Quello Panelists Warn of Bells’ Internet Market Power
The Bells, particularly Verizon and AT&T, have enough Internet market power to discriminate against content providers and squeeze small ISPs out of the game, panelists warned Thurs. during the annual Quello Symposium. On a panel delving into the hot policy topic, net neutrality, speakers said the Bells’ IP-based networks can charge content providers different access fees based on volume or give some services priority over others -- and they fear that’s just what the big carriers plan to do.
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Panelist Link Hoewing, a Verizon asst. vp., sat through the criticism without much comment, choosing instead to talk about the business aspects of his company’s broadband network. Asked afterward why he didn’t defend Verizon, he said the answer’s simple: “Let the market work. That’s all we need to say.” The Bells have said they think some network management is necessary, but they also know consumers wouldn’t stand for any action that makes it difficult for them to get content they want.
Broadwing Chief Regulatory Officer Lawrence Strickling said the Bells plan to use their “excessive power in the backbone to extract additional toll from content providers,” though content providers already pay ISPs for use of their networks as do end users and sometimes other backbone providers. The issue “isn’t about fairness,” as some Bell executives have said, he said. “There’s no free ride on the Internet today,” Strickling said. In addition, network management practices contemplated by the Bells could harm start-up companies that couldn’t afford the high capacity they might need to offer new types of applications, Strickling said.
Charging end users based on the capacity they desire seems the fairest solution and more economically sound, Strickling said. Consumers’ willingness to pay for various speeds or capabilities would offer an indication of where investments should be made, he said. MIT scientist David Clark said a better route would be for networks to sell “enhanced network services” such as data backup, caching and security. There’s “good and bad blocking,” he said, and “blocking for security is good.” What’s bad is charging high fees to content providers which would reduce innovation and stymie the development of new applications, Clark said.
“At its core, this issue is about nondiscrimination,” said Gerry Waldron, an attorney for a coalition of Internet content companies such as Amazon.com, Microsoft and Google. He said his members understand that some applications, such as telemedicine, need high priority. “But our view is prioritization should be married with nondiscrimination,” with like applications treated equally, Waldron said. The solution isn’t to put innovation “in the hands of a handful of network providers” who can make decisions about the movement of content without oversight, he said.
Although Bell critics urged more binding rules than the FCC’s guidelines for net neutrality, communications lawyer Richard Wiley said, “policy makers should proceed with caution” given the possibility that binding rules might “chill innovation.” One thing that definitely won’t work is a proposal in the House Commerce Committee to codify the FCC’s net neutrality policy statement and make it enforceable through the complaint procedure, said Strickling, a former FCC Common Carrier Bureau chief. The statement is too broadly worded; besides, the FCC doesn’t have the capacity to deal with enforcement case by case basis without a rulemaking, he said.