RIP Net neutrality?
Published: 07 Jun 2006 15:30 BST
... the rapidly advancing new technologies and business models of the Internet with rigid, potentially stultifying rules."
This opinion is backed by Republican Senators Jim DeMint of South Carolina and Sam Brownback of Kansas. They sent a letter to their Senate colleagues on 16 May stating that to oppose "the heavy hand of regulation... is critical if we are to maintain the Internet as an open, evolving and market-based tool, and to protect children and families from the negative aspects of Internet content that exist today".
Network operators argue that they are spending billions of dollars to provide broadband infrastructure and would be penalised "for making major improvements to the Internet" if such legislation were enacted. Online content providers, meanwhile, are accused of being anti-competitive by wanting "all Internet content to be treated the same, instead of being required to compete for consumer attention". Senators like DeMint argue, any legislation enshrining network neutrality would stifle innovation and competition.
Maribel Lopez, an analyst at Forrester Research, believes that network neutrality is unlikely to be mandated in the short-term at least. The FCC, she says, has already put guidelines in place that prohibit the blocking of traffic and the operators, which have yet to introduce tiered services anyway, are unlikely to infringe upon these as it would bring more stringent legislation down upon their own heads.
Moreover, she believes that content owners are "shrewd negotiators who will pit operators against each other to get the best deals. Attempting to block or extort cash out of content owners for prioritised delivery will create adversarial relationships at a time when operators want to negotiate distribution deals for music, movies, gaming and TV services."
But Dean Bubley, principal analyst at Disruptive Analysis, has doubts as to whether degrading the performance or blocking traffic is even practical. Not only would it generate a lot of distrust and dissatisfaction, but it also does not fit in with the way the Internet seems to be evolving in the shape of Web 2.0. He claims the technology is moving towards a theme of "bolting together a lot of different sub-components onto Web sites in a kind of DIY portal effect", which would make it virtually impossible for the providers to bill content providers anyway.
"It's a huge issue because consumers might be trying to access five different background providers from one page, and trying to work out which traffic is coming from where is difficult from a service provider's point of view. I don't think they can do that level of granular analysis because there are so many levels of abstraction when you have services embedded in other things," explains Bubley.
Things are different in the UK and the US. Europe has been subject to a high level of telecoms liberalisation, and has not allowed its network operators to control the infrastructure in the same way as the US due to local loop unbundling. This means that the competitive landscape is different, because the incumbent telcoms providers face competition from smaller players to which customers are free to move to. Nonetheless, both the UK regulator Ofcom and the Department of Trade and Industry say that they are monitoring the US situation with a view to taking suitable action here if it is deemed necessary.
On both sides of the pond, a more likely scenario than a tiered Internet based on charging content providers is one based on charging customers for "quality of service". This means that if you want to use bandwidth-hungry applications such as games or voice over IP, you'll be charged accordingly for receiving just such a "value-added service".
"So the operators won't segment the market from a speed point of view any more, it will be more based on the type of user people are. That means that if customers are just using the Internet for surfing and email, they'll pay a competitive rate, but if they're a heavy user, they'll have to take a service that allows for heavy usage if they want a good quality experience. It's starting to happen already," says Ovum's Phillpott.
However some experts, such as analyst Dean Bubley, argue that providers are already going down the charging for quality route, but are failing to clarify what they are doing to customers.
"Providers are marketing their broadband products as providing unlimited access, but in the press and public forums, they're being criticised for limiting availability and changing contract terms and conditions," says Bubley." It has to be transparent as to whether a cheap consumer product is limited or whether it is truly unlimited, and currently there's just not enough of this transparency."
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