The Net Neutrality argument – ‘unsexed up’: Untangling the various threads of the Net neutrality argument

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Note: The blog is partly inspired by the taxonomy of Open discussion in my talk at CEBIT in Hannover .Creating a similar taxonomy for Net neutrality turned out to be far more complex – but I hope I have done it some justice!

The title of this blog / article relates to the (in) famous Iraq dossier which the British government used to go to war on Iraq and which was supposed to be ‘sexed up’

If you follow the Net neutrality discussion, there is a major debate going on in Europe about Net Neutrality which the International Herald Tribune/ New York times called Shaping Europe’s Web from across the Atlantic

Considering the complexity, confusion and the significance of the issue, this blog is an attempt to ‘unsex up’ this debate and to provide a balanced perspective by untangling the various threads of Net neutrality

At the heart of this debate is the Net Neutrality argument that ‘All packets are created equal’. This means a complete separation between the network and the service. It means that IP traffic is not charged for. It means that the (network) provider’s services are not favoured above others and indeed more generically, that no service is favoured over another for commercial reasons. The network becomes a pure platform and the platform agnostically ‘enables’.

Two initial thoughts

Firstly, while the issue has always been important, it has become more so since Europe could set precedence for US legislation later this year (see IHT article for more details).

Secondly, the issue is framed in emotive terms on both sides and mixed up by lobbyists. We all seem to be defending the rights of illegal file sharers under net neutrality arguments – when in contrast there are other issues which are at stake affecting the wider population globally.

I frame my thinking in a series of questions/ points which apply to this issue

Why was Neutrality NOT an issue when the Internet was created?

When the Internet was created, the ‘networks/infrastructure’ underpinning the Internet belonged to either to Government or Academia or Defence. Even when Telecom companies were involved, they were Government owned. In addition, no one really knew what they were doing. Not so today, when the Government, Academia and Defence are not the main people responsible in creating the next generation network infrastructure. Today, private companies are going to create the network – and we all need these global networks going forward.

If we asked the government to step in, for sure we can expect a ‘toll booth’ just like a highway (that’s why I hate the term Information superhighway). If that happens – then we have lost the argument by default. Having said that, the governments do not have the money to invest in network infrastructure anyway (credit crunch etc) – so we need a set of private companies to invest in infrastructure (aka Operators)

Why are we defending the rights of file sharers?

The discussion seems to be focussed on the ‘rights’ of file sharers to share content. Most of us are not file sharers and the emphasis on this segment clouds the wider issue since it stalls the discussion and makes it emotive. Undoubtedly, file sharing applications do have a major impact on the network and most pragmatic people (including me) would argue for limits on file sharing. Whatever your view, I believe that the limits on file sharing should not be the cause to hold up benefits to the wider public.

Can twitter pay for undersea cables?

I said before that a ‘pure’ platform merely ‘enables’ services i.e. it is completely agnostic. Today, the best example of a pure platform is Twitter (in the sense that you can easily ‘morph/reuse’ twitter in many different (unpredictable) ways) – for instance even the tower bridge has a twitter feed . Question is: Can you fund undersea cables (i.e. infrastructure) from a twitter like business model? (Which leans towards the Long Tail)? To me, the answer is no. So, that tells me that you cannot use the platform argument in ALL cases.

Do we need a distinction between service level interconnectivity and network level interconnectivity?

This morning, I posted a blog called Grand Central (Google Voice) vs. VOLGA: Swim with the tide or drown? where I said that there needs to be distinctions between network levels interconnect and service level interconnect.

>>>

We need interconnect at network level to foster interconnect at a service level. Interconnect at the network level is harder (MUCH harder – and indeed much more expensive!) than at a service level (SMS interconnect took seven years and still ongoing globally. Voice interconnect also took a lot longer for mobile). Yet, you cannot do the service level interconnect without network level interconnect (think about the fact that we need similar network elements – at least IMS and LTE, new cables and network capacity etc)

<<<

So, if we need network level interconnect to enable service level interconnect - then a way needs to be found for the entire ecosystem to work

The impact of Video

The impact of video on networks is a more important issue (more so than file sharing). We are already seeing the first discussions in this argument in the UK with the BBC iPlayer debate

In “Hidden Costs” Of Watching TV Online, Ashley Highfield of the BBC proposes a solution for Net Neutrality

>>> 5. There could be an industry standard for “high definition broadband”. HD Broadband (working title) would be a minimum guaranteed speed of connection (probably 8Mbs-1). All ISPs could market the service (like Sky HD and Virgin HD) and drive up revenue per sub

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I discuss this in greater detail below. But suffice to say that the impact of video is only now being felt and will be increasing going forward

Who decides what to pay?

This is another important issue. In other words, it is a business model issue and ‘sharing of the pie’ issue between two camps. We see this over and over again .. And it is important not to forget this.

It started with iTunes with 99 cent downloads – and with newspapers Good king Google and with YouTube(most recently with argument with PRS) YouTube stands by UK video block

All these cases have in common that the Web companies indicate what should be the pricepoint and that is different (both in terms of the price and also in terms of the business model itself ex iTunes) to the prevailing model.

Are Web platforms always perfect/fair?

Are Web platforms always perfect/fair?

This is a good question .. And I thought of this in context of Amazon(which affects publishing – a topic close to my heart). Web platforms also have a conflict of business models as we see in the case of Amazon and kindle(emphasis mine)

But Amazon is in something of a catch-22. Lowering Kindle’s price too much might threaten Amazon’s print book business, says Jeffrey Lindsay, analyst with New York-based Sanford C. Bernstein. “They don’t want to antagonize the book publishers and they don’t want to cannibalize their own book sales,” Lindsay says. He estimates that the company makes around 5% to 10% higher margins on print books than it does on digital downloads to the Kindle, which run around $9.99.

Trust and transparency are the key issues

All this brings us down to the real issue of trust and transparency – on a day when GE loses its AAA rating

We now know that for years, it’s ‘quarter on quarter’ steady growth was ‘stage managed’ through the financial services division and when the financial services business was impacted – the rest it seems is like any other business with cyclical ups and downs.

While there is nothing wrong in using financial services to ‘smoothen’ – quarterly profits – what has been lost is a sense of trust- and GE’s non transparent nature now causes us to question everything – leading to talks of a break-up of GE – something unheard of even a few months ago

Why is this important for platforms : The web and for telecoms?

Because, Trust is the core asset of the Web and especially of Google

Barring some issues(like Google in China) – the Google platform itself is agnostic and mirrors the Web in its ethos. By that I mean – that a Google web search does not ‘discriminate’ on content – for instance it does not filter in any way content which is not flattering to Google. Thus, Google is intellectually honest.

The question is: Can network operators also become trusted? If they can, then it’s a great business model

Content bias

A potential nexus between content providers and network providers lies at the real concern of Net neutrality. It’s a trap that the newspapers have fallen into and the Web(and Google) have largely resisted.

In the decline and fall of traditional media and its grassroots impact on politics

I said that

a) The media and content industry (along with advertising) has a bias and it is important that this bias (left leaning/right leaning etc) not act as a filter to content (as it does currently with newspapers) and that

b) The nexus between content providers and communication providers IS the real issue – think citizen Kane here

The charging of traffic is not the real issue – it is the succumbing to the ‘content bias’ that is more important to free speech and democracy. For instance – Its sad and worrying that Rupert Murdoch newspapers ‘agree’ to support the Labour party. We see same variants all over the world with media and politics

Innovation at the edge:

Innovation will continue to be driven to the edge of the network. Think of it every time you use Google maps. Networks wanted 15 pence a map request (from memory) of which they wanted to keep 60% . Thankfully those days are now gone. We will see an increasing trend towards decoupling of the network from the service applications. But more importantly, not all applications will be decoupled from the network especially those that need end to end QOS over the mobile network(voice, video – point to point applications)

Customer – main driver.

Customers will continue to be the main drivers. They can communicate and create content – which means it will be hard to suppress them as the Chinese government found out with the Grass mud horse . It is the customers who queue up to buy the iPhone and will ultimately drive transparency and new business models

QOS – Best case vs. Good enough

Similarly, some applications will need QOS and network level interconnect – especially person to person voice over IP over mobile networks. That was the point of Grand Central (Google Voice) vs. VOLGA: Swim with the tide or drown?

The debate between ‘quality’ and ‘best case’ does not work well with person to person session based interactions i.e. for a person to person session based interaction, we do need some form of QOS.

Conclusion:

We need to untangle different ideas – and they are:

• Investment

• Network level interconnect

• File sharing is the simplest of these and the one which gets most attention. However, limits on file sharing don’t affect

• QOS applications

• New formats with a better experience and a higher cost – this is fine as long as it does not affect person to person communication and there is no content bias

• The conflict of business models

• Innovation at the edge: Increases when the network and the service can be decoupled.

• Trust and transparency

• Nexus between content owners and networks.

The last is the most severe and needs most attention since in my view – we don’t want to create a ‘newspaper 2.0′ here i.e. media which is biased and network operators who have a bias for specific content – either for philosophical or monetary reasons.

Beyond that, the charging of IP itself will be needed in some cases and if that helps fund the next generation network – then it is good for all of us

Net neutrality is an evolving business model /tradeoff issue in light of a change of ecosystem and different models will co-exist as I speak in my CEBIT video

PS: Was it Napoleon who said that ‘All my generals are all ready and trained to fight the LAST battle’? Sometimes it seems that way and the real way it all plays out remains to be seen!

Comments welcome

Image source: http://www.thoughttheater.com/upload/2006/04/TangledWires.jpg