The blogosphere has been buzzing since last night, with all manner of “experts” offering opinions about the dispute between Comcast and Level 3 over their commercial arrangement for the exchange of Internet traffic.  While I am a bit hesitant to add to the ruckus, I think it is important to refute the misguided notion that this business dispute is really a “net neutrality” problem that can and should be solved by federal regulation.

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.

In the previous segment, we looked at how First Amendment principles manifest themselves in how the Internet should or shouldn’t be regulated.  And I concluded that media – including ISPs – should be able to maximize the value of their services without rules from the government that serve to protect and promote certain speakers.  But that doesn’t preclude government intervention to protect the public from harms that may be posed by any actor on the Internet.

Many of the threats and potential harms identified by proponents of net neutrality, for example, are rooted in interests and concerns that have little to do with affecting the protected marketplace of speech.  One example is the possibility that cable operators and telephone companies will seek to protect their own affiliated video and telephone services by degrading or otherwise discriminating against competing Internet-based video and telephone services.

But the government has tools – including, specifically, antitrust laws – that are designed to prevent unfair conduct that threatens competition in a way that harms consumers.  Such laws, to the extent that their purpose isn’t related to affecting speech, aren’t precluded by the First Amendment, whether applied to ISPs or content and application providers.

Laws aimed at protecting privacy or preventing deceptive marketing practices – by ISPs or other Internet entities – also could be narrowly crafted in ways that do not impermissibly target or seek to affect protected speech.

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In the previous segment of this series, I briefly touched on how government officials may attempt to weigh in on questions of what content the media, and cable systems, can/cannot or should/should not carry – and the harm to the public interest caused by such activity.  This same principle transcends traditional technology and carries over into today’s Internet-based communications world.

For instance, network neutrality, as defined by its proponents, may be viewed as “content neutral,” insofar as it is supposedly meant to guarantee all Internet content and application providers nondiscriminatory access to broadband Internet customers.  But, in fact, the purpose of the proposed restrictions is hardly neutral with respect to content and speakers.

A flat nondiscrimination rule actually goes well beyond a traditional common carriage requirement, and would force Internet service providers to make their transmission services available to persons wishing to use them on nondiscriminatory rates, terms and conditions.  Under such a formulation, Internet service providers would not be allowed to charge content and application providers at all – not for transport, not for enhancements or services in addition to transport, and not for guaranteed quality of service.  Nondiscrimination under this rule would mean one-size-fits-all for all application providers, at a fixed, nondiscriminatory price of zero.  All regardless of whether consumers actually might prefer different choices and models of access and delivery.

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The First Amendment is generally understood as one of the most important of our Constitutional rights, and easily understood as a right secured to individuals.  But most people don’t understand how the First Amendment has played a key role in determining telecommunications policy; and often don’t think of it as being applicable when it comes to individuals working together through institutions or organizations like a corporation.

However, across a broad range of telecom policy issues – from net neutrality, to commercial speech, to merger & acquisition activity, and others – you’ll find advocates for all sides brandishing First Amendment arguments in support of their cause.

For instance, cable operators and programmers, along with newspapers, broadcasters and other media, have consistently – and mostly successfully – maintained that the First Amendment protects them from government regulation that interferes with their ability to provide content to consumers.

For the cable industry specifically, it is important to recall that cable systems do not use the public airwaves, like television broadcasters, and are not a public utility, like telephone companies.  Instead, an incredible distribution infrastructure was created with private risk capital that extends from traditional video to broadband, and it now offers a platform for myriad voices, managed by those who invested the money to create it.

In our view, this is a 21st century version of the Jeffersonian ideal of a free, diverse, and robust media.

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If there is any one common theme that has arisen from the years-long policy debate surrounding network neutrality, reasonable network management and preserving an open Internet experience – it’s that there is no simple solution and the entire Internet ecosystem must be engaged with a common purpose to continue providing consumers with a great Internet experience.

That is why today’s announcement of the formation of a Broadband Internet Technical Advisory Group (BITAG) is such encouraging news.  The BITAG starts off with some of the leading broadband providers, high-tech companies and Internet content providers, and will provide an inter-industry forum to allow technical and engineering experts to discuss technical issues and develop best practices related to matters that affect the consumer broadband experience.

According to today’s announcement, the BITAG’s mission is to:

Bring together engineers and other similar technical experts to develop consensus on broadband network management practices or other related technical issues that can affect users’ Internet experience, including the impact to and from applications, content and devices that utilize the Internet. Participants agreed that the TAG’s mission could also include: (1) educating policymakers on such technical issues; (2) attempting to address specific technical matters in an effort to minimize related policy disputes; and (3) serving as a sounding board for new ideas and network management practices.

An impressive list of companies that touch all points of the consumer broadband experience have signed on to the initial BITAG effort, including AT&T Inc., Cisco Systems, Inc., Comcast Corporation, DISH Network, L.L.C., EchoStar Corporation, Google Inc., Intel Corporation, Level 3 Communications, LLC, Microsoft, Time Warner Cable, and Verizon.

Importantly, the BITAG will be managed by an independent and expert facilitator, Adjunct Professor Dale Hatfield of the University of Colorado at Boulder, a former FCC Chief Technologist who is executive director of the highly-respected Silicon Flatirons Center.

Formation of BITAG was applauded by The Internet Society, one of the world’s foremost non-profit organizations which provides leadership in Internet related standards, education, and policy:

“This joint effort by industry leaders provides an exciting opportunity to address key operational challenges facing the Internet user experience,” said Leslie Daigle, Chief Internet Technical Officer of the Internet Society.  “The Internet Society believes this activity is an important contribution to the ongoing global, open technical dialog and looks forward to seeing its output appropriately integrated with the work of existing Internet standards activities.”

(Also see NCTA’s statement on our website.)

As today’s BITAG announcement indicates, this is really the beginning of a process to attract interest and participation by others and to organize the BITAG to meet the mission statement to which these companies have committed.  We look forward to learning more about the BITAG and to supporting its efforts.