net.wars: Double the networks, double the neutralities
by Wendy M Grossman | posted on 23 March 2007
Well, now here we are, and the Internet is chewing up the telcos' business models and creating havoc for the cable companies who were supposed to be the beneficiaries, and so it's not surprising that the telcos' one wish is to transform the Internet into something more closely approximating the controlled world they used to love.
Which is how we arrived at the issue known as network neutrality. This particular debate has been percolating in the US for at least a year now, and some discussion is beginning in the UK. This week, at a forum held in Westminster on the subject, Ofcom and the DTI said the existing regulatory framework was sufficient.
The basic issue is, of course, money. The traditional telcos are not, of course, having a very good time of things, and it was inevitable that it would occur to some bright CEO - it turned out to be the head of Verizon - that there ought to be some way of "monetizing" all those millions of people going to Google, Yahoo!, and the other top sites. Why not charge a fee to give priority service? That this would also allow the telcos to discriminate against competitor VOIP services and the cablecos (chiefly Comcast) to discrminate against competing online video services is also a plus. These proposals are opposed not only by the big sites in question but by the usual collection of Net rights organization, who tend to believe all sites were created equal - or should be.
Ofcom - and others I've talked to - believes that the situation in the UK is different, in part because although most of the nation's DSL service is provided either directly or indirectly by BT that company has to be cooperative with its competitors or face the threat of regulation. The EU, however, is beginning to take a greater interest in these matters, and has begun legal proceedings against Germany over a law exempting Deutsche Telecom from opening the local loop of its new VDSL network to competitors.
But Timothy Wu, a law professor at Columbia and author of Who Controls the Internet: Illusions of a Borderless World, has pointed out that the current debates are ignoring an important sector of the market: wireless. The mobile market is not now, nor ever has been, neutral. It is less closed in Europe, where you can at least buy a phone and stick any SIM in it; but in the US most phones are hardware-locked to their networks, a situation that could hardly be less consumer-friendly. Apple's new iPod, for example, will be available through only one carrier, AT&T Wireless.
Wu's paper, along with the so-called "Carterfone" decision that forced AT&T to stop confiscating people's phone cords, is cited by Skype in a petition to get the FCC to require mobile phone operators to allow software applications open access. Skype's gripe is easy to comprehend: it can't get its service onto mobile phones. The operators' lack of interest in opening their networks is also easy to comprehend: what consumer is going to call on their expensive tariffs if they can use the Internet data connection to make cheap ones? Wu also documents other cases of features that are added or subtracted according to the network operators' demands: call timers (missing), WiFi (largely absent), and Bluetooth (often crippled in the US).
The upshot is that because the two markets - wireless phones and the Internet – have developed from opposite directions, we have two network neutrality debates, not one. The wonder is that it took us so long to notice.