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August 30, 2010
CAMBRIDGE, Mass.—Was the future of the Internet wrenched onto a new path on November 7, 2005? Bloomberg Businessweek posted an interview that day with Edward Whitacre, Jr., CEO of the telephone company SBC, posing some general questions about his plans in the wake of purchasing AT&T Wireless. When asked what he thought about “Internet upstarts like Google,” Whitacre replied with some heat:
“How do you think they’re going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it. So there’s going to have to be some mechanism for these people who use these pipes to pay for the portion they’re using. Why should they be allowed to use my pipes?
“The Internet can’t be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes [for] free is nuts!”
Whitacre wasn’t talking about routine interconnection or peering, which are the ways all Internet users go online. He was clearly suggesting a more explicit business strategy. The notion had taken shape in his mind of a bidding war among major Internet sites such as Google, Yahoo!, and Vonage. Like towns along the ancient Silk Route, telephone companies could extract tolls from anyone who passed, and these tolls could be mapped to the value of goods being transported.
Some have decried the idea floated in Whitacre’s interview as an irreparable rent in the delicate silk that constituted the Internet up to that time. Others see nothing special. They point out that traffic shaping and preferential rates had been used on the Internet for a long time, and see Whitacre’s utterance as merely a business-oriented implication of that practice.
Disputes between Internet providers and customers had already come up. Cable companies were known for throttling high-volume data transfers, and many ISPs required customers who ran servers on their sites to pay for higher-priced business plans.
Columbia law professor Tim Wu had published a paper in 2003 using the term “network neutrality” to describe various notions of non-preferential or equal treatment for Internet traffic. The term was therefore already in circulation before the Whitacre interview. Furthermore, telecom companies had been quietly investigating ways to charge differential rates to different types of Internet traffic.
This interview, and announcements by major phone companies in the following weeks, introduced the public to the idea of preferential treatment as a negotiating tool. The statements repositioned these companies as active agents mediating between web sites and their users. This was indeed something new.
The distinction between old forms of preferential treatment and the proposed forms happened to reflect the distinction Wu made in his paper between behavior he approved of and behavior he wanted to ban. Whether in homage to Wu or out of convenience, the term “network neutrality” became a rallying cry for free speech activists, a subject for Congressional hearings, and even a presidential campaign plank.
But even Wu acknowledged that network neutrality could have more than one meaning. The term has evolved since then into a kaleidoscope of nuance. As proponents and opponents glide over its terrain, one can never be sure when someone has changed his opinion of neutrality and when he is merely using a different definition. (Such confusion reigns, for instance over the recent joint statement by former opponents Google and Verizon, which I cover elsewhere).
Why has the idea of network neutrality gripped public debate with a tenacity Internet policy issues have never before achieved? Where does the zeal on both sides come from? Although I can’t cover every shade of the debate, I will try in this article to classify the motivations that drive it.
Behind the principles on both sides I see three sets of fears that lend network neutrality its force: fears over competition, censorship, and creativity. In other words, debate is raging simultaneously on three different levels that sometimes get mixed up. On each level, each side holds different views of what’s at stake. And while the levels do blend at times, one needs to distinguish them to understand the feelings brought by each participant.
The simplest angle from which to view network neutrality is its impact on competition. The values behind network neutrality hark back at least to the mid-1800s, when a similar doctrine constrained railroads and other transport systems.
Nowadays we tend to take for granted that our winter vegetables, our foreign electronic devices, and our fossil fuels will reach us without hindrance. The “just in time” manufacturing strategy assumes undisturbed supply chains. Once in a while, though, a political struggle for rare materials or piracy in shipping lanes reminds us of the importance of our location in relation to critical supplies.
In earlier times, as cities and industry grew up and required critical goods from far away, governments became conscious of the importance of unimpeded shipping. The notion of a common carrier embodied the responsibilities of transportation companies. They were not allowed to favor one client over another or charge arbitrarily different rates.
Discrimination would have allowed a railroad or shipping line to set up a subsidiary and favor it over other firms through cross-subsidies. Many people accuse telephone companies of doing just that in the 1990s when they started offering Internet access. Even if firms don’t set up their own subsidiaries, they could choose winners and losers in the marketplace.
Proponents of network neutrality raise its banner as a guarantee of fair competition, so that Yahoo! and Google have a level playing field. Opponents cite totally different needs, however, for competition.
Opponents are concerned with competition not so much in Internet applications, but in basic telecommunications service. How, they ask, can telephone and cable companies distinguish themselves and compete for customers? If they can discriminate on the basis of traffic, one company can create an environment appealing to online gamers, another to people practicing telemedicine, and a third to those concerned with social networking.
What galls Internet activists is that competition at the basic telecommunications level shriveled during the past fifteen years, despite being the core promise of the landmark 1996 Telecom Act. Refusals by telephone companies to share lines and interconnect led to the current monopoly or duopoly in most locations. There is no scarcity on the backbone—the long lines that connect municipalities across the continents—but practically no competition for the “last mile” to homes and offices. The companies who took this prize would probably not be able to talk about preferential treatment of Internet sites if they themselves had a more competitive market.
But what about these Internet sites—Yahoo!, Google, Vonage, and the rest? The telephone companies that want them to bid on quality of service say this too is a form of healthy competition. Anyone with a valuable service to offer should be able raise the capital to buy fast access.
Differences in phone company charges will not ban any service from reaching potential customers, but will slow it down. Customers will notice that its pages load one or two seconds slower than the competitors who pay for faster access. This has a powerful psychological effect, which is why large companies use Akamai or other content delivery networks to keep content near the end-users.
Google is actually big enough to create its own content delivery network, buying fiber directly to Internet providers. If someone wants to start a competing mail or voice application, it actually might require the purchase of preferential access just to give people the same speedy experience Google can offer.
So the level at which you look for competition, and the context in which you seek it, determines what you think of network neutrality.
Competition is a major concern for Chambers of Commerce, but is not likely to bring scruffy young activists to pack FCC hearings. Censorship is far more powerful rallying cry.
Network neutrality proponents worry that phone companies, by choosing the messenger, can ultimately choose the message. Thus, arguments over competition overlap with arguments about censorship.
Fears of censorship are a bit far-fetched, considering that phone companies do whatever can bring in the most income, and that preferential treatment merely means that some pages load faster than others. But one can construct a scenario somewhat like this: large corporations invest in media outlets. A broadcaster flush with cash buys faster access. Busy consumers visit its site for fast-breaking news because they find that it loads faster, and end up making it their home page.
As luck would have it, opponents of network neutrality also raise the specter of censorship. To them, every instance of government regulation gives it an excuse for controlling corporate behavior. And above all, the companies who want to offer preferential treatment hate government meddling. There have even been calls to dismantle the FCC, on the principle that there are so many ways to deliver information nowadays that it’s no longer needed as a referee. (Whitacre, who started off this article, didn’t seem to mind the intervention of the government so much when he took over the helm of General Motors, whose existence was saved by over eight billion dollars in US and Canadian government loans.)
Fear of censorship on this side are even harder to take seriously than the fears of network neutrality supporters. The government routinely regulates such things as the use of megaphones without regulating what is said over the megaphones. There could certainly be potential First Amendment effects in every telecom policy twist, but some claims are clearly targeted more at the gut than the cerebral cortex.
The third category of arguments in network neutrality involve the most subtle arguments with the most far-reaching implications. Here the questions of competition and censorship combine and rise to a teleological level. The question becomes: how will new ideas spread through society?
Proponents of network neutrality cite the Internet above all other considerations as a driver of innovation, or “generativity,” to use the term created by law professor Jonathan Zittrain and woven through his book The Future of the Internet (And How to Stop It).
Neutrality advocates present the Internet as an ever-churning sea that turns up wild and beautiful new species in turn: Amazon and Yahoo! and Google and Second Life and Facebook and Twitter…
The stifling of competition (because telecom companies can choose winners) and censorship (because well-established firms can reach users faster) brings an end to generativity, in the formulation of network neutrality advocates.
Generativity partisans have a lot to worry about these days. The threat from networks has been somewhat eclipsed by the more immediate—and obviously intrusive—antics of cell phone companies and manufacturers. Everybody seems to have a complaint about the Apple iPhone App Store, even though it approves over 95% of applications, and the majority of rejections are for low-quality programming practices.
So while concerns of generativity have moved from the “last mile” of the network to the “last centimeter” where the mobile user interacts with her device, many of the same companies are implicated and the control exerted by cellular providers seems to prefigure the future of the Internet that generativity activists fear so much.
Opponents of network neutrality have no beef with innovation, but they believe it is driven by very different factors. First, they worry about innovation at the lowest levels of the network, which tends to be forgotten by proposals for network neutrality. Where will the investment in new lines come from, and the willingness to try new protocols that can deliver a better experiences such as interactive video?
Proponents of network neutrality, as I mentioned earlier, place their faith in the presence of more companies at the network level to drive innovation. Current companies would prefer to maintain their dominance, while funding innovation by finding new ways to charge profitable web sites for the use of their lines.
Innovation on the physical layer isn't finished. There's lots of bandwidth in fiber, but routing can always be improved, and new fiber remains be strung in much of the world. The first question is who invents; the second is who invests.
One intriguing possibility is for communities to invest together, but even when people get together by the thousands, they might not have the wherewithal to create local networks or connect to long-distance backhauls. Governments have the funds to create networks, but not a track record for fostering generativity.
A recent trend has moved away from celebrating the non-profit roots of the Internet—such as the origins of the Web in research facilities and colleges—toward an appreciation for charging people for content. Journalistic outlets who can’t make ends meet through advertising are uniting to promulgate the doctrine that the Wall Street Journal and New York Times provide information of a quality that can’t be matched by non-profit outlets. While the associations representing music and movie studios continue to sue people who illegally share songs and videos, book publishers strike deals with Google to reward content providers for any access to excerpts of their work.
Some observers see the new appreciation for commercialism as a part of the inevitable evolution of any homesteading movement. But it also represents a radical re-interpretation of what leads to innovation. Whereas earlier conditions invoked thousands of spontaneous contributions from amateurs, the new ones preserve the province of the professionals. Ideally one would want both sets of conditions.
Ultimately, one’s attitude toward network neutrality will be determined by one’s fears. This is a natural human tendency. Much of our lives—where we make our homes, how we raise our children, how we vote—is determined by what we tend to fear. And fear is not a matter of right or wrong, but of priorities. A healthy public policy finds room for everybody’s fears and allows them to co-exist in a fluid if sometimes uneasy balance.
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