The Google-Verizon Proposal Is Not The End of the Internet as We Know It

Google and Verizon were rumored to have cut a deal last week that would prioritize Google traffic over Verizon's network.  Not true, as it turns out.  Instead, the two companies announced a proposed "legislative framework" for net neutrality principles.  The full text of the proposal is available from the Google Public Policy Blog.  The basics include a general ban against traffic discrimination on wired networks, with some exceptions; transparency to consumers of network practices; and mechanisms for the FCC to enforce violations.  Wireless services would not be subject to the same regulations. 

The exceptions are for specialized services that come from developing technologies.  Examples from the Google Blog post include things such as Fios TV, access to health care monitoring, entertainment, and gaming.  Conceptually, interactive services consume heavy amounts of bandwidth.  Assume that a technology is developed that runs over broadband allowing a specialist to operate on a patient several thousand miles away using video and precise robotics.  Should that signal be subject to degradation because an intern fires up Bit Torrent on a computer in the doctors lounge?  Should the hospital create a dedicated line for such things?  Should that dedicated line run for the several thousand miles between the parties?  Is this the Internet?  Or not?

Some of the criticism directed against the proposal concerns whether carriers would develop services that run on private networks available by subscription.  It's as if the fun parts of the Internet would turn into cable.  That concern was succinctly expressed in the New York Times report on the proposal:

But some expressed fears that this exception could let companies bypass open-access regulations. For example, an online video start-up could create a competitor to YouTube that did not run on the public Internet and would pay for faster connections to viewers. As those types of payments grew, the access companies might have less incentive to invest in Internet capacity, pushing more content providers to these special services and creating alternative networks that look similar to cable TV.

That is true.  Isn't that what Hulu is doing now with its subscription service?  Isn't that what Netflix does now and what Blockbuster wished it would have done if it had the vision?  Of course these run over the Internet now.  In the current regulatory environment, which is effectively none (I'll come back to this),  there is nothing stopping Netflix from paying providers a fee to guarantee better access to its customers.  I'm not sure there is anything wrong with this in circumstances where all other access is NOT degraded in favor of Netflix (i.e., keeping other access the same as it was).

One argument that is always trotted out in net neutrality discussions is the fear that companies such as AT&T will degrade services to favor their own.  That fear has never been backed up by actions on the part of the company.  They offer U-verse television over the same wire that more or less supplies 3 and 6 megabyte Internet access.  To my knowledge, that signal is not degraded when someone turns on a TV and a computer at the same time.  That's because the pipe carrying IP television supports a greater bandwidth than that 6 megabyte top speed.  Tiered service and pricing, in effect, already degrades bandwidth artificially. 

Ed Whiteacre ran AT&T when he made statements to the effect that successful Internet companies should pay to use his pipes.  As obnoxious as he was about this, AT&T never attempted to implement anything remotely like this.  If the head of the company couldn't make it happen, who could?  On the other hand, if Netflix came to AT&T as I've suggested and said we'll pay you money to guarantee delivery of our product, and nothing that wasn't already available via the public Internet would be degraded, why can't Netflix do that?  AT&T demanding money to insure service is one thing.  Taking money from a third party company to provide better service is something else.  I think its called competition.

Another fear mentioned is that Internet providers will block legal applications.  Perhaps Apple not supporting Flash on the iPhone and iPad has slipped a few minds.  Flash is ubiquitous.  From ads, to videos, to whole web sites built in Flash, it's out there.  Apple took criticism for the move.  To my knowledge no one is investigating Apple because the company excluded the legal application of Flash from it's products exclusively licensed to AT&T.  Apple is under at least an informal investigation from the FTC because of its practices involving it's control of the ad market on its devices and the requirements that its developers use its own development tools.  But the outrage over the exclusion of Flash is mostly relegated to the comments sections of tech stories.

I said I would get back to the regulatory environment.  It comes down to this.  Since the D.C. Circuit Court of Appeals decision that the FCC has no legal authority regulate the Internet, there is nothing stopping companies such as Comcast (the subject of the suit) from degrading P2P transmissions as part of management and traffic shaping practices.  Congress did not step in to support the Commission or overturn the decision.  There is no law or regulation stopping companies from creating private entertainment, gaming, or other networks for a fee. 

Congress recently sent letters to the FCC, one signed by 74 House Democrats and another signed by 37 Republican Senators, telling the Commission to back off on attempting to implement net neutrality until Congress acts.  Previous Congressional action suggests that Congress is not in favor of net neutrality, not from any egalitarian view at least.  Democratic control of Congress, a more natural alignment of politics and progressive causes, hasn't changed that.  The Google/Verizon proposal, if adopted, creates light regulation that keeps wired broadband more or less in the status quo, with the FCC having authority to right the egregious wrongs. 

I think this context gave Google and Verizon the incentive to create their set of proposals.  It's easy to mock Google with its "Don't be evil" motto in light of its move with Verizon.  Don't be evil, however, doesn't mean don't be practical or don't be in business.  Both of them are companies that provide services.  They are actually advocating regulation that doesn't exist now.  President Obama was asked why there was no public option in the recent health care legislation.  He responded that there would have been one if it were possible to get it through Congress.  It won't be any different with some form of net neutrality.

I don't see different treatment for wired and wireless access to the Internet as a problem.  There is much more competition in wireless than there is in choice for wired Internet providers.  Bandwidth is limited in wireless, and competition offers better opportunity for innovation in that developing market.  Yes, wireless is the future as more individuals adopt mobile devices.  I don't see wired networks going away, however.  The arguments seem to imply that a wired home computer will shrivel up and die over time.  Mobile devices represent convenience, but they can't, in most cases, handle complex software tasks.  I don't see tablets, with their limited storage and memory changing that.  In any event, not regulating now does not foreclose regulating later, if it becomes necessary.  [MG]