Net Neutrality, Part 2

Note: This was originally published at the Overture Networks "Overtones" blog site at http://www.overturenetworks.com/connect-with-overture/overtones-blog/net-neutrality-part-2/. That site is no longer available.

“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 second 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.

Fixed Versus Mobile

The totality of the rules apply to fixed or wireline providers, with some narrowing of applicability for mobile or wireless services.   The table below compares the wired and wireless sections of the section 8.5 “No Blocking” rule.

	Fixed / Wireline	Mobile / Wireless
“shall not block” Category	A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged	A person engaged in the provision of mobile broadband Internet access service, insofar as such person is so engaged
Lawful content or sites	Applies, subject to reasonable network management	Applies, subject to reasonable network management
Applications and Services	Applies, subject to reasonable network management	Applies to applications that compete with the provider’s voice or video telephony services, subject to reasonable network management
Non-harmful devices	Applies, subject to reasonable network management	Does not apply. Mobile operators routinely limit the allowed devices.
Reasonable network management	Section 81: (1) reduce or mitigate the effects of congestion on its network or to address quality-of-service concerns; (2) address traffic that is unwanted by users or harmful; (3) prevent the transfer of unlawful content; or (4) prevent the unlawful transfer of content. … A network management practice is reasonable if it is appropriate and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service.	Section 103. As indicated in Part III.D above, the reasonable network management definition takes into account the particular network architecture and technology of the broadband Internet access service. Thus, in determining whether a network management practice is reasonable, the Commission will consider technical, operational, and other differences between wireless and other broadband Internet access platforms, including differences relating to efficient use of spectrum. We anticipate that conditions in mobile broadband networks may necessitate network management practices that would not be necessary in most fixed networks, but conclude that our definition of reasonable network management is flexible enough to accommodate such differences.

The mobile operators are clearly taking advantage of the ability to restrict what devices are used on their networks, which is allowed as described above.  One of the operators that I talked to pointed out that the reasons for this are 1) supporting different devices is a significant cost to carriers and 2) ensuring that all devices act and behave properly is critical to the proper functioning of the network or other customers, because the impact of a bad actor on the wireless network is large and hard to remedy.

Not as clear are some other policies of wireless operators.  For example, Gogo inflight internet blocks streaming video from providers such as Netflix (BTW – Gogo, I love you!   Please don’t cut off my inflight internet!)  Is this a case of reasonable network management due to the limited bandwidth?  Or is it a case of a service provider blocking a competing service (in this case, competing with Gogo’s own inflight movie offering).

Competition

One of the original drivers of the Open Internet rules was the lack of competition in the access networks.   As described in Section 51 on page 31:

51. We also do not apply these rules to dial-up Internet access service because telephone service has historically provided the easy ability to switch among competing dial-up Internet access services.

¹⁴³ Contrary to the suggestion of some, neither the Department of Justice nor the FTC has concluded that the broadband market is competitive or that open Internet rules are unnecessary. See McDowell Statement at *4; Baker Statement at *3. In the submission in question, the Department observed that: (1) the wireline broadband market is highly concentrated, with most consumers served by at most two providers; (2) the prospects for additional wireline competition are dim due to the high fixed and sunk costs required to provide wireline broadband service; and (3) the extent to which mobile wireless offerings will compete with wireline offerings is unknown.

Interestingly enough, the order gives more latitude to wireless operators, while at the same time recognizing a higher level of competition in that space.  Section 95 on page 53 and section 96 on page 54 state:

95.   Moreover, most consumers have more choices for mobile broadband than for fixed (particularly fixed wireline) broadband.²⁹² Mobile broadband speeds, capacity, and penetration are typically much lower than for fixed broadband,²⁹³ though some providers have begun offering 4G service that will enable offerings with higher speeds and capacity and lower latency than previous generations of mobile service.²⁹⁴ In addition, existing mobile networks present operational constraints that fixed broadband networks do not typically encounter.²⁹⁵ This puts greater pressure on the concept of “reasonable network management” for mobile providers,²⁹⁶ and creates additional challenges in applying a broader set of rules to mobile at this time. Further, we recognize that there have been meaningful recent moves toward openness in and on mobile broadband networks, including the introduction of third-party devices and applications on a number of mobile broadband networks, and more open mobile devices. In addition, we anticipate soon seeing the effects on the market of the openness conditions we imposed on mobile providers that operate on upper 700 MHz C Block (“C Block”) spectrum,²⁹⁷ which includes Verizon Wireless, one of the largest mobile wireless carriers in the U.S.²⁹⁸

96. In light of these considerations, we conclude it is appropriate to take measured steps at this time to protect the openness of the Internet when accessed through mobile broadband. We apply certain of the open Internet rules, requiring compliance with the transparency rule and a basic no-blocking rule.²⁹⁹

Validity of the Order

Starting on page 62, section IV (“THE COMMISSION’S AUTHORITY TO ADOPT OPEN INTERNET RULES”) gives a detailed defense of the validity of the rules.  It details the authority of the FCC to act based on the 1996 Telecommunication Act, and it provides reasoning as to why the order does not violate the First or Fifth Amendments to the US Constitution.  What I find more interesting are the dissenting opinions of commissioners Robert M. McDowell and Meredith Attwell Baker.

Commissioner McDowell makes an interesting point on page 145:

For those who might be tuning in to the FCC for the first time, please know that over 90 percent of our actions are not only bipartisan, but unanimous. I challenge anyone to find another policy making body in Washington with a more consistent record of consensus. We agree that the Internet is, and should remain, open and freedom enhancing. It is, and always has been so, under existing law. Beyond that, we disagree. The contrasts between our perspectives could not be sharper.

He then proceeds to a lengthy analysis based on 4 key points listed on page 146:

1)      Nothing is broken in the Internet access market that needs fixing;

2)      The FCC does not have the legal authority to issue these rules;

3)      The proposed rules are likely to cause irreparable harm; and

4)      Existing law and Internet governance structures provide ample consumer protection in the event a systemic market failure occurs.

Commissioner Attwell also provides a detailed analysis in his dissent.  Here is his summary from page 181:

I have seven principal objections to this decision. First, the factual record does not support government intervention. Second, the majority’s claim that consumers will benefit from this government overreach is unsupported and deeply flawed. Third, the majority’s focus on preserving network operators’ current conditions will distort tomorrow’s Internet. Fourth, the majority puts the Commission in the unworkable role of Internet referee. Fifth, the majority fails to marshal a sustainable legal foundation. Sixth, the majority’s decision to act a legislator, not regulator, is a mistake that may undermine our agency’s mission. And, lastly, opportunity cost. By that I mean, we have squandered months on this effort, diverting resources and political capital away from real problems that lie within our core competencies, like universal service and spectrum reform.

How did a body like the Commission go from near unanimity on decisions to a very divisive 3-2 vote, with such strong dissents from two members?

What’s It Mean?

Next week’s blog will dig more into how Net Neutrality impacts service providers today, how it might affect their plans for advanced services, and what they are doing about it.

Other Resources

Neutral (i.e. Net Neutral² J):

• “Net neutrality in the United States” – Wikipedia overview.

Pro Net Neutrality

• SavetheInternet.com – Organization in favor of Net Neutrality.
• “An Introduction to Net Neutrality: What It Is, What It Means for You, and What You Can Do About It” – Opinion piece from LifeHacker.com
• “Network Neutrality” – Opinion piece from Ray Lin at Berkely.
• “Net neutrality opponents make little sense” – Opinion piece from Andrew on Everything

Anti Net Neutrality

• “An Introduction to Network Neutrality” – Opinion piece from RoaringRepublican.
• “Net Neutrality: A Solution In Search Of A Problem” – Opinion piece from CIO Network / Forbes
• “Net Neutrality” – Position piece from Cisco
• "Cloudy Forecast: No need for rainmakers" – Article in Connect-World, March 2012
• “Open Skies and Open Spectrum” – An opinion piece about the value of open spectrum, and the reluctance of the FCC to embrace it.