Thursday, November 24, 2005

Network Neutrality: Why it's a Big Deal

End of the Line : The Rise and Fall of AT&TImagine if the power company got to decide which devices would work with the plugs in your house. For example, say you could no longer recharge your iPod because Apple refused to pay the power company a "compatibility tariff". In other words, consider a world in which the power company literally decides which device and appliance manufacturers survive. Silly, right?

Maybe not. The nation's telecommunications laws are being rewritten and some telcos -- who generally control the "last mile" of Internet infrastructure -- want to dictate which Internet sites get preferential treatment and which go to the back of the bus.

Here's one scenario: the telcos upsell a "super high-quality" video streaming capability to Blockbuster for delivery of their content. Because Blockbuster ponied up, they get their packets delivered with QoS (quality-of-service) while Netflix suffices with "best effort" packet delivery. In other words, in addition to the "last mile" charges the telcos already hit consumers with, they could upsell preferential packet treatment to service operators.

Battle Lines are Drawn

On one side of the battle are technology companies, who argue that letting network operators favor certain types of services, while interfering with others, opens the door to all sorts of unsavory possibilities.

Remember: bandwidth is a limited resource. Every prioritized packet pushes aside another, "less important" packet. In addition to streaming video and audio, the telcos could theoretically have approved search engines (that return results faster), web-mail services, mapping systems, and the like. Thus, if you're a service operator of any kind, it's conceivable that -- in order to have acceptable performance -- you may have to pay the telco for the privilege.

"Enshrining a rule that broadly permits network operators to discriminate in favor of certain kinds of services and to potentially interfere with others would place broadband operators in control of online activity," Vinton G. Cerf, a founding father of the Internet...

What's most worrisome is that -- while the nation's telecommunications laws are being revamped -- language prohibiting preferential treatment of network traffic has been removed.

On Nov. 2, another draft of the [telecommunication law changes] bill came out, with language specifically addressing the Internet video services that are proliferating as connection speeds increase and the phone companies get into the digital television business. In this draft, the prohibition on blocking or impeding content was gone.

The Potential for Abuse

The new FCC chairman is said to favor the concept of network neutrality, but not establishing its tenets as law. According to the Washington Post, that opens the system to all sorts of potential abuse:

...What if Internet service providers decide to provide lots of bandwidth to customers who buy their other services, such as cellular or voice-over-Internet telephony -- but less if the customer uses rival providers of those services?

I'm thinking of even worse possibilities: imagine Google, Yahoo and MSN run dirt-slow because they won't pay the "performance tariff"? And only, say, the telco's search-engine works acceptably.

Over time, one unsettling telco strategy might be: pick a vertical offering (say, video) and continually raise tariffs for acceptable performance... while building a competitive offering that simply performs better. In other words, the telcos -- and not the merits of the service providers -- would control who wins and who loses.

Maybe I'm just paranoid and these malevolent scenarios are all bunkum. The bottom line is that content providers deserve a level playing field when it comes to IP traffic.

If the telcos want a piece of the video, or search-engine, or web-mail business, they should invest in it and compete on a level playing field. Otherwise, they should do what they do best: slinging bits without regard to who owns them.

A better strategy for the telcos: put the consumer in charge

If the telcos put control of prioritization in the hands of consumers -- with a tiered pricing structure -- they can't lose. Consider a base Internet package that costs $29 a month with no QoS. If I want IPTV with QoS for superior quality, I pay a surcharge. And if I want higher quality voice-over-IP, I pay another surcharge.

In other words, the telcos need to put the consumer in control. A foreign concept for the telcos, to be sure, but one that -- for a change -- might be a winning one.

Washington Post: Renewed Warning of Bandwidth Hoarding

Update: In its battle with the telcos, Google may be lining up with Time Warner for VoIP. ZDnet has the scoop.

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