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					        Decoding the Network
Neutrality Debate in the United States

                   A Presentation at the
              Pennsylvania Broadband Summit
                  Camp Hill, Pennsylvania
                    September 20, 2010




   Rob Frieden, Pioneers Chair and Professor of Telecommunications and Law
                              Penn State University
  email: rmf5@psu.edu; web site: http://www.personal.psu.edu/faculty/r/m/rmf5
                   blog site: http://telefrieden.blogspot.com/
                      Explaining the Concepts—
                         Network Neutrality
   Internet Service Providers (“ISPs”) want to diversify and engage in price and
    quality of service discrimination downstream among end users and upstream among
    content providers.

   Deep Packet Inspection and other innovations make it efficient and economical for
    ISPs to operate non-neutral networks offering “better than best efforts” traffic
    routing, variable quality of service, Digital Rights Management, and all kinds of
    “traffic shaping.”

   Advocates for network neutrality want a non-discrimination mandate, but explicit
    common carrier regulatory authority does not exist.

   Advocates for net neutrality claim ISPs have the incentive and ability to block,
    delay, or otherwise thwart the delivery of content in violation of consumers’
    reasonable expectation of an open and free Internet.

   How this debate plays out will have a major impact on the scope of lawful Internet
    regulation as well as the accessibility and affordability of Internet-delivered content.
                         Stakes and Mistakes
   Converging and concentrating information, communications and
    entertainment (“ICE”) markets raise questions about the viability of self-
    regulation and an unfettered marketplace of ideas.

   ICE technologies defy compartmentalization, yet mutually exclusive
    definitions apply and trigger different regulatory treatment.

   Technological and marketplace convergence means that three screens (TV,
    computer monitor and wireless device) can display the same content on
    demand.

   The FCC seems unable to apply more than one model to a single venture
    even when it delivers “triple play” services. Creative statutory
    interpretation and stretched jurisdiction recently rejected by an appellate
    court.

   Despite the view that the Internet qualifies for limited regulation, the FCC
    has intervened extensively.

   The FCC has issued a consultative document that outlines a proposal to
    establish enforceable rule designed to promote nondiscrimination and
    consumer freedom.
                  The Convergence Quandary

   ISPs combine conduit and content.

   ISPs have speaker rights, but the First Amendment and other
    legislated free speech rights do not cleave solely between ISPs and
    their subscribers.

   In the U.S. ISPs gladly abandon editorial control to qualify for “safe
    harbor” exemption from tort and copyright infringement liability,
    but they also use such control to create “walled gardens” of content.

   Current media models, such as print, cable television and telephony,
    do not fully work for the Internet.

   Network neutrality seeks to preserve and open and free marketplace
    of ideas, but how can ISPs lawfully manage their networks and
    afford to make costly upgrades?
The FCC’s 4 +2 Network Freedoms/Proposed Rules

    In 2005 the FCC articulated four Internet “principles”:

   (1) consumers are entitled to access the lawful Internet content of their
    choice;

   (2) consumers are entitled to run applications and services of their choice,
    subject to the needs of law enforcement;

   (3) consumers are entitled to connect their choice of legal devices that do
    not harm the network; and

   (4) consumers are entitled to competition among network providers,
    application and service providers, and content providers.

   In November, 2009 the FCC proposed to codify as rules the 4 Network
    Freedoms plus require Nondiscrimination and Transparency for both wired
    and wireless networks.
Can the FCC Lawfully Regulate Internet Service?

The FCC uses service definitions that create a dichotomy between
regulated telephone services and largely unregulated information
services.

Despite a regulatory safe harbor for information services, the FCC
has invoked ancillary jurisdiction to impose burdens on ISPs, e.g.,
providers of Internet-delivered telephone calls must contribute to
universal service funding and comply with several telephone
company regulations.

The FCC rejected Comcast’s claim of a right to thwart, delay and
degrade certain bitstreams as legitimate “network management”
even when congestion did not exist.

An appellate court reversed the FCC’s assertion of jurisdiction
calling into question what enforceable rules, if any, the FCC can
establish.
 Impact of Net Neutrality on Content Providers

Positive Impact

A nondiscrimination requirement attempts to maintain a level competitive playing field in the
marketplace for content against the incentive and ability of ISPs to favor affiliates and protect
revenue streams, Comcast’s pay per view/video on demand vs. IPTV and P2P file transfers.

If Enron employees could create artificial bottlenecks and congestion in the switching and
routing of electrons, then ISPs can achieve similar outcomes for Internet packets. Net
neutrality could prevent, or penalize “dirty tricks.”

“Walled Gardens” of easily accessed content not likely to support struggling new artists.

Negative Impact

Both users and content providers might want (and be willing to pay for) “better than best
efforts” routing delivered to computer desktop monitors; faster delivery of “mission critical”
bits.

Likely to trigger regulatory uncertainty, litigation and claims that government involvement
creates disincentives for private investment. The Internet has thrived with government
incubation and early privatization.

Exclusive access arrangements can serve lawful promotion and marketing goals.
      Net Bias Versus Reasonable Price and Service
                     Discrimination
Impermissible Net Bias                           Permissible Network Bias
Deliberate Packet Loss                           Variable Bandwidth and Throughput

Creating Artificial Congestion, e.g., 99/1
partition of premium and regular bit delivery.   Bandwidth Partitioning

Targeting Large Volume Content                   Metered Service
Generators for Punishment or Extortion
                                                 Better Than Best Efforts Routing
Most Types of Port Blocking (but not to
control spam and denial of service attacks)
                                                 Akamai-type Enhanced Traffic Routing and
Unilaterally Imposing Upstream and               Management
Downstream Rules That Violate Existing
Service Level Agreements
                                                 Special or Exclusive Content Deals
Affiliate Favoritism That Violates SLAs, Fair
Trade and Antitrust Laws

Fees for Overriding Firewalls and Filters
               Conclusions and Recommendations

   The next generation Internet will not offer a one size fits all
    “network of networks.” Flexibility in pricing, service provisioning
    and quality of service options can make economic sense.

   However, deliberate blocking, or degrading traffic violate many
    nations’ communications laws and possibly non sector specific
    consumer protection law and competition policy.

   Better than best efforts is not a contradiction, nor does it always
    constitute unlawful discrimination.

   ISPs should fully disclose terms and conditions as well as report on
    network usage. Requiring transparency does not foreclose net
    flexibility, but it can prevent Enron-type gaming and induced
    congestion.
                  Additional Research Questions

   Is Net Neutrality a solution in search of a problem? What potential
    exists for anticompetitive practices in switching and routing content?
    Does a bottleneck, or market failure exist in first or last mile access to
    the Internet, or farther upstream?

   Would Google have any problems finding alternative ISPs to carry its
    traffic if AT&T refused? Would start-up ventures have the same
    opportunities?

   Would net neutrality rules create disincentives for investment in next
    generation networks?

   Can non-sector specific regulators and the courts remedy any actual
    abuses in lieu of ex ante regulation?

   What is the scope of permissible jurisdiction over ISPs that fits within
    existing legislative authority and does not violate freedom of speech
    rights?
            Consider These Two “Real World” Scenarios




SCENARIO A

Thanks to digital recording technology, one can easily record and store in a user friendly format the stunning come from
behind football victory of the Nittany Lions over perennial powerhouse Ohio State University. Broadband networks
coupled with Peer-to-Peer (“P2P”) software make it possible to share the game file.

Abby would like to share the file with her husband Bob stationed in Iraq. Unlike perhaps much of the content sharing
facilitated by the P2P software BitTorrent, the fair use doctrine allows Abby to share the file and expedite its delivery to
Iraq, a necessity in light of the fact that Bob has to share Internet connections with many others.

As she has done in numerous instances, Abby established a link with Bob using her cable modem, Internet access
connection. However something has prevented the file from arriving in its entirety at the remote computer in Iraq.
After repeated denials, Abby’s cable television service provider, Vision Cable, has admitted that it used Deep Packet
Inspection techniques to locate P2P traffic and disable its transmission through the issuance of reset commands.

Abby feels that Vision Cable has violated her privacy by sniffing out her traffic and interfered with her subscriber rights.
She believes the FCC should enforce Network Neutrality rules to prevent Vision Cable from interfering with her traffic
in light of the fact that she is not a heavy user of the Vision Cable network, the company never demonstrated that
network management requirements, such as congestion, required intervention, and her P2P use did not involve
copyright piracy.
SCENARIO B

Thanks to the combination of digital and broadband technologies, the Internet can serve as a medium for the real time
“streaming” of video content. Converging markets and technologies make it possible for three different screens (television,
computer monitors and wireless handsets) to offer the same content on demand instead of by appointment.

Among the many ventures that seek to exploit Internet Protocol Television (“IPTV”), CBS and Victoria’s Secret have used
“better than best efforts” traffic routing opportunities to deliver “mission critical” video bits to consumers’ screens. CBS
delivers live basketball tournament game broadcasts and Victoria’s Secret “webcasts” fashion shows. If these companies
relied on conventional “best efforts” routing, the Internet probably would not provide all viewers with full motion video free
of blurring, drop outs and the dreaded blue screen of death.

One of the key principles in Network Neutrality would require Internet Service Providers to treat all content, software, and
applications equally. In Scenario A, Vision Cable wanted to treat P2P traffic in a discriminatory, possibly anticompetitive
manner. Yet in this Scenario, CBS, Victoria’s Secret and their web viewers want ISPs to prioritize traffic streams to ensure a
reliable stream of packets.

Can you square the two Scenarios and formulate a set of Network Neutrality rules that prevent only harmful kinds of
discrimination? Put another way, how can the Federal Communications Commission or Congress create rules that require
transparency and nondiscrimination, but allows ISPs to accommodate higher Quality of Service and other requirements of
both end users and content providers?

				
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