what does this say about services like Akamai, that help make content distribution more efficient, benefiting both consumers and content producers?

Really, all we’re saying here is that these are very complicated issues and we hope that the government treads lightly as it contemplates taking action.

The participants will debate the motion “A network neutrality law is necessary.“ Arguing for the motion will be Professor Tim Wu, venture capitalist Brad Burnham and Professor Nicholas Economides. Presenting the case against the motion will be James Assey, Robert Quinn (AT&T’s Senior Vice President of Federal Regulatory) and Professor Christopher Yoo.

The event will be streamed live this evening at 8:00 p.m. A podcast will be available afterwards at Tech Debate’s website.

James Assey did a bit of debating on net neutrality and other telecom topics at the Personal Democracy Forum back in July. You can read a write-up of that conversation or watch a video of the proceedings.

My thoughts on the argument were confirmed for me by a panel at CES this past January, entitled “The Internet – How Do We Keep The Road Open.” If you read this account, you’ll note agreement among the panelists that managing networks is important, but so is transparency.

I understand that, as the FCC examines the issue of “net neutrality” (or the “Open Internet”), it isn’t just about network management, but I welcome having a more sophisticated, complex discussion.

So, imagine my dismay when two of my favorite cable shows – The Rachel Maddow Show and The Daily Show – recently took on the net neutrality issue and described it the way it was described back in 2006.

All About Blocking?

On October 23rd, Maddow said, “Telecom companies want to be able to slow down access to some parts of the Internet and to block some others. Essentially, they want the right to privilege the content that they want to privilege for their own telecom corporate purposes.” Maddow’s guest, Boing Boing editor Xeni Jardin, said that net neutrality is about everyone having equal access to all Internet content: “No cable companies, no telcom, should be able to slow that down because what you want access to is against their competitive interest.” [Watch the whole Maddow/Jardin segment here.]

The following Monday, October 26, Jon Stewart devoted a whole segment on The Daily Show to the same topic. He said, “The Internet Service Providers – your Comcast, your AT&Ts – would like net neutrality not to happen so they would have the ability to decide which content and websites get the preferential treatment.”

Let’s start right there. The charge is leveled that cable companies will slow down content that competes with their interests. FCC Chairman Julius Genachowski, in his September 21 speech at the Brookings Institute, listed reasons that he thought net neutrality regulation might be necessary. Blocking competitive content was not one of those reasons. Nor am I aware of any instance of a cable company ever doing such blocking. NCTA’s President & CEO Kyle McSlarrow has said on a number of occasions that our member companies don’t block and won’t block lawful content.

All Bits Are Not Treated Equally.

In addition, Xeni Jardin is being disingenuous and Jon Stewart (I presume) doesn’t know any better. Jardin says, “All packets are created equal.” Stewart says, “Currently everything moves through those tubes at pretty much the same rate. Like, if you’ve got a packet of information from a major corporation like Google that information gets exactly the same treatment as, say, a packet from a little startup company…”

But, in fact, all packets aren’t the same. You wouldn’t want a voice packet, a video packet, an e-mail packet or an image packet to be treated the same. TCP/IP isn’t neutral and never was. There are times when you need to prioritize different packets.  George Ou at Digital Society has done some great work explaining the difference between low-bandwidth and high-bandwidth applications. If you want a dumb pipe, with every bit treated the same, that will significantly affect telemedicine and other advanced services which may require priority treatment. If creating some method of optimized delivery was such a terrible thing, what does this say about services like Akamai, that help make content distribution more efficient, benefiting both consumers and content producers?

Stewart posed the question, “Why are all these people so opposed to this innocuous, populist legislation?” If all that was being discussed was the right of consumers to visit any website they want, or use any legal Internet service they desire, there would be no problem. NCTA has gone on the record many times that our member companies are in favor of this. When Chairman Genachowski proposed the two new principles in his Brookings speech, we applauded efforts to preserve an Open Internet. The trick is that the conversation is more about how and when networks can be managed.

Jardin proposes, “Whenever there’s a fight on the Internet, it’s always good to side with the geeks who actually built the Internet, rather than, sort of, fat-cat telcom lobbyists. You have guys like Vint Cerf… he’s coming out, saying this is a dangerous thing.”

• Point One is that Mr. Cerf has worked for Google since 2005; that company is hardly a little garage start-up, nor are they a disinterested party in telecommunications.
• Point Two is that Professor David J. Farber (the “Grandfather of the Internet”) thinks that net neutrality is not such a good thing.
• Point Three is that we agree that network management is an issue best addressed by engineers rather than policymakers. The cable industry has a lot of engineers of its own. For the past 15 years, cable companies have been able to offer high-speed Internet access thanks to the hard work of these engineers, who still have to manage these networks on a daily basis. Let’s cast our minds back to 1994 and remember that it’s those cable engineers that helped drive all the broadband we currently enjoy.  It was cable that developed the DOCSIS standard and first laid significant amounts of fiber out in the field, ahead of the phone companies.

(It’s ironic that Maddow, who is so publicly a fan of infrastructure, seems to miss this last point.)

The Challenges of Creating Neutrality Rules

As long-time telcom reporter and industry analyst Gary Kim pointed out, the need for management is exactly why net neutrality poses some difficulties:

It is very hard to define and covers a range of business discrimination issues, network management and performance practices as well as potential future services that consumers might very well want to buy, that provide value precisely because they allow users to specify which of their applications take priority when the network is congested.

Kim notes that it’s a good thing for ISPs not to discriminate against the competition, but he is concerned “whether ‘affirmative’ packet handling, as opposed to ‘negative’ packet handling, will be lawful in the future.”

Swing too far in one direction and you create broad draconian rules that stifle innovation. Swing too far the other way and you end up with vague principles that don’t let anyone know for certain what’s allowed and what isn’t.

Finally, let me observe that there is a lot of hubbub about what might happen without net neutrality. I am reminded about a recent tweet from Blogads.com Founder & CEO Henry Copeland.

RT @nickbilton What life w/out Net Neutrality will look like: http://j.mp/2UYL2H ++Umm, wait, there’s no NN law right now.

As he says, when you imagine what life might be like without net neutrality, you might want to remind yourself that we have no such regulation right now.

Saying the FCC must be a "smart cop on the beat preserving a free and open Internet," FCC Chairman Julius Genachowski Monday proposed adding two new Internet access principles to the existing four, and will begin the process of codifying all of them with a Notice of Proposed Rulemaking at the FCC’s October meeting.

In a written statement, NCTA’s President & CEO Kyle McSlarrow applauded Genachowski’s "vision of preserving an open Internet in order to promote entrepreneurship without permission." He reiterated the cable industry’s commitment "to an open Internet that allows consumers to use and enjoy lawful content and services of their choosing."

He also said:

We recognize that we may, however, have a different view about the state of competition and the choices and benefits that flow to consumers from that competition.  While we look forward to working with Chairman Genachowski and his colleagues, we will continue to present facts and data to the Commission that suggest that any regulation in this arena should be approached with great caution and only in the most targeted way, and to advocate policies that avoid government entanglement in operational decisions that could undermine the very dynamism of the Internet we all seek to preserve.

David L. Cohen, on the Comcast Voices blog, also indicated their support for the process.

We welcome the dialogue suggested by the Chairman in his comments, and we completely agree that any consideration of new “rules of the road” begin with notice and an open, public rulemaking proceeding – this is both fair and appropriate.

A tweet from Julian Sanchez yesterday raised an interesting point. There are those who may object to any government regulation at all. There are also those who may reflexively support any regulation that seems to be opposed by "big companies."

Previously, we noted on this blog how the "net neutrality" debate has evolved over time. NCTA has consistently supported our customers’ ability to travel the Internet freely; our Internet access service wouldn’t be of much use without that. But the devil is always in the details and while we have always supported fair rules, it will be critical to move forward carefully.

…the real question for today’s broadband networks is not whether they need to be managed, but rather how.

We couldn’t agree more, since I’ve expressed that same sentiment once or twice or thrice. Network managers know that networks need to be managed. Cerf even explained why:

Network capacity (bits per second or data rate) is a limiting factor in all communications networks. Users cannot send traffic faster than the amount of network capacity available to them. But when users’ aggregate demand exceeds the available capacity of the network, network operators naturally seek to manage the traffic loads… The end result is the potential for traffic congestion, leading to service delays and even outages for consumers.

Cerf then goes on to discuss various methods, such as transmission rate caps, low latency prioritization and bandwidth constraints, but they’re all based on that phrase: “…not whether [networks] need to be managed, but rather how.” [Emphasis added.] I take great interest in these remarks, because I’ve been following his arguments over the last couple years.

For example, back on June 13 of 2006, he appeared on Public Radio’s The Kojo Nnamdi Show. You can find that episode online; if you skip ahead to about 23 minutes in, you can hear Cerf speak of net neutrality for a few minutes. At that time, he argued that innovation will be stifled and users will not be able to freely access content unless the Internet is kept “open and neutral.” He said that the government may need to provide protection. Two years later, it’s unclear what innovation was stifled.

By October of 2007, Cerf was speaking of other concerns, such as at his address at the WebbyConnect conference, which I attended. He said in his speech that “net neutrality” as a phrase has been distorted and that he would clarify what Google was asking for.

• It’s okay to charge for higher capacity.
• It’s okay to address denial of service attacks, viruses and so on.
• It’s okay to provide low latency services.
• As long as all of these practices are done in a non-discriminatory fashion.

Even at this point, Cerf was arguing that network management was necessary, but he had his opinion about what methods ought to be used.  That approach is much better than comments (like this one) that argue that the “management” argument is a scare tactic. There are those who would claim we should just build a bigger pipe. But then you read this quote from a Singapore ISP executive: “Even buying more bandwidth will not work since stuff like BitTorrent is designed to gobble whatever extra bandwidth we buy.”

Cerf specifically mentions that conversations with Comcast engineers have led him to a better understanding of the underlying motivation and rationale for that company’s network management decisions. As we often see, when people examine the capacity constraints we face and the unique challenges of running cable systems, it can contribute to the conversation.

Now that Cerf has confirmed that network management is a fact and a necessity, we can begin to have the broader dialogue about the network management that needs to take place. Cerf argues the “how” of network management is the important piece of the puzzle, but I would suggest the “who” is even more critical – as in, “Who decides what network management practices are reasonable?”

Cerf argues that government should. I think that is the wrong approach. I think it makes more sense for engineers and companies to make those decisions, not government bureaucrats. Those decisions should be based on what methods of network management might be most efficient and which ones would provide the best experience for the largest number of their customers. They should not be based on the dreams and schemes of politicians.

I recently heard one of these people describe network congestion as akin to a mail truck being full. This kind of talk makes my head hurt.

I shudder to think of the regulations that would be dreamed up by the US Department of Network Management.

• Richard Bennet of Broadband Politics: A sad day for the Internet
• Randolph J. May of the Free State Foundation: Hard Cases Make Bad Law: On Regulatory Bits and Torrents–Part II
• Barbara Esbin of The Progress & Freedom Foundation: Legally and Procedurally Suspect and Misguided as a Matter of Policy
• Scott Cleland of The Precursor Blog: Takeaways from FCC Decision on Reasonable Network Management
• Cynthia Brumfield at IP Democracy: FCC’s Copps: Apply Net Neutrality Principles to Wireless Carriers
• Stacey Higginbotham at GigaOM: FCC Punts on Network Neutrality
• Matthew Lasar at Ars Technica: Reactions to FCC’s Comcast decision come fast and furious
• Drew Clark at Broadband Census: FCC Hammers Comcast For Deception and Unreasonable Internet Practices

UPDATE: Will Richmond at VideoNuze: The FCC’s Comcast Sanction: More Problems, Fewer Solutions Ahead