Neutral suspicion

Telecom Asia, Sept, 2006

It's the war of the tech titans. On one side, the Internet's biggest brand names--Yahoo, Google, eBay, Amazon, Microsoft and Intel. On the other, the heaviest of heavyweight carriers--AT&T, Verizon, Comcast, Sprint.

They're slugging it out in the US Congress, in the press and online over what is termed "Net neutrality" but is really about operators' plans to impose fees for delivering content.

Like most things political in the US today, it is a polarizing topic. People are either strongly for neutrality and against price discrimination, or they're all for keeping the government out of the Internet and providing incentives to build infrastructure.

It's an issue right now because a new telecommunications bill is before the Senate, the first major change since the 1996 Telecommunications Act, with a provision for neutrality.

The extra clauses, known as the Snowe-Dorgan Amendment, do not permit carriers to "block, interfere with, discriminate against, impair or degrade" access to content. Network operators would also be barred from promising better QoS or other deals with individual content providers or owners and would be required to offer all Net material on an "equivalent" basis.

Historically, non-discrimination has been a core principle of US telecom regulation: all traffic had to be treated equally as it was delivered over a network.

It remained on the statute books until last year when FCC chairman Kevin Martin determined that it no longer applied to residential broadband on the grounds that the market was heavily competitive.

Martin told an interviewer in March that one of his goals was to "remove" the role of the government in areas that were becoming "increasingly competitive". He acknowledged the concerns of consumers, but said he believed the FCC had the power to act if service providers degraded or blocked content.

He said the FCC's policy principles, adopted last year, would ensure consumers of continued access to content available on the Net, "but also make sure the network operators can control the quality of service and that they have the opportunity to offer consumers different speed with different services."

Despite that, the FCC hasn't totally let go of neutrality yet. When approving the Verizon-MCI and SBC-AT&T mergers last year, Martin allowed that the neutrality rules remain in place for two more years.

Critics note that it was shortly after that green light that AT&T chairman Ed Whitacre spoke out for the first time. He complained in an interview with Business Week that the Net companies "use my lines for free--and that's bull. For a Google or a Yahoo! or a Vonage or anybody to expect to use these pipes for flee is nuts!"

Since then Whitacre and other AT&T officials have put little flesh on what they would actually charge and how they would structure their prices in a post-neutrality environment.

But they have insisted that end-users receiving best-effort broadband service would continue to receive the same quality service. Rather, those who wanted guaranteed delivery or better QoS would have to pay more.

AT&T spokesperson Claudia Jones said: "It's requiring companies like AT&T and others to offer a network that can carry these services that the Net is used for. The model of the Net which existed before is no long a fair model. The Internet firms are not paying their fair share."

Fair share

Jones pointed to the recent Google-MTV tie-up. "They will carry MTV videos onto the network--that requires more and more uses of the network."

She said the neutrality proponents had not made clear what they were seeking. "Does anybody really understand what Net neutrality is?" she said, adding that the Snowe-Dorgan bill definition would have the effect of preventing all Internet traffic prioritization, even for voice.

Paul Misener, VP of global public policy at Amazon.com, says the definition of neutrality sought by the Internet firms revolves around content and content ownership, not different packet streams.

He says the Internet firms want a definition that means networks cannot discriminate on the source or ownership of content. "They cannot prioritize or degrade the traffic traveling on the networks based on the source or ownership of that" he said.

Misener says the core issue is the lack of competition. "The FCC got it wrong last summer," said Misener. "They concluded that there was channel competition in broadband. The fact is they were wrong."

The FCC decision was based on a study that found most Americans had the choice of four or five broadband providers in their neighborhood. Yet Misener says the methodology was severely flawed, using the zip code to define a neighborhood.

"While there may be five, six or ten [providers] in a single postal code, there is not one consumer who can get more than two broadband providers. Different phone companies serve different parts of the same postal code."

Misener said neutrality proponents were not against upgrading the network or prioritizing traffic by segments. "It makes sense that video gets priority over a spreadsheet. Let them prioritize, let them provide QoS. We certainly don't oppose them."