Net neutrality extremism versus common sense economics

[Updated 6/18/2006 2:00 AM] In my last blog, I stated that "Net neutrality and politics don't mix" and tried to move the debate beyond fear mongering but no one answered the call to answer some tough questions.  Organizations like MoveOn.org and companies like Google have latched on to a tiny portion of the Net neutrality bill in congress such as the Markey amendment and have hijacked the definition of Net neutrality.  They'll have you believe that if you oppose Markey or amendments like it, then you are for destroying the Internet by allowing the big evil Telcos to control what you see on the Internet or degrade competitor's services to monopolize the market.  But nothing could be further from the truth since the existing Net neutrality bill in congress without Markey's amendment mandates FCC oversight for all complaints within 90 days with fines of up to $500,000 per infraction.  Even before any talk of Net neutrality, the FCC slapped down Madison River Communications for blocking Vonage VoIP service with a $15,000 fine.

To scare the public, the Markey proponents have brought up the case of Craigslist and Cox Interactive which our own Tom Foremski has reported.  The problem is that the Craigslist incident has little to do with Net neutrality because it's all about a software bug in Authentium which Cox is using for security purposes [Upadate: This is actually a problem with Craigslist].  This has nothing to do with any of the amendments like Markey because all of them have provisions that have to allow for security software.  For example, my own ISP will block any infected PC that attempts to infect other computers on the Internet.  Foremski writes: "Craigslist has approached Authentium several times to get it to stop blocking access by Cox internet users but it has been unresponsive"  [Upadate: This is actually a problem with Craigslist and has nothing to do with Cox or Authentium].  Well if that's the case, that sounds like a civil lawsuit against Authentium for lost business over the course of recent months.  That has nothing to do with Net neutrality.  Hypothetically speaking, if there was a patch available from Authentium but Cox for some reason chose not to implement it because they have their own classified services, then that would fall under the existing bill's provisions for FCC oversight.  But even now, nothing prevents Craigslist from suing Cox interactive and Authentium [Upadate: Since this is a problem with Craigslist itself, it explains why no legal action was taken].  (more...)

Net neutrality extremism and free markets don't mix

What the Net neutrality extremists don't want to do is debate the specific merits of the Markey amendment and I had a difficult time of getting any of the Markey proponents to address my specific question which is: Do we want to ban all forms of priority service.  If the answer is yes, do we also ban services like:

• Priority mail
• Priority shipping (FedEx, UPS, USPS, etc ...)
• Priority downloads (Gamespot.com, FileShack.com)
• Priority seating (First class seating on planes)
• Premium search result placement or "search neutrality" (Rep. Charles Gonzales amendment proposed to do precisely this!  Companies like Google should be careful on what they wish for.)

One slippery answer I got was: Well we don't want to ban priority service or QoS (Quality of Service); we just don't want anyone to be able to charge for it.  Take this specific portion of the Markey amendment:

SECTION 201. NETWORK NEUTRALITY.
(b) IN GENERAL.—Each broadband network provider has the duty—
(3) if the provider prioritizes or offers enhanced quality of service to data of a particular type, to prioritize or offer enhanced quality of service to all data of that type (regardless of the origin of such data) without imposing a surcharge or other consideration for such prioritization or enhanced quality of service;

Everyone will want priority service since the Government has declared it free but NO ONE will offer it because there is zero incentive to do so Well if no one can charge for it, why would anyone offer the service in the first place?  What if we told FedEx or any other shipping company they can't charge for priority overnight shipping and that if they want to offer priority service, then they can't discriminate against the sender and all packages must be sent via priority shipping?  What do you think would happen to priority overnight delivery service?  The exact same thing that happens in any socialist system like the Soviet Union where lines were a mile long and service was lousy.  Under such a system, everyone will want priority service since the Government has declared it free but NO ONE will offer it because there is zero incentive to do so.  When you declare everyone gets priority service or no one gets it, the end result will always be no one gets it.

If we look the priority shipping example, I'll often go with the cheapest ground shipping method.  Of course "ground" shipping doesn't necessarily mean something is literally shipped by ground, what it really means is something is shipped by "best effort".  This means if there is room on an airplane to ship something overnight when all other priority overnight packages are already on board, then the standard priority packages will get shipped along with the priority packages.  This means I'll sometimes get my "ground shipping" package in one day and sometimes it might take up to 5 days which is still perfectly workable if I'm not willing to pay extra to get guaranteed overnight delivery.  The same thing applies to VoIP packets on the Internet.  Businesses often buy enhanced quality of service with priority packet forwarding for a set amount of data throughput today.  For those who pay for enhanced QoS, their VoIP packets may take 20 to 40 milliseconds to get to their destination.  For those who don't pay for enhanced QoS who have settled for cheaper "best effort" service, their VoIP packets may take 20 to 100 milliseconds to get to their destination.  In the typical "best effort" scenario, VoIP still works fine though the quality may range from excellent to tolerable.  In the case of enhanced QoS customers, the sound quality is almost always excellent.  This is how a free market society works; pay average prices and get average service, pay premium prices and get premium service.  So long as no one deliberately stops the packets or deliberately slows them down, everything should be perfectly legal. (more...)

Coming up with sensible Net neutrality

Responding to my first blog on Net neutrality, some have asked me: If we allow prioritization, aren't we essentially robbing Peter to pay Paul?  Others in congress supporting the Markey amendment have compared priority Internet traffic service to reserving two lanes out of a four lane highway for the rich.  The problem with this analogy is that it is simply ignorant of how network prioritization works.  As I mentioned in my previous blog, applying QoS on most applications that truly need it like VoIP (Voice over IP) or online gaming does not put a tremendous load on the network and the effects to non-prioritized data is almost unnoticeable.  Even in my home network, I apply priority policies on my home router for services like VoIP and online gaming.  Since these types of services don't require a lot of bandwidth to begin with and it makes no difference to anyone else in my home if their webpage comes up in 2 seconds or in 2.5 seconds in inconsistent bursts of data.  But if my VoIP or online gaming traffic was delayed for even for 1/10th of a second, the phone call or game becomes unworkable.

But some are still concerned about the potential abuses of traffic prioritization and ask: Isn't it at least possible for an ISP to sell so much priority traffic that it leaves only a trickle of throughput for "best effort" customers while avoiding the wrath of the FCC because they're not discriminating against any specific customers?  This is certainly possible and I share some of these concerns.  But resorting to a draconian set of Soviet-style regulations and banning all types of priority service by virtual of not allowing anyone to charge for it is not the solution.  I believe these potential abuses can be best addressed by mandating that all ISPs disclose all network traffic metrics to the public.  As a matter of fact, one of the most frustrating things about Internet Service providers is getting honest metrics and downtime statistics out of them.  Forcing them to disclose their performance metrics, backhaul to last mile throughput ratios, QoS policies, and other pertinent data would shed light on any suspicious behavior or incompetence.

Sensible limits on prioritization without an outright ban strikes the balance between free market economics and the need for a healthy information highway. Based on simple economics, the market will choose the Internet service providers that treat them best.  While I firmly believe this, I can understand the concerns of the public and the need to have some assurances in public policy.  Even though there are laws in place to address these abuses and even stronger policies are in the works with existing congressional bills, it is reasonable to ask if that is enough.  The Internet has become such a crucial public resource like the public highways that we need to be more proactive by clearly defining the limits of what constitutes ISP abuse.  But instead of Soviet-style regulations that ban all types of premium for-pay services, perhaps what is really needed is some sensible ratios in the classes of service.

Now I want to be very careful on how I define the word "ratio" here.  Whenever QoS technologies are implemented, you never want any hard limits because it's perfectly reasonable for one set of users to take up the vast majority of the pipe when another set of users is off-peak and vice versa.  What I mean is that if everyone is contending for the same bandwidth on an Internet backbone at the same moment in time, then the priority-service packets should never exceed half the total available bandwidth.  The truth of the matter is, no sensible network provider should ever violate this type of network policy anyways because they would make service so unbearable for the majority of their customers that they would alienate them.  Furthermore, if a Telco builds additional infrastructure on top of what they already have for the purpose of transporting Internet traffic, they should not be permitted to designate that entire new infrastructure for priority service and must reserve at least half of that new resource for general purpose "best effort" service.

Net neutrality is a very complex topic and needs to move beyond the fear mongering and mindless rhetoric.  While it is in everyone's best interest to have an Internet that continues to improve for all Internet users, we won't ever get there by implementing socialistic policies.  Sensible limits on prioritization without an outright ban strikes the balance between free market economics and the need for a healthy information highway.