The narrowing net neutrality dispute

Scott Cleland Contributor
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The practical dispute over net neutrality continues to narrow.

One could miss the huge and steady progress being made in practically working through the many facets of the net neutrality dispute, given the headline-grabbing histrionics of net neutrality’s most ardent proponents.

Netflix’ announced a ‘paid-peering’ agreement with Comcast. This is just the latest example of how voluntary commercial negotiations, competition, and innovation are all naturally resolving issues that some want government to decide.

Originally net neutrality proponents introduced net neutrality as, “Internet freedom of speech,” “all bits are created equal,” and “no fast or slow lanes on the Internet.”

Today most understand net neutrality as users’ unfettered freedom to access the legal content and apps of their choice with no unreasonable blocking or discrimination by the Internet service provider. And the broadband industry has long been, and remains fully supportive of, protecting net neutrality and a free and open Internet.

How has the net neutrality dispute narrowed over time?

The first substantial narrowing came when the Federal Communications Commission voted unanimously in a broadband policy statement in 2005 that users had the right to access the content and apps of their choice, “subject to reasonable network management.”

The FCC recognized that reasonable network management of Internet traffic was essential to delivering reliable quality of service and to protecting users.

The agency’s decision recognized that all Internet bits did not have to be treated equally, that some needed to be reasonably managed or prioritized in order to prevent network congestion and to deliver a quality experience for Internet users.

In addition, the FCC also recognized the need for reasonable network management to mitigate spam, malware and other “unlawful” Internet traffic.

As broadband competition developed, it became clear to the FCC that different technologies and infrastructures naturally delivered different Internet speeds for users. It also became clear that Internet users did not have uniform needs, wants or means.

Thus the FCC understood that offering different Internet speeds for different prices was not discriminatory, but reasonable network management and normal market price discrimination that well served users.

The FCC also appreciated that since the Internet backbone was privatized by the National Science Foundation in 1994, there were different Internet peering tiers of service based on how much, and how balanced, one’s traffic was.

In its 2010 Open Internet Order, the FCC ruled that economically offering different broadband access speeds, i.e. faster and slower access lanes to the Internet, was no violation of net neutrality.

In that same FCC order, the FCC also allowed usage-based broadband pricing and data usage caps as reasonable economic mechanisms to manage congestion and to help fund increased infrastructure capacity as Internet traffic grew very rapidly.

Additionally the FCC allowed for specialized services so volume and specialized users could pay for guaranteed quality of service. This also formally recognized that the economic offering of “faster lanes on the Internet” was no violation of net neutrality or a free and open Internet.

The FCC does not view normal economic and competitive differentiation and price discrimination as a violation of net neutrality.

This January, AT&T announced its “Sponsored Data” innovation, a two-sided market pricing experiment where a sponsor could pay for the cost of a user’s bandwidth usage of their service. FCC Chairman Wheeler quickly signaled that this cost-sharing innovation and experimentation did not appear to be a net neutrality problem and should be allowed to play out.

Even after the D.C. Court of Appeals struck down part of the FCC’s open Internet order, FCC Chairman Wheeler indicated at the State of the Net conference that Internet backbone interconnection disputes were not net neutrality problems, even if they may be a “cousin” of net neutrality.

Most recently, Netflix’ voluntary ‘paid-peering’ agreement with Comcast is an important example that disputes over payment for high-quality delivery of large-volumes of asymmetric Internet traffic can be handled via voluntary commercial negotiations.

This positive development is more powerful evidence that the Internet does not require prophylactic FCC net neutrality price regulation to ensure a free and open Internet.

Too many are mistaking jurisdictional disputes over the FCC’s legal authority to preserve net neutrality and a free and open Internet, with disputes over what behavior may actually be a violation of net neutrality.

What all this means is a clear narrowing of the net neutrality dispute.

In the broadband industry there is a broad consensus and a deep commitment to abide by freedom-based net neutrality adjudicated by the FCC that ensures a free and open Internet where users have the freedom to access the legal content and applications of their choice.

Scott Cleland is Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests and President of Precursor LLC, a research consultancy for Fortune 500 companies. Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration.