Network neutrality and quality of service: what a nondiscrimination rule should look like.

Author:van Schewick, Barbara
Position:II. Proposals for Nondiscrimination Rules D. More Nuanced Rules 2. Substantive Approaches a. The First Approach ii. Allowing Discrimination Among Classes of Applications That Are Not Alike D. Innovation Without Permission through Conclusion: Network Neutrality and Quality of Service, with footnotes and table, p. 122-166
  1. Innovation without permission

    Finally, "like treatment" harms application innovation by making it more difficult for new applications to get the type of service they need. (437) In order to get Quality of Service, an application developer would have to convince network providers that its application belongs to a new class of applications that requires a certain type of service or that it is "like" an existing type of application that already receives that type of service, thus violating the principle of innovation without permission. (438) This introduces considerable transaction costs. Certain types of innovators (e.g., innovators that develop an application at home in their free time, noncommercial innovators, or start-ups) may not have the resources necessary to engage in this type of negotiation with a potentially large number of network providers. (439) In addition, even if an innovator manages to contact a network provider, the innovator may not receive the appropriate Quality of Service for its application if the innovator fails to convince the network provider. This is an example of the more general phenomenon that requiring cooperation or support from the network provider reduces the likelihood that innovative applications can be realized or successfully deployed. (440) Thus, requiring network providers to take action before an application can get the Quality of Service or differential treatment it needs violates the principle of innovation without permission and reduces the chance that new applications actually get the type of service they need.

  2. Certainty and costs of regulation

    In general, this rule--ban discrimination among like applications and classes of applications, but allow discrimination among classes of applications that are not alike--is a lot clearer about which behavior is and is not allowed than the standards-based proposals discussed above. It clearly allows certain forms of Quality of Service while banning others. In particular, the rule allows network providers to provide different types of service to different classes of applications that are not alike, as long as they do not discriminate among classes of applications that are alike or discriminate among like applications within a class. The rule does, however, prohibit network providers from offering a certain type of service only to some applications within a class. Thus, the rule restricts the evolution of the network more than approaches that allow all discrimination but less than approaches that ban all discrimination.

    With respect to specific instances of differential treatment among classes of applications, the rule provides less certainty than a more abstract reading of the provision may suggest. In particular, the ambiguities surrounding the definition of "like" make it difficult for network providers to predict whether their chosen definition will withstand regulatory scrutiny in case of a complaint. For the same reasons, application developers and their investors will not necessarily know in advance how far the rule's protections reach. (441) If adjudicators clarify the interpretation of "like" in the context of individual adjudications, this uncertainty may be reduced over time. (442) Until then, the rule will suffer from many of the problems associated with and will create similar social costs as the standards-based approaches discussed above, including high costs of regulation.

    In sum, this rule is based on the assumption that discrimination among classes of applications that are not alike is socially harmless and should therefore be allowed. This assumption is not correct. In many cases, discrimination among classes of applications hurts some classes of applications even if the classes are not alike. Like treatment removes the application-agnosticism of the network and violates the principles of user choice and innovation without permission. It allows network providers to deliberately or inadvertently distort competition among applications or classes of applications and interfere with user choice. Due to the ambiguities surrounding the definition of "like," the rule creates considerable uncertainty that will need to be resolved in case-by-case adjudications, resulting in social costs similar to the social costs of the standards-based approaches described above. Thus, like treatment creates considerable social costs and does not adequately protect the values that network neutrality rules are designed to protect.

    b. The best approach: ban application-specific discrimination, bat allow application-agnostic discrimination

    Instead, regulators or legislators should adopt a nondiscrimination rule that clearly bans application-specific discrimination, but allows application-agnostic discrimination. (443) (Again, I use "applications" as shorthand for "applications, content, services, and uses.") Discrimination is application-specific if it is based on a particular application or class of applications, or, in other words, if it is based on criteria that depend on an application's characteristics ("application-specific criteria"). (444) Application-specific criteria include what this Article calls "application"--the specific instance of an application a user is using (e.g., Vonage vs. Skype), application type (e.g., e-mail vs. Internet telephony), the application-layer protocol or transport-layer protocol the application is using (e.g., Session Initiation Protocol (SIP) vs. Skype's proprietary protocol, or TCP vs. User Datagram Protocol (UDP)), or the application's technical requirements (e.g., latency-sensitive vs. non-latency-sensitive applications). (See also Box 19: A Technical Perspective on Application-Specific vs. Application-Agnostic Discrimination below.) Since the term "applications" stands for applications, content, services, and uses, the ban on application-specific discrimination applies equally to discrimination based on criteria that depend on characteristics of content or of a service or use. Thus, discrimination against certain content based on, for example, publisher, author, content type, subject matter, or viewpoint would also all be prohibited by this rule.

    The rule should be coupled with an exception for reasonable network management that requires reasonable network management to be as application-agnostic as possible and allows the use of narrowly tailored application-specific measures only if a problem cannot be solved in an application-agnostic manner. (See Box 18: The Exception for Reasonable Network Management below.)

    This rule plays an important role in the FCC's Open Internet Order. The Order's nondiscrimination rule for fixed broadband access banned discrimination that is unreasonable. Whether discriminatory behavior complies with the rule proposed by this Article and described in this Subpart (i.e., whether it is application-agnostic) is one of the factors the FCC proposed to use to determine the reasonableness of discriminatory conduct under the Open Internet Order's nondiscrimination rule and exception for reasonable network management.

    BOX 18 THE EXCEPTION FOR REASONABLE NETWORK MANAGEMENT Network neutrality rules usually include an exception for reasonable network management. Behavior that would otherwise violate the rule against blocking or the nondiscrimination rule is allowed if it constitutes "reasonable network management" as defined by that exception. The rule proposed in the text should be coupled with an exception for reasonable network management that requires reasonable network management to be as application-agnostic as possible and allows the use of narrowly tailored application-specific measures only if a problem cannot be solved in an application-agnostic manner. (445) More formally, to qualify as reasonable network management, the practice would have to further a legitimate network management purpose and be narrowly tailored to address that purpose. In the context of network neutrality rules, the term "network management" refers to technical measures whose purpose is "to maintain, protect, and ensure the efficient operation of a network." (446) Network management includes, for example, managing congestion or protecting the security of a network. (447) To qualify as narrowly tailored, the practice would have to, among other things, be as application-agnostic as possible and result in as little discrimination or preference as reasonably possible. (448) The treatment of network management practices under the proposed rule is described in more detail in Part II.D.2.b.i.B below. The rule described in this Subpart bans all discrimination among applications and classes of applications that is based on application-specific criteria, regardless of whether the applications or classes are alike or not. Thus, contrary to some nondiscrimination rules in other areas of law, this approach does not require an analysis of whether the applications or classes of applications that are treated differently based on application-specific criteria are "alike" or "similarly situated." Nor is there an inquiry into whether the differential treatment of like applications or classes of applications is somehow justified. Instead, the rule strictly bans all discrimination based on application-specific criteria. The only way to justify instances of application-specific discrimination would be through the reasonable network management exception or any other exception that applies to the nondiscrimination rule.

    Under this approach, a network provider would not be allowed to treat Vonage differently from Skype, or Comcast's differently from Hulu. That would be discrimination based on application. (449) Nor would a network provider be allowed to treat online video differently from e-mail, treat applications that use the BitTorrent protocol differently from applications that do not use this protocol, or treat latency-sensitive applications differently from latency-insensitive...

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