<nettime> ratpie: Sleepwalking into Walled Gardens

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ratpie: The US Net Neutrality Debate; Sleepwalking into Walled Gardens

<http://ratpie.org/2014/02/21/the-us-net-neutrality-debate-sleepwalking-into-walled-gardens/>


Being an outsider to the US Net Neutrality debate, I don't feel the pain
of cable monopoly, or the blight caused by expensive and poor quality
broadband. Over here in the UK we hear more about Verizon FiOS and
Google Fibre, and mobile investments and megadeals, than we do about
coax. In the UK, and increasingly in Europe, our regulators manage
markets with perhaps too much diligence.

The usual way regulators deal with monopoly is to encourage or mandate
competition. I have been surprised by the number of US states banning
muni wifi -- though I can understand the argument that common property
should not be preferentially available to private interests. In many
cases it seems to me that the public interest should clearly override,
and that monopoly providers who gained their own wayleaves and easements
under different regulatory and technological  environments should not be
considered adequate provision for the next 20 years. Susan Crawford
seems to agree with me (!) according to an article she wrote for the FT
this week (Feb, 2014).

Perhaps, though, the problem is as much about what content and services
might be available over new competitor access networks, and on what
terms, rather than how an incumbent should be obliged to manage their
business and network.

Here's a simple question which illustrates in some ways how difficult
the regulation challenge is. Should an aspiring competitor to Netflix or
any other content or service provider, which does not yet have the
subscribers or the bandwidth requirement of its competitors, be able to
force a consumer broadband provider (CBP) to purchase public peering
capacity at parity with whatever private arrangements the CBP (I avoid
the term ISP deliberately) has made with competitor content or service
providers?

If your answer is no, they should not, then you are setting the bar
higher for the Internet as an engine of competition and innovation; the
new entrant will have to overcome market inertia as well as poor quality
of service in order to grow. And that will be true of all networks, not
just the problematic incumbents, be they monopolistic or competitive.

The complex balance between colocation, private peering, and public
peering seems to me very poorly understood by many content companies --
sleepwalking into walled gardens in my opinion -- and regulators, who
have bought the narrative without looking at the grammar or semantics of
what they were sold. It is very well understood by a very small number
of highly successful content and services companies, who, not an
accidental coincidence, are getting off the public internet as fast as
they can.

Whether or not a CBP tweaks its packets in favour of one content or
service provider or another could be well covered by fair trade
regulations; it could be dealt with completely outside the scope of
telecoms regulation. How your CBP connects to the Internet is an
entirely different matter, and one that only a telecoms regulator can
really be concerned with.

It is very tempting to gravitate towards one lobbying platform or
another, and it sure gets a reaction from the crowd if a journalist or
lobbyist can work up a good foam. Through my strongly sceptical filter,
however, the US Net Neutrality debate looks as much about content and
service providers trying to open CBPs to uncompensated private and
colocated access, as it does about CBPs trying to use their control of
the last mile to extract rents. It's not as if there is anything to
preserve -- NN as it seems to be deployed by commentators and lobbyists
was never adopted by the broadband industry, but emerged out of the
evolution of the technology and business models of telcos, only to
retreat as content and service providers became able to influence CBP
profitability by stressing their networks.

Framed in those terms, profitability will be a key metric of the
relative success of the contestants over 'connected world' business
models, as will their share price relative to current earnings as the
market collectively decides who it thinks is winning. Again, none of
this is a regulatory matter, beyond the usual fairness arbitration.

This is not to say that telco regulators have no place. Far from it. If
any of this analysis proves apt, regulators need to consider the
connectivity and openness of the Internet itself, being how networks
connect, who can connect to them, and the capacity, capability and
status of that connection vis a vis any other ways that content and
services get carried to people.

But that is not neutrality by any ordinary definition of the term. What
I think the progressives are saying in this debate is that we should use
regulation to create an Internet governance policy which is sustainably
open, and which has the capacity and capability to support the
innovation and churn we need to remain healthy. This I wholeheartedly
would support, but what Comcast or Verizon do to your Netflix or Google
packets has no relevance at all to any of it.

Wake up America! Thinking that it is all about whether Verizon throttles
Netflix, or whether AT&T has 'provider pays' QoS, will just hand more
advantage to incumbent content and service providers at the expense of
new entrants, as colocation, caching, and private peering dig deeper
into the CBPs' networks. No wonder that the popular content and services
companies are bleating about how much they need Net Neutrality; as
currently framed it would be a great way to keep out competition.

It is probably too much to ask that CBPs should be obliged to maintain a
public Internet at parity, as posited in my simple question above. It's
not too much to ask that between them they maintain an adequate public
Internet, even if their customers are blissfully ignorant of whether
their 21st Century couch/remote combo ever touches the it on the way
through.



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