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H.R. 3458 – A dangerous experiment in Internet regulation

By 30 September 2009 11 Comments

Ask 6 different people what Network Neutrality or Net Neutrality means and you’re likely to hear 6 different definitions.  Most of the time we’re likely to hear noble but vague definitions like “innovation without permission” or “no net censorship” or “no Internet discrimination” and these all sound like principles that everyone would support.  So long as Net Neutrality is marketed under these definitions, no one would dare oppose it because it would make them appear to be a freedom-hating oppressor of the Internet.  But once we examine the actual Net Neutrality bill currently before the House of Representatives H.R. 3458 from Representative Ed Markey, we see that the actual regulation has nothing to do with how Net Neutrality is generally portrayed.

Past attempts to pass Net Neutrality legislation

Representative Markey had been trying to get his “Network Neutrality” Internet regulation bill passed since 2006 and he tried a very similar bill in 2008.  In those two previous attempts, it contained some controversial provisions that would have outlawed “enhanced Quality of Service (QoS)” (the prioritization of applications over the network) if it didn’t apply to the entire class of applications regardless of the traffic’s source.  QoS is an advanced network engineering technology that will improve efficiency on the Internet, but QoS only works if traffic sources don’t “cheat” and transmit high priority packets even when they aren’t supposed to.  By outlawing the ability to look at traffic source and enforce good behavior, Markey’s first two Net Neutrality bills would have made QoS impossible to implement.

Another main component of Markey’s first two bills was that it also outlawed existing business class Internet services by preventing Internet Service Providers (ISPs) from charging for prioritization service.  This would have stifled Internet adoption as businesses would have moved away from the Internet as a communications platform and opted for private circuits that can provide the priority characteristics they need.  Network operators would have invested less on Internet capacity where business opportunities are more restricted by regulation and diverted their capital towards private non-Internet infrastructure where they could get a return on their investments.

Why is it so hard to find good endorsement for Net Neutrality legislation?

If Net Neutrality regulation was such an important piece of legislation that is purportedly vital to the future of the Internet, wouldn’t prominent proponents of Net Neutrality be the first line to endorse the proposed legislation?  One would certainly think so but the stark contrast between the feel good Net Neutrality slogans about “preserving” the Internet and the harsh realities of the radical regulatory changes it would impose on the Internet has made the legislation difficult to justify.  As a result, prominent intellectuals who say they support the principle of Net Neutrality will rarely talk about the actual regulation much less endorse it.  Even when specifically asked to debate the proposed legislation or asked if they support the bill, prominent Net Neutrality advocates have deflected the question or simply refuse to answer.  For example;

  • Tim Wu, the man credited with coining the phrase “Network Neutrality” during a panel at the Net Neutrality Summit 2008 at University of San Francisco repeatedly declared that he didn’t want to debate the legislation.  When I pointed out to Wu that he was on YouTube reminding the newly elected Democrats of their promise to pass Net Neutrality legislation, Wu deflected the question and said: “The legislation isn’t important, it’s how we feel about Net Neutrality and the spirit of Net Neutrality that counts”.
  • Vint Cerf, co-inventor of TCP/IP and one of the most prominent advocates of Net Neutrality has refused to answer whether he supported Net Neutrality legislation.  When Cerf debated David Farber (an early pioneer in the field of network engineering) on Net Neutrality in 2006, Cerf acknowledged that he had no problems with QoS jitter management since that was an engineering matter and not a bad kind of discrimination.  But this would seem to put him at odds with Net Neutrality regulation which does prohibit QoS jitter management.

Not only is finding endorsement of Net Neutrality legislation difficult, but some prominent Net Neutrality proponents have actually come out explicitly or implicitly against Markey-type Net Neutrality legislation.  For example;

  • Larry Lessig who once testified to Congress in 2006 against fee-based priority service because it would have only been affordable to the big companies now appears to have flipped in his opposition to fee-based priority and come out against Markey’s Net Neutrality bill.  Lessig now says that fee-based priority is fine so long as the same nondiscriminatory price (not sure if Lessig has a problem with promotional or quantity discounts) is available to everyone.
  • Inventor of the HTTP web browsing protocol Tim Berners-Lee has stated that there was nothing wrong with paying more money for higher priority, yet he told the public to support Net Neutrality legislation by telling them that Net Neutrality regulation would NOT prohibit priority tiering even though the opposite was true.  Giving Tim Berners-Lee the benefit of the doubt that he simply hadn’t read the bill which he seemingly endorses, his stated belief that priority tiering is reasonable is actually a testament against Markey style Net Neutrality legislation.

So while the Net Neutrality proponents count the intellectual heavy weights listed above as people who support the principle of Net Neutrality, getting them to actually endorse Net Neutrality legislation seems to be extremely difficult at best and counter productive at worst.

Cut bait or double down on more misguided legislation?

Just when it was beginning to appear as if support for heavy handed bans against priority tiering was waning, Ed Markey’s third attempt at Internet regulation H.R. 3458 shot for the stars and took heavy handed Internet regulation to new and uncharted territory.  Perhaps realizing that his earlier attempts at Internet regulation would have scared investment capital away from the Internet and towards non-Internet networks, Representative Markey didn’t just give up on the misguided legislation he doubled down on it.

Now the heavy handed regulations not only apply to Internet infrastructure, the new bill applies to private non-Internet infrastructure as well and it forces private infrastructure to cede priority and capacity to the Internet.  The new bill would simply disregard the very concept of private property (not that the Internet is public property either) and threaten the viability of existing industries that employ hundreds of thousands of workers at a time when this nation needs to preserve every job it can.  In fact, no piece of communications infrastructure is left untouched in this new bill whether it’s wired or wireless.  Even free Internet connections will have to abide by the zero-differentiation requirements of Markey’s third Net Neutrality bill.

In summary, Markey’s latest Net Neutrality H.R. 3458 bill is proposing to mandate the following:

  • Mandates a dumb and inefficient Internet where all applications have to be handled the same even if they have vastly different requirements.
  • Threatens existing service models for residential and business customers. Business customers would no longer be able to buy business-class Internet access which includes prioritized network access. Consumer broadband would lose its distinction between business and residential service because Markey’s third Net Neutrality bill would insist that all residential broadband should have the same capability as higher costing business class Internet.  The result is that consumers would have to pay more money for functions they probably don’t need.
  • Outlaws existing business models and private capacity networks that “diminish” Internet capacity
  • Applies heavy handed Net Neutrality regulation to wireless networks without regard to the competitive nature of the wireless market and the critical importance network management plays in enabling a wireless broadband infrastructure.
  • Establish an unfunded mandate for ever increasing capacity to meet any possible workload while ignoring the fact that network providers are already investing and risking significant private capital to expand network capacity in response to consumer demand.  The bill would effectively be a subsidy to the more affluent Internet users at the expense of higher prices for the average user.

The US leads the world in innovation on the Internet and all of its related technologies and continues to do so under the current regulatory regime.  Yet in the absence of market failure or any materialization of dire predictions from Net Neutrality regulation advocates 3 years ago, why is now a good time to pass radical new changes to the regulatory landscape to enforce an experimental version of the Internet that has never been tried?  Why destroy existing business models that have flourished on the Internet today in favor of hypothetical businesses that may never materialize?  The Internet is simply too vital to risk this kind of change so over the course of these next few weeks, Digital Society will provide a multi-part analysis of H.R. 3458 exploring all of these issues in detail and we’ll examine the pitfalls of this proposed legislation.

Part 2 – Don’t outlaw successful business models on the Internet