Burton Group: Net Neutrality in 2010: More Important than Ever


Bottom Line: Net neutrality is becoming more important than ever to Internet users—including enterprise organizations. The loss of net neutrality was once mostly a theoretical concern because little evidence existed that service providers were actually discriminating against certain types of Internet-customer traffic. But recent developments in the regulatory environment, new networking technologies, video content delivery via the Internet, the growth of wireless networking, and Internet usage patterns—including Internet service providers (ISPs) filtering or blocking certain types of traffic—have raised net neutrality as a key public policy issue.

Context: As the public Internet becomes a virtual “Main Street” for e-commerce, delivery of video content, and marketing to customers, there is a concern that network operators will use their position as ISPs to act as “gatekeepers” in order to control network-user access to Internet-based services, applications, and content. This has led to the term net neutrality to define ISP behavior that doesn’t discriminate against traffic that the ISP finds to be objectionable, or that competes with the ISP’s own services (e.g., Voice over Internet Protocol [VoIP]), content (e.g., video), or applications. Some government organizations, such as the U.S. Federal Communications Commission (FCC), have proposed net neutrality principles that ISPs must follow, while most ISPs oppose net neutrality.

Takeaways:

  • Rather than being a theoretical concern, net neutrality violations have occurred “in the wild” in the following ways:
    • Blocking or downward-rate-shaping traffic that the provider considers to be “abusing” bandwidth, creating security threats, or that threatens the provider’s business model:
      • Comcast was caught blocking BitTorrent peer-to-peer (P2P) file transfers
      • Madison River was caught blocking VoIP traffic from overlay providers such as Vonage
    • Giving preferential treatment to operator applications and multimedia content over all other traffic, in order to guarantee consistently high performance:
      • Verizon Fiber Optic Service (FiOS) and AT&T U-verse routinely prioritize their video-on-demand traffic ahead of customer Internet traffic
  • In response to real or potential net neutrality concerns, the U.S. FCC has proposed six principles
    • An ISP may not:
      • Prevent any of its users from sending or receiving the lawful content of the user’s choice over the Internet
      • Prevent any of its users from running the lawful applications or using the lawful services of the user’s choice
      • Prevent any of its users from connecting to and using on its network the user’s choice of lawful devices that do not harm the network
      • Deprive any of its users of the user’s entitlement to competition among network providers, application providers, service providers, and content providers
    • Additionally:
      • Subject to reasonable network management, a provider of broadband Internet access service must treat lawful content, applications, and services in a nondiscriminatory manner
      • Subject to reasonable network management, a provider of broadband Internet access service must disclose such information concerning network management and other practices as is reasonably required for users and content, application, and service providers to enjoy the protections specified in this rulemaking
    • However, these principles are likely to be found unenforceable by U.S. courts (as a result of a Comcast lawsuit appeal), forcing the FCC to go back to the U.S. Congress to pass net neutrality legislation
    • Other countries have taken a “hands off” approach that involves monitoring for anti-competitive behavior rather than instituting explicit net neutrality rules
  • As video content delivery over the Internet replaces broadcast and cable television:
    • More mergers between ISPs and video content providers will occur
    • This will put pressure on ISPs to violate net neutrality to provide the best video service delivery
    • Governments (especially the United States) will have a difficult time standing up to powerful broadcasting, telecom, and entertainment businesses that will benefit from net neutrality violations
  • Wireless cellular broadband will challenge current net neutrality principles
    • Net neutrality rules originally developed for wireline services may not be applicable to wireless services due to wireline vs. wireless technical differences:
      • Bandwidth constraints on wireless
      • Wireless device interaction with the mobile operator network
      • The much greater rate of technical change in mobile networks
    • Net neutrality violations may be necessary for wireless operators to deliver services such as VoIP (necessary with upcoming fourth-generation Long-Term Evolution [4G LTE] services)
    • Greater competition may exist among wireless services, giving customers a choice of alternative service providers in case net neutrality is violated
  • Enterprises should:
    • Maintain awareness of net neutrality-related industry developments
    • If possible, boycott providers that violate net neutrality
    • If possible, employ technical countermeasures to reduce the impact of ISP discrimination against enterprise traffic

Conclusion: Net neutrality continues to be a key public policy issue that potentially affects all users of the public Internet—virtually everyone. In a major battle between ISPs vs. consumers and enterprise network users, governments are being asked to institute rules and regulations that preserve openness and prevent discrimination. Whether or how such rules can be fairly applied without negative side effects is still open to considerable debate.

External source: http://www.burtongroup.com/Client/Research/Document.aspx?cid=1901


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