Baseline Service or Degraded Quality? Little Agreement on Net Neutrality

Requiring networks to abstain from value-added agreements with content and VoIP firms “doesn’t make any sense on a shared facility,” BellSouth Gen. Counsel Bennett Ross said: Innovation -- speed, quality of service and multiple consumer choices -- can’t go forward unless networks have the freedom to provide better services with interested Internet firms. The “virtuous cycle” by which networks and content firms drive each other’s adoption should work “on a commercial basis,” he said.

Others saw the Bells’ plans as an attempt to impose a cable carriage situation on the Internet. “Larry Page did not have to go and ask permission to start Google,” said Gerry Waldron, who represented a group of Internet companies asking Congress to impose net neutrality. He wants to preempt a situation “where we have to go knock on BellSouth’s door… to provide content.” Referring to Bell statements that the carriers need to recoup network improvements, Waldron said: “We should worry about… the investment at the end of the network” as well, since what consumers ultimately want is content.

Bell speakers repeatedly said they couldn’t answer questions for “hypothetical” situations, because network providers haven’t yet made commercial agreements with online firms. “I don’t know how the market will evolve,” said Link Hoewing, Verizon asst. vp-Internet & technology issues, adding net neutrality provisions will impede that evolution. Mark Cooper, Consumer Federation of America research dir., said the Bells’ proposals weren’t hypothetical at all. “They have just spent the past 10 years doing that with the CLECs,” which were “miserably abused” under their agreements with the Bells, Cooper said: “They want to legitimate their practices going forward.”

Ross decried the “antiquated common carriage regime that [says] everyone has to be treated exactly the same and you can’t differentiate your product in any way.” He portrayed commercial agreements helping up & coming firms: “Maybe a smaller search engine that seeks to compete with Google may want to differentiate itself” with BellSouth’s “network management services.” Google has the market power to improve its service without help from ISPs, he added.

The power of expanded bandwidth to render moot quality- of-service issues, and therefore the need for regulation, was disputed -- on cost, not technical, grounds. Danny Weitzner, World Wide Web Consortium dir.-technology & society, noted that an Internet2 representative told a Senate hearing Tues. that it’s cheaper to add bandwidth than to prioritize packets in efficient distribution. “It’s far from clear that the thing to do is create scarcity” by improving service for some Internet firms that theoretically will hurt others: “The Internet allocates scarce goods differently” than telecom.

“Who’s going to pay for it?” Ross shot back, saying some customers won’t pay $24 for “DSL lite.” The 100 Mbps connections that Internet2 says should be available in 5 years won’t be cheap, and “you cannot expect to recover the entire cost… from the end user customer” through access charges. Customers won’t notice any difference in service from today when commercial agreements are common, he said. “You have overpriced that access” in the first place, Cooper retorted: “The real innovators need access to the public… You haven’t innovated anything.”

The so-called baseline model is a reality today, Hoewing said. Speed of delivery largely depends on network congestion and many players are needed to route packets efficiently: “Over time we're going to find a lot of these debates are going to be worked out” in the market, not Congress. He cited AOL’s announcement it would let providers buy the right to skip its e-mail filtering for instant access to inboxes: “The concept is the same” for network management. Cooper challenged the comparison, saying customers have hundreds of choices for e-mail providers: “If I'm lucky I have 2” for ISPs. “There’s not enough competition to “discipline their ability to leverage that pipe” against disfavored firms, he added.

There’s no point requiring network providers to disclose their commercial agreements with other firms to potential customers, Hoewing said. Verizon already has a contract clause describing possible limitations in service. Responding to Jonathan Krim, WashingtonPost.com dir.- strategic initiatives, he said the Bells will have “every incentive to tell people what they're offering -- that’s the market.” Ross said network providers will advertise those commercial agreements as an incentive to customers.

The U.S. relative rank in broadband speed vs. pricing in the world was used as evidence that network providers are slowing innovation to pad their bottom line. Krim said the Bells have been able to provide 10-15 Mbps connections for a few years, but “you've chosen to meter that bandwidth at what some would consider very high price points.” Ross challenged Krim, asking how easy it was to get 15 Mbps speed from twisted copper. The 24 Mbps needed for BellSouth to offer IPTV will require a “significant investment,” he said.

But Cooper said the availability of 100 Mbps in Japan and approaching speeds elsewhere demonstrated a “failure of vision between applications and pipes” stateside. Consumers abroad are paying “much lower rates,” Cooper said, which helped create the “astronomical” online gaming industry in Korea. Loewing noted that Verizon was rolling out 30 Mbps connections: “We have done a pretty good effort to deploy this stuff,” considering they're competing with existing cable networks and they don’t have franchises yet. “There’s a lot of moving parts to this.” Weitzner said the real international issue was that all the major network exchange points were based in the U.S., which worries international firms that distrust U.S. motives on network provisions. -- Greg Piper

State of the Net Notebook

Google didn’t decide blithely to do business in China, Chief Internet Evangelist Vint Cerf said. Cerf, also chair of ICANN, told the conference intense internal deliberation preceded Google’s decision to enter China and play by the govt.’s stringent censorship rules. In the end, the opportunity to tap a large online audience 2nd in size only to the U.S.’s was “very hard to ignore,” Cerf said. Google operates lawfully wherever it works, so its Google.cn search engine had to comply with Chinese rules, he said. It’s “not our favorite situation” -- but giving Chinese citizens Internet search access with the curbs is better than no access, he said. Over time, the flow of information will erode govt. interest in filtering and blocking Web content and ability to do it, he said. Cerf fielded questions about ICANN -- particularly on a proposed .xxx top level domain and the group’s coming settlement with VeriSign. He said he isn’t sure what the board will decide on .xxx, a discussion already delayed to allow ICANN’s govt. advisory committee to react to feedback from a Dec. Vancouver meeting. The board likely will take up the subject within months, he said. The latest proposal to end the ICANN/VeriSign rumpus and advance a controversial new .com contract will probably come this month, Cerf said. At a review set for Feb. 21, the board will examine public comments on the deal. A decision could come then or 8 days later, when the board next meets, he said. - AN ----

“Blogging changes everything and blogging changes nothing,” Progress & Freedom Foundation’s Adam Thierer said Wed. at the annual State of the Net conference. He said the medium gives anyone with a computer and an Internet connection the ability to publish and broadcast their views to the world. Blogging has helped speed “the death of massification in an important way,” Thierer said -- but it hasn’t changed how consumers take in information. The 80-20 principle that a small minority of content producers get most of the attention rings as true for blogging as it does for other media. But blogging is supposed to be “the most egalitarian form of all media” so he wondered aloud: “Is anyone listening?” Still, small-time bloggers’ content has a “long tail,” Thierer said. Diverse viewpoints can be found, tapped, searched, explored and referred to for years to come. ----

A hypothetical U.S. embargo on China to protest the govt.’s extensive Internet filtering regime would have “zero effect” on the country’s online bottom line, said Grant Aldonas, former Commerce Dept. undersecy. for international trade. Many of the technologies used to surf the Web are made in China so a cessation of American high-tech exports wouldn’t matter, he said. “As little as I like the ISPs collaborating with the Chinese government in censorship, we're far better off with Internet access into China,” Aldonas said, because Chinese consumers have found ways to sidestep govt. control over and over. Each time a new high-tech door is opened to them, new seeds of democracy are planted, the Akin Gump attorney said. “The tool is better off in place even with the limitations [the govt.] thinks they can impose,” he said. David Gross, the State Dept.’s international communication guru, said China-based companies would welcome a lack of U.S. competition for the country’s 111 million Internet subscribers. ----

Copyright and trademark policies, which have been driven on Capitol Hill by large corporate entities in previous years, are now being shaped by new, independent voices as well, House Judiciary Committee staffer Joe Keeley said. Self-publishing raises a lot of policy questions but that’s not to say existing laws don’t already cover some. Although state and federal laws exist, there may be situations in the Internet age that prompt consideration of new laws and regulations, Keeley said. One such issue that deserves clarification is orphan works -- copyrighted content whose creators are hard to find. After months of public hearing, the Copyright Office released its final report and recommendations to Congress last week, he said. ----

Popular video podcast Rocketboom and others that make video available on the Web are going through the same growing pains the music industry went through 5 years ago, Rocketboom’s Andrew Baron told the conference. Baron, half of a 2-member team that runs the brief daily program, said his high-value, low-cost show and others like it have “a big impact on the world.” Broadband’s expansion has changed the way people perceive the Internet and it would be bad to start “throwing FCC regulations” at the budding medium, he said: “Video is flowing and people don’t have to sit there and wait for it to buffer. It’s had a big impact on the world.” New regulations would stifle innovation and would “ultimately hamper the spread of democracy around the world,” Baron said.