Tuesday, June 27, 2006

Net Neutrality: Clear Disclosure?

Issue #1: Charging Consumers Extra for "Atypical" Network Usage

On one side of the net neutrality camp, there are those who argue that providers of broadband service should not discriminate against "how" broadband users who pay X dollars for Y "service", actually make use of the service.

In other words, we currently purchase what we've typically known as "unlimited broadband service" at a "given speed". That speed is made of "upstream" and "downstream" speed. When you browse the web, or do e-mail, you typically consume more "downstream" speed than consume "upstream" speed, and the typical consumer service packages offered by most broadband providers reflect this assumption.

And it's not insane to assume that many broadband providers are to some extent "overselling" their capacity, assuming that aside from certain peak usage hours, most people don't use their broadband service on a sustained basis. If they can provide the illusion of a reliable "web browsing" experience during those peak hours, they've thus-far believed they'd be ... "okay".

And all was pretty-much, indeed, "okay", as long as we broadband consumers were nice little pawns, and only did two basic things: browse the web and do email.

Then ... with various advancements in media delivery, communications, and file sharing over the Internet Protocol, many are starting to make the most of that service. So ... broadband consumption patterns are evolving from short peak bursts, into sustained network usage, as people watch online videos, exchange files, and do voice and video conferencing, at no extra metered cost.

So obviously, that doesn't make the network operators too happy, because it starts eating at their margins. Just how comfortable those margins are, is hard for us consumers to tell, but any sound corporation will fight tooth and nail to walk the profit margin line, while keeping-up enough smoke and mirrors to not alienate existing and prospective consumers. Fair enough.

Here's the other snag though. As many consumers are leveraging their Internet connectivity for communications, and slowly phasing out their phone service, network operators who also happen to have a highly profitable traditional phone service business (say Verizon, AT&T), are really starting to freak out.

Imagine a possible eery scenario:
"Oh you want to use Skype for all your phone calls instead of our phone service? We just might "prioritize" your Skype traffic differently from your web browsing traffic, in such a way that your Skype call quality will go to crap, and you'll go back to using your regular phone service, like the nice little consumer you are, thankyouverymuch. We won't let un-metered communications happen under our watch! NO SIR."
I've seen little proof out there that phone companies that offer broadband services are doing this today, but, as many consumer advocates fear, there is currently very little that would stop them, and from the mouth of a few telco execs, they appear to have every intention to find creative paths toward this goal.

Possible Resolution to Issue #1:

If they want to pass those costs on to consumers, i'd say bring it on.

In this specific instance, a good Net Neutrality bill would enforce those broadband providers to disclose CLEARLY, and EXACTLY to consumers what type of service they're offering. Such as: "You are getting unlimited broadband service to surf the web and do e-mail for $X/month, at speeds of Y downstream and Z upstream. All other activities are subject to extra costs.". Picture a mandatory warning label akin to what you'll see on cigarette packs: "WARNING: This 2nd-rate Internet Service will keep you in the broadband stone-age, while everybody else in the world communicates in real-time for free."

From here, this opens the door to competing, more progressive broadband providers (EarthLink, Speakeasy, Covad, your local mom and pop DSL or Cable) to clearly distinguish themselves as the providers of "unbridled Internet" for $X/month.

Think about the myriad of Credit Card companies out there. When you apply for a credit card, there are a number of "gotchas" you've got to look out for. They'll advertise a 0% introductory rate that might lure you in, unless you notice that the rate will jump up to 19% after the introductory period. No thanks. Some also have annual fees. Cash advances are often subject to a different APR. It would be nearly impossible to compare credit cards, if the key terms of an offer were not clearly, disclosed to us, in a sheet that always comes with each credit card offer I've ever seen. That sheet is easy to read, and allows me to compare offers side-by-side. I can't imagine this type of information disclosure is "volunteered" by credit card companies. My guess is that at some point, a law was passed to regulate the clear disclosure of key credit card offer information.

update: those disclosures and motivations behind them are explained here.

I'm asking for the exact same modus operandi from all broadband providers. Give me a clear, easy-to-read, uncluttered disclosure sheet before I sign-up for your service. Let me know exactly what it is I'll be able to do with my so-called "unlimited" service.

Rather than a Net Neutrality Bill, should we instead be discussing some sort of Internet Connectivity Disclosure Act (ICDA)?

Issue #2: Charging Web Site Operators for Driving Broadband Usage

But of course, telcos are not dumb, they realize that passing costs on to consumers just might not be too popular and/or enough. We've heard certain telco executives threatening to charge companies who make substantial profits providing content to broadband subscribers, for the right to serve that content to them. For example, if i watch a lot of video from video.google.com, Google might start getting slapped with a bill from SBC/AT&T. NOW THAT would be totally frickin' insane. Google, and all other "content providers" pay their own ISPs for the bandwidth they consume. Those ISPs in turn pay their own ISPs for the bandwidth consumed by their clients. And so forth and so on. They're "peering agreements".

In such instances, consumers would have no power to influence the market with their dollars, because Google would be getting billed without my knowledge, without my consent. Heck, Google might raise awareness to this fact, by detecting the fact that i'm coming from an SBC/AT&T-owned IP address, and warning me? Or simply blocking me? Can you imagine the nightmare it would be for content providers to catalog IP addresses coming from broadband providers that charge them? And selectively refuse service to those users?


I don't see one, beside the ultimate collapse of the incentive to build anything on the Internet. If anybody were to be far enough out of their mind to even consider such compensation model, a good Net Neutrality bill might explicitly allow content providers to request from the phone companies to flat out BLOCK all traffic to their sites, rather than being automatically slapped with a bill. Let's just see how long SBC/AT&T will stay in the business of offering broadband once their users can no-longer go to http://www.google.com/ or even use Skype.

They seem to forget that people purchase broadband Internet connectivity to you know, actually, do things on the Internet. If people were only interested in surfing text web sites and do e-mail, they might as well stick with $10/month 56K dial-up.


As a consumer, I'm perfectly willing to be open to the idea that the way in which I use my Internet connectivity can have an adverse impact on the profitability of the business that provides me with this connectivity. In which case, I, the consumer, should be the only entity being billed extra for "Atypical" usage on the network, and such extra charges should be clearly disclosed to me before I sign-up for the service, and those charges should be clearly outlined in my monthly bill. Only then can I make an informed decision as to who should provide me with broadband connectivity. And I believe a Net Neutrality bill should enforce this.

When it comes to the whole Net Neutrality debate, i don't believe we'll get anywhere trying to see what's true and what's untrue on the realities of operating a network, and by determining whether or not we should "allow network operators to prioritize traffic and charge more for certain types of traffic". Let them do what they want and focus enforcement on clearly disclosing their practices to consumers, so we consumers can make informed decisions. Let competing network operators expose phone companies' suspected deception by offering unbridled connectivity at the exact same price-points or heck, lower.

Well that is, assuming we do have a competitive broadband landscape in the U.S.. But that's a different issue.

See also: Fire your Phone Company. Today.

See also: If we build it, they will come.

No comments: