Happy anniversary.
It has been 5 years since the CRTC introduced its ground-breaking regulatory policy on Internet Traffic Management Practices. At the time, Konrad von Finckenstein, the CRTC Chair, hailed the policy, saying “Canada is the first country to develop and implement a comprehensive approach to Internet traffic management practices.”
It can be lonely being first.
Last year, I wrote about an OpEd in Forbes that warned net neutrality rules could block innovation that can offers more services at a lower cost. In the Forbes article, Everett Ehrlich, Bill Clinton’s former undersecretary of commerce wrote that net neutrality could be keeping consumer bills higher than they might be otherwise:
Moreover, getting rid of “neutrality” would lower consumers’ bills. That’s because the Internet is something economists call a “two-sided market.” A newspaper such as USATODAY is such a two-sided market – it charges advertisers to reach its readers, and it charges its readers to see its advertisements.
If a newspaper wasn’t allowed to take money from its advertisers, the reader would have to pay more. It’s the same with the Internet; if a provider can’t charge the big websites for a premium connection (if they want one) then the consumer has to pay instead, meaning consumers subsidize the companies sending big data packets.
Ehrlich called for Tom Wheeler, the incoming FCC Chair, to “end this tired debate” in the United States: “The rules that governed e-mail two decades ago won’t bring us the new services that lie ahead, and an Internet stuck in ‘neutral’ isn’t going anywhere.”
South of the border, the debate has hardly ended.
Gordon Crovitz, the former publisher of The Wall Street Journal, writes in this week’s edition of his Information Age column that by lobbying for ‘net neutrality’ regulations, big technology companies pave the way for authoritarian governments to censor the Internet.
In 2012, for example, the browser company Mozilla warned that the Internet “is just too fundamental to our lives to leave it to governments to decide its fate.” Now, Mozilla — along with other fair-weather friends of the open Internet such as Facebook, Netflix and advocacy groups such as Public Knowledge — is busily lobbying Washington under the “net neutrality” banner to regulate Internet companies under telecommunications laws designed in the 1930s for the AT&T monopoly. They want the Internet to become a utility, with regulators setting prices and rules. Silicon Valley’s embrace of regulation at home undermines its case against the ITU.
Citing Eli Dourado, a George Mason researcher on Internet governance, Crovitz argues that the reality of international politics means the US has a hard time “arguing that regulating for neutrality and common carriage is OK, but regulating for security, content and payment is not.”
The International Telecommunications Union has just begun meetings in Busan, South Korea that could result in a vote over the future of the internet.
There was a risk for Canada in being first.
Five years later, how many countries have followed Canada’s lead? Should we be reviewing the policy framework for traffic management and content delivery examining whether our rules are appropriate? Does our leadership in regulation enable Canada to take a leadership role in the deliberations in Busan?
Canada may have been first, but one might ask if Canada can be considered a leader if other countries haven’t followed behind. Are Canadians – consumers, creators and carriers – well served by the current “comprehensive approach to Internet traffic management practices”?
Does net neutrality help advance our digital economy, or keep us stuck in neutral?
Is the net neutrality framework another area that should be reviewed by a communications policy review panel?
Update: [October 21, 3:00 pm]
There is a good piece in the MIT Technology Review today by former FCC Chief Economist Gerald R. Faulhaber and former FCC Chief Technologist David Farber.
David Clark of MIT, an early chief protocol architect of the Internet, has said that “the network is not neutral and never has been,” dismissing the assumptions of net neutrality supporters as “happy little bunny rabbit dreams.” Early Internet operators routinely discriminated in favor of traffic that was sensitive to latency, and similar options are available today. The phenomenal success of the Internet suggests that the technologists who have been running it really don’t need help.
They conclude “Yes, the open Internet is in danger. But not from lack of neutrality—from the prospect of the FCC regulating it like a 20th-century utility.”
The “net neutrality” debate is really very simple.
All major ISPs are also content distributors. This is a massive conflict of interest. These companies have a huge incentive to use their control over the wire to tip the scales against new OTT competitors on the content side (e.g. Netflix).
This imbalance can be corrected through very simple regulation. The most obvious (“only-bridge-over-the-river”) option would be to require telecoms to divest their content-distribution businesses. ‘Net neutrality’ is the less-draconian alternative – merely ensuring that ISPs treat competing content as they would their own.
Either way, consumers foot the bill. So it’s not unreasonable to ask that we should pay the same rate for every byte – not magically more for Netflix bytes.