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Net Neutrality is a complicated issue.  The recent Google/Verizon policy proposal has raised new questions about the open internet – the idea that all online content gets treated equally.  To explore this issue, we’re featuring a series of guest blog posts on our site.  Today, a post from Larry Downes, a nonresident Fellow at the Stanford Law School Center for Internet & Society. His books include “Unleashing the Killer App” and, most recently, “The Laws of Disruption: Harnessing the New Forces that Govern Life and Business in the Digital Age.”  

As both an Internet entrepreneur and a legal scholar, I’ve been watching and sometimes participating in the “net neutrality” debate for several years now.  At times it’s seemed like real progress was being made, but lately I’ve grown concerned about the prospects for a peaceful resolution.  It seems that some of the participants in what has been transformed into an honest-to-goodness fight over public policy have more to gain from aggravating the situation than in solving the problem.  I can’t predict what’s going to happen next.  Technology and business are rational subjects—politics is not.

Many of those now arguing the loudest in favor or against minimal or even drastic changes to U.S. law simply don’t understand enough about law, business, or the engineering details of how the Internet works to be making much sense. 

Unfortunately, uninformed opinions are being encouraged by a few media reform groups in Washington who have co-opted net neutrality.  They see it as an issue they can use to get their foot in the door to pursue broader agendas. 

(The broader agendas, which the groups make no secret of, include restrictions on media ownership—think of the pending Comcast-NBC Universal merger—and long-term hopes for full or partial nationalization of everything from the communications and broadcast infrastructure to the failing newspaper business.)

Reducing “net neutrality” to the kind of sound-bite screaming that so poisoned the debate on health care has many unfortunate side-effects.  Not the least of these is that the chance of any real resolution of the problem gets farther rather than closer.  For many of the groups advocating most vocally in “favor” of net neutrality, it is becoming clearer that they don’t actually want a resolution.  In pursuit of their long-term interests, they benefit much more from continued rancor.

That I think it what explains the strangely hostile response to the legislative framework proposed jointly by Google and Verizon last week.  Advocates and journalists, all of whom know better, continued to characterize the proposal as if it were some kind of secret deal to carve up the Internet and its users, like the clandestine treaty between Germany and Russia at the beginning of World War II.  I’ve seen the proposal referred to as a “deal,” “agreement,” “treaty,” “accord,” “pact,” “contract” or worse.  It’s not a business arrangement, it’s not law, and it’s not treason.

To understand why and why there’s such a strongly-vested interest in mischaracterizing pretty much everything said by anyone on the other side of the debate, let’s step back for a moment and ask how we got into this mess in the first place.

What is Net Neutrality?

For starters, it’s hard to come up with a concise definition of net neutrality, largely because it’s one of those terms, like “family values,” that means something different to everyone who uses it.  For me it’s become something of a litmus test—people who use it positively are generally hostile to large communications companies.  People who use it negatively are generally hostile to regulatory agencies.  A lot of that anger, wherever it comes, seems to get channeled into net neutrality.

In fact the Federal Communications Commission doesn’t even use the term—they talk about the “open and transparent” Internet instead.

But here’s the general idea.  The defining feature of the Internet is that information is broken up into small “packets” of data which are routed through any number of computers on the world-wide network and then are reassembled when they reach their destination.

Up until now, with some notable exceptions, every participating computer relays those packets without knowing what’s in them or who they come from.  The network operates on a packet-neutral model—when one computer receives it, it looks only to see where it’s heading and sends it, depending on traffic congestion at the time, to some other computer along the way just as quickly as it can.

That’s still the model on which the Internet works.  The “net neutrality” concern is not with current practice, but of future problems.   Increasingly, those advocating for new laws see a few dominant providers controlling the outgoing and incoming packets to and from consumers—the first and last mile. 

So while the computers between my house and Google headquarters all treat my packets to Google and Google’s packets back to me in a neutral fashion, there’s no law that keeps Comcast (my provider) from opening those packets on their way in or on their way out and deciding to slow or speed up some or all of them.

Why would they do that?  Perhaps they make a deal with Google to give priority to Google-related packets in exchange for a fee or a share of Google’s ad revenues.  Or, maybe they want to encourage me to watch Comcast programming instead of YouTube videos, and intentionally slow down YouTube packets to make those videos less appealing to watch.

Most of this is theoretical so far.  No ISP offers the premium or “fast lane” service to individual applications.  Comcast, however, was caught a few years ago experimenting with slowing down the file-sharing traffic of some of their customers who use the BitTorrent peer-to-peer protocol.  The reason was that some of Comcast’s most active customers were slowing down the network by sending and receiving very large files (mostly illegal copies of movies and other copyrighted content, as it turns out).

When Comcast was caught, the company agreed to stop offering “unlimited” access and to use more sophisticated network management techniques to ensure a few customers didn’t slow traffic for everyone else.  Comcast and BitTorrent made peace, but the FCC held hearings and sanctioned Comcast after-the-fact, leading to the court case that made clear the FCC has no authority to enforce its existing neutrality policies.  (More on that in a moment.)

The Network Was Never Neutral

The revelations about Comcast revived the net neutrality debate, this time with a strongly partisan bent.  Net neutrality, it was argued, was “about” free speech on the Internet, about a few large network operators destroying the innovative spirit of the net, about a secret plan to replace the Web with walled gardens of approved content.  There was either complete neutrality, or there was chaos.

But the with-us-or-against-us mentality of the rhetoric that followed this shift in the discussion leaves out some important and complicated technical details. 

First, some applications already require and get “premium” treatment for their packets.  Voice and video packets have to arrive pretty much at the same time in order to maintain good quality, so Voice over IP telephone calls (Skype, Vonage, Comcast digital voice) get priority treatment, as do cable programming packets, which, after all, are using the same connection to your home that the data uses.

Google, as one of the largest providers of outbound packets, has deals with some ISPs to locate Google-only servers in their hubs to ensure local copies of their web pages are always close by, a service called “caching” that is offered more generally by companies such as Akamai and LimeLight.  In that sense, technology is being used to give priority even to the most requested data packets, about which no one should complain.

When Should the Federal Government Step in?

So the net neutrality fight, aside from leaving out any real appreciation either for technological or business realities, is really a fight about the future.  As cable and telephone companies invest billions in the next generation of technology—including fiber optics and next-generation cellular services–application providers fear they will be asked to shoulder more of the costs of that investment through premium service fees.

That’s possible, of course, and it’s also possible that network operators will make business decisions that, in the long-term, will do great damage to the remarkable engine of innovation that the Internet has proven to be for the last decade.  If the market really does fail, or fails in significant local ways (rural or poor customers, for example, have no or little access to broadband Internet), then some kind of regulatory intervention might make sense. 

But history has shown that it’s a bad idea to regulate ahead of a market failure, especially when dealing with technology that is evolving rapidly.  In the last ten years, the Internet has proven to be a source of tremendous embarrassment for regulators trying to “fix” problems that shift under their feet even as they’re legislating.  Often the laws are meaningless by the time the ink is dry or—worse—inadvertently make the problems worse after the fact.

Nevertheless, in October of last year the FCC proposed—in a 107-page document—six net neutrality rules that would codify the principles described above and a number of peripheral, perhaps unrelated, ideas.  Implicit in that rulemaking was the assumption that someone needed to codify these principles, that the FCC was that someone, and that the agency had the authority from Congress to be that someone. 

There are good reasons to be skeptical that the FCC in particular is the right agency to solve this problem even if it is a problem.  Through most of its existence the agency has been fixed on regulating a legal monopoly—the old phone company—and on managing what were very limited broadcast spectrum—now largely supplanted by cable and more sophisticated technologies for managing the spectrum.

The FCC, recall, is the agency that watches broadcast (but not cable) television and issues fines for indecent content—an activity they do more, rather than less, even as broadcast becomes a trivial part of programming reception.  (An on-going challenge to how the FCC enforces broadcast decency rules is headed back to the U.S. Supreme Court soon.)  Congress has three times tried to give the FCC authority to regulate indecency on the Internet as well, but the U.S. Supreme Court has stopped all three.

But in April, as I noted, a federal court of appeals in D.C. ruled that the agency did not have the legal authority to enforce its existing net neutrality guidelines, which have been in place since 2005, regardless of their merits.   That decision also threw the proposed six rules into limbo. Why?  The FCC based its jurisdiction to issue them on the same legal theory the court rejected in its effort to enforce the earlier neutrality policy statement against Comcast.

So now the agency is pursuing a second avenue, which is to change the classification of broadband Internet access in a way that would give it all the authority it needs (and then some) to go ahead with the October rulemaking. 

A better solution, for many reasons, would have been to go back to Congress for specific authority over broadband, but the agency is feeling political pressure to move quickly on net neutrality, and so is pursuing what everyone understands is a procedure that stands on very shaky legal grounds, at best.  (Net neutrality means full employment for communications lawyers in Washington for a long time to come.)

Back to the Google-Verizon Proposal

Here’s where last week’s proposal from Google and Verizon fits in.  Network operators, content providers, and responsible consumer groups have come to recognize, as has the FCC itself, that the net neutrality policy fight has gotten out of hand.  Almost no one likes the way the FCC is trying to plug the holes in its legal dam which are appearing faster all the time.  Investors are unhappy, content providers are distracted, and the FCC’s more productive efforts, including the truly visionary National Broadband Plan issued and then forgotten back in March, are foundering.

So FCC Chairman Julius Genachowski sensibly asked his chief of staff to try to get all the parties together and figure out some way out of the legal logjam.  That shouldn’t have been hard, because almost everyone agrees on the basic principles of net neutrality—and has operated accordingly all along.  And, it seems, the meetings were going well, or as well as these things can go in Washington in the middle of a hot summer.

One positive side-effect of the meetings was that Google and Verizon discovered they had more common ground than they thought.  (The two companies have been working closely for some time—Verizon’s cellular network now handles smartphones that use Google’s Android operating system.)  The companies had earlier written a joint letter to the FCC, and jointly filed comments in the net neutrality rulemaking.  Those documents all indicated that Verizon was prepared to accept a larger FCC role in ensuring the continued success of the net neutrality model, a significant concession.

So to those of us who have been following the maneuverings for a while, the proposal released by Google and Verizon was no surprise.  With one exception, it followed nearly exactly the earlier statements the companies had made together.

It also followed closely what the FCC has been proposing since October, 2009.  Most of all, it proposed nearly-identical rules to the six the FCC announced.

The rules proposed by Google and Verizon include the kinds of exceptions necessary for voice, video, and new services that are already in place.  The FCC proposed the same exceptions.

The Google-Verizon proposal excuses network operators from applying neutrality to unlawful content—including spam, viruses, and illegal fire sharing—just as the FCC proposal does.  It recognized the need fast-changing networks and new innovations in technology and user behavior create for “reasonable network management” and private “managed services,” just as the FCC’s proposal does.

And the Google-Verizon proposal called for Congress to make the neutrality rules a matter of federal law, enforceable on a case-by-case complaint basis by the FCC—precisely what the FCC said.

What was most disappointing about last week’s response to the Google-Verizon framework was the thick layer of hypocrisy and cynicism that came with it.  Much of the invective launched against the proposal criticized features of the Google-Verizon framework that were identical to aspects of the FCC proposal.  

Many of those doing the loudest complaining are those who most ardently supported the same rules when the FCC proposed them.

That’s what happens when a technology problem gets perverted into a political problem.  And it’s why so little progress is being made.

I mentioned that there was one important difference between the Google-Verizon proposal and the FCC’s.  That has to do with wireless broadband.  The FCC, albeit reluctantly, proposed in October that it would apply the six neutrality rules to wireless just as it would to wired broadband.  Google initially agreed, but now takes the same position as Verizon and other cellular operators, which is that the rules should not apply—at least not for now.

Why the distinction?  As anyone with a smartphone knows, wireless broadband access is seriously constrained by overburdened cellular networks.  Even at its best, the capacity of the wireless Internet is a tiny fraction of what can be delivered over cable or fiber, but its users want to do the same kind of high-bandwidth activities on the road as they do at home.  Watching high-definition videos or sharing large files on the wireless Internet is not just technically possible right now.

There are ways to increase the speed and reliability of cellular networks, but they require a combination of new technologies, additional spectrum allocation, and the cooperation of local communities, many of whom resist the installation of additional towers and other infrastructure.

So for now a growing consensus of Internet service and content providers acknowledge that wireless network operators need flexibility.  Some applications will indeed be blocked.

This kind of network management is not “evil.” It’s simply a technical necessity.  It doesn’t make sense to ban it, or even to put a slow-moving federal bureaucracy in charge of deciding how to implement it.

But that, at least, is a conversation that reasonable people could have.  Unfortunately there aren’t many of them around these days.