“I am convinced that there are few goals more essential in the communications landscape than preserving and maintaining an open and robust Internet. I also know that achieving this goal will take an approach that is smart about technology, smart about markets, smart about law and policy, and smart about the lessons of history.”  — FCC Chairman Julius Genachowski at The Brookings Institution, Washington DC, September 21, 2009

 

On Monday, September 21, 2009, FCC Chairman Julius Genachowski outlined proposed net neutrality rules to preserve the openness of the Internet.  For those unfamiliar with the concept and issues of net neutrality, here is a snippet from my February 2006 paper, Net Neutrality: An Important Topic for National Conversation:

“The concept of Net Neutrality is straightforward.

In a neutral network, all network traffic is treated neutrally (not discriminated against) regardless of origin or destination. In a neutral network, all endpoints (content, applications, equipment) are treated neutrally (not discriminated against), regardless of function, ownership, or implementation. Since the Internet’s inception, the network has been neutral.

From the consumer’s point of view, a neutral network allows for unfettered access to any (legal) content and applications, using the equipment of their choice.

From the application and content provider’s point of view, a neutral network supports the offering of any (legal) content and application, using the platforms of their choice.

From the network operator’s point of view, a neutral network dictates the implementation and management of a standards-based network, to transmit information from origin to destination, without consideration for the usage patterns, payload, and volume generated by the endpoints.

In essence, a neutral network is a dumb pipe. The intelligence resides at the endpoints. And there lies the conflict.

In a neutral model, the network operators claim the application and content providers get a free ride on the network, with great financial returns, on the network operator’s investment, while the network operators themselves are prohibited from offering new services (access tiers, prioritized traffic) to realize a return on their investment. Without a return on investment, network operators claim no incentive to continue their investment, specifically in broadband deployment.

In response, the application and content providers claim a discriminatory model would limit consumers’ choice on the Internet, and create high barriers to entry for new, innovative, application, and content providers. Without accessible and compelling content and applications, broadband adoption and usage will decline. Not to mention, the network operators do collect fees from the endpoints (consumers and providers).

As you can see, the Net Neutrality issue is circular. The network needs compelling applications and content. The applications and content need a viable network.

However, the good news is both sides, and the government, are in agreement that further broadband deployment and adoption are critical for innovation, social causes, economic growth, and global competitiveness.

The challenge, then, is setting forth policies that encourage both network and endpoint investment and innovation today, without placing unforeseen restrictions on future innovation.”

In making the case for net neutrality, Chairman Genachowksi began by attributing the success of the Internet to the its open design:

“Why has the Internet proved to be such a powerful engine for creativity, innovation, and economic growth? A big part of the answer traces back to one key decision by the Internet’s original architects: to make the Internet an open system.

Historian John Naughton describes the Internet as an attempt to answer the following question: How do you design a network that is “future proof” — that can support the applications that today’s inventors have not yet dreamed of? The solution was to devise a network of networks that would not be biased in favor of any particular application. The Internet’s creators didn’t want the network architecture — or any single entity — to pick winners and losers. Because it might pick the wrong ones. Instead, the Internet’s open architecture pushes decision-making and intelligence to the edge of the network — to end users, to the cloud, to businesses of every size and in every sector of the economy, to creators and speakers across the country and around the globe. In the words of Tim Berners-Lee, the Internet is a “blank canvas” — allowing anyone to contribute and to innovate without permission.”

Next, Chairman Genachowksi spoke of real challenges to the Internet’s openness, including providers purposely blocking user access, limited broadband provider choice, broadband provider incentives and traffic explosion.

“Notwithstanding its unparalleled record of success, today the free and open Internet faces emerging and substantial challenges. We’ve already seen some clear examples of deviations from the Internet’s historic openness. We have witnessed certain broadband providers unilaterally block access to VoIP applications (phone calls delivered over data networks) and implement technical measures that degrade the performance of peer-to-peer software distributing lawful content. We have even seen at least one service provider deny users access to political content. And as many members of the Internet community and key Congressional leaders have noted, there are compelling reasons to be concerned about the future of openness.

One reason has to do with limited competition among service providers. As American consumers make the shift from dial-up to broadband, their choice of providers has narrowed substantially. I don’t intend that remark as a policy conclusion or criticism — it is simply a fact about today’s marketplace that we must acknowledge and incorporate into our policymaking.

A second reason involves the economic incentives of broadband providers. The great majority of companies that operate our nation’s broadband pipes rely upon revenue from selling phone service, cable TV subscriptions, or both. These services increasingly compete with voice and video products provided over the Internet. The net result is that broadband providers’ rational bottom-line interests may diverge from the broad interests of consumers in competition and choice.

The third reason involves the explosion of traffic on the Internet. With the growing popularity of high-bandwidth applications, Internet traffic is roughly doubling every two years. Technologies for managing broadband networks have become more sophisticated and widely deployed. But these technologies are just tools. They cannot by themselves determine the right answers to difficult policy questions — and they raise their own set of new questions.”

According to the Chairman, we are at a crossroads:

“The rise of serious challenges to the free and open Internet puts us at a crossroads. We could see the Internet’s doors shut to entrepreneurs, the spirit of innovation stifled, a full and free flow of information compromised. Or we could take steps to preserve Internet openness, helping ensure a future of opportunity, innovation, and a vibrant marketplace of ideas.

I understand the Internet is a dynamic network and that technology continues to grow and evolve. I recognize that if we were to create unduly detailed rules that attempted to address every possible assault on openness, such rules would become outdated quickly. But the fact that the Internet is evolving rapidly does not mean we can, or should, abandon the underlying values fostered by an open network, or the important goal of setting rules of the road to protect the free and open Internet.

…

In view of these challenges and opportunities, and because it is vital that the Internet continue to be an engine of innovation, economic growth, competition and democratic engagement, I believe the FCC must be a smart cop on the beat preserving a free and open Internet.”

How will the FCC be a “smart cop”?  Chairman Genachowksi recommends adding two more principles to the Four Freedoms (pdf) originally proposed by then FCC Chairman Michael Powell in 2004.  In his speech, Chairman Genachowksi summarized the Four Freedoms as:

“Network operators cannot prevent users from accessing the lawful Internet content, applications, and services of their choice, nor can they prohibit users from attaching non-harmful devices to the network.”

New 5th Principle is Non-discrimination:

“The fifth principle is one of non-discrimination — stating that broadband providers cannot discriminate against particular Internet content or applications.”

“This means they cannot block or degrade lawful traffic over their networks, or pick winners by favoring some content or applications over others in the connection to subscribers’ homes. Nor can they disfavor an Internet service just because it competes with a similar service offered by that broadband provider. The Internet must continue to allow users to decide what content and applications succeed.

This principle will not prevent broadband providers from reasonably managing their networks. During periods of network congestion, for example, it may be appropriate for providers to ensure that very heavy users do not crowd out everyone else. And this principle will not constrain efforts to ensure a safe, secure, and spam-free Internet experience, or to enforce the law…”

New 6th Principle is Transparency:

“The sixth principle is a transparency principle — stating that providers of broadband Internet access must be transparent about their network management practices.”

“…Today, broadband providers have the technical ability to change how the Internet works for millions of users — with profound consequences for those users and content, application, and service providers around the world.

…

We cannot afford to rely on happenstance for consumers, businesses, and policymakers to learn about changes to the basic functioning of the Internet. Greater transparency will give consumers the confidence of knowing that they’re getting the service they’ve paid for, enable innovators to make their offerings work effectively over the Internet, and allow policymakers to ensure that broadband providers are preserving the Internet as a level playing field…”

Call for Public Participation

After outlining the principles, the Chairman spoke of the rule-making process.  Although the process starts with fellow commissioners, there is a call for public participation, via openinternet.gov, the same site that published the Chairman’s full speech.

“While my goals are clear — to ensure the Internet remains a free and open platform that promotes innovation, investment, competition, and users’ interests — our path to implementing them is not pre-determined. I will ensure that the rulemaking process will be fair, transparent, fact-based, and data-driven. Anyone will be able to participate in this process, and I hope everyone will. We will hold a number of public workshops and, of course, use the Internet and other new media tools to facilitate participation. Today we’ve launched a new website, www.openinternet.gov, to kick off discussion of the issues I’ve been talking about. We encourage everyone to visit the site and contribute to the process.”

Public and Industry Reaction

As you might expect, not everyone is thrilled with the administration’s move towards formalized net neutrality policy.  The party lines remain drawn, users, content, application providers are thrilled with this action, broadband, and wireless carriers remain skeptical.  For a great synopsis of reactions, see this WSJ piece by Amy Schatz.

Why this post?

So, why such a long post on Net Neutrality, the same reason as I shared back in Feb 2006, I couldn’t help myself.  Net Neutrality is an important concept for all IT professionals to understand. Even more so now, as Carl Brooks points out in era (or not) of cloud computing.

“The implications of net neutrality for the public cloud are plain; because it’s basically margins-driven, any squeeze from carriers would hamstring providers. Amazon’s cloud success is driven precisely by the fact that using it is easy and costs about the same as running your own server, minus the investment.

If it became more expensive to run a cloud server than a real server, which prejudicial network pricing would assuredly do, cloud adoption would stumble badly. Little users would stick with hosting; enterprises might still move into private cloud, but there would be no compelling reason for them to stick appropriate applications and data in the public cloud

The true benefits of cloud computing– cheap, elastic and massively parallel computing power at the finger tips of the bright young things in industry and academia– would never be realized, since Comcast or Verizon would be lying in wait to pounce on data crunching projects and surcharge them.”

To learn about Net Neutrality’s historical context (policy and marketplace), issues, pro and con positions, intersections and convergences, see the full piece I wrote in February 2006, on the heels of a Senate Commerce Committee hearing.

To get involved in the conversation, check out openinternet.gov.