Late in December, Michael Geist published an A-Z review of the year in Canadian technology law.

For the letter N, he had:

N is for network neutrality, the hot-button Internet issue of 2006. As several ISPs in Canada and the U.S. openly touted the potential for a two-tier Internet, opponents called on regulators and legislators to preserve a neutral approach with equal treatment for all content and applications.

Net neutrality was the subject of a number of my posts in the wake of AT&T’s year-end concessions offered to win approval of its merger with BellSouth.

“Save the Internet” advocates express the concern that ISPs will block or degrade the transmission of material from content providers that refuse to pay, thereby creating a two-tiered internet, contrary to the ideals of the internet’s origins. [A presentation of the perspective of this as a utopian myth can be found in Craig McTaggart’s paper¹]

An alternate view would suggest that at least the larger content providers are able to negotiate commercially with those that might seek to impose a tariff on transmission. For example, is it possible that a major content provider might demand fees in exchange for carrying their content? It might be more done with subtlety or finesse, but are there examples of such arrangements in preferred distribution agreements?

Perhaps these deals would take the form of having the ISP offer free space in a data centre to improve service quality. [Put on your best Al Pacino accent from Donnie Brasco and repeat “after all, we wouldn’t want your customers to have to wait more than 32 msec for a response, would we?”]

Can we think of content providers that have sufficient market presence to be able or to threaten to turn off the flow, making their material inaccessible for customers of ISPs that attempt to engage in a transmission ‘shake-down’? In such cases, neither the content providers nor the ISPs unilaterally impose terms on the other.

The threat of mutually assured destruction may help ensure reasonable negotiations among the larger players. The absence of regulation does not necessarily imply the end of the internet – a scenario painted by some.

Net neutrality is a complex issue. It should not be solved by backroom deals and concessions, slogans and populist campaigns, but through reasoned discussion in an open forum. Expect N for Network Neutrality to continue to be on the telecom policy agenda for 2007.

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¹ Craig’s paper was presented at the 34th Research Conference on Communication, Information and Internet Policy at George Mason University, in September 2006.

What is the special fascination with telecom regulation? Why is telecom regulated differently from other industries?

That was the question asked of me, only somewhat rhetorically, a few weeks ago by a telecom carrier executive.

Why do we still need to have a government body, the CRTC, that cares so much about regulating incumbent carriers? More than any other industry, why is telecom so heavily regulated?

Why don’t we simply let the cable companies and phone companies fight it out and let the customers benefit from the pricing bloodbath?

Right.

That scenario isn’t going to happen for a whole bunch of reasons that I would be pleased to discuss. Over the holidays, I was working on my February lectures to the 2007 class for the University of Toronto Master of Engineering in Telecommunications. My notes on the subject of regulation in a competitive market framework are still fresh. I would be happy to share my views.

In the meantime, those executives can still dream of a future world with no specialized telecom regulation. After all, there are a lot of kids who will return to school next week with a firm belief in Santa.

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