Net Neutrality -- What is it about?

There’s been more talk lately about net neutrality. In large part due to the neutrality day thing… Many people are (rightfully) confused. There’s good arguments on both sides. I’m very much for net neutrality and having sensible regulation to make all players play fair. I’ll go into why, what the past looked like, what’s going on now, and where things are steering absent changes.

So why am I qualified to talk about any of this? I’ll explain more later but – I’ve worked for a number of content providers. I’ve worked for ISPs and NSPs. I’m also, like anyone reading this, an eyeball, an end customer. I’ve lived in cities and in rural areas.

What we all need is a referee or at least an agreed upon set of rules. Would you consider playing baseball, basketball, football (American or European), scrabble, chess, checkers, hopscotch, or battleship without an agreed upon set of rules? Of course not that’d be silly. No one would win, ever for starters. It’d make the game impossible to play if there were no agreed upon rules. Sometimes this happens informally (a baseball game among friends, or a pickup basketball game type situation), sometimes this is formal (pro football). This is what net neutrality is about. The rules may not end up entirely fair to everyone, but would be a compromise to ensure we all play the same game. The neutrality debate has been sparked largely by big regional monopoly ISPs *not* playing the same ball game with NSPs and CPs. They can, and do, write their own rules, and expect NSPs and CPs to show up with a blank check. Why and how they can do this comes later here.

To start with the debate isn’t simple, for the purposes of my discussion here there’s no less than four big classes of players at stake…There’s the end user consumers (eyeballs) – this is everyone, you, me, your neighbors, even the CxOs and employees at ISPs, NSPs and CPs (the other classes). There’s the Internet Service Providers ISPs – this includes big huge players that have regional monopolies like Verizon, Comcast and TimeWarner as well as vastly smaller local players like Blackfoot Telecommunications (Hello Missoula, MT), Project Mutual Telephone Cooperative (Hey Rupert, ID!) and others – I’m naming just a couple names of ones I know. There’s the Network Service Providers – these are largely companies that many of you have never heard of like Level3, XO, Telia, and Cogent. And then there’s content providers (CP). The web sites you visit and services you use on the Internet – places like Amazon, Netflix, Hulu, Facebook, Google, Yahoo, The Washington Post, your bank, and on and on – besides eyeballs this is the largest group. These pieces together make an internet into The Internet. Yes the caps matter, because The Internet or Internet is the globe spanning network we all tend to take for granted today. An internet is simply an interconnected network…but the proper noun Internet refers to the big cloudy entity that spans the whole globe, that encompasses tens of thousands of technologies and uses. And as key, attempt to treat all comers as fair. As the data they represent doesn’t matter. It’s just a letter to be delivered.

Many of these classes get fuzzy at the edges, providing multiple types of these services and there’s nothing wrong with that at all. The premise is that they’re all on relatively equal footing as any other that’s on the Internet, because that’s what the consumers, the eyeballs, pay for. That’s what CPs also pay for. There’s technical limitations at play, physics is a harsh mistress and getting to services located only in say Australia from Seattle, WA will always be slower than something located on the continent you’re on or the city you’re in.

The Internet today largely exists to connect eyeballs to CP. At the content end monopoly is largely prevented by the way everything works in between. ISPs connect you to the WHOLE of the internet equally. ISPs *NOT* doing this is a *huge* part of network neutrality, but net neutrality has further reaching effects into the NSP and even the CP space. By doing this you as a consumer have choices. This is part of what Microsoft ran afoul of with IE and being hostile to other browsers on Windows.

What has *traditionally* been the case is that ISPs and Content Providers negotiate with NSPs for mutual access. The NSPs provided the continent and globe spanning networks that really make the internet The Internet (yes the caps matter here). There’s always been, and continues to be, a good amount of healthy competition in this space. Because as content providers and ISPs they aggregate all the little charges from their mutual customers to bring in bargaining power against the NSPs – NSPs are beholden to both sets of customers to provide a guaranteed level of service that benefits everyone. An NSP is unlikely to refuse any customer for any reason. They may have to charge a customer more because of specifics of size, or location, but since every NSP is largely on mostly equal footing here the pricing is competitive. As even a small ISP or Content Provider you almost always have MANY choices of NSP no matter where you are globally. So the free market largely works here. The NSPs also have a vested interest in playing fairly with eachother, often times agreeing to “peer” in mutually beneficial locations for little, or no cost to each other beyond the actual costs of equipment where equipment exists. This is called Settlement Free Peering. They both have large mutual customer bases that pay them to communicate, and so market factors tend to make these large NSPs cooperate (and the architecture of The Internet encourages this).

So what’s changed? Well, ISPs have grown larger and larger. Holding bigger and bigger regional monopolies. Many of the bigger ones are getting local and state level government on their side by lobbying and kickbacks. This reduces or removes competition in the end user to Internet space. Many of these gargantuan conglomerate ISPs also have Video and Voice services, both of which are suffering at the hands of companies like Netflix and Amazon, Skype and similar. The ISPs have gotten large enough and have so little competition in their regional marketplaces that they dictate terms to NSPs and CPs without regard to their customers at a business/corporate level. The men and women building their networks are by and large neutral and rarely willingly commit actions against the “old” model of ISPs working with NSPs together with CPs. What we’ve been seeing more and more of is these ISPs “waking up” to their uncontrolled, unregulated status and taking advantage of that to cut out the NSPs, force CPs to negotiate directly with them individually. This increases the cost of business for the CPs, and the cost of the service they deliver to you. The ISPs doing this are often doing this to protect their own revenue streams and get themselves a bigger piece of the pie. They have no need, nor market force, to play fair with anyone, and so they’re not. The ISPs will claim insufficient facilities and congestion to an NSP, ultimately some number of the CP customers of the NSP are forced to buy directly from the ISP. The big ISPs as a business decision aren’t interested in any form of settlement free peering even when it’s mutually beneficial, not with NSPs and not with CPs. This partly comes about because they view the NSPs as holding them hostage over the years.

As an eyeball you’ve already paid for the WHOLE Internet, on an equal footing. Not for ISP X’s walled garden. You’ve likely been sold a service as X mbit up/Y mbit down without limitation beyond that. The ISPs are slowly and surely introducing limitations on that. Data Caps. Their own preferred services that do not count against the data cap or the service speed limitations. And they get away with it. If you’re in a Comcast service area it’s likely that comcast is your only choice. Comcast is big enough to force CPs to end run around the NSPs to get more of the pie. Forcing the CPs to pay again for what you’ve paid your ISP to purchase on your behalf. Smaller and medium sized ISPs don’t usually work like that because they can’t. They haven’t enough power to make even Bobs Bait and Web Services LLC to connect to them even though they often do have a regional monopoly.

In the few areas where there is “competition” the choice is usually a coax/cable broadband provider which can easily service many tens or hundreds of mbit down with tens of mbit up per customer and a WISP or xDSL provider which due to technology limitations that aren’t going away are lucky to get around 10s of mbit to an area (WISP) or ~10mbit to a customer (xDSL).

Entrants into wired market (coax, fiber, or copper…) are difficult due to cost, but also very much due to regulations and contracts that greatly favor the existing (usually cable) monopoly. Cable companies have been very good at establishing monopolies in their service regions over the decades they’ve built their coaxial plants. They’ve been among the very last to adopt broadband but due to these monopolies, and the technical benefits of the deployed physical plant
which have huge amounts of bandwidth, especially as they’ve begun to sunset analog cable services.

The big monopoly wireline ISP/telco services have fought at every turn against any fair access to the last mile, to the homes and even in many cases businesses. They’ve blocked municipal wired and wireless access initiatives time and time again through lobbying and kickbacks. They hold the eyeballs hostage and then force CPs and NSPs to negotiate terms favorable to the ISP to service the mutual customers. Customers who’ve already paid the ISP to buy access to the whole Internet equally and fairly.

The technology exists to deliver coax or fiber to every home in a city or area, and open that physical line up to virtual/logical service by any ISP who makes a relatively small investment to be in the physical hub(s) of these municipal or metro access networks. In that model you’d have a real choice of who you pay as an ISP. ISPs would have to compete with each other for customers and would have to compete for a share of the pie. Similar to what we had for a good while with DSL (see like Covad for example). Those regulations that required the telco’s to open their lines are what really kick started the Internet. Helped CPs to develop new technologies, new games, content, ways of interacting. Not the free market. Without a referee to ensure players play fair.

That’s all kind of blue sky, but it’s not at all impossible, not even a little.

What we absolutely must have is the middlemen working together, ISPs and NSPs, to provide you as an eyeball with what you paid for. Fairly and equally. CPs should still be allowed to negotiate directly with ISPs as they’ve been allowed to do, but absent real technical of physical logistical reasons (these rarely exist) they need not negotiate directly with any ISP. And in the past they never really have. The NSPs are by and large beholden to eachother and their CP customers. the ISPs traditionally have acted as neutral gatekeepers, but there’s been nothing in the rule book that states they have to. And the bigger ISPs are waking up to that and pushing their size advantage against *all* the other classes.

Moving forward what we’re now seeing more of is peer to peer technologies. Things like Bitcoin, voice/video chat, multiplayer gaming, personal “cloud” services hosted at your own home under your control, mutual peer to peer backup and storage networks. All of these are data intensive and very quickly run afoul of data caps, preferential treatment, and heavy handed attempts at injecting advertising into your Internet connectivity that the big ISPs are doing more and more of.

If those technologies don’t receive the same equal treatment we’ve all enjoyed they cease to exist. Data caps by ISPs are most directly aimed at competing video services because they’re the largest bandwidth consumer. But they also harm other peer to peer and cloud based services. Services and content we haven’t yet even dreamed up.

The Internet only works at all because we’ve semi-formally agreed to various sets of rules already. Web browsers speak to web servers and services via mutually agreed upon rules of the game. Web browsers and services that don’t play the same game get shunned in favor of those that do because a free market does exist at that level due to the Internet as a whole. When you remove that piece as many big ISPs are attempting to do, and to a lesser extent some NSPs have tried to do you hurt the whole thing. When competition does not exist (as in the case of the ISP space here in the US) the free market doesn’t function. When there are no agreed upon rules, the game goes to those willing and with enough power to change the rules to suit them. That’s what’s already happening right now to the Internet. That’s what neutrality is about. Setting rules that we all play by.

There’s no entity outside of the government big enough to put Comcast and TimeWarner to the fire and provide competition against them with how they’ve gerrymandered everything now. Even though eyeballs vastly outnumber every other class and are the whole reason any of this is what it is at all – they have NO power to negotiate in the largest (and therefore most powerful) regions because the big ISPs have systematically taken that ability away. Net Neutrality is about restoring that power where it’s out of whack. It will have effects reaching farther into CPs and NSPs and that likely can’t be avoided. They’ve both had to play ball due to market forces beccause the market exists in those spaces and it does NOT currently exist in the ISP space.