The real reason behind the net neutrality push

Written by on January 28, 2015 in Opinion with 5 Comments

Regulation written on multiple road signAm I the only one that sees the real danger of impending net neutrality (NN) rules? It’s not just they are unnecessary, they are a threat to our democratic freedom as well. Strong words you say? Read on.

For a start, why does anyone really think the internet needs regulating at all? It seems to have been doing very well on its own since 1982 when the TCP/IP protocol was introduced and even earlier when ARPANET was first developed.

Maybe it’s because regulators led by the FCC in the USA have run out of other things to regulate. They rose to power, strangely enough, because of deregulation of the fixed-line PPTs and telco monopolies that existed in every country. Because new competition had to be protected from these behemoths regulations had to be put on them to effectively help markets deregulate.

These days, with fierce competition in every communications sector, the regulators don’t have much to do and since data traffic over the internet is now bigger than voice and messaging traffic ever was they are looking for greener pastures. Even that old stalwart of fixed-line standards, the ITU, is trying to get in on the action.

The reasoning behind most attempts to ‘regulate’ the internet is to ensure that everyone has equal access to it with nobody being favored or restricted, no service being prioritized over another and no operator providing access to the internet being able to differentiate traffic for billing purposes. Of course there is lot more to it than that, but the basic gist of the current neutrality push is – no blocking, no throttling, no paid prioritization.

It’s a farcical argument because fixed broadband networks are like roads – some are superfast superhighways, others are dirt and gravel covered country roads. No two networks are the same and there is no standard speed limit that can be maintained 100 percent of the time. There are also limitations to the amount of traffic any road can take and when it gets congested the traffic slows down, even stops. Will broadband providers be prosecuted every time this happens or they don’t match the speeds laid down by regulators?

Wireless networks have even more issues to contend with firstly in acquiring spectrum or utilizing limited free bandwidth for Wi-Fi access. Even the best technology available today is neither able to make best use of available spectrum nor maintain speed and connectivity in any/every location. Will mobile network operators be in breach of NN rules if they fail to give everyone equal access anywhere at anytime?

You just have to look at one of the few countries that jumped blindly into NN legislation to see how agonizing it is going to be for everybody providing any type of internet service. The Netherlands regulator this week fined KPN and Vodafone for violations that were bound to happen in the normal operation of their business.

KPN was found guilty of blocking various services, including VoIP, on its Wi-Fi hotspots and fined €250,000. Vodafone’s offence was to zero rate the data charge for subscribers watching HBO on their mobile devices for which they copped a €200,000 fine.

Mobile World Live reported, “four leading trade bodies (Cable Europe, Etno, GSMA and Make The NetWork) issued a statement directed towards the EU. The statement pointed out that the industry has to cater for diverse demand from users which requires a wide variety of internet access products and services.”

They are absolutely correct but maybe they should have voiced their concerns on behalf of their members well before the rules were pushed through at the behest of Neelie Kroes.

The main reason for telecoms’ deregulation was to provide a competitive environment that would benefit consumers and enterprises alike and the results speak for themselves. Competition is key to any capitalist society and it is self-regulating. Those that provide poor service or uncompetitive prices soon fall by the wayside. Consumers are the regulators and they know what they like and don’t like, voting with their feet and their wallets.

It would be suicidal for any ISP or CSP to purposely stifle access to the internet but they must retain the right to manage the traffic on their networks for optimum service and they should have the right to charge more if people want faster speeds or priority. Taking away those basic business principles is tantamount to imposing state rule over the business.

Now we get to the point. If network operators don’t comply with the rules as they are being shaped now they will certainly not be able to manage their networks effectively and services will definitely suffer. If they can’t bill for their services or even differentiate types of service for billing purposes then they become the big fat dumb pipe everyone hates to mention.

The business will very soon become unviable, especially if they are fined for every breach, and there will be thousands of breaches per day no matter how good they operate or cover their activities. And if businesses become unviable they will be sold, close down or be taken over by the state because of the critical role they play in every country’s development and even survival.

Is that the real reason behind the NN push by regulators (nee governments)? Is the end game to get back control of all those networks and, more importantly, the data that flows through them? The concept may sound a little extreme but just give it some thought. Why else would they want NN rules to be introduced? I can’t think of one logical reason, apart from keeping regulators and consultants in a job or for eventual control of the whole of the internet by governments.

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About the Author

About the Author: Tony is a freelance writer, regular speaker, MC and chairman for the telecoms and digital services industries worldwide. He has founded and managed software and services companies, acts a market strategist and is now Editor of DisruptiveViews. In June 2011, Tony was recognized as one of the 25 most influential people in telecom software worldwide. .

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  1. Dean Bubley says:

    I think you’re missing a few things here. In particular, the KPN fine seems clearly justified, as it appears to have been engaging in egregious anti-competitive behaviour. Application blocking or deliberate degradation of public Internet access is pretty much universally-viewed as unacceptable, except for child-protection reasons and (arguably) certain national-level firewalls relating to local definitions of legal content

    It could perhaps have been dealt with using competition law rather than NN, but that would likely have been a long-winded process. If we had 24×7 courts to rule on telecoms-related competition issues, without months/years of wrangling, then perhaps fair enough. But most countries’ legal systems wouldn’t cope. KPN could also perhaps have been sued under sale-of-goods legislation, as it wasn’t providing access to the Internet, but merely “processed Internet-like substitute”. It’s a shame that “Internet” doesn’t have similar protection to specific products like “Champagne”. There is also a strong argument that access to the (full) Internet should be a basic human right, for both social and economic reasons.

    The VF and Slovenian cases are more nuanced. Personally, I think that (in small quantities) zero-rated data is fairly harmless – it’s basically like giving someone a promotional coupon. Regulators should ask telcos how *much* of their total traffic is zero-rated, and if it’s less than 10% (say) treat it as fairly immaterial.

    The “dumb pipe” argument was incorrect & irrelevant 5 years ago, and time hasn’t helped. Networks are neither dumb nor pipes (and anyway, pipes are often very profitable), so it’s not a useful angle for anything other than lobbyists.

    Paid prioritisation is also irrelevant, as it doesn’t work, never will, and nobody would pay for it anyway. Especially in mobile. It would probably cost telcos more to implement than any additional revenue they could get – I ran the numbers & forecasted it: http://disruptivewireless.blogspot.co.uk/p/non-neutral-mobile-broadband-business.html

    • Tony Poulos says:

      Thanks for clearing up my many misconceptions Dean, but what do you really think about net neutrality rules? For or against?

  2. Dean Bubley says:

    For NN rules, but kept fairly simple:

    1. Public Internet access is very different from “broadband” per se.
    2. No blocking or deliberate degradation of legal Public Internet applications or services
    3. No non-consensual “interference” with Public Internet data (eg so-called “optimisation”, “header enrichment” or other monkeying-around)
    4. Mandate ISPs report the amount of data traffic that is zero/differently-rated. If it’s less than 10% of total then it’s immaterial, above that threshold it needs reviewing carefully
    5. Paid prioritisation of traffic – allowed *only* for services/content that are not also available on the open Internet. ie actual innovation, not just discrimination among existing apps. Careful scrutiny. (see http://disruptivewireless.blogspot.co.uk/2014/04/net-neutrality-getting-right.html)
    6. Fast-tracked courts to deal with NN complaints promptly
    7. Establishment of Network Ethics Boards & requirement for network operations staff & execs to swear an “IPoCratic Oath” to do no harm
    (See http://disruptivewireless.blogspot.co.uk/2014/10/net-neutrality-solution-force-telco.html)
    8. Proactive monitoring by regulator of neutrality compliance (eg non-blocking)

    • Eric Priezkalns says:

      Seriously? These are the rules you favour?

      “No blocking or deliberate degradation…” So accidental degradation would still be legal. So when cases go to court, everybody will need to debate the intention of defendant. Which would be a bonanza for lawyers but misery for everyone else.

      “No non-consensual interference”. So interference is okay when “consensual”. And what would such consent look like? Does it look like a oath spoken by customers whilst holding their hands on their bibles? Or does it look like fine print in a contract that nobody reads?

      Report when ISPs rate things differently. Differently to what? And if it’s more than 10% you’ll review “carefully”. What sounded like a simple rule is only simple because you avoided dealing with the complicated part.

      Paid priortisation only for ‘actual’ innovation. Oddly enough, I live in a world where marketeers keep telling me lots of things are innovative. Others may disagree. Unless you’re proposing a similar regime as used for patents, which is another legal mechanism that distinguishes what is innovative from what is not innovative, this proposal collapses into “innovation is whatever the regulator says is innovation”.

      “Fast tracked courts”. If it’s so easy and so important to have fast tracked courts for net neutrality laws, why not simply implement fast tracked courts for every law? Every legal dispute should be dealt with “promptly”.

      Swearing an oath to do no harm. Seriously? This is a rule? Or is it an excuse for a rule because it’s obvious that the other rules wouldn’t work very well?

      Proactive monitoring. That would seem to be the obvious implication of lot of rules to create lots of powers without troubling to stipulate what the goal is or when intervention is necessary.

  3. Richard Doughty says:

    Net neutrality is a misnomer. Unfair Practices would be a better description. Access to products shouldn’t be restricted except for exceptional circumstances such as unsuitable content (define your own terms on that one).

    So a network operator (fixed or wireless) blocking access/throttling to a competitor’s products should not be tolerated.
    However I see no problems with a network optimising access to their own products. It’s no different to a retailer placing their own-label products at eye level on shelves. For an M/NO these products are most likely to be content the network operator partners to re-sell and the access is a combination of charges levied and delivery speed. If you are a M/NO customer the cost of that service is an agreement between you and the M/NO. How the network chooses to price the different components of that service (the access, the content, the upkeep of infrastructure etc) and allocate revenue from the total package is a question for the network’s marketing people and accountants, not for the regulator.

    I’d like to say that in a free market an operator should be able to levy whatever restrictions they wish on access to their own and competitor’s products and that in due course the efficient market would learn about these restrictive practices and customers would allocate their business between providers as meets their requirements. But of course we don’t have such a free or efficient marketplace and it does need some level of regulation, but not this much. Blocking bad, promoting your own wares – fine.

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