Net neutrality

The FCC supports net neutrality and wants to ensure that broadband providers don't block access to certain sites or impede competitors' services while prioritizing their own. Julius Genachowski, the agency's chairman, announced its net-neutrality principles in September, and cable and wireless carriers, as well as some lawmakers, were quick to signal their discomfort.

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The FCC’s 2005 policy commits:

To encourage broadband deployment and preserve and promote the open and interconnected nation of the public Internet, consumers are entitled to access the lawful Internet content of their choice.

Consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement.

Consumers are entitled to connect their choice of legal devices that do not harm the network.

Consumers are entitled to competition among network, application, service and content providers.

Most recently, Genachowski added two precepts in September. These and the preceding policy he seeks to strengthen through a Notice of Proposed Rule Making (NPRM) during October’s meeting:

The proposed additions would serve to:

Prevent Internet access providers from discriminating against particular Internet contect or applications, while allowing for reasonable network management.

Ensure that Internet providers are transparent about the network management principles they implement.

The FCC’s proposals don’t get into pricing plans, leaving open the option for ISPs to charge based on data consumption, something that Oppenheimer’s Tim Horan pointed out.

“These regulations will not significantly change the industry landscape given that wireline providers currently do not block any traffic,” he said. “We think service providers” solution will be to tier users and regulate heavy Internet users (bandwidth hogs). The solution would be similar to any regulation in the wireless sphere, where carriers will be able to impose low usage caps.”

“Non-discriminatory access is already a well established business practice on the Internet,” Todd Rethemeier of Hudson Square Research said in another report. He added that “open access does not necessarily mean free access” and that the FCC’s rules, once nailed down, are likely to face legal challenges.

Those could escalate and broaden into bigger-picture-communications-law discussions next year, say Stifel Nicolaus analysts Rebecca Arbogast and David Kaut. “If the FCC rules are thwarted in court, which would take some extended time, we believe it would spark a major legislative battle in Congress, where net neutrality advocates have introduced legislation,” they said. “And even if the FCC rules are upheld, we believe there would be continued wrangling and litigation over their enforcement.”

What does this mean for the multifamily industry, its broadband service providers and residents? Here are two opposing views of the net neutrality argument by Lisa Benson and Richard Jahnel, both of Ellipse Inc. based in Dallas, Texas.

The argument against net neutrality, Lisa Benson, president
The joint statement of commissioners, Robert McDowell and Meredith Baker, in response to the FCC Chairman’s announcement stated, “This dramatic proposal to grow government’s involvement in Internet governance and management would appear to be a reversal of decades of precedent and of the Clinton-Gore administration’s bipartisan policy to allow a diverse assortment of technical experts, rather than politicians and bureaucrats, working in loosely knit non-governmental organizations to make such engineering decisions.”

The government’s latest edict may be in response to the Comcast/bit torrent debate, whereby the company intentionally and regularly prohibits/usurps peer-to-peer traffic transmission on its network. At present, the FCC is unable to impede such activity.

“As early as 2006, Comcast has implemented measures using Sandvine hardware which sends forged TCP RST (reset) packets, disrupting multiple protocols used by peer-to-peer sharing networks. This has prevented most Comcast users from uploading files,” chronicles Wikipedia.

Perhaps the latest policy is simply an effort to constrain the billions in stimulus money which the new administration earmarked for Internet improvement and broadband development? Net neutrality is directed exclusively at access providers, or the Internet backbone, attempting to ensure the marketplace allocates a fair and equitable stance on content, application and equipment. With that said, why hasn’t the administration invoked anti-trust law to “police” the Internet and its growth?

Each day brings new advancements in rich media, services and equipment. Such “add ons” are politely adopted by the current telecom infrastructure providers, supported by free market pricing and program packaging amicable to consumers and provider alike. Lest we forget, advancements in VoIP, video conferencing, HDTV, peer-to-peer file sharing, streaming video, and advanced virtual private networks do, and will continue to, require precedence in data packet delivery to ensure quality of product and service advancements.

Capitalist ideologies are in play as the marketplace continues to exchange innovation for fair and equitable revenues. Businesses and consumers, alike, are willing to pay stepped pricing for access and advancements, all driving the market in a free enterprise exchange.

The Internet is a free exchange of data between a network of intelligent computers. To prevent congestion on the Internet, providers must be able to prioritize packets within incoming and outgoing circuits. The commercial adoption of advanced telecom technologies will certainly slow if quality and feature improvements are constrained by standardizing traffic prioritization.

Telecoms, private enterprises that they are, must be able to provide and effectively manage service level agreements in an effort to advance fiscal goals, and free market trade, based on open markets, with determine the rest.

Regulators must recognize the telecom’s organic, competitive need to control reliability, throughput and speed of data delivery. Government intervention to suppress rate escalation and remove network limitations in an effort to reach these advanced service offerings is contrived and doomed to fail in free market environments.

Network access providers must operate within a professional right to control their own infrastructure ideologies and management practices, rather than dictated into accepting all forms of products and services delivered by non-technically administered regulations.

Today, they can. But if net neutrality protagonists have their way, tactical tools, such as the iPhone, will no longer be available. One of the key components to this raging piece of intuitiveness is Apple’s ability to gather innovative cohesion by commercially constraining ineffective applications and extraneous components.

Will apartment communities become the next target with access constraints at their curb? Sure. It’s anti-competitive, but to a technical manager such as myself, it is a blessing and a commercially-effective means to an end: consumer benefit.

The argument for net neutrality, Richard Jahnel, CIO
To understand the benefit of net neutrality, begin in a time when phones and phone service could only be purchased from one corporate monolith. At the time, selection was limited and new features were few. Regulation of the phone industry, and the sundering of Bell into its various entities, gave rise to the telecommunications industry as we know it today. Losing the neutrality of the Internet would be like going back to the days of Ma Bell.

On Sept. 21, 2009, FCC Chairman Julius Genachowski provided his vision for net neutrality in a keynote presentation given at The Brookings Institute. During this presentation, he proposed formalizing the four existing FCC guidelines for net neutrality, and adding two new ones.
These measures will help prevent current and future telecommunication abuses, encourage investment in the expansion of Internet resources, and provide consumers with the choices to aide in self-regulating their ISPs (Internet Service Providers).

Consider the following scenarios and points concerning innovation and lack of competition might impact your own IT operations.

Univesco Management’s CFO, Paul Ivanoff, made the reasonable decision to reduce expenses through the consolidation of Internet and phone service by installing a VoIP (Voice over Internet Protocol) system at the central office. The system tunnels the property’s phones through the main office Internet, allowing the company to discontinue land-line telephone service (and its associated cost) at all property offices.

Their telco, which offers all three services (voice, Internet and TV) across their platform, is now compelled to provide better value in order to retain this customer’s voice service. Without network neutrality, the telco can choose to selectively block, reset, restrict or otherwise interfere with the ports and protocols used by VoIP phones and applications, thus reducing or eliminating this competition for voice service, all without ryme, reason or explanation.

Business owners have expressed concern that residential data streams are being provided at the same priority as their business class data. This is nothing new. The Internet has operated in this fashion for two decades.

While packets have the same priority, the capacity data circuits and the amount of provisioning is radically different between business class service networks and residential networks. At the end of the day, the provider must meet the Service Level Agreement (SLA) that they contracted to provide, and of which the business owner agreed. They meet that SLA by having more bandwidth available per megabyte sold on the business circuits than they do on the residential counterparts.

Some counter that market forces will organically eliminate providers with shady practices.

While this might be the preferred method of shaping the market, it isn’t applicable here. Most residential households have access to only one high-speed broadband provider, if that provider begins to interfere with their traffic, they have no recourse but to accept the interference or switch to a much slower provider.

Obviously with what are essentially local monopolies on high-speed Internet access, market forces alone are not sufficient to keep the large providers in check.

The Internet has undergone explosive growth into nearly every aspect of our daily lives. From the beginning, it has been easy to place innovative services onto the Internet for all to partake.

Whether a pay service (Netflix, World of Warcraft, eBay) or free service (YouTube, Wikipedia, Hotmail), developers have nothing more to do than purchase bandwidth from their provider of choice, and make the service available.

If developers had to worry about whether providers were going to interfere with their service in some way, they may not be as willing to take on the cost and risk involved in developing said services. This openness and ability to innovate, is what makes the Internet the great and useful asset to which we have grown so accustom.

Reference: Read the full FCC announcement. An explanation of service provider Comcast’s inability to ethically self-regulate can be found here.