Opening bottlenecks: on behalf of mandated network neutrality.

• Author: Herman, Bill D.

1. INTRODUCTION II. IN PRAISE OF NEUTRAL NETWORKS A. A Stable Platform for Innovation B. An Open Channel for Communication III. BOTTLENECKS AND ROADBLOCKS: ACTUAL AND POTENTIAL THREATS OF DISCRIMINATION A. Voice over Internet Protocol ("VoIP") B. Threatened Innovation C. Restrictions on Content D. Why Tomorrow Looks Scarier Than Today IV. CURRENT BROADBAND COMPETITION GUARANTEES LITTLE A. Reigning Duopolies Gaining Speed B. Regional Market Concentration Matters C. The Cable Television Precedent D. New Technologies Are Improbable Solutions V. AD HOC REGULATION Is INADEQUATE VI. MANDATING NEUTRALITY VII. REBUTTING COUNTER-ARGUMENTS A. Network Congestion B. Network Diversity C. Better to Wait and See D. Unintended Regulatory Consequences VIII. CONCLUDING BITS I. INTRODUCTION

   How do you think they're going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes flee, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes? The Internet can't be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! ... or Vonage or anybody to expect to use these pipes [for] free is nuts! (1) In an interview last November, then-SBC Telecommunications CEO Edward Whitacre was exceptionally honest about his company's market position. Representing half of the broadband duopoly, (2) he confessed his industry's disproportionate market power and his intention to seek monopoly rents. SBC spokesman Michael Balmoris quickly insisted the company will not block consumer access to popular Web sites, but Whitacre's words--uttered the same week SBC won regulatory approval to buy AT&T--were, and still are, frightening for many. (3) Other telecommunications executives have since stated either their intention or desire to charge online content providers for the right to reach customers at the fastest speeds. (4) Thanks to recent Federal Communications Commission ("FCC") moves to change the regulatory system for broadband Internet services, this business model is now completely legal. (5) Even if broadband providers never actually blocked access to a single site, a doubtful proposition addressed below, any preferential treatment based on payment would radically reshape the character of the Internet.

   Transposed to another sector of the national infrastructure, domestic air travel, this scenario is patently offensive. Imagine showing up for an overbooked flight. "The agent tells you that he's sorry, but as happens on occasion the flight is oversold and you can't board. He then informs you that only passengers who are staying at the XYZ hotel in Las Vegas may fly to Las Vegas today because the XYZ hotel has paid his airline an extra fee to make sure XYZ customers get to Las Vegas." (6) If even one company in the competitive airline industry began this practice, a sizable bipartisan majority in Congress would be justifiably outraged, decrying the practice and declaring that air travel is too important to allow it.

   Nonetheless, the majority in Congress appears cool to the proposed legislation that would mandate network neutrality in the very noncompetitive broadband industry. On June 8, 2006, the House passed a sweeping telecommunications reform bill, H.R. 5252, (7) with only nominal network neutrality requirements. (8) In April, the House Committee on Energy and Commerce rejected the network neutrality amendment sponsored by Rep. Ed Markey; (9) the full House did the same just before passing H.R. 5252. (10) The bill strips the FCC of any rulemaking authority on the matter. (11) Many Congressional Democrats, (12) public interest groups, (13) and online content providers (14) are vocally angry.

   Senator Ted Stevens has pushed another, substantially different telecommunications reform bill, S. 2686, (15) through committee. Senators Olympia Snowe and Byron Dorgan offered their network neutrality bill (16) as an amendment, which lost on an 11-11 tie. (17) During debate over the amendment, Stevens gave a speech against the amendment that has since become the object of much online derision. (18) Due in large part to the political sensitivity of the network neutrality debate and the impending election, the bill has not yet been scheduled for a floor vote and probably will not be before the midterm Congressional elections. (19) Yet Congress may reconsider it after the election. To speed its reconciliation with the House version, Stevens has renamed the bill H.R. 5252; if it passes the full Senate, it need not be reintroduced in the House before being heard by a House/Senate Conference Committee. If this bill becomes

   law without stronger protections for network neutrality, the current architectural and business model of the Internet may become an historical artifact.

   In this paper, I argue on behalf of legislation mandating network neutrality, requiring broadband service providers to permit all legal, nondestructive uses of their Internet service on the same financial terms. As part of this principle, BSPs would be permitted to prevent destructive transmissions and preserve network stability. BSPs could continue to charge varying end-user prices based on neutral measures of bandwidth such as maximum bandwidth and total amount of uploads and downloads, but not for the right to use certain sites or applications or to use them at full upload/download speed.

   While many proclaim the value of a neutral Internet platform and the legal requirements to ensure it, few scholars urge BSPs to build a non-neutral Internet architecture in order to discriminate among nondestructive data. Christopher Yoo, Professor of Law and Director of the Technology & Entertainment Law Program at Vanderbilt University, is the most visible such author--at least in the legal community. In one article (20) Yoo argues BSPs should be permitted to restrict users in any way they see fit, though he contends that restrictions will primarily be intended to manage network congestion. (21) Elsewhere, he argues that a diverse set of specialized BSP networks would be preferable to a redundant set of general-purpose networks and that this anticipated positive development is hindered by a neutrality regime. (22) Unless one subscribes to a Lochneresque view of private property rights (23) or to the factually and legally mistaken notion that BSPs enjoy editorial rights over the Internet, (24) these two arguments--congestion and network diversity--are two of the strongest arguments against a neutral Internet. Further, a few high-profile proponents of a generally neutral Internet share the fear of broadband discrimination but are nonetheless opposed to a network neutrality mandate. They believe that regulation should be postponed or that the regulatory cure may be worse than the disease. In arguing for a network neutrality regime, I respond to each of these claims. Because he actually supports a discriminatory Internet architecture, I rebut Yoo throughout as the main voice of opposition, but I reserve space at the end to insist that the disease is still much worse than the cure.

   In Part II, I present a generalized description and defense of the networking principles that undergird the calls for network neutrality. In Part III, I discuss some of the past and likely future instances of broadband providers placing undue restrictions on subscribers' network uses. In Part IV, I argue that the present level of competition is insufficient to ensure neutral networks. In Part V, I demonstrate that ad hoe regulation is inadequate to the task of stopping even the grossest anticompetitive acts of network discrimination. Part VI briefly details a regulatory option that could better preserve neutrality into the future. In Part VII, I rebut four major counterarguments, including the arguments that a neutrality mandate would leave network administrators with too few tools to deal with network congestion, would prevent an improvement in the form of several diverse networks, should be postponed, or would do more harm via unintended regulatory consequences. I conclude with a brief overview.

2. IN PRAISE OF NEUTRAL NETWORKS

   Computer networks can be designed either to discriminate between applications and data or to faithfully transmit all data regardless of content. While a neutral network is not necessarily desirable in every type of network architecture, the vast majority of stakeholders benefit the most from a generally neutral network. In the first half of this Part, I discuss the importance of a neutral network in encouraging and rewarding valuable, unpredictable online innovation. Second, I detail the role that neutrality serves in preserving important First Amendment values such as free speech and freedom of the press.

   1. A Stable Platform for Innovation

      We have clear examples of both types of network architectures--intelligent networks designed to carry specific types of information and nondiscriminatory, stupid networks designed to carry any information users send. An excellent example of the former model is the "smart" network administered by AT&T through most of the last century. "[A]t every layer in the distributional chain, the AT&T network had been optimized for voice telephony. But this optimization meant that any effort to change a layer in the AT&T distributional chain would disable other layers.... [S]o change became impossibly difficult." (25) In contrast, those who built the Internet organized it on the latter model. (26) The network is "stupid," faithfully carrying all data and placing the intelligence at the ends of the network. (27) While "smart" networks predestine certain uses, stupid--or neutral--networks liberate "large amounts of innovative energy."...