Net neutrality debate spreads to Europe

Today I spoke in Brussels at a well-attended seminar on “Net Neutrality and the [EU] Reform Proposals for the Electronic Communications Sector.” The event had a number of sponsors, including two Belgian Universities (Namur and Leuven) the ISP Association of Belgium and some consultancies. It appears that the neutrality norm for internet governance is becoming widely discussed in Europe and is influencing the European Commission's implementation of its sectoral reform efforts. Indeed there is a

Chris Boam of Verizon was there and made some interesting comments. One was that Verizon has no interest in Deep Packet Inspection technologies and has rejected the idea of implementing them. The other was that Verizon's Open Development Initiative, which supposedly loosened up its vertical leverage over wireless handsets on its network, was “not a change in policy” but simply a re-packaging and more aggressive public promotion of its prior policy, which was that any handset manufacturer or developer could approach Verizon and be approved if they met some basic criteria. Hmmm…

I of course tried to emphasize the global relevance of the net neutrality norm and its free expression and innovation implications. I pointed out that state actors are often the worst violators of the NN principle, either by orders to block content or to leverage ISPs to enforce policies. I also tried to distance the NN norm from opposition to bandwidth differentiation. In a slide titled, “it's the pricing, stupid,” I tried to explain that if ISPs need to ration bandwidth they should do it not by Comcast-style meddling with protocols, nor by making decisions for users about when and where they can use specific applications, but by pricing that discriminates only on the basis of actual bandwidth consumption, making heavy users pay more than lighter users. This of course implies that NN advocates who oppose charging more for more bandwidth are really fighting against their own cause: if ISPs cannot price-discriminate between bandwidth hogs and lighter users then they are less likely to invest in bandwidth expansion, and their only bandwidth conservation strategy is to restrict or meddle with applications and content.

Pierre LaRouche's presentation, based on his Sept. 2007 paper, focused on a critique of access tiering, and made a zero-sum game argument that offering faster speed to one group necessarily meant degradation of service for others. But his paper also carefully explained which aspects of EU regulation could address which problems associated with deviations from net neutrality.

Richard Cawley of the EC's DG on the Information Society characterized the NN NN debate as a fight over revenue extraction in a two-sided market. He advised that discrimination is not per se bad, it can serve good purposes when it leads to more efficient pricing and supply. Yves Blondeel of T-REGS stimulated an interesting discussion of the contractual terms of ISPs and the degree to which regulators can make them be more transparent and/or enforce the commitments they make. Tom Kiedrowski, of Britain's Ofcom noted that he didn't fear deviations from NN because of the high level of competition among ISPs there, which (we both noted ironcially) is partly attributable to the imposition of very heavy nondiscrimination regulation on layers 1 and 2.

The more I see of this debate over broadband policy, the more convinced I become that systematic content discrimination or extensive vertical integration into content by ISPs will be abandoned as both politically indefensible and bad business. The ISPs only valid concern is efficient bandwidth management in an increasingly bandwidth-hungry, multimedia environment. The real solution to that problem lies in a rational alignment of bandwidth use and service pricing.

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