Tuesday, January 25, 2011

Net neutrality update: where are we now?

Lots has happened since my last post on net neutrality back at the beginning of December, which related to the then-imminent FCC order on the issue. This was subsequently published just before Christmas, about which more later, but first I need to wind back to an event previous to my December post which I neglected to reference at the time.

This event was a speech by Ed Vaizey MP on 17th November 2011 in which he set out the coalition government's stall on the net neutrality debate. Some key quotes:
"A lightly regulated Internet is good for business, good for the economy, and good for people. But it is also right the Government puts in place the right infrastructure to support it and has a view on how it should be governed...The continued delivery of high quality content will...require massive investment, and it may also mean networks and the traffic that flows over them are increasingly managed as the information super-highway – an old phrase but with compelling resonance in this debate – becomes ever more crowded...At the heart of this debate...is the extent to which traffic should be managed on the Internet, and more specifically whether ISPs should ever have the right to favour one content provider over another, particularly for commercial reasons."
He went on to flag the importance of openness (in terms of being able to access any legal content or services), transparency (the need for easy to understand information about traffic management policies and their impacts) and, echoing Neelie Kroes, the importance of supporting investment and innovation. He also acknowledged the fact that virtually all ISPs manage traffic on their networks already, and further illuminated the importance of supporting innovation:
“We have got to continue to encourage the market to innovate and experiment with different business models and ways of providing consumers with what they want. This could include the evolution of a two sided market where consumers and content providers could choose to pay for differing levels of quality of service. The market could develop in many different ways. The important thing is that ISPs and networks remain free to innovate. In doing so they may make mistakes and consumers should have the ability to make them pay for those mistakes. Again, the key is that consumers must be informed and aware of what they are buying and of any limitations attached to it; allowing them to choose a level of connectivity appropriate for their needs.  Transparency is not something that should only be available to consumers. It is a principle that needs to extend throughout the entire value chain. Content and application providers should be able to know exactly what level of service they are getting especially if they are paying for it.”
The coalition government is "no fan of regulation" and there is currently "no need for intervention", a fact reinforced by the responses to Ofcom's consultation last year (to which a formal response is yet to appear from Ofcom I believe, but Ed Richards did cover this in  his speech to the same conference the previous day, as well as in this one yesterday), though the situation does need to be kept under review as the market develops. All of which was, I thought, a pretty reasonable take on what can be at times a rather hysterical and ill-informed debate.

However,the Guardian didn't share this view, accusing Vaizey of suggesting that "ISPs should be free to abandon net neutrality", which I don't think is a fair representation of his speech at all. The BBC's headline ("Minister Ed Vaizey backs 'two-speed' Internet) was better, but the article then spoilt it by going on to suggest that his speech "paves the way for an end to "net neutrality" - with heavy bandwidth users like Google and the BBC likely to face a bill for the pipes they use", when it's wholly questionable whether a truly neutral Internet has ever existed, a fact emphasised by Vaizey's point that most ISPs already manage the traffic on their networks. In an interview with the Telegraph a few days later Vaizey emphasised again that his overriding priorities in this area are an open Internet and the protection of consumers: "Should the internet develop in a way that was detrimental to consumer interests we would seek to intervene." In my view I think the media were a bit premature in hitting the panic button on this one?

Anyway, this furore provided an interesting UK context for the FCC's publication of their order on preserving a free and open Internet, which as I mentioned earlier, was published a few weeks later, just before Christmas (the related FCC press release includes a useful summary - the full document runs to just under 200 pages). Vaizey's speech would seem in keeping with the FCC's approach, this from the FT:
"The "net neutrality" ruling prohibits broadband providers from blocking any lawful content, applications and services, though it would allow "reasonable network management" and permit operators to manage congestion by charging heavy users more."
While the BBC had this to say:
"The new rules prohibit telecommunications companies that provide high-speed internet service from blocking access by customers to any legal content, applications or service. But, for the first time, there is now a policy that will allow for what has been termed "paid-prioritisation", where companies will be able to pay for a faster service."
The rules remain highly contentious though: the FCC voted 3-2 in their favour; the FCC's three Democrats voted to pass the regulations, while the agency's two Republicans opposed them. And the commercial sector has already thrown down the gauntlet: on 20th January 2011, Verizon filed an appeal against the FCC's order  (further commentary here). So far from a done deal.

Returning to the UK, net neutrality was in the news again at the beginning of January 2011 as BT launched its ContentConnect service, "a new content distribution network that addresses the extraordinary growth of video services over the Internet". This led to renewed claims of the dangers of creating a two-tier Internet, as reported by the BBC, but ZDnet's David Meyer (who shares my views on the way Ed Vaizey's speech was misrepresented) offered (in my opinion anyway) a far more measured reaction on his blog:
"Let's have a look at Content Connect. It's a content delivery network (CDN), much like those from providers such as Akamai and Level3. This means a bunch of servers located in areas of high congestion, where extra bandwidth is needed to push through (generally video) content at high quality. CDNs are already widely used by content providers such as the BBC, which relies on CDNs to support iPlayer across the UK, and by ISPs. BT has simply built its own CDN, which — seeing as the company utterly dominates the country's wholesale broadband market — it is in a good position to market as part of an end-to-end, we-can-guarantee-you-X-level-of-service package for other ISPs. This spring, it will start selling Content Connect access to BT Retail, which will use the CDN to deliver iPlayer on its BT Vision IPTV platform. Other ISPs will also be able to use Content Connect to push through heavy content, or they can just use the same rival CDNs they already use. I don't see how this leads to the creation of a two-tier web/net/whatever. My fear regarding net neutrality is that, within the paradigm of one network, one service gets boosted to the detriment of another. If someone wants to build spare capacity for a specific service, which will result in no change to the quality of rival services, I really couldn't care less — that sounds like a sensible business practice to me. "
I entirely agree. This is clearly a complex and challenging area, but surely any arguments should be based on facts first and foremost? It will be important to keep a close eye on this area as the market continues to develop at a dizzying rate, but the principles underlying both Ed Vaizey's recent speech and the FCC's recent order seem to me to be the right ones - transparency in delivery and openness in access.

It will be interesting to see how the market responds, both in the UK/Europe and across the Atlantic. Surely a light-touch is preferable to heavy handed regulation, but a light touch does suppose that parties will "play nicely"...

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