“Net Neutrality” refers to the FCC rules regarding the non-discriminatory treatment of services and applications. While the basics of Net Neutrality are simple, the ramifications are broad and complex.
This blog is the third of a three-part series.
- Part 1 describes the basic principles and applicability to residential versus business services.
- Part 2 covers fixed versus mobile, the impact of competition, and the validity of the order. It also provides pointers to additional resources.
- Part 3 explores how the rules impact service providers, and how they could evolve.
For this part, I talked to some senior people at two major service providers. They denied being legal experts, but their roles do give them insight into the impact of Net Neutrality, and their opinions are pretty interesting. These discussions were off the record, so I can’t name them or their employers. To simplify this blog, I will refer to them by pseudonyms:
- Indigo is an incumbent service provider that has both local access and backbones, and also provides content. Indigo is neutral to slightly negative on Net Neutrality.
- Charlie is a competitive service provider. They have little local access and do not provide content. Charlie is supportive of Net Neutrality.
As discussed in Part 2 of this series, a basic assumption of the FCC was a lack of competition.
Today, many urban and suburban subscribers have a choice of two or three providers using DSL, cable, fiber or fixed wireless. Should the rules take this competition into account?
I asked Indigo about whether there was likely to be any petition to the FCC to recognize the emergence of competition. They said probably not. Their thinking was that the current penetration was so geographically spotty that it would be difficult for the SP to show competition and to have different policies in those areas. Furthermore, it was unlikely that the FCC would consent to providing such specific exemptions.
Charlie pointed out that even when competition is present, it is not always equal. For example, certain areas may have more than one wireline provider, but the differences in available bandwidth may mean that only one of the providers has a suitable service.
It looks like a lack of effective competition is and will continue to be a factor in the basis of net neutrality.
Impact on Service Planning
One of the assertions of the FCC was that the Open Internet Report and Order would have little or no impact on service providers. To test this assertion, I asked the folks at Charlie and Indigo.
At Charlie the answer was answer was both “yes” and “no”:
- Yes: Their services rely on third party local access, and the equal treatment of internet traffic is one of their basic assumptions. They need and assume Net neutrality.
- No: There is not any thought of creating a service that would run afoul of Net Neutrality due to blocking or prioritization. They said that they consider it bad business to engage in any preferential treatment of internet traffic on their part, or to engage in a deal to support such priority in the local loop. Their basic assumption is equal treatment in the backbone and on the part of the local access providers. Furthermore, they do not expect any FCC action except in the most egregious cases, such as port blocking.
At Indigo the answer was also both “no” and “yes” – but with a very different slant:
- No: There is little or no impact of Net Neutrality considerations on most services. The FCC assertion that the rules are consistent with current practice is true in general. However …
- Yes: There is always concern that the ambiguity in the rules and/or the changes in technology could cause the FCC to change its interpretations. Decisions that are OK today from a Net Neutrality standpoint may be called into question down the road.
With respect to the future possibilities of increased regulation, I want to share Figure 1 from Mercatus that shows the growth of all US Federal regulations from 1997 to 2010.
Figure 1: US Federal Regulatory Growth
Clearly the trend for the amount of US Federal regulations is upward and to the right. The two viewpoints above (i.e. Net Neutrality is a basic assumption versus Net Neutrality is a potential monkey wrench) reflect the two faces of the same regulatory coin.
What is Being Done?
This concern about regulatory impact is shared by a number industry players. One example of a response is the Broadband Internet Technical Advisory Group (BITAG), which was formed to “to discuss and opine on technical issues pertaining to the operation of the Internet, as a means of bringing transparency and clarity to network management processes as well as the interaction among networks, applications, devices and content” and to “provide the best technical information and counsel to policymakers and the public.”
Some of the work to date serves to provide a technical basis for some current and upcoming trends by the service providers. One paper is on Large Scale Network Address Translation, which is needed to maximize the efficiency of IPv4 address usage during the transition to IPv6. However, there is a side effect that may impair some protocols.
Another paper is on SNMP DDOS attacks. This study describes the possible deleterious effects due to SNMP-enabled home routers in combination with malicious DDOS attacks. The study points out that a possible remedy is the blocking of SNMP, noting that this may have a deleterious effect on business users. We at Overture ran into this at one point when we couldn’t do some troubleshooting over our internet connection because our ISP was blocking SNMP – without clearing informing us.
The issue that we had at Overture underscores the need for accurate disclosure of management practices.
Do NAT and SNMP blocking fall under the allowance for “Reasonable network management?” The BITAG hopes to make the case that they do so as to minimize the chance of an unfavorable ruling by the FCC.