US: The Net Effect of Neutrality

Publisher Name: 
Technology Review

In Congress this week, two sides presented their cases in front of a
Senate committee that's considering revising a 10-year-old
telecommunications bill. The topic was Internet neutrality: the idea
that all bits coursing along the Web should be treated equally. It's
been a founding principle of the Internet - that anyone can access any
Web page regardless of how they connect to the Internet - and a
previous federal regulation had mandated Web neutrality in the dialup
era. Now, with broadband the preferred access method, Congress is
considering rewriting the rules so that some traffic can get
preferential treatment.

On one side of the issue stand powerful Internet and software companies
such as Google, Yahoo, Microsoft, and Amazon. They - and others - are
arguing that all bits should be equal - that a "best effort" should be
made to deliver Internet information, regardless of where it comes from.

On the other side are the powerful infrastructure companies, who own
the conduits through which the traffic flows, such as Comcast, Bell
South, and SBC. They argue that because they own the pipes, they ought
to have the right to charge companies such as Google or Apple something
extra to "guarantee delivery" of their data.

At issue, potentially, is the ability of Internet users to visit the
sites they want, with no speed difference in the delivery of data
between a site that pays for preferential treatment (say, Google) and
one that doesn't (say, your favorite blog).

The issue of net neutrality, while seemingly weak on public awareness
and galvanizing sound bites, is actually making headway through
Congress. This week, the Senate Commerce Committee held hearings to
gather evidence on how best to update the 1996 Telecommunications Act -
which was written before the Internet exploded, and therefore is
woefully out of date. Representative Joe Barton (R-TX) made it known on
Wednesday that he planned on presenting President Bush with a revised
telecommunications bill this year. "We don't have that many legislative
days this year, so it is time to stop talking and it is time to start
working," he said at a speech this week in Washington.

One of the key issues Congress is examining is whether or not to codify
"net neutrality" in the revised bill. Cable and telecommunications
companies are opposed to the idea, because they want to charge firms
like Google, Yahoo, Microsoft, and others additional levees to
"guarantee delivery" of their traffic over the cable and telco pipes.

Right now, a carrier such as Comcast or BellSouth doesn't discriminate
between data from a competitor or from a service it provides. That's
why - with all variables removed - a video from should load
as quickly as something from a Comcast site, and why users can surf to
any site they want.

This scenario exists in large part because of a federal regulation that
designated telephone companies (at the time the main route for Internet
access) as "common carriers." Under this FCC distinction, telcos
couldn't discriminate against data packets on their networks; they had
to send them along just as they would voice calls. This allowed the
Internet to flourish.

In August 2005, however, the FCC declared broadband conduits
"information services" - not beholden to the same requirements as
common carriers. The phone companies argued that this created an unfair
competitive landscape, and, as a result, the FCC mandated that all
high-speed carriers were information services, but also had to continue
to carry other ISPs for one year.

With the net neutrality issue before Congress, the cable and
telecommunications companies are mounting a classic "land grab" effort.
They want to create a system where bits from companies that agree to
pay a toll, essentially, will be given preferred delivery status. Ed
Whitacre, CEO of the newly merged AT&T and SBC, laid out his
opposition to codifying net neutrality in BusinessWeek magazine in
November: "I ain't going to let them do that because we have spent this
capital [on fiber lines] and we have to have a return on it."

The argument that these companies should be able to recoup their
significant capital expenditures is not without merit. However, they're
already doing so in many ways by venturing into markets that weren't
available to them until they put down the fiber. Telephone companies
are now offering television packages. Cable companies now provide
digital cable services and sell On Demand movies. What's more,
consumers already pay to use these companies' pipes via the monthly
bill we receive. Any additional fees charged to a Microsoft or Yahoo
will undoubtedly be picked up by the consumer.

But there's a darker possibility ahead if the cable and telco companies
succeed in blocking specific "net neutrality" language in the revised
Telecommunications Act. A company could conceivably hamper delivery of
content that doesn't meet its standards of decency, doesn't share its
chairman's political outlook, or doesn't originate from a site owned by
its network of media sites. Why would Comcast - a company that gleans
the majority of its revenues selling cable television service to
consumers - want to give those consumers equal access to sites such as
YouTube, where a treasure trove of free videos is there for the taking?

One of the most exciting things happening online - the crux of the Web
2.0 movement - is the burgeoning of content created by individuals.
Sites such as YouTube, the blog explosion (one in five people in the
United States regularly reads a blog, according to Nielsen NetRatings),
photo-sharing sites like Flickr, and the nascent podcast community -
all got their start or get their content from individuals. The majority
of those individuals would probably stop contributing if they had to
pay extra to make sure their content would make it to users' computers.

Unfortunately, these restrictive possibilities have become realities in
the past. Vonage, the Internet phone company, found its service blocked
by regional telephone companies that didn't want their customers to
discover cheaper alternatives. The service was eventually restored
after Vonage complained to the FCC.

If such "packet discrimination" is codified into law, what will be the
recourse? And, given our current Congress's clumsiness with technology
issues and tendency to favor big business, do we trust them to write a
law that would allow some packet discrimination (a fast lane for
companies that opt in) and disallow others (stealth handicapping of
competitors' sites) without making our voices heard? I hope not.­

I spoke with an exhausted Larry Lessig a few hours after he testified
in front of the Senate Committee on Tuesday. Lessig, the noted Web
author and expert, was tired in part because he'd sounded the alarm
against this possibility six years ago: in his groundbreaking Code and
Other Laws of Cyberspace. In it, Lessig warned that when corporate or
government interests control the code of the Internet, the Web as we
know it will cease to exist.

"The [non-neutral] plan inverts the fundamental end-to-end architecture
of the Internet," he says. "Congress doesn't have a clue about what
they're doing on this. The only question is whether they'll have the
spine to guarantee net neutrality. I'm not terribly optimistic at this

AMP Section Name:Technology & Telecommunications
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