Net Neutrality is Bad for You

WHAT ?
The calls for a US “network neutrality” rule get louder and louder and louder. I’ve covered this topic at length before. So now I’m going to try something completely different readers. I’m going to become a HERETIC !
Soooo… here we go and don’t hate me
Think of this scenario: Would you want to make it illegal for at&t to offer a $5/month plan to poorer households that only allowed access to services by Yahoo!?
The proposed neutrality rules would do just this, hurting the weakest in society most. (Personally, I’d prefer to make typographically-challenged corporate identities illegal first!)
Network neutrality rules, apart from being a fuzzy undefined concept, throw out the best of price discrimination and entrench the false “natural duopoly” for access.
There are deeper, more philosophical reasons too for being suspicious of such rules. Underlying the idea of “neutrality” is the idea that Internet Protocol embeds no assumptions or values, and the mesh of interconnect agreements we call the Internet is likewise “neutral”.
I don’t see a common understanding of what ‘Net Neutrality’ actually is. Despite many of the Internetorati demanding it by law (myself included). Whatever.
There appear to be several different camps, which you could paint as “bottom of IP”, “middle” and “top”.
The bottomistas would see enforced Internet Protocol itself as a premature optimisation and violation of the end-to-end principle. Unhappy that you only get IPv4 or IPv6? Still grumpy that you only have IPv4 and not even IPv6? Really miserable that your VoIP packets are staggering under the poisonous load of IPv6 headers? You’re a bottomista.
I suspect there are some fundamentalist bottomistas who would object to your service providers not giving you a choice of Ethernet, ATM or roll-you-own-L2-protocol. We’ll pretend to be out and not answer the door when they knock.
The middlemen draw a distinction between “raw IP” (before the ISP gets ahold of it), and “retail IP”, which is what you and I get to experience. This kind of suggests that the OSI 7-layer model got it horribly wrong, because there’s a fundamental cleave right in the middle of layer 3, where IP sits. Fair comment, but sounds pretty radical to me. Although I’ve never really got layer 6, so maybe they’re onto something.
Then you might be a “top of IP” kind of girl. You can cope with the discrimination creeping higher up the stack to the next layer, where particular TCP and UDP ports and flags are screened off. But you only get queasy if particular commercial service providers or applications are targeted. Blocking off port 25 is OK to you, since it doesn’t discriminate against any particular email service provider.
Sadly, these are all hogwash and bunkum.
Net Neutrality is a dead end, because as Searls and Weinberger correctly noted, the Net isn’t a thing, it’s an interconnected set of agreements. These are bilateral and freely entered into. And since those agreements weren’t modelled off a viral template such as the GNU General Public License, they are all unique (this argument works both ways and used freely by those in favor of neutrality). There’s no contagious clause that insists the Internet becomes a “thing” by virtue of everyone having to agree to freely and neutrally pass packets in an ever growing pool of Neutraldom. So to impose neutrality you’re going to have to interpose yourself into a lot of contracts. (Another reason why “Internet Governance” is an oxymoron when referring to anything beyond IP address allocation and routing, which do require some central agreement and co-ordination.)
There’s no grand “first principle” from which you can derive network neutrality as an economic argument. No public choice, competition, game theory or otherwise construct that leads us there. Indeed, saying that the public would benefit if there was a transfer of wealth from providers to users isn’t good enough. You’re playing with matches in the oil refinery when you start messing with property rights. Yes, those networks are mostly funded by risk capital. The local loop copper of a fixed operator may still be hangovers from monopoly days, but generally those assets were brought into the private sector on clear rules, the stockholders took a punt, and some of the better informed ones who saw the long-term potential of DSL etc. got to reap a windfall. Of course in parallel the telcos have done a superlative job of lobbying for rules that keep competition out, but that’s a different issue.
But wait a moment, it gets worse.
What if I wanted to allow people in the street to access my WiFi? But I only want to offer web and email, so as to make P2P filesharing tricky. As a good public-spirited citizen I put up a splash page so they know exactly what’s going on. Am I allowed to? Or is Net Neutrality only for the mythical mystical “them”?
When in deploying my network do I need to “design-in” neutrality? Concept, build or operation? Should we be outlawing the deployment of PSTN-specific GSM networks because they’re “unfair” to non-PSTN voice applications like Skype? Am I allowed to deploy non-technological measures for neutrality, such as contract terms? Am I allowed to read the packets, but not block them, in order to enforce my contract (repeat - freely entered into by both partners)?
What level of jitter and congestion is perceived as “neutral”? What if I deploy technology like Qualcomm’s 1xRTT, which separately supports voice and data, with PSTN-only voice, but the data is a bit lousy for VoIP? Is that being unfair, or merely a realistic response to the limitations of technology?
Is neutrality a wholesale or a retail problem? What if the access infrastructure owner offers “neutral” IP connectivity, but no retail provider chooses to pass that on directly to the public without layering on some filtering and price discrimination?
Oh, and what’s so special about the Internet? Do other IP-based networks need neutrality principles? Do any networks? Should more network industries be forced to forego “winner takes all” rewards? Google looks awfully dominant at adverts, doesn’t it… I wonder if that ad network needs a bit of “neutrality”?
I think you can make a stand on Network Neutrality on political and free speech grounds, but that requires a very different policy approach (i.e. not one that confiscates the proceeds of private capital investment).
And if the users value a neutral connection so much, perhaps it’s time for them to self-organise a bit, build their own networks, or tender for connectivity together — rather than rolling over and accepting whatever the local telco can cableco provide by default. But that would burst the illusion that government is here to save us from ourselves and we’ve no need to take personal responsibility for our connectivity freedom.
Beware demanding net neutrality as a blanket principle, rather than a scalpel to excise particular local anti-competitive acts. Khrushchev declared the corn harvest was great, too — but it didn’t create the incentives for more corn to be sown and for the system to succeed on future iterations. And net neutrality rules are also likely to have the exact opposite effect of that intended. Net neutrality messes up freedom of contract, freedom of association, and property rights.
You probably won’t fall off your chair with surprise if I tell you this is nonsense. The Internet is riddled with design and political assumptions, and we should be open to competing architectures emerging.
Exhibit A. The Internet takes the “end-to-end” philosophy of distributed intelligence well beyond the application layer. There is no equivalent of the GNU General Public License for the Internet that you have to agree to in order to join. Repressive, filtering China can happily peer with anyone else. Everyone is free to negotiate their own interconnect at the financial and political layers.
You might want to contrast this with the PSTN, where common carriage agreements flatten the possible set of interconnect agreements. There are plenty of “managed” networks in telecom with standard rulesets to be abided by. The resulting networks have a more homogenous nature. This might be a good thing, or it might not. Let the customers decide. Would an “IMS-net” with universal rules for interconnect create more value than the deliberate emergent, chaotic Internet? I have an opinion, but I certainly don’t want to make the experiment with other people’s shareholder capital illegal!
Exhibit B: The semantics of IP addresses follows a particular “lowest common denominator” format. The databases held by ARIN, RIPE etc. allow you to trace back from an IP address the ISP to which it is assigned. This is probably the minimum possible assumption that can be embedded in the network, so follows the “end-to-end” philosophy, although is outside the scope of its original concept. But we can imagine networks where these databases offer much greater detail on the nature of the end nodes. Is it a good anti-fraud device for me to know you’ve been personally assigned that address for 3 years? For me to be able to verify with your telco (for a fee) that the delivery address you gave for the plasma TV is the same as the premises address of your IP address?
Exhibit C: The Internet doesn’t allow “topological introspection”. OK, protocols like BGP in principle allow this. But you don’t get access to that data as an edge node. Yes, you can traceroute your way around all day. But as a matter of universal fact, you can’t from the edge determine the real topology of anything in the middle. Internet Protocol assumes the world is, indeed, flat. Which is fine, until you hit the limits of that abstraction. I’d rather stream my P2P IPTV from someone else the minimum possible number of hops away. We have kludge it, but it’s not pretty.
In fact, there are lots of ways in which the current Internet design could be improved, and many people working on doing that just now.
Having a “two tier” network is something we should look forward to. We want more Internets! Plural! They may continue to interconnect; they may decide that the Internet Mk1 is more a source of digital pollution than valuable content. I just can’t see how any “stop the clock — we’re all just comfortable as we are!” neutrality rule helps us reach new and better places. Even monopolies have an interest in deploying new and more valuabe (monopoly) stuff. Kinda hard when by law you’re only allowed to offer Net service as experienced via dial-up modem c. 1997, only faster.
Indeed, this is all reminiscent of the arguments about socialized medicine. “We must spend more on the National Health Service to prevent a two-tier system emerging!” Yet lots of people who can afford it opt-out and hit private medical care. Likewise, ossifying and constricting the Internet’s rules of engagement will just result in a hidden transfer of traffic onto other, completely private networks outside of the neutrality rules. Do you really think the Baby Bells won’t be able to buy some finessing get-out clauses? This is a much easier lobbying problem that undoing the whole unbundling regime of the ‘96 Act!
So neutrality rules that entrench our “Internet Mk1” as somehow sacred, hallowed and for all time are just totally counter-productive. Better to allow Verizon to screw over their customers and make it worthwhile for someone to bypass them entirely using newer technology. Or just swallow your pride and copy the unbundling rules that work just fine where implemented. BT (UK) can deploy a two-tier walled IMS garden, if they like. Just they have no way to make me buy it unless it creates some compelling value.