Our response to Ofcom and the European Commission regarding Net Neutrality

October 19, 2010 | By Tal Givoly | In: Innovation, Standards, Strategy

This blog post was co-authored with John Oswald. John is a consulting manager out of our consulting division and is based in the UK. He also blogs. Recently, John and I worked together on responding on behalf of Amdocs to Ofcom’s public consultation on Net Neutrality and the European Commission’s consultation on the Open Internet and Net Neutrality. Attached you can find our formal detailed responses (Amdocs Response to Ofcom inquiry regarding Net Neutrality and Amdocs Response to European Commission’s Net Neutrality Consultation). Here’s a slightly more personal perspective:  

Why I’d love Net Neutrality

Speaking as a consumer I would instinctively love the idea of net neutrality. I’d love everything I do on the Internet to be treated equally. No different from that experienced by any other person. I would like to be able to access every site with the same speed and the same quality of experience. I’d like to be able to share stuff with peers. I’d like to be able to serve any content from my own servers or web site, and do so at the same speeds and latency that Google does. I’d love to be able to do all that. It would also mean that I could access any file, any file type, any type of data, from any server and any peer – using any service, unencumbered and unfettered by the network provider I just happen to be connected to in order to have access to it all. 

Basically, wouldn’t it be great if internet access was a human right, a little bit like access to the oxygen we need in order to breathe? Although the quality is not uniform, just about every living person on the planet has unrestricted access to oxygen. 

But why this cannot work

However, this model is unsustainable. You might ask “Why is it unsustainable?” Well, on one hand the network capacity, and the access to it, are finite resources that continuously require investment in order to provide a service. On the other, the usage that we have is disproportionate – one user can and does use 100 times more than another user. As opposed to oxygen, which we all use approximately the same amount of, this is not true for network capacity. In fact, a very small percentage of the users consume a large percentage of the network resources, as various bits of research indicate. In addition to this, as opposed to oxygen, the amount that each of us consumes is not fixed, but rather grows exponentially over time. As we use the network to download more and more video, with higher definition, and more content and applications use the network in new ways, we simply keep on using more of it more of the time. It’s not even linear growth, but rather exponential. Just to maintain the quality of service that we are familiar with – that is adequate for the services we consume, communication service providers need to pour in continued investment. So it’s not just a matter of adding users to the network, for which it is obvious investments are required, but the users that are already there use more and more network resources. 

Mobile Data Volume vs. Revenue

 

The analogy to draw is closer to electricity or energy in general. In the case of electricity, people that use more, pay more. Electricity is not an infinite resource, it’s a finite resource. 

So the hypothesis that the network is a resource that’s evenly available with no distinguishing elements between users or services is simply wrong. 

While I would love it as a consumer, it’s simply unsustainable from a business perspective. 

Could a government take it upon itself to provide this network connectivity? Well, perhaps. But it too would need to invest more and more taxpayer money into building out and maintaining the network, which would be devoured at exponential rate and very unevenly by its citizens. The government would be subsidizing the use of the very few heavy network users. 

Smartphone Usage by Percentile

 

So what does work?

Well, a predominantly self-regulating free market works. That market is what has created the amazing broadband we see today – both fixed and mobile. That market has created all the innovation that we are experiencing in our exceedingly connected lives. It hasn’t been without its challenges: the fact this market exists at all has been considerably helped by regulators intervening to ensure that free competition can exist. In most places, consumers have the power to change providers, to comment on their services, to avail themselves of the most appropriate type of connectivity for their needs. 

And what is required for this free market to continue to benefit us all is the ability to innovate and for new consumer-facing propositions to be created. In order to fuel this innovation, as has been the case since time immemorial, innovators need to be able to expect a return on their investment. Therefore, they should be able to enjoy some form of exclusivity to experiment and launch new ideas. 

Let’s suppose an innovator wanted to develop a new service that requires a particular quality of service – for instance, the service might require that 99% of the packets arrive in sequence and within 50ms to their destination. That service might require conditioning of the network in order to support such a commitment to the innovator. However, in a ‘best efforts’ network, any congestion or burst from another user might thwart the ability to receive this high quality service. So, the innovator would, perhaps, be willing to pay for this high quality service – but if the innovator pays for this service, it would mean that any other user of the network might get bumped in order to support the committed agreement. That means that the packets of the innovator and other users of the network are not treated equally. 

Mobile Usage Forecast

 

However, if the service provider were unable to offer this ability to the innovator, such services might never emerge – since it would be impossible to fund them. Innovators require a return on their investment in innovation. 

What is true for the innovator holds true for any organization – emergency services, for instance, might need (and receive today on the telephony network) preferential treatment for handling of their communication needs. Not to mention some of the other services we’re increasingly seeing a lot of, like healthcare, home security etc. We are effectively ‘guaranteed’ a high quality of service when we watch TV; why not allow this for elements of the internet, which after all is becoming much more of an entertainment platform. 

Indeed, the mere fact of building a network creates inequality in the availability of service to consumers and businesses. The placement of cell towers as well as any other configuration of the network has impact that prefers one person’s communications over the other. It is technically impossible to do it otherwise. 

Bottom line

The network is not oxygen – it’s not a virtually infinite resource we all consume in a similar manner. It is a finite resource that is disproportionately used and useful. Service providers need to continue to invest heavily in maintaining and building out the network required for our exceedingly connected and high-bandwidth-demanding lives. The mere operation of the network in order to fairly serve the existing users requires active policy enforcement for the general population of users. Supporting innovators requires service providers to invest and experiment with various methods to condition the network. Such investment is not rewarded by significant regulation in the how’s and when’s of managing networks. 

To learn more

We’ve included both our responses to the inquiries (Amdocs Response to Ofcom inquiry regarding Net Neutrality and Amdocs Response to European Commission’s Net Neutrality Consultation), should you wish to dive into the matter in greater detail and to see more explanations and justifications. We do realize this is an emotional debate, and one which strikes right at the heart at one of the catalysts for the global economy. We just felt the time was right to state what we think is an appropriate case, and continue to watch the debate with very high interest. Naturally of course, your comments are part of this debate, so they are very welcome!

23 Responses to Our response to Ofcom and the European Commission regarding Net Neutrality

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iamreddave

October 19th, 2010 at 7:07 am

Network usage is not like oxygen. You pay to receive a certain amount of bandwidth. You do not pay for oxygen. Network usage is like electricity, once you buy it you can use it for whatever you want to. There is not good and bad electricity on one network. The electricity provider does not say you should only get high voltage for certain tasks. In the same way no one should tell you what tasks using the bandwidth you have paid for should be high or low bandwidth.

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Florin

October 19th, 2010 at 8:05 am

I totally agree with red Dave: the focus needs to be shifted to recalculation of the bandwidth price at global level. Then based on each country the same bandwidth will cost differently.
If one user is willing to pay the top price, then it should get the best – it might be the only one using a site (i.e. youtube – the favorite one). The businesses (sites) will then take their share from the ISPs based on the monthly traffic originated from their IPs.

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Rakesh Waghela

October 19th, 2010 at 8:44 am

“The principle of Net Neutrality states that if a given user pays for a certain level of Internet access, and another user pays for the same level of access, then the two users should be able to connect to each other at the subscribed level of access.” ~ Wikipedia

♥ Matter of the fact is that Network as a resource has not reached the maturity level in terms of availability and usability ( given the consideration of multiple geographic areas ) and hence people would not become so demanding for kind of **equal** experience !

♥ The first commenter “iamreddave” has certainly made a nice analogy of the whole scenario !

♥ Network consumption is local cultural dependent thing, it is exponential for sure but it’s growth depends on how the people perceive the usage !

People in USA would cry for more bandwidth & accessibility for data services as they have huge exposure to network dependent applications, unlike India where people would seek a bare minimum price sensitive network consuming products !!!

In such a diversified & competitive world it is not viable to have Neutral Net but the universal accessibility does matter if we give a consideration to equality !!

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BogusGenius

October 19th, 2010 at 10:52 am

I’m not sure I understand. What about the network infrastructure deployed today? Service providers are making money anyway. Does this mean that, access to nework services will become cheaper to the average user, because it looks like the average user is now subsidising the leechers?

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Ksheerasagar Akella

October 19th, 2010 at 12:14 pm

Hi,

The main issue I have with having a non-neutral network is that there will be reduced opportunity for Innovation as opposed to an increased opportunity as you hypothesize. Consider the following scenario:

“Net Neutrality is now a thing of the past and you have to pay for the service level that you need. So now if you are a struggling Internet-based startup trying to attract as much traffic as possible, you need to pay your Internet company for the “kind” of traffic that you are attracting, not just the volume. Heaven forbid your website contains video, cause then you are gonna be paying through your teeth, which of course you cannot really afford.” — Bid goodbye to blog-based multimedia news reporting.

Innovation can never prosper in an environment where the system doesn’t provide some ‘leeway’ to support long tail events … and a random startup working on the next big thing is a really long-tail event.

From a business point of view I can see the logic behind a non-neutral network … you pay for what you want to use. However, this is already being achieved right now because if I am subscribing to a 1Mb line then I am not going to be streaming too much video. On the other hand, if I stream movies all day, obviously a 4Mb line is better suited for me, and I would gladly pay for it. This is the only granularity of service discrimination which still maintains freedom. If service providers begin to discriminate based on individual websites, then the Internet is no longer free, and this will put an end to any worthwhile innovation. What it does do is give service providers more control over the pipeline, which in a different situation might sound more like a case for an anti-trust lawsuit than anything else.

What is dangerous about this campaign by the service providers is that they are all in this together, so there is no more free market. There is going to be no real alternative for the customer who wants a simple pipeline which is content-blind. This is another step towards an Orwellain society.

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mark

October 19th, 2010 at 12:24 pm

I think this article might miss the point slightly. While net neutrality might impact the end user’s experience, it only covers the traffic that is transferred across the Internet. It doesn’t cover the access leg so premium streamed service such as IPTV/VoIP will always fall outside such concepts. Indeed so might iTunes download, if you have a local mirror within the SP’s network.
The problem comes for transit providers like AT&T. A significant portion of the traffic their core carries is BitTorrent coming from a seed not on their network to a leech not on their network carrying traffic which is likely in breach of copyright. AT&T make no money on any of this but net neutrality forces them to carry this traffic alongside that of their subscribed users and not to treat either preferentially, if at the same priority level. At part of the global network, all operators who provide transit are impacted.
Note that in this case, BitTorrent is one of the most innovative and disruptive IP tools developed over the past 10 years but in this case, we might wish to push back against the innovation. Skype also falls in that category, though their codecs are so efficient that they have very meagre bandwidth requirements and if it drops out who cares, it’s (nearly) free.
Anyone who develops a net-based tool over HTTP that requires QoS is innovating the wrong thing.
VoIP traffic in 4G mobile is not subject to net neutrality, neither is IPTV.

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Greg

October 19th, 2010 at 2:22 pm

I agree with Mark that there is a risk of missing the point here.
There seems to be widespread confusion/ambiguity/(deliberate obfuscation?) about what ‘Net Neutrality’ really means. To paraphrase Tim Berners-Lee: it is not asking for the Internet for free, nor is it saying that one shouldn’t pay more money for high quality of service; it is simply saying that if I pay to connect to the Net with a certain quality of service, and you pay to connect with that or greater quality of service, then WE CAN COMMUNICATE AT THAT LEVEL.

This definition doesn’t prevent ISPs from enforcing limits on the small percentage of Internet users who consume most of the bandwidth. It doesn’t even prevent traffic management. It does however mean that ISPs should have no say about where I spend my bandwidth. If I choose to spend it all on YouTube, or file sharing, or video on demand then that is no concern of the ISP. The ISP only needs to worry about how much data I am transferring and how fast, not where I’m transferring it to/from. In the same way that banks don’t control where I spend my money, I don’t want ISPs controlling what I do with my bandwidth.

I’m not confident that competition alone will preserve net neutrality. It is more likely that a user will have to choose the ISP that gives them access to most (but not all) of a locked-down, partitioned web.

Also, I think that it is a far greater stimulus to innovation that applications can be simply created and connected to the Net without asking permission from, or negotiating contracts with, an ISP. To quote the guru once more: ‘It is of the utmost importance that, if I connect to the Internet, and you connect to the Internet, that we can then run any Internet application we want, without discrimination as to who we are or what we are doing.’

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Brian Schnack

October 19th, 2010 at 6:42 pm

Tal, John,

I have never applauded this loudly to a blog post in quite a while. But cheers for the spirited defense of investing in – and expecting returns from – innovation.

Too often people see the regulators for the consumers they protect – not (to paraphrase Murray Rothbard) the consumers services they prevent.

Brian Schnack

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Mark

October 19th, 2010 at 8:18 pm

I’m curious where the perceived canary in the coal mine is on Net Neutrality. I see it raised every time a bit cap is adjusted or carriers advise that torrent traffic may be throttled at peak periods. I consider myself a heavy user of rich content including iTunes music and video downloads, YouTube etc. both over fixed and wireless networks. I have never come close to the bit cap of my service provider.

I have seen study after study of real world traffic use. The top 100 bandwidth users consume an INSANE amount of total capacity. If all consumers used a similar amount I guarantee an ISP couldn’t charge sub $100 per month for most plans. I don’t think it’s fair that I pay more so that someone else can consume 100x more data than I do, i.e., unlimited. Price is about value for what I do and the price for speed and bandwidth seems to get better and better and so far well ahead of my ability to consume it.

Torrents are a a real problem. They instantly saturate any network unless managed. That’s fine if other traffic can get through at a good quality of speed and low latency but especially closer to peak times the impact is significant. Torrents seed and leech 24/7. Businesses pay thousands of dollars for sustained available bandwidth at that level, but we raise the Net Neutrality flag when the sub $100 plans manage that traffic. That’s not net neutral.

5 years ago I paid $15 per month for less than 10MB of data on my mobile device at dial-up modem speeds. Today I pay $30 for 6GB at 7.2 MBps (could go up to 21 Mbps if my iPhone supported HSPA+).

So other than a general desire to pay less or nothing for everything (which I like everyone has), where is the real canary in the coal mine?

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Tal Givoly

October 19th, 2010 at 9:19 pm

Hi,

Thanks for all the comments. Some response:

IamRedDave, indeed, we agree that network usage is not analogous to oxygen. However, the analogy of electricity is also imperfect. You see while people pay for a different maximum bit-rate on fixed broadband (e.g. 1.5Mbps or 10Mbps), and they may pay differently for these, they aren’t most often charged based on the total usage. In mobile broadband networks, there are “all you can eat” packages, and there are also packages in which you pay for total usage. That said, there are may other parameters that affect performance of the network that might require conditioning.

Rakesh, its growth might have some geographic-dependency, however, it is going exponentially up – practically everywhere, and that is not supported by the revenue. I am not arguing that network neutrality should be uniform across the globe. However, I do argue that any regulation that prevents service providers to offer a variety of business models and technically different offers is a barrier to innovation. The whole network neutrality principal is one that is debated on a sovereign basis – that is, each sovereign determines its own policy. That said, many are now evaluating regulations with regard to this topic – which is why we opine on the topic.

BogusGenius, the networks are indeed deployed, and today, users with heavy usage are, effectively, being subsidized by users that are light users. Indeed, if the overall cost of the services provided is spread more evenly based on usage, the majority of users might see their charges reduced since the same network could handle many more users while some of the heavy users would alter their usage patterns, pay for their fair use, or possibly switch providers. That said, all users are using more of the network over time. So the issue doesn’t go away just by a pricing scheme that appears more equitable.

Ksheerasager, taking your point further, you could even argue that YouTube and all Internet-based video would never have emerged if they were charged for the usage they generated equitably or the consumers of the usage – the end users, would have had to pay for that downloaded bandwidth. What I do not buy is the lack of competitiveness in the marketplace that gives options. In most geographies (not all, but most), there are several options for individuals to connect to the Internet. These include wireline DSL providers, cable MSOs, wireless providers, WiFi in a variety of forms, WiMax / LTE providers, and others. These are very competitive, and each has a different business model. This creates choice for the consumers – and the startups you mention.

mark (first), I agree with most of what you are saying. However, the IPTV you are referring to is not the OTT video play such as YouTube, Netflix and Hulu. Most IPTV provided by a broadband access provider is conditioned, of course, to meet its required QoS. The questions posed by net neutrality debate is whether the access provider can condition negatively access by 3rd party OTT content. That’s where the challenge is. Regarding BitTorrent and other peer to peer file sharing, which is most often of illegally transmitted copyrighted material. It too, is very heavily biased towards video content (and software applications). So, as you suggest, also interconnect backbone providers should be able to shape/condition traffic and give different priority (and perhaps even block) different types of traffic, such as illegal copyrighted material distribution.

Greg, Tim Berners-Lee’s argument, which you are eloquently describing, sound very reasonable indeed. However, most often, both users are not connected to the same service provider. Each provider should be able to offer the different conditions based on their preference. Furthermore, they may not have the technical integration that would enable carrying a specific quality of service between their networks (and all the intermediary networks that might be between them). So assuring an end-to-end quality of service is very challenging. In many cases, the services today already exceed that basic quality of service. Additionally, practically all networks are not sized for peak usage, but rather far above expected peak usage. If everybody at once begins downloading videos in high definition, the networks will all simply collapse and nobody will see anything. So when one user purchases a given service, there is “over booking” of that service among many other users – and it cannot economically work otherwise. The vision of Tim Berners-Lee is certainly possible once you actually buy a committed QoS between point A and point B – as in the case of a virtual private network (VPN) for a business. It is also possible to do this among different users. But this sort of service would be considered a premium service that would invariably cost much more than the basic service most consumers purchase. Many assume that the stated rate of their access technology is what they can use “all the time”. That is not the case.

Still, thanks for bringing this into the discussion – absolutely terrific argument indeed. I too would like to have that expectation!

Brian, thanks so much for the applause. I am still smiling :-)

Mark, good question – where is the canary? how would we know there’s a problem. Right now, knowledgeable consumers have ample ability to understand what sort of shaping is being performed on traffic – whether service providers are transparent about it or not. And they do. Whenever anything is discovered, it is immediately advertised and becomes, effectively, public knowledge. Consumer outcry often changes policies, but if not, there is still consumer choice. The fact that you aren’t charged excess doesn’t actually mean that you aren’t a relatively heavy users that others, much less active than you, are still subsidizing to some extent. Network capacity is absolutely increasing at a very fast pace – it is just not as fast as the usage of that network. So where do you think is the canary? would our ability as consumers to monitor the impact the network has on our traffic be sufficient? what else is necessary?

Thanks again – I think we’re getting to a healthy discussion here. I realize that this is a very sensitive and emotional topic.

Tal

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Cream of SomeYoungGuy

October 19th, 2010 at 9:39 pm

I have to disagree both with the blog (and supporting commentary) on several points:
1. “a predominantly self-regulating free market works” – uh, not really. Corporations, if they had been free from regulation, would only run broadband into wealthy neighbourhoods. They wouldn’t build infrastructure into smaller more distant towns, or to poorer neighbourhoods (where the number of subscribers would be small) if there wasn’t government regulation preventing them from redlining (which is what the practice is called). In wireless, things are worst – the US is still relying on older, slower 3G networks for wireless data, as opposed to Europe, which enjoys _much_ more 4G networks. And the 3G network in the US is pretty bad – just ask the iPhone users.
2. “the innovator would, perhaps, be willing to pay for this high quality service” – There’s no “perhaps” about it; wihtout net neutrality, in 5-10 years time, anyone who wants a decent consistant internet will _have_ to pay for it – and through the nose. Innovation will become the purview of the wealthy, and you can forget about new facebooks or twitters or Googles or Amazons or e-bays, created by a couple of briliant minds with an idea, drive and not a lot of money.
3. “The analogy to draw is closer to electricity or energy in general” – not a good analogy for the point you’re trying to make, for several reasons: first, energy (and other utilities) are _heavily_ regulated industries, whereas you aspouse no regulation. Second, what the service providers want to do with network (i.e. throttle one subscriber to give more to another) would never fly in the utility market. Can you imagine an electric company, in mid winter, cutting down power to one house to supply more to another? Or reducing the water pressure in one house to give more to another? It’s unthinkable. It’s certainly ok to provide _more_ of a utility to someone who pays more, but you can’t cut someone else down to do so. So really, if internet is a utility (and personally I see it as such), it needs some protection.
4. “The network is not oxygen – it’s not a virtually infinite resource” – technically speaking, oxygen is not an infinite resource. Consider, for example, a heavily poluted city (there are plenty of those in the world); would anyone agree to a scheme which “pushes” the polution from one part of the city to another, because the first part paid more for better access to Oxygen?

There’s a lot of confusion when discussing net neutrality, I think. I don’t think it’s incompatible with enterprise and supporting business needs, nor does it stifle innovation – quite the opposite: it will spur providers to seek new innovative ways of providing needs of heavy consumers, without harming the rest of us. Regulation isn’t bad just because it’s regulation.

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Jacob Kaul

October 20th, 2010 at 8:34 am

It is like communism – the idea is great, but somehow not suitable for the “ordinary” people.
It is like democracy – where are the borders of the freedom?
It is like children – no responsibility but many restrictions to enjoy the “freedom”.

SO – only by many discussions by users and smart people PLUS trial and error – the result of a “regulated” and “neutral” network will enable better usage and some feeling that actually it belongs to all of us and to no one PLUS it is working well.

Jacob

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John Oswald

October 20th, 2010 at 8:59 am

Folks,
Some thoughts in response to the great commentary on this post. We always knew this would be a fairly passionate debate!

I wanted particularly to focus on what we mean by ‘regulation’ in our response to net neutrality (@Jacob @Creamof in particular)

We’re not saying ‘don’t regulate’. Far from it. The UK and European context is one where regulators have succeeded in creating a pretty free market where different ISPs compete hard with each other for our subscriptions, and where we can easily churn and go someplace else for our broadband.

So we’re absolutely not saying we should abandon that. What we’re saying is that we don’t see the need to regulate *in addition* to what we already have in Europe to ‘protect’ net neutrality. We feel that there’s enough competition already and enough flexibility for consumers to change, such that we don’t need additional frameworks to ensure providers manage their networks in particular ways.

Hope that makes sense
John

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iamreddave

October 20th, 2010 at 1:46 pm

Tal thanks for the reply. I agree that if network bits are charged like electrons then that will end all you can eat payment schemes.

It also means ISP’s become a utility like water and electricity providers. They may not want to become a ‘dumb pipe’ like this.

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Ksheerasagar Akella

October 20th, 2010 at 3:01 pm

Hi Tal,

Thanks for your reply. My further comments are as follows:

Regarding the issue of competition, I would like to point out that if one service provider begins to discriminate based on traffic content, then it stands to gain higher profits because of its different pricing schemes. This will guarantee that other service providers follow suit, else they become uncompetitive. You may argue that customers who are heavy users will migrate to competitors who do not discriminate, but since the research shows that they form a small part of the total population of users, their needs will not be a high priority for anybody. Also, for a resource that is fast becoming a utility, the market generally hastens to arrive at a stable standard so that the “rules of the game” are well-defined.

As I was reading all the excellent posts in this blog page, it occurred to me that the Net Neutrality debate has two distinct facets to it, which are often confused and mixed up. One facet is about providing different QoS and pricing schemes for different “types of traffic” like video/audio/torrent/text etc. This as such is not bad … it is just good business. It does hurt innovation, but by its very nature innovation will find a way to overcome it.

The other facet is providing packages and pricing schemes based on “individual websites”. I have seen examples of packages having just the most popular websites (interestingly enough with no clear segmentation based on traffic type). This kind of packaging in my opinion is really bad and potentially Orwellian in nature, because the service provider suddenly has control over what websites you can and cannot visit. This is the real danger that I believe we all have to fight.

The ideal solution to this debate is for service providers to charge different rates based on traffic type, and not restrict traffic in any form except by enforcing a bandwidth cap based on the network line cap.

For example, I take a 4 Mb connection, and I am charged a flat rate of $20 per month for “normal” usage like text and web services, additional 1c per Mb for audio, additional 2c per Mb for video and additional 10c per Mb for torrents. If I use all my network for torrent all day long, I am charged $20 + 10c*(Mb usage), but there is no traffic shaping and no restriction to my download except that I cannot download at a speed higher than 4Mbps. This kind of scheme ensures that all customers pay for what they get, ensures that all freedoms are maintained as before, and ensures that service providers make money from their most demanding customers.

What do you all think??

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Mark

October 20th, 2010 at 7:40 pm

Tal, I guess I was posing the question more than anything as to what the warning signs are? It appears in many cases to be more rhetoric than a substantive concern.

There is an interesting analysis published this morning by Morgan Stanley regarding Cable and Satellite companies and the challenges of competing against over the top providers. They raise a very important point that I think is often completely missed in the discussion about how net neutrality in of itself will somehow enable lower price points. What we forget is that Vonage, Hulu and the like can be cheaper because they do not have to provide the facilities based infrastructure that the incumbents already provide. If they don’t have to spend on last mile connectivity of course their cost structure is lower. However that cost doesn’t disappear. It moves to the broadband providers who need to provide a return to their shareholders. The Stanley position is that Cablecos and Telcos who are perhaps starting to loose video and voice revenue to over the top providers have a natural hedge as usage caps and tiered pricing become the norm.

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Adi R

October 21st, 2010 at 4:58 am

I think the biggest struggle with Net Neutrality is to define it, and I didn’t feel that the article or all the debate still do a good job of it.

It is clear to me that connection speed cap and bandwidth cap are fine mechanisms of Internet providers to control heavy users. Yes, tiered pricing is already the norm in Wireless world, and people seem to agree with it, mostly realizing that wireless is “hard” still.

Meanwhile, with Comcast being “in-bed” with NBC, the real danger is if they decide to degrade service for other network’s video feeds traveling over their own last-mile. Of course they can easily sell it as “we simply provide QoS for NBC as a premium choice”, so if you happen to set 2 shows to DVR at the same time, the one on NBC will come out flawless while that “other” show, will get garbled.

I think this is what we need to focus on preventing via regulation like Net Neutrality. I do do believe it can be achieved without entering any theoretical debate on “finite resource” and “ongoing costs”.

Net Neutrality properly defined is also critical if we are to maintain Innovation. Services like Hulu, YouTube and Vonage could not survive if Internet providers started “giving priority to their alternative services in same category”. We (consumers) pay broadband providers every month and expect that they focus on bringing us Entire Internet with consistent quality, instead of constant QoS to their own “prefered” streams and partners.

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Tal Givoly

October 24th, 2010 at 7:46 am

I’ll just begin by saying that we have to admit that there are powerful arguments on both sides of this debate. I can easily see why it causes such a emotional and passionate discourse.

I’ll repeat by saying that I’d be personally very upset if my traffic is shaped in such a way that I feel is unfair. For instance, if it prevents me from accessing services, sites, or peers, or using applications which feel should be available to me. The question is, who pays for these privileges?

Some more responses to the comments:

Cream, regarding your points, I’ll address one by one:
1. The quote is accurate, though I should moderate it. We’re not really suggesting “no regulation”. What we’re saying is that in most cases (that is most geographies), the regulatory framework and laws that exist are almost sufficient. Perhaps some additional regulation is required here and there, but it is a delicate balance – so regulators should take a “light touch” approach rather than introduce sweeping changes. I disagree that the US is disadvantages from wireless technology perspective. While there are areas where Europe has faster networks, the situation is much more balanced than normally considered. In fact, the US has quite a lot of wireless broadband. Especially if you consider the prevalent availability of free WiFi, which is much less common in Europe. Add to this the “actual throughput” you get on the network and the fact that in the US unlimited mobile broadband is still an option in most cases in the US.

2. Great examples – Facebook, Google, Amazon, and eBay are NOT bandwidth hogs – as their basic services. The expansion of those services to serving video (which they have expanded to). Do consider that video services over the top of networks is like gobbling up a scarce resource of capacity, which costs a lot of money to provide – disproportionately. Indeed, there’s a question whether all the OTT services (e.g. YouTube, BBC iPlayer, Hulu, Netflix streaming) could have emerged in an Internet that would have shaped these to be impossible? Probably not! That’s the biggest tension. Who should pay for the “privilege of few” to innovate with such expensive resources? It’s a good question.

3. Yes, these are regulated industries – are there many that aren’t? We’re not suggesting more regulation, we are suggesting regulation and laws that exist are mostly sufficient, and little should be added/changed – but perhaps some. See our detailed response for some more on this. I agree that the access to the Internet as is today functions very close to a utility.

4. I do mention that Oxygen is not infinite nor completely uniform. Still, it is almost uniformly used and accessed.

Net Neutrality clearly favors one form of innovation over another. I’d rather see both rather than impact one or the other!

Jacob, nicely put!

IamRedDave, I don’t think they want to become ‘dump pipes’, but I suggest that innovation doesn’t need to be exclusively a privilege of the “over the top” Internet players – it can be an area of innovation also for the broadband access provider – they can innovate a lot. But without it, they will indeed become ‘dump pipes’.

Ksheerasager, you are assuming that all competition will align and there will be no options. That doesn’t seem to be the case thus far, instead, there are many alternative providers in most regions. Nevertheless, the lack of options for consumers is certainly a possibility in the future. Regarding the second facet you mention – but what if a broadband access provider directly peers with, or even hosts, those popular web sites. Shouldn’t they be entitled to do this and test out the commercial and technical benefits from this? They should not prevent “best effort” to the entire “Internet”, perhaps, but they can have more direct relations with content providers. No? You want to completely eliminate the possibility of content that is directly associated with access?

What you suggest is in terms of a consumer pricing plan makes more sense than flat all-you-can eat. However, it also itself is a barrier to adoption. Some of the reason broadband usage has exploded is the fact that people didn’t have to think about their usage patterns. That might be one reason wireless broadband is so popular in the US and not just as popular yet in Europe. I think such schemes are something a service provider can already introduce. The market will decide which models work. Arbitrary distinction between one service and another is indeed a problem, but one the market can easily become aware of and react to.

Mark, I now understand what you meant. In many areas in the world, whenever there is seemingly unfair treatment of traffic – whether due to type/service/application or origin/destination, there is some sort of public awareness and public outcry. Sometimes this has impact, and sometimes it doesn’t. The canary would be a boolean indicator – I don’t think it’s that easy for this debate.

Adi, first, we did not try to define Net Neutrality. We refer to it, but not define it. We left that for others. I see “degrading service” as one level beyond “best effort”. Degrading a competing service just because it is competitive is probably where I would draw the boundary. The question is, how is that boundary “enforced”? So far, the market forces have been able to address this issue. If they don’t, regulation might be required. But it’s not clear regulation will be required in many cases. Eventually, I think different nations will get to different conclusions and the terrain will become very interesting. There is clearly a difference in what consumers “expect” and what they are actually buying. The “fine print” is important in the broadband access agreements. People don’t buy the “entire” Internet. There are few, if any, consumer agreements that allow for peer-to-peer, or in fact, any hosting of web sites or content on consumer’s devices/homes.

Thanks again for the great debate.

Tal

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Yair S

October 24th, 2010 at 4:48 pm

Electricity is a good example of evolution of usage of restricted resource. We have it for over 150 years and only recently electricty companies are starting to charge consumers not only according to usage, but also according to other factors like time of the day, peak usage etc… so maybe net usage is not “THE” only real factor here.

What I mean is that there is kind of evolution in the way providers are and will charge us and it is quite arrogant to forcast the way it will be 5 or 15 years from now. Eventually we’re talking about cost vs profit ( isn’t it all in life ?) profit can be long term or short term, but surely neutrality of the net in the way the blog started – is only a romantic myth.

Anyway Tal and his colleagues keep challenging us with such ethical debates – it’s simply wonderfull as Brian mentioned.

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Cream of SomeYoungGuy

November 1st, 2010 at 2:09 am

By the way, we’ve just recently received a good example by Fox of unfair practice (at least in my eyes) which would require a net-neutrality-esque legislation: http://mediamemo.allthingsd.com/20101016/news-corp-shuts-off-hulu-access-to-cablevision-subs/
Basically, Fox shut off its Hulu content to customers who had Cablevision internet, because it had a dispute with Cablevision over royalties for its content which Cablevision shows. So if you have Cablevision internet, even if you pay for Hulu services, you can’t get the content you’re paying for, because the company that owns your internet provider has a dispute with the content provider. Note you didn’t have to actually be subscribed to Cablevision video to be blocked, even if you only had Cablevision’s internet, you’d still be SOL. Fortunately for those people, Fox lifted the ban after a day, but the precedence was set, and we’ll probably see lots more of this sort of thing happening from now on. Unless there’s some sort of regulation to prevent it, of course.

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Florin

November 22nd, 2010 at 3:54 pm

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Tal Givoly

November 22nd, 2010 at 5:45 pm

Thanks again for the lively debate. Responses/comments regarding yours:

Yair, thanks for encouragement. Electricity is therefore a good example in more ways than one. I don’t consider it arrogant to forecast how things will evolve. All planning makes assumptions about the future. Some more longer term than others. All predictions, especially about the future (extract from Yogi Bera quote), are unpredictably reliable…

Cream, the issue you mention is covered by free speech and access to it. I don’t think it requires specific additional regulation unless the constituiton or principle laws cannot be interpreted properly.

Florin, great catch. This leads me to part of “the solution” I think is relevant. A basic broadband Internet access at affordable price with a best-effort service should be made available to all. USF could be used to fund that. However, not every service provider would need to offer it (for example, a service provider catering only to businesses). It’s a basic service, but it is access to all the information available. It would unlikely be able to service 4 concurrent HD video streams from over-the-top players. But it will allow access. The question is what is this basic service, and who subsidizes it, is something each country/sovereign would need to define, perhaps. But this then gives a lot of flexibility for all other services. Thinking that such a service should be the only service offered is the most unrealistic part of this whole issue.

Thanks again,

Tal

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Steve Cotton

November 23rd, 2010 at 4:57 pm

Just as Winston Churchill observed about Western representative government–”Worst form of government, except when compared to all others.”, so too is a free market the superior method of delivering value for value. Any and all attempts by governments to intervene will always have worse results and many unintended consequences.

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Tal PortraitTal Givoly has over 20 years of telecommunications technologies and software development experience, and has held management positions in technology, innovation, intellectual property, research, development, standards, and product management at Amdocs, XACCT, MIS, and other companies. Until March 2011 and for the 7-years prior, Tal was Chief Scientist at Amdocs and led innovation activities across the company.

Tal is a prolific inventor with over 25 granted patents. Tal is recognized for his passion for, and expertise in, innovation, being invited to speak at major industry events such as TeleManagement World, Mobile World Congress, CTIA and Billing & OSS World. He was also actively involved in industry forums and standard bodies including TM Forum, IETF, ATIS, and IPDR.org. Tal was a director on the board of IPDR.org and TM Forum. Tal has been named one of the top 10 people to follow in OSS/BSS.

Tal is now a full-time entrepreneur and inventor – focused on trying to build some world-changing companies. The most important startup Tal is now involved in is Medivizor, as Co-Founder and CEO. Occasionally, he shares his thoughts on this blog.