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February 1, 2010 9:01 AM

The Crux Of The Net Neutrality Debate

Last week I attended day one of the State of the Net conference, which featured a rousing debate on net neutrality led by Susan Crawford, who spent last year advising President Obama on all things broadband.

While much of the discussion was polarized and driven by talking points, there were a few moments of clarity that suggest that the divide over what to do about net neutrality appears narrower than ever.

Before getting into where the two sides are meeting, let's first acknowledge a couple of great points that were made by either side to strengthen their own case.

First off, on the anti-net neutrality side, one idea Christopher Yoo brought up was that there are a ton of things that the Internet isn't good at today that could be made better through innovation in the network:

Multicast: sending out one stream and reach a large audience.
Mobility: taking your connection with you wherever you go.
Security: making your data safer.
Cloud Computing: accessing apps run on servers rather than on your computer, which requires very low latency so when you move your mouse it moves on the screen.
Interactive Video: two-way video communications or video you can manipulate on the fly.
Change: the ability to adapt to new applications.

He continued on to suggest that there are a number of innovations in applications and technology that will require a different approach to networking than the current Internet paradigm of dumb pipes.

This way of looking at things clearly highlights some of the advantages of having networks that evolve beyond just dumb pipes. And the thing is, the real point isn't that the idea of the Internet as a stupid network is necessarily wrong, but rather that we shouldn't let this mindset limit in any way the possibility that innovation in developing smart networks will ultimately be a key component of the modern Internet.

This then ties into Yoo's closing point related to the ideas above, namely that it's ambiguous which way it's going to fall regarding which model for the Internet will win out, one where the networks are smart or stupid, so we shouldn't make a premature decision of trying to pick one over the other. Instead it's better to let the innovation happen and then regulate where needed.

On the pro net neutrality side, Markham Erickson of the Open Internet Coalition made a point that caused me to rethink my opinion about reactive vs. proactive net neutrality regulation. He's actually someone who supports the notion that networks being able to offer prioritized service may potentially be a net positive, but he cautions that if we allow operators to profit as much as they are able from offering this prioritized access that it'll mean Wall St. will start expecting the higher returns generated from investing in prioritized networks. He then asks the question of can we afford to let these expectations settle in?

It's a really interesting question and one worth considering. By not putting any rules on how network operators can sell prioritized access, they'll naturally move to maximize the profit they can generate off of this new service. Over time this could lead investors to push for all new investment to go into building out prioritized access rather than open bandwidth since it will realize a greater return.

This is the other significant point that was made by the pro-net neutrality side, namely that the issue of net neutrality itself is a product of underinvestment in network capacity and the resultant need to find ways to manage traffic to a greater degree to prevent congestion. This then leads into the dual questions of how do we avoid the situation where network operators are able to profit off of scarcity, and how do we encourage them to keep investing in capacity, especially for open bandwidth?

With all these thoughts in mind, I think I was able to identify the crux of the net neutrality debate. I did so by asking the following question of the panelists:

"If I were a policymaker in this room right now I'd be pretty frustrated as it seems like I have only two choices and whichever one I make will destroy the Internet as we know it. Is there not the possibility of a third way, a solution for encouraging innovation at the edge and in the network?"

The gap between the responses I got was remarkably narrow.

On the anti net neutrality side the answer from Hal Singer of Empiris was that we should allow network operators to strike deals for prioritized access with application and content providers, but that we need to make sure those terms are available to all comers.

On the pro net neutrality side the answer from Michael Livermore of the Institute for Policy Integrity was that we need some mechanism to protect content and application providers.

Notice how they're basically saying the same thing? The crux of the net neutrality debate isn't about open vs. closed or dumb vs. smart networks, it's about making sure that everyone has access to the advanced capabilities of smart networks.

The great thing about this is that we now have a clearly defined problem to find a solution for. But that doesn't mean the challenge is over.

Figuring out how government can insure fair access to prioritized service is extremely complex.

For example, fair access does not mean everyone necessarily gets the same price as there needs to be some accounting for economies of scale. The more I buy the cheaper bandwidth should get. But is it fair if Sony gets way cheaper access than the startup down the street? How big can that gap get and still be fair?

Another serious issue is how do we make sure we don't create a system that incentivizes investment in private prioritized service vs. open bandwidth. Just as we shouldn't outlaw prioritized service in favor of open bandwidth, we also need to protect the possibilities of the open Internet. But how do you define a solution for this? Do you mandate some percentage of investment in infrastructure going towards building up open bandwidth capacity? How do you identify if and when the market needs any intervention at all?

We also have to figure out how much we need in terms of government-mandated standards to establish the rules of the market vs. having some mechanism to respond to market failures. I ultimately think that any good net neutrality policy requires both, but the question is how much of each do we need and how much is too much vs. not enough overall in terms of government intervention.

But regardless of how we ultimately solve net neutrality, the point of this post is to highlight that we seem to have narrowed in on the crux of the matter at hand, namely how are we going to promote fair access to all application and content providers to the prioritized services of network operators.

With this in mind, I'd suggest that we all try to stop demonizing the other side as trying to destroy the Internet as we know it. Instead let's focus all that terrific energy on figuring out a solution for this clearly defined problem.

And then we can focus more of our energy on what really matters, figuring out how we can get the power of broadband to all Americans, and how we can transform America into a network-optimized country and sustain our leadership position in the global digital economy.

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Comments (2)

Who pays for advanced services has always been the question, and the driver is the wireless networks in which simply adding bandwidth is not an option. But it's taken seven long years to cut through the smoke that the radical regulationists have thrown up around that issue with the free speech nonsense to have a sensible public discussion of it.

Posted by Richard Bennett on February 1, 2010 6:47 PM

Free speech nonsense and radical regulationists? Sorry the little people have gotten in the way of letting the people who pay Richard Bennett's salary to turn the Internet into radio or television - a communications medium run by and for the benefit of a few companies that can profit from it.

Network neutrality was a tradition that got us to where we are. The question is how to preserve it - if we can do so without legislation or regulation, so be it. But I'm not going to renounce regulation merely because it annoys AT&T; that they cannot profit _more_ off the Internet.

Posted by Christopher Mitchell on February 2, 2010 5:01 PM

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