Thursday, February 04, 2010

Reasonable People Achieving Consensus?

There have been some extremely constructive developments in the net neutrality debate in the US (notwithstanding the 'beliefs' argument).
Verizon, one of the two biggest DSL and now fibre providers, and Google, owner of YouTube, submitted a joint response to the FCC NPRM. I hadn't blogged about it last week because the book launch was a pretty busy time. There was also a response by eminently wise men: Dave Clark, Bill Lehr and Steve Bauer.
Both submissions make very similar points, and I will summarize them crudely. But the main point emerging is that it is essential to design a system that does not let lawyers spend years screwing with the Internet. Therefore, both submissions propose what in Europe we would call a net neutrality lite co-regulatory solution - based largely around allowing standards and alternative dispute resolution to replace traditional adversarial rule making.
So here is the basic message:
[1] The Internet has largely been unregulated except by standards, and that has contributed to its dramatic growth and vigorous developer community, along with private investment.
[2] There is relatively little evidence of anti-net neutrality behaviour but an acknowledged need for traffic management on networks to cope with congestion.
[3] A light touch response is therefore appropriate. In particular, traditional knock-down drag-out mortal combat before the FCC and then courts does not seem timely or appropriate in most cases.
[4] The FCC - or whichever agency deals with the issue, possibly in cases of consumer harm the FTC - should rule on reasonable management practices where it receives complaints of abuse, but otherwise should leave the players to decide, and take what in Europe we might call 'utmost account' of technical advice.
[5] Technical Advisory Groups should be established to help flesh out what 'reasonable' should mean. That should include application development as well as network development - P2P apps should help solve not worsen the problem.
[5] These 'TAG's should then offer a possibility of arbitration for more toothy problems.
[6] The regulator thus acts as backstop in especially difficult cases.
And the three clinchers:
[7] Discrimination should be permitted - 'special access' is a normal development that will help attract investment to build faster lanes alongside the open Internet.
[8] The overall regime may not be appropriate for wireless carriers given their especially constrained bandwidth and overall network ecology.
[9] Government should ensure that the basic Internet access option must be offered alongside any future filtered version, and take steps to define it such that it not become a 'dirt road' alongside the more commercially partitioned versions. I would describe this as a 'Parliamentary train' failure of universal service.
All of this could be applied to the European debate too, and there's where the tenth take-away becomes so important:
[10] It is not the proper role for ISPs to act as copyright police or proto-government censors.
There seems to have been an outbreak of sanity in Washington?


Tom Vest said...

Hi Chris,

All eminently reasonable suggestions, with the noteworthy exception of (7):

"Discrimination should be permitted - 'special access' is a normal development that will help attract investment to build faster lanes alongside the open Internet."

I think that in this particular context, (7) is actually an unproven prediction phrased as a general, invariant fact. I also believe that the implicit claim upon which it rests -- i.e., that attracting investment for building 'faster lanes' is ipso facto so intrinsically beneficial that it naturally justifies discrimination -- is also categorically false.

My reasoning goes like this: Beyond a certain level (which varies over time), additional incremental investment in the production of additional network capacity -- or 'speed' x 'lanes' -- is *not* beneficial, much less beneficial enough to countenance any significant level of discrimination, price-based or otherwise. To illustrate, it would be insanely wasteful (even if it were commercially sustainable, which it is not) for at least several decades to come, for multiple individual ISPs and online content providers to attempt to build their own ubiquitous, greenfield terrestrial facilities platforms in order to reach end users. With the extension of the first very high capacity optical platform all the way to the CPE, individual homes and shops will already enjoy the same physical-topological status enjoyed by the average "downtown" commercial building. To overbuild additional fully diverse (i.e., physically, as well as economically "redundant") high capacity physical paths on top of that would effectively imbue every single customer premises with the same topological endowments as today's commercial Internet data centers. That doesn't make sense to me -- and to the extent that it doesn't make sense at all, it suggests that the challenge of attracting *really* beneficial investment -- the kind that might actually justify the temporary imposition of some kinds of selective incentives -- is really a one-off problem.

The myth of "facilities based competition" cannot stand up to the observed fact that accelerating, technology-driven productivity gains in network capacity production (i.e., DWDM, et al.) have long outpaced the growth of observable and foreseeable human demand for network services, and continue to outpace those demands by ever-increasing orders of magnitude over time. My great fear is that by elevating the primacy of investment (even targeted investment in network capacity), as the summum bonum, we'll be committing ourselves to a self-negating principle that will ultimately yield a rich variety of of discriminatory mechanisms and practices, but increasing less and less productive investment.

Toby Williams said...

well at least one company has taken the lead and jumped feet first in to facilities based competition; promising to build superfast access


Funny that

Tom Vest said...

Hi Tony,

I can't be sure, but it sounds like your reaction might have been intended as an ironic commentary on what I wrote about "facilities based competition." On the outside chance that that was your intention, here's a few more facts that you might find relevant:

(1) The "mythical" aspect of FBC to which I was referring is the claim, made with ever-increasing frequency (mostly by representatives of legacy incumbents, post-RBOCs, et al.) for about a decade now, that an abundance of FBC already exists, and has existed for many years. Based on that view, Google's move is both insane (because it's too late), and irrelevant (because all conceivable facilities-related demands are already being met by the current "abundance of FBC").

(2) While I have complete confidence that they could pull it off, it's still not entirely clear how far Google intends to go with this plan, c.f.:

(3) Finally, even if Google were to blanket the world with optical facilities, the official statements that I've seen suggest that they have no intention of using any facilities that they construct in any way that remotely resembles the role advocated by the current defenders and champions FBC. To the latter, the whole point of controlling FBC is to internalize a min. 100% of the benefits of that facilities investment, both to satisfy shareholders, and in order to inspire other market players to make their own glorious investments in the same sort of facilities that (any)one would need to reach the same end users.* To some (esp. anyone familiar with optical transport networks) that might sound like a rather wasteful exercise in capital investment -- but champions of FBC know better; they know that every new investment is by, definition, glorious -- because it's investment!

If you're comment was not meant to be ironic, then nevermind ;-)

*or, per standard theory, to offer incremental use of the existing facilities at a price equal to $0.01 less than the price at which the would-be incremental user would prefer to not go into business at all. Since that's how theory declares that pricing works, the observation that there are relatively few takers entails that there is no unmet demand, QED.