Net Neutrality Roundup (July 1, 2006)

The U.S. Congress recently considered and dismissed legislation to force cable and phone companies to have fair pricing for the Internet traffic they carry, for some notion of "fair". Proponents of this regulation have taken the term "network neutrality", but it seems more to me as an FCC for the Internet.

Neutrality in general

I can believe that the layered nature of the Internet is one key to its high popularity and capability. It is tempting for network designers to try and make networks smart in various ways. TCP/IP, however, mostly restricts itself to moving packets around from address A to address B. The one feature it offers is retransmission to ensure reliable delivery, and that feature is optional.

The result is that there is a marketplace of network services to run on top of TCP/IP. Anyone, anywhere in the world, can start their own Internet service. The good ones become Googles. The poor ones become Floater bridge networks. There are a lot of good ones.

Network neutrality proponents fear that this aspect of the Internet will disappear soon. They fear that a few companies in the U.S. could, through offering different prices to different customers (e.g., charging more if you appear to be wealthier), could cause competition to be stifled.

The last mile

To clarify matters, I should say from the outset that phone and cable lines—the industry targeted by the original proposal before Congress—typically have a local monopoly. Thus, their behavior in locales can and should be carefully regulated.

The question I wish to address, though, is for nationwide companies, companies like Verizon, AT&T, and Cingular. At such scales there is no strong reason to grant a monopoly. Any company can lay down a new cross-country network. There is a case for separating inter-city networking from local networking, and the standing policy in the U.S. for phone networks is precisely that.

Efforts in the past

Since the feared problem has never occurred on the Internet, we can only speculate about the future. One way to do this is to look at efforts in the past by companies to segment the Internet.

Prodigy, CompuServe, MSN, and AOL are examples that leap to my mind. They all had their own network, and they all gave customers only restricted access to the rest of the Internet. What became of these companies?

  1. Prodigy and CompuServe are dead as far as I can tell. They never changed and their customers simply left.
  2. MSN gave up network service providing and went into other business.
  3. AOL stopped their segmentation efforts, and now gives full Internet access.

The available evidence is that when network providers try to isolate their customers, the customers leave.

Defining a solution

I am at a loss to even imagine a regulatory structure that would force better network neutrality than we already have. Proponents, on the other hand, seem to find it obvious.

I believe that proponents might be thinking of the Internet as looking like a star:

With such a topology, you can control the Internet by controlling the central node. However, the Internet is actually more like a spiderweb:

The net in Internet means network. The Internet looks like a big spiderweb. Who, in this web, is supposed to be regulated? And how? The very design of the network is to switch packets. Each router handles packets in its own way, and each router has easier access to some parts of the network than others. Since giving equal access is impossible, what exactly would the regulation require?

To rub it in, try considering some specific networks segments you may be familiar with. Most companies and universities, for example, have their own internal networks plus a router connecting them to the Internet. The internal network is a bona fide part of the Internet, but existing practice is to treat internal packets differently from packets coming in and out of the institution. That is to say, the majority of existing networks are only effectively network neutral, but technically they include discrimination against different packets. How would you tailor regulation so that the current beneficial behavior does not become outlawed?

For that matter, what about the wireless routers within individuals' homes? Why should they not have to provide network neutrality themselves?

Given the web-like and not star-like topology of the Internet, controlling its behavior is difficult at best.

More likely solutions

In the previous section I tried to imagine the best possible regulation, but realistically we cannot assume that Congress will find the best possible regulation. Let us take a moment to look at previous government attempts to regulate networks, to gain a more likely picture of what they would accomplish.

Consider first the Communication Decency Act (CDA). The CDA attempted to control the content exchanged on the Internet, but there was no practical way for most service providers to implement the requirements. Thus, the CDA, if it had stayed in effect, would have forced most services like livejournal or blogspot to disappear to go out of business. The Supreme Court struck down the CDA, but the CDA gives us an idea of the kind of stifling law that Congress considers par. They do not seem to understand the Internet.

Consider the Digital Millennium Copyright Act (DMCA). The DMCA simultaneously allowed backups of DVD's but disallowed copying DVD's. Which is it? These two parts of the DMCA contradict each other, but that is acceptable to Congress when it comes to technical matters. Congress does not appear to understand software.

Consider the Federal Communications Commission (FCC). The FCC provides important administration of limited wireless bandwidth. However, in doing so, they must inevitably make decisions about who may use that bandwidth. Over time, they have come to enact decency provisions analogous to the CDA. To see the effect, compare the bland, inoffensive content on broadcast television to the more highly varied content on cable television. Do we really want an FCC for the Internet?

Finally, the elephant in the room is the current telephone network. For various reasons, U.S. governments at all levels have applied a sophisticated web of regulations to the telephone network. Among many other results, it is now cheaper to make a phone call over the Internet than via the dedicated, carefully coddled phone network. The effort to "save" the telephone network through regulation has resulted in a worse network than the much younger Internet. Instead of making the Internet more like the telephone network, perhaps we should embrace its key differences.

Can any readers point me to insightful network or software regulation that Congress has passed?

Related Reading

Those are the main things I want to say. There has been much discussion around the Internet.

I like Arnold Kling's take as an economist, and I sympathize with Jim Robertson's frequent snarks about an "FCC for the Internet".

On the flip side, there are many big names proposing regulation, but their arguments are troublingly weak. (Take this as a challenge, readers—tell me about arguments you find strong, and I will link to them.)

Lawrence Lessig provides one example. Lessig first equates open source to GNU-like licenses, a bizarre claim which means that Apache, FreeBSD, and Scala are not open source. Then, he claims that the GPL "regulates" software, even though "regulation" usually applies more to government mandates than to voluntary private agreements. I have never seen a starker example of doublespeak.

Tim Berners-Lee makes an eloquent and compelling argument about layered architectures--far better than my feeble attempt above--but he fails to address what exact kind of regulation he would like. Indeed, he himself writes:

To actually design legislation which allows creative interconnections between different service providers, but ensures neutrality of the Net as a whole may be a difficult task.

If you want flame more than light, go visit

Finally, many, many links can be found from the Wikipedia article.

Lex Spoon