Net Neutrality – Will the FCC Get It Right?

The Net neutrality debate boils down to an age-old argument: what constitutes a free market? Do those who have paid hard cash control that which they paid for? Or, should a free market ensure and enable competition in order to provoke innovation and lower prices for all? This is the essence of the Net neutrality debate. As the sole investors in infrastructure, should ISPs such as Comcast, Verizon, AT&T et al have total authority over what — and how — information is delivered over the Internet? Or, should the YouTube’s, Google’s and Skype’s of the world be guaranteed an accessible place on the Web?

These are not easy questions to answer. Further, they are not the only questions to be asked. Among the questions yet posed is how will either winner of this debate go on to affect any given enterprise in terms of its bottom-line and operations? How, for instance, will a win on either side affect IT?

It isn’t an idle question. The results could range from debilitating costs on the one hand to debilitating latencies and service drops on the other. Of course, those are the extremes of the spectrum but there are plenty of lesser consequences to fill up the middle. The bottom-line remains the same, however: whichever side wins, IT will surely pay the penalty. It is, therefore, incredibly unwise to leave the outcome of this squabble solely to the industry players directly involved.

It is also prudent to note that nary a whisper is made of the potential effects on business — the old “let sleeping dogs lie” tactic at its finest. Instead, the argument is couched in terms of consumers who are generally presented as spoiled children or, conversely, as masters of the universe.

“Let’s be clear,” said Jim Lakely, co-director of the Center on the Digital Economy at The Heartland Institute, a respected libertarian-bent think tank based in Chicago, “the concept of Net neutrality is good, as long as it’s a market-driven concept of ‘best practices. Consumers can, and do, demand all the ‘neutrality’ they need. Pocket-book decisions correct any potential ‘abuses’ of consumers by ISPs.”

In theory, that statement is true. In practice, it falls woefully short of the customer experience. To wit: The U.S. offers among the slowest broadband speeds in the world, yet providers charge the highest rates on the planet.

“While Europe and Japan have Fiber to the X (FTTX) services, we have not rolled out much here in the U.S.,” said Asif Hazarika, senior director of Product Management at IP Infusion. “The issue that we see is that the US has a great deal of legacy deployment and thus, to match the speeds with GPON or EPON, the cost is much higher.”

It’s a cost that U.S. carriers are not willing to bear despite the fact that they charge much higher rates than their European and Asian counterparts. Why?

“There is not much competition and at this time, they are not being forced to improve,” explained Hazarika.

Adding salt to the wound, the FCC’s recent Broadband Performance report found that broadband service across all technologies — cable, fiber, DSL and satellite — generally delivered 50 percent of the speeds the providers advertised. The FCC also made a series of tests available so that the public can test broadband speeds for themselves, the first of which can be found at Consumers are now aware they’re getting ripped off, but what of it? It’s easy for consumers to know which provider to fire, but to what provider can they turn for relief? None. The findings were across the board leaving few to no competitive alternatives.

This mirrors the predicament business finds itself in. Global businesses in particular have known of the gaping disparities between U.S. and other countries’ broadband speeds and rates for years. The problem is that there are no competitors offering anything better in the U.S. so business is stuck with whatever it can get. This creates myriad disadvantages for businesses in the U.S. Poor speeds and high rates diminish businesses’ ability to compete with foreign peers. Lack of broadband in U.S. rural areas deprives businesses of access to cheaper American labor and new customers who may buy online if they had the opportunity to do so.

Add to that the insult of deep packet inspection (DPI), the method ISPs use to protect themselves against protocol noncompliance, which in the consumer end of things generally means peer-to-peer (P2P) sharing. This practice means that the ISP can inspect all packets coming and going from any user’s computer. The ISP can and does read the content of everything uploaded or downloaded that isn’t encrypted. That should trouble big business as much as it does the man on the street. For example, instant messages (IMs) are not encrypted, neither are most low-level business files or communications by staff working at home or using mobile devices.

DPI can be used for data mining, eavesdropping and censorship. How much of it is directed against businesses is unknown as there is no way for a business to detect it. There is no anti-virus/malware program nor a traffic metric or anything else capable of exposing the practice. IT would never be the wiser. At the very least, DPI should be illegal for this very reason.

If ISPs were to control the Internet too, competing services and broadband intensive services could either be dropped entirely or hit with a surcharge high enough to remove any real sense of competition. Verizon or Verizon Wireless, for example, could elect to squash Google Phone, Vonage or Skype.

“Skype worries that its service, which requires a lot of bandwidth, could be throttled by the ISPs,” said Lakely. “Yet it is incumbent on Skype to prove worthy of hogging lots of bandwidth to both consumers and ISPs — not to get government to step in and validate its business model.”

One could argue, however, that it is not the government that would be validating Skype’s business model but rather the ISP that was invalidating Skype’s entire existence. Net neutrality, at least in concept, opens the Internet to all without favor or bias whereas an ISP could presumably use its own benefit as the sole criteria for allowing or disallowing an Internet service such as Skype or YouTube.

There is the separate question of whether Skype or other Internet telephony users should have to pay more for the extra bandwidth use, but few are looking at the impact of rate hikes or denial of service on companies outside the telecom sphere.

What will it do to enterprises if Internet telephony is blocked from use or its rates pushed through the roof? Is it fair to force businesses to use traditional phone providers (who also happen to own a piece of the ISP market) instead? Is this not a hijacking of the rest of the business world? Do ISPs have the right to command a larger share of every businesses’ expense column?

“Unless you happen to be an internet provider, there seems to be little debate that preserving that aspect of Net neutrality (the part that protects against anti-competitive behavior) is desirable,” said Dan Griffin, founder and managing partner of JW Secure, a Microsoft Enterprise Security MVP. “The real debate is regarding whether that aspect should be regulated, and if so, how to do so effectively.”

Hence the FCC’s long, drawn-out process of testing and taking comments before making any further official moves on the matter.