MyDD :: A Loophole in the Net Neutrality Bill?

A Loophole in the Net Neutrality Bill?

by mitchipd, Fri May 19, 2006 at 04:59:36 PM EST

(Cross-posted from IP Democracy)

In an email, Mike Bookey, author of "America at the Internet Crossroads," raises an intriguing question about the Internet Freedom and Nondiscrimination Act of 2006, introduced yesterday by members of the House Judiciary Committee.

Mike sees a significant "loophole" in the bill's network neutrality protections. He bases this on a careful reading of the bill's language (always a good idea with legislation) and some creative thinking about company strategies. The language in question is found in two related provisions of the bill:

Section 28(a)(1) It shall be unlawful for any broadband network provider to fail to provide its broadband network services on reasonable and nondiscriminatory terms and conditions such that any person can offer or provide content, applications, or services to or over the network in a manner that is at least equal to the manner in which the provider or its affiliates offer content, applications, and services, free of any surcharge on the basis of the content, application, or service;

That long sentence is arguably the heart of the net neutrality provision. As it seems to clearly state, its protection applies to "broadband network services," which are defined in another part of the bill:

Section 28(d)(3) the term 'broadband network service' means a 2-way transmission service THAT CONNECTS TO THE INTERNET [Mike's emphasis] and transmits information at an average rate of at least 200 kilobits per second in at least one direction, irrespective of whether such transmission is provided separately or as a component of another service;

Mike then asks what I think is a good question:

How does the law prevent the following situation? The cable or telco access network provider walls off 99% of its private bandwidth from the Internet. This walled-off bandwidth is used to sell telco and cableco services and services from providers that agree to pay them premiums. The remaining 1% of the bandwidth used to connect end users to the Internet is non-discriminatory, and therefore satisfies the law. The effect of this situation is to starve the public Internet of bandwidth and render service providers on the Internet non-competitive.

Though I think the numbers Mike uses are purposely exaggerated to make a point, I'm inclined to think that his analysis of the language is on the money and that such a scenario would be legal under the proposed bill.

And since the top players in a still-consolidating tier of broadband access providers are all developing their own private backbones, it does seem that a more moderate and gradual version of Mike's scenario could unfold.

Operators might, for example, begin by migrating some of their existing commercial arrangements (e.g., cable VOD) to IP delivery on a walled-garden IP service tier. All of these would be delivered end-to-end without travelling over the Internet. Operators could the begin to negotiate commercial "access-tiering" arrangements with more and more service providers, while simultaneously shifting more and more of their IP bandwidth to walled-garden services that also don't travel on the Internet.

Over time, as Mike suggests, the effect would be "to starve the public Internet [i.e., service providers not paying premium carriage fees] of bandwidth and render service providers on the Internet non-competitive."

Some folks might not consider this a problem, but I'd guess that most net neutrality advocates would, unless Mike and I are missing something.

Tags: net neutrality (all tags)

Permalink :: 10 Comments :: Post a Comment

What's a 'service'? (none / 0)

I'm a technical telecoms ignoramus, so this may be a dumb question: what does transmission service mean?

If a telco was going to go the walled off route, would it supply its customers with its walled-garden service via a different length of wire/fiber than its internet service?

(That's the tech question.)

If it used the same wire for both net and WG, could each be treated as a separate service for the purpose of the definition of broadband network service? Or is it one wire, one service?

(That's the legal question - I'd be fairly sure there's caselaw, FCC rules and rulings, etc, so I'm not even going to speculate!)

by skeptic06 on Fri May 19, 2006 at 05:24:18 PM EST

Re: What's a 'service'? (none / 0)

skeptic06,

The answer to your first question is that it would go on the same wire. Your question about whether its "one wire, one service" is a good one and I don't have an answer. And I'm not so sure that this would be clearly enough defined in previous caselaw, FCC rules, etc. It might be, but I wouldn't be too surprised if it wasn't. It may be that the definition of "that connects to the Internet" is fuzzy enough to be interpreted either way.

Then there's that last phrase I just focused on:

"irrespective of whether such transmission is provided separately or as a component of another service;

I'm not sure that one makes a difference, but it does contribute to the muddling of my mind as I read this stuff...and reminds me why I didn't become a lawyer.

by mitchipd on Fri May 19, 2006 at 05:40:08 PM EST
[ Parent ]

Re: What's a 'service'? (none / 0)

I think I see your point a little more clearly. Maybe the key phrase to know the definition of is "transmission service that connects to the Internet." Clearly, if they travel on the same physical pipe, that pipe will connect to the Internet. But if, at some higher layer in the protocol stack, they are can be considered clearly separate IP "transmission services" (I'm already getting a bit over my head technically here), maybe the argument can be successfully made that the "private IP network" would not be subject to the law..???

In any event, I think its a question worth asking and getting an answer to before its time to go to court. If I get any replies from my IPD post, I'll summarize them here.

by mitchipd on Fri May 19, 2006 at 05:48:48 PM EST
[ Parent ]

Re: What's a 'service'? (none / 0)

Nobody's going to go to the huge expense of running additional wires out to the customers unless they're doing a full-blown facility upgrade (e.g., replacing copper with fiber, or if there's a need to replace an aerial drop with an underground line).

Telcos already send voice and DSL Internet over the same copper (and here in Qwest territory in Phoenix, Arizona, digital television). Cable companies already send voice, Internet, and television over the same coax cable.

From a legal perspective, it's also the case that different services are treated differently. For example, Internet services have been classified as an information service, and have almost entirely unregulated (contrary to some claims that they have been subject to common carriage requirements for telcos--that's just not true).

On the legal question, my reading of the definition given is that only the Internet component counts as "broadband network service." That is, if less than 200 kbps of the bandwidth on the wire is devoted to a service that's connected to the Internet, it's not a broadband network service, it's a less-than-broadband network service.

by Jim Lippard on Fri Jun 23, 2006 at 03:52:16 PM EST
[ Parent ]

Re: A Loophole in the Net Neutrality Bill? (none / 0)

Its good to muddle minds! :-) Cable and telephone are already delivering more than one service over the same wire. Cable delivers broadcast video, VOD, and Internet access over the same wire. The telephone companies deliver telephone service and Internet access over the same wire. Unless Congress and the FCC passes legislation proscribing that all bandwidth on a wire should be used for Internet access, which the telcos and cablecos will argue is the taking of private property, there's no way to effectively prevent discrimination from occurring.

by bookeym on Fri May 19, 2006 at 06:19:16 PM EST

Re: A Loophole in the Net Neutrality Bill? (none / 0)

This is a weird bill, and it sounds to me like it should be redrafted for technical reasons. For one thing, the bill doesn't define "the Internet". The Internet is so named because it is a network of networks. There are not technical nor historical reasons why there can only be one such network. In fact there are already many such networks. So I think the bill would need to define what is meant by capital-I Internet.

Unfortunately that step alone could be fraught with danger, and done incorrectly could act to retard innovation in networking.

Also it ignores the existing reality of network services to the home. The bill, as written, would outlaw digital cable television. Digital cable uses a huge majority of the bandwidth available to deliver television programming from its paid affiliates. This traffic is delivered with extreme efficiency, and no other traffic is afforded that kind of high-quality isochronous service.

A better bill would simply force a network provider to divest themselves of any and all services which operate over the network, and to provide reasonable and non-discriminatory access to all who wish to have access to that network. This, at least, would not present all manner of unintended dangers which are present in the language here.

by jwb on Fri May 19, 2006 at 06:47:21 PM EST

Re: A Loophole in the Net Neutrality Bill? (none / 0)

jwb...your proposed solution is simple and elegant in theory but strikes me as a political not-starter in this country.

Another path to your solution is via municipally-owned networks that are basically "public packet roads" equivalent to today's public motor vehicle roads.

This solution would require some level of grassroots mobilization at the local community level, which I think would be a healthy trend that could be leveraged (as could the network itself) and tied into other issues.

As you probably know, there's a movement afoot around the country in this direction, though it's being challenged by incumbents through state legislation, proposed federal legislation and endless lawsuits and high-spending local anti-muni PR campaigns (think local versions of the Hands off the Internet group).

Things are a bit different overseas. Though I don't know much about the details, I think BT in the UK has agreed to seperate its retail and wholesale operations in a kind of settlement with the regulators there.

But, as I said, I can't imagine this approach getting any political traction in the U.S.

I think muni-broadband "public packet roads" are the best way to achieve what you're suggesting. Though its not absolutely necessary, this movement could use a simple piece of federal legislation (as proposed by Lautenberg and McCain last year) that clarifies that states cannot pass laws that restrict local communities' ability to build this kind of network. The 1996 Telecom Act apparently did not do this clearly enough according to the Supreme Court, and about a dozen states have laws that impose a range of restrictions.

There's a newly formed organization called US-CCA (US Connected Communities Association) that seems to have some real potential to move forward in a coordinated and practical way. I've talked to one of the group's leaders and was impressed.

It'd be great to see the progressive netroots/grassroots get behind this group, which aims to bring city government and IT leaders together to pool expertise, lessons, successes, info, resources, etc. to help each other build 21st century "Internet roads" in communities around the country.

Here's a link to their site:
http://www.extremelabs.com/US-CCA/?page= home.html

Thanks for commenting on this thread.

by mitchipd on Fri May 19, 2006 at 07:14:06 PM EST
[ Parent ]

Re: A Loophole in the Net Neutrality Bill? (none / 0)

"I think muni-broadband "public packet roads" are the best way to achieve what you're suggesting. Though its not absolutely necessary, this movement could use a simple piece of federal legislation (as proposed by Lautenberg and McCain last year) that clarifies that states cannot pass laws that restrict local communities' ability to build this kind of network."

I'm inclined to doubt this would work well. Look at how it works for roads--cities aren't consistent in how they repair and maintain roads, and there's been a huge movement towards proprietary communities and privately maintained roads. There are fewer engineers with the expertise to build and maintain networks than there are workers to build and repair city streets, so municipalities would end up outsourcing to private companies which would serve multiple municipalities in order to get economies of scale. We'd end up with something like what we have today, only worse, because rather than having regulation at the state level, it would be at the municipality level, with thousands of variant demands on the private provider rather than 50+ (states plus D.C. plus federal).

by Jim Lippard on Fri Jun 23, 2006 at 04:00:11 PM EST
[ Parent ]

Re: A Loophole in the Net Neutrality Bill? (none / 0)

I think we need to climb the tallest tree in the forest and look around. We are so busy running from tree to tree fighting battles over meaningless issues like net neutrality that we miss the larger public policy issue - what is the role of the Internet in our society.

In my book, American at the Internet Crossroads, which Mitch so kindly referenced, I make the case that rather than think of how the Internet best fits into the private market system, we should think in terms of how best to fit the private market system inside the Internet.

The Internet is a transportation network fundamental to the workings of the digital economy in the same way that motor vehicle roads are a transportation network fundamental to the workings of the industrial economy. The Internet is not simply another private sector of the economy to be regulated (or deregulated) in the usual manner.

The motor vehicle road network provides end-to-end connection service. It is a publicly funded infrastructure that creates encompassing conditions that affect and influence the ability of all entrepreneurs to innovate at its edges. This is what the Internet does. It is a digital road network for packets that establishes encompassing conditions for entrepreneurs to create wealth at its edges. In this respect, the Internet supplies an environment inside which the private market can flourish and grow. A public policy that puts the Internet inside private telephone and cable companies can never generate comparable wealth because it does not create general conditions in which ALL entrepreneurs can thrive. The Internet is too fundamental and important to be put inside the private market and classified as a service like another television channel.

by bookeym on Fri May 19, 2006 at 07:39:20 PM EST

Re: A Loophole in the Net Neutrality Bill? (none / 0)

No bill is going to be perfect, or even useful. The important point is to beat the bastards, here, now, and then work on creating real competition.

http://www.danablankenhorn.com/2006/05/n o_bill_can_gua.html

by Dana Blankenhorn on Mon May 22, 2006 at 05:08:18 PM EST

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