#techessay

This really gets to the core of the debate. The Oatmeal and other net neutrality hardliners fear that ISPs may use their unique position to discriminate among different sources of Internet traffic, favoring well-heeled and/or affiliated edge providers and ultimately resulting in significant (and externalized) harm to small businesses and free speech. The solution, as they see it, is to mandate bright-line rules that will prohibit ISPs from engaging in such discrimination. But, while simple, bright-line rules have a certain appeal, in this case — considering the inherent complexity and diversity of the issues at hand — such a broad-sweeping rule against discrimination would do great harm, because it fails to account for a key facet of the Internet: some bit traffic is qualitatively different than others, because some is bursty (like web-browsing) and some requires sustained bit streams (like VoIP calls). Thus, while “neutrality” of treatment would perhaps be warranted when comparing like services (i.e., apples to apples), when comparing unlike services (i.e., apples to oranges), mandating neutral or equal treatment could do significant harm to both. In recognition of the fundamental differences between different forms of bit traffic, Internet engineers developed, among other tools, the Differentiated Services (DiffServ) set of protocols, which were designed to enable differential treatment of bit traffic in real-time. And by allowing ISPs and transit providers the capability to treat some bits differently than others, the Internet itself can work smarter, faster, and better for all parties in the online ecosystem.

Also contrary to popular belief, these are not recent developments. The 8-bit DiffServ field has been built into all packet-headers since IPv4 was implemented (back in the 1980s), and it was retained in the updated IPv6 standards, so any claim that “equality” is embedded into the Internet’s foundation is just patently false. And these are not just hypothetical applications — ISPs already utilize the DiffServ protocols to prioritize voice-over-IP (VoIP) packets, such as Skype, on their networks. They do this because they know that two-way voice services are very latency-sensitive, so ensuring a seamless delivery of VoIP packets makes those services work better and their customers more happy.

Most everyone can agree that certain forms of Internet traffic ought to be prioritized over others (e.g., 9-1-1 calls undeniably should be prioritized over non-emergency traffic). But, more often than not, outside of the realm of emergency services, people struggle to think of prioritization uses that would be beneficial to consumers, competition, and society writ large. The nefarious examples of anticompetitive prioritization (e.g., An ISP prioritizing its affiliated traffic over its unaffiliated traffic, resulting in skewing of the competitive Internet landscape) are typically all that come to mind. However, putting potential harms aside for the moment, it is easy to envision a number of beneficial uses of prioritization via the DiffServ protocols:

Microsoft, Sony, Nintendo, Steam, and Blizzard, to name a few online gaming companies, would willingly offer to pay extra — on top of the hosting and transit fees they already pay — to get their users’ bits prioritized, because they know even minor latency (or “lag” as it’s typically referred to by gamers) can ruin the online gaming experiences that they’re trying to cultivate.

ESPN, Fox, NBC and others that own broadcast rights to live sporting events, and offer online streaming capabilities (e.g., WatchESPN, FoxSportsGO, NBCSportsLiveExtra), would willingly offer to pay extra to get their bits prioritized, because doing so would make their consumers happier — through higher-quality bit streams — and would allow them to finally outperform the illicit websites that host sports streams in violation of copyright law, convincing more consumers to subscribe to their legitimate online streaming services (which likely will soon be offered a la carte).

And on the flip-side, although many net neutrality supporters rail against the idea of getting “stuck in the slow lane,” there are innumerable web-based services that would likely jump at the chance to get their traffic de-prioritized, because they know their services are time-insensitive (a.k.a. latency-robust), so slower delivery of bits wouldn’t matter much to their users, and — this is key — the cost of delivering those bits would be lower than if they were in a faster lane of Internet traffic. For email hosts, software developers, or any startup company (not trying to live-stream video) looking to cut their transit costs, such an option would surely have at least some appeal (depending, of course, on the particular price points).

As part of its At Issue written debate series, CQ Researcher asked TF's Berin Szoka and Free Press' Derek Turner, "Is the price for watching TV unfairly high?" Read both essays as printed, or check out Berin's "no" argument below: We live in a “golden age” of television, as The New York Times’ David Carr puts it: “The vast wasteland of television has been replaced by an excess of excellence.” We love TV, and it’s getting better all the time — but we hate paying for it, even when we’re getting a better deal.

Since 1996, the cable industry has invested $210 billion in infrastructure. That’s meant faster broadband, higher video quality and new TV features like DVRs and smarter interfaces. Adjusting for inflation, basic cable video prices rose 2.7% annually from 2005 to 2012. 

But adjusting for quality is hard, so consider how much cable companies paid programmers during that period: 5.61% more annually. Indeed, programming costs, which have more than doubled since 1992, represented 56% of cable bills in 2012 — and are rising, largely due to the cost of sports programming.

Cable’s become just another distribution channel, watched by fewer than half of American households. Viewers have switched to satellite (a third), telco services like Verizon FiOS (15%), or entirely to online services like Netflix and iTunes (5%).

Studios are also investing in quality because they face unprecedented competition. The number of channels has exploded, from 565 in 2006 to over 800 today. Some of today’s most popular programming comes from once-stale channels like AMC (e.g., Breaking Bad and Mad Men). And new entrants like Netflix now offer enormously popular, original content like House of Cards.

Understandably, people hate paying for channels they don’t want. Yet economists have found that mandating a la carte pricing would raise prices per channel, perhaps costing consumers more overall while hurting new and smaller channels. Meanwhile, the availability online of individual episodes is pressuring video programmers to change how they do business. There’s no reason to think the market won’t find the right balance — without more government meddling.

In fact, government has increasingly helped to drive costs up, not down. Most egregiously, Americans shouldn’t have to pay for broadcast stations when they buy basic cable. Repealing other privileges for broadcasters might also help ensure that the prices distributors like cable pay for content reflect its value.

As the debate over FCC Chairman Wheeler's Net neutrality proposal rages on, the Wall Street Journal asked two tech policy experts whether broadband should be regulated like a public utility. Arguing the "no" side was TechFreedom's Berin Szoka, arguing "yes" was Columbia Law School's Tim Wu. Read the article and both essays on WSJ.com , or see Berin's essay below:

Public-utility regulation is a self-fulfilling prophecy: It assumes competition is impossible—and keeps it that way.

Utilities accept heavy regulation, which insulates them from competition. This quid pro quo makes sense only when technology is static and alternative infrastructure just isn't cost-effective.

Broadband, however, isn't a "natural monopoly" and it doesn't require the kind of oversight originally developed for railroads. The industry is rapidly evolving and competition is thriving as never before, thanks to a regulatory light touch and despite lingering federal and local obstacles.

Competition Is Alive and Well

Telephone and cable companies have been trying to out-innovate each other since the mid-1990s. Despite talk of a cable monopoly in broadband, phone carriers are gaining ground.

AT&T's upgraded DSL service, delivered via fiber to neighborhoods, should reach 75% of its footprint by 2016 with download speeds 10 to 15 times faster than Netflix high-definition streaming. Some 70% of Verizon households will soon have access to FiOS, the carrier's fiber-to-the-home network, and cable firms have raised top download speeds to match Verizon's. Google Fiber may expand its full-gigabit service to 34 more cities from the original three, giving more Americans access to a "third pipe" to the Internet.

One in 10 Americans, meanwhile, relies entirely on wireless broadband and the number is growing as those networks get faster. Opening more radio spectrum would help, but the FCC and Congress have moved slowly. Likewise, the FCC has been reluctant to let phone companies transition to Internet protocol-based networks, even though doing so would save billions of dollars that could be used to make the "second pipe" faster.

Where government has gotten out of the way, broadband competition, investment and innovation have flourished. Indeed, the regulatory light touch for broadband wisely begun by President Clinton's FCC unleashed $1.3 trillion in private broadband investment. Yet some insist the FCC made a mistake in not subjecting broadband to public-utility rules in 2002.

Congress, including 74 Democrats, overwhelmingly opposed "reclassification" to public-utility status in 2010 and with good reason: Even if the FCC promises not to apply the most burdensome public-utility rules, the process would be slow and messy, paralyzing investment for years and discouraging new entrants.

And for what? The FCC has already claimed sweeping powers to regulate broadband just shy of a full-blown utility. The more judiciously it uses that power the better, but merely having the option makes reclassification largely unnecessary.

A Better Way

Reclassification would distract the FCC from doing what it can to facilitate broadband competition and deployment.

Some think the answer is having cities operate broadband networks. Provo, Utah, tried that, and the city wound up selling its $39 million network to Google Fiber for $1 after realizing the city just wasn't good at running it.

Instead, municipalities should reduce the local bureaucracy that discourages new entrants like Google Fiber and even incumbents like Verizon from expanding. If cities want to spend tax dollars to improve Internet access, they should install "Dig Once" conduits under streets that any broadband provider could lease. That could make deployment 90% cheaper while adding just 1% to the cost of a road project.

Increased competition can bring down prices, making Internet access more affordable for those who still don't have it. Subsidies also could help—but added regulatory barriers certainly won't.

Sprint, America's #3 wireless provider, is attempting to buy T-Mobile, the industry's fourth-largest player. It's unclear if regulators will approve the deal, but they're certainly looking at it closely. Writing in The Hill, TF's Jon Henke warns that because of the merger's controversy, the FCC could require numerous conditions that could then spread to the rest of the industry, effectively regulating wireless companies without any of the transparency and deliberation real regulations would require. He writes:

...

We’ve already seen four net neutrality controversies this year … and it’s still only February.

There was speculation recently that broadband providers like Comcast and Verizon were throttling Netflix performance (apparently Netflix said that wasn’t happening). Before that, it was objections to AT&T’s “Sponsored Data” program, which would let content providers subsidize customers’ mobile data usage. And then of course there was the court decision last month, gutting most of the FCC’s net neutrality rules and heightening sensitivities.

Now it’s the Comcast-Time Warner merger, which is not only stoking fears about net neutrality — but about content providers.

After the DC Circuit Court struck down most of the FCC's Open Internet Order, many have claimed the ruling was a loss for the agency, even declaring "Net Neutrality is dead." But that's far from the truth, as Berin Szoka and Geoffrey Manne point out in Wired today. They begin:

No matter what you think of network neutrality — for it, against it, it’s complicated, who cares — the fact that a federal court just struck down most of the FCC’s net neutrality rules is clearly cause for concern. But not for the reasons you think. Others are saying that the FCC just lost the battle but “can finally win the war” — if the agency formally “reclassifies” broadband as a heavily regulated “common carrier” (like traditional telephone services). Actually, the FCC lost the battle, but it just won the war over regulating the internet. It no longer needs to bother with reclassification, a process so difficult and drawn-out it was always a political fantasy anyway. The FCC’s broad new powers should worry everyone, whatever they think of net neutrality. Because beneath the clever rallying cries of “net neutrality!” lurks a wide range of potential issues. Most concerns are imaginary or simply misplaced. The real concerns would be better addressed through other approaches — like focusing on abuses of market power that harm competition.

In a refreshing break from our typical prose, TF's Jon Henke critiques the NSA's countless surveillance programs in a reworking of Edgar Allen Poe's "The Raven" in The Atlantic. It begins:

Once upon a database query, while I pondered weak security, And many avenues of access via backdoor, While I nodded, nearly napping, suddenly there came a wiretapping, As of some one gently sniffing, sniffing at our server's door. “‘Tis some hacker,” I muttered, “tapping at our server door Or just a virus, nothing more.” Presently my fear grew stronger; acquiescing then no longer, “Spy,” said I, “truly your secrecy I deplore; But the fact is you're wiretapping, and so quietly you came tapping, And so faintly you came tapping, wiretapping at our server’s port, That scarce was sure I'd detected you—and when I opened wide the door; — a National Security Letter, speak nothing more.

With only one day left for the White House petition to reform ECPA, TF President Berin Szoka took to RedState to illustrate just how important this fight is in the larger battle against mass surveillance:

ECPA reform would restore a core constitutional principle: with narrow exceptions for emergencies, law enforcement should have to get a warrant for searches and seizures. This privacy protection should have extended to online files just as it does to files on your computer, but an activist Supreme Court in the 1960s mucked up the law by holding that the Fourth Amendment doesn’t apply to files held by third parties — like cloud email providers. It may seem unfair that this is the first step in the surveillance battle. After all, ECPA is a complicated, arcane issue that’s gotten only a fraction of the attention the NSA has. But hey, politics ain’t fair. It’s all about optics. Momentum is critical.