Full of dignitaries and speeches, I was impressed by both Secretary of State Mark Ritchie and Senator Al Franken breadth of knowledge on what this highly charged but reasonably simple issue could mean to me, Minnesota and the nation.

I listened to FCC commissioner Michael J. Copps and commissioner Mignon Clyburn.  They are both on board to turn the FCC in the direction of a true consumer advocacy position.

I listened to many impassioned pleas for the FCC to stand up for consumer protection.  Most of the public comments came from community groups and individuals.

Lastly, I was fortunate enough to speak myself and wanted the FCC commissioners to know that not all corporations are opposed to enforced network neutrality.  In fact, this corporation is strongly in favor of it.

This morning, around the foosball table, we had a discussion about net neutrality and what it could mean to have corporations both owning the content and distribution mechanism.  This is something I commented on, tangentially, in January of 2000:

It's scary to think that one company can own the character I love, (Bugs Bunny) owns the studio he's drawn in (Warner Brothers), the cable network he shown one (The Cartoon Network), the cable company I use to view him (Paragon now called Time Warner) and now the Internet access (which I don't use) used to email my niece about his "cwazy antics".  

Is this the final step in the complete homongenization of our media?  I think it's a large step towards that goal.  The final step will be when all the bookstores, radio stations, television stations and even printing presses are owned by one company.

It's also appears to be a dark day for the proponents of openNET.  They're looking at an ever increasingly difficult battle to demand open access to the cable networks.  When Time/Warner had a subsidiary that provided Internet access to their subscribers, it was feasable that a third party such as AOL or Mindspring could gain access to those subscribers via a mutually beneficial arrangement.  All bets are off now that the
parent copany IS a Internet Access provider.

Maybe the question isn't what are the impacts of AOL / Time Warner.
Maybe the question is who will buy AT&T/MediaOne?

That was sent to the Pioneer Press when AOL was about to merge with Time Warner.   The battle OpenNet fought was lost.  The FCC actually went the opposite way and allowed telephone companies to shut out small independent ISPs (like us).  We cannot sell Internet access on the Cable networks and we’re not allowed to sell the new technologies on the Telephone networks.

I think the issues of the content being owned by the distribution network is still a problem.  The issue of consumers getting access to content is the biggest issue the Internet faces.  Technology to deliver that content continues to evolve very rapidly.  As we look back, the major stumbling blocks for consumers to get access to content has been legal or commercial restrictions.  The delivery mechanisms have been in place LONG before the legal battles are resolved.  This is the nature of capitalism.

Still net neutrality is more than just allowing equal access to content for consumers. Its equal access for business and entrepreneurs  who come up with new ideas of how to use networks.  It’s equal access for both sides of the equation, consumer and business.  If I search and find your product online, but when I try to get to your site, it’s slow, I’m moving on.  Without net neutrality, that problem will be exacerbated.

Adjunct to the content access issue are two issues that haven’t been mentioned because they further complicate the issue.  I think they’re rather important.

• Data Privacy.  All 6 of you who read this blog have heard me talk about this before.  Data privacy goes hand in hand with net neutrality.  If I’m net neutral, I DON’T NEED to know what you’re doing with the delivery network.  But if I’m not net neutral, I kinda gotta know what you’re doing so I can make sure you use my network the way I intend.  And if I know what your doing, then I can generate…
• Revenue.  Governments across the nations are struggling to balance their budgets and I fear that cable operators and telephone companies will bond together and promise huge rewards in added tax receipts if net neutrality is written out.  Network operators today can easily tell what packets are destined for where without breaking into the data.  Would it be hard for them to “tax” you for your traffic going overseas and promise that revenue to Uncle Sam?

This issue IS the largest issue facing the country right now.  Net neutrality underlies everything.  I URGE the FCC to take Internet service and place it back where it belongs, as a telecommunications service.  Protect consumers and businesses alike by creating a playing field where traffic is safe and secure and equal.

Peace.

Bil

In 1997 I spent some time lobbying at the Minnesota Legislature and the Minnesota Public Utilities commission about the differences between a data connection and data communications.  The differences may seem plainly obvious to those of us in the Internet / Cable / Telephone industries, but for those milling around on the hill, they can’t quite grasp the difference between a carrier pigeon and the message tied to it’s leg.  This analogy was too esoteric for those who were approaching dementia so I changed the analogy to a letter carried by a postal service.  They seemed to understand that governments should regulate the postal service, but not the contents of the letter.  You tell me, which part of that analogy resembles a connection and which resembles information?  Pretty obvious, huh?

While it has been obvious for a long time that a telecommunication service is HOW you connect, I think the codgers on the hill got fouled up in the language. The word telecommunication contains that magic word, communication.  When you hear communication, you immediately think of what you DO with a voice service, a cable television service or the Internet.  But we in the industry all know that the Internet, voice, cable television, or anything you DO with a telecommunications service is an information service.

We all use telecommunications services AND information services everyday.  Honestly, it’s difficult to think of a reason to have a telecommunications service without an information service laid on top of it.  I admit that they are so closely tied together that most often you need one to utilize the other.  But there are so many methods of delivering information services that there really is a need for separation.

And that’s how we buy most of our services.  We buy an Internet LINK/PORT and we buy Internet BANDWIDTH.  These are two line items on one invoice.  Sounds like the telecommunications companies already realize these are separately regulated items.

Way back in 2002 the FCC ruled that cable modem service was an information service.  This was dismaying to many ISPs.  Cable companies could legally block ISPs from delivering Internet on cable networks and this new ruling spelled out a path for the ILECs to shut the ISPs out of the DSL / high-speed Internet access market too!  And that’s exactly what happened.

Today Qwests third generation DSL offering is FTTN DSL, with dramatically higher connection speeds than the prior Qwest DSL offerings.  That’s a mixed blessing for consumers.  If consumers really want faster speed for their Internet access and want to stay on DSL, they have but 1 choice, buy from Qwest.  Consumers must buy a bundled telecommunications service and information service from Qwest if they want the higher DSL speeds.  Sadly, that means customers who want to remain loyal to ipHouse cannot.

Prior to 2002 consumers had dozens of ISPs to choose from.  Those same ISPs have been squeezed out of the market by a simple “reclassification” of broadband by the FCC.  Today, if you listen closely you can hear ISPs across the country rejoice at the thought of being able to buy connections again if the FCC is successful at retracing it’s steps.  It might take another 8 years or even longer, but I think that progress is worth waiting for.

Peace.

Bil

All I can say is wow.

The Electronic Frontier Foundation did some preliminary analysis of ACTA. What it comes down to is that ACTA is about to require that signatory countries impose liabilities on ISPs for their users’ behaviors. That means ISPs need to be enforcers/police/nannys for their users. And US ISPs will lose any protections they currently enjoy from the DMCA.

If you use the Internet to share copyrighted information, YOUR ISP could face penalties. Do you think ISPs will accept this? You might expect ISPs to be up in arms about ACTA, but instead they look like they might accept ACTA openly. By all counts ISPs were lucky the FCC lost the case against Comcast. Otherwise ISPs would have no way to be an enforcer! Just kidding.

With vertical ‘content to provider’ consolidation, the big ISPs have a vested interest in becoming an enforcer. Remember, they own some of the copyrighted data being “illegally” shared on their networks. My bet is that the big ISPs are going to start throwing users to the lions as fast as they can.

I can also see that the US government is troubled by copyright infringement on the net. They HATE p2p networks. But thanks to provisions they worked out in the early 90′s for promoting the growth of the Internet, they can’t directly legislate for ISPs to become copyright enforcers. It’s easier to sign onto a treaty…

ACTA is going to seriously challenge US law, possibly overturning rulings by the US Supreme Court.

Maybe “wow” is an understatement.

On a somewhat related but adjunct topic, Steve Jobs recently let the world know his opinion on Adobe’s Flash. Steve put together a nice letter explaining his thoughts and reasons on why Apple has not incorporated Flash on it’s newest technology.

I admit, I’m sometimes frustrated that I can’t view a website on my iPhone because it’s a Flash site and even cursed Steve under my breath. But I can see Steves point.

So does Charlie Stross. Charlie has a theory that might explain what is really going on at Apple. Apple seems to be able to see into the future and Charlie thinks they’re seeing the end of the PC.

How is this “somewhat” related to ACTA?

Simple.

Industry leaders are pushing towards the 3 screens and a cloud scenario. The basic idea is to have all your content accessible to all screens. This would be great, right? Yes, it would. My content available on any device I own would make life a little simpler.

And if copyrighted content is all online, located in large warehouses and I can only license ACCESS to the content, copyright enforcement becomes easy. Very easy.

Right now, Apple keeps 29¢ for each 99¢ sale on the iTunes store. So why should Apple change its model? Steve realizes that maintaining a strong vertical market for content and the devices that consume content requires the strong ENFORCEMENT of copyright. That enforcement is much easier if the copyrighted content is not on the device, but in the warehouse…

Apple realizes that a strong enforcement of copyright is the ticket to maintaining revenues for Apple, not for the holders of copyrighted materials.

The iPad is a reasonable device to view content on, regardless of it’s copyright status. The iTunes store is a great place to purchase or even license content from, especially is you own the copyright… And if you’re Apple, you can change your model to let consumers view content through a device you totally control. Once the content is in the “cloud” you never let consumers actually HAVE a copy of the content (yeah yeah, if I can see it, I can copy it, I know). but I can see copyright infringement beginning to solve itself, which draws in more people with content they want to protect, which enlarges the offering to consumers, which brings more profits to everyone, which makes everyone happy. Right? Right.

WRONG.

Aged consumers like me want to be able to share what moves us. I enjoy giving books and CDs and DVDs to my friends. It’s exciting to see someone light up when they connect to a piece of art like I do. More importantly, I want artifacts I can hand down to my kids that they can hand down to their kids. I expect that I will bequeath my iTunes account to my children. But for some reason it does not have the same heft as that first edition of The Hobbit by Tolkien.

It appears that content in the cloud will protect copyright. But if content really IS king, then the secrets that the next generation iPhone might have held could explain the reaction the “police” had to Jason Chen. What else could explain the over-reaction by the law? Not protecting copyright.

Peace.

-Bil

First off I found out that the FCC can’t protect consumers from big bad corporations. It’s no fault of their own. Big bad corporations spend LOTS of money making sure that the law is in their favor. It was expected that the court would rule (a PDF of the ruling is here) to allow Internet providers to restrict access in order to “manage” their networks.

From the Internet provider side, this makes some technical sense. We need to be able to throttle traffic in order to meet Service Level Agreements and maintain quality service. How we manage our network is part of what sets us apart from our competition.

But content providers are worried that their content will play second fiddle to the content owned by the provider. This seems logical to me too. If we have content that competes with the content provider, why should we give the content provider a free ride to our consumers?

Because that’s what net neutrality is.

I think it’s reasonable to assume that a consumer does not really care who owns the content, as long as access to the content is not restricted in any fashion by their access provider. And that’s exactly how ipHouse operates.

Way back in 1997 I posed this exact conundrum and worried about what happens when one access company / distributor owns the content I want to view? Will I be required to have a Time Warner connection in order to view Bugs Bunny? Will I need a Comcast connection to see MTV online? Today, no. But what about tomorrow? Big corporations without watchdogs will do whatever they want, just watch.

I waited a few days after the ruling to see what the feedback was going to be. This is such a fascinating problem that people have a hard time taking sides. You tell me, should consumers be upset by this ruling? It seems some people just can’t tell if they should be upset or not.

In other fascinating news, a local jeweler gets lambasted by social media and wonders if the publicity generated by the “failed” advertisement offsets the publicity generated by the response to the ad…

Really, you may not have known who R. F. Moeller was a few days ago, but you might know now. This is exactly what social media is all about, responding socially to what companies do in the marketplace. Consumers have a voice, and social media lets those voices be heard, loud and clear. Some might think that this is a win for R. F. Moeller. The amount of publicity they’re receiving might outweigh the scar. Only time will tell…

Then along comes a reminder that some crazy new treaty will put ISPs on the hook for our customers bad deeds. What are people thinking?

All these things make me ogle at the wonder that is the Internet. But it leaves me wondering, is it time to take a break from the Internet?

Nah.

Peace.

Bil

——

We live in a society that has mostly agreed on what is right and what is wrong.  We have coined the term, Common Values in order to build communities where we can agree on what is acceptable behaviour.  To enforce our safe communal living, we turned these common values into laws.  As a society, we have set up governments to enforce the laws (common values) and protect us from those who would harm us.

As members of society, I think we’re all in agreement that theft is a bad thing.  No matter what country you are from, it’s pretty much a given that stealing is frowned upon.  It’s a pretty common value, maybe even sacrosanct.

As an individual living in a society with common values, government is the enforcer of the laws and government prosecutes suspected thefts.  What is interesting is that if an individual is convicted of theft, they receive a punishment based on the severity of the crime, and that punishment is roughly agreed upon by the COMMUNITY.  As a defendant, you have rights of due process and would be able to defend yourself according to the law of the land.  Further, in this country a defendant is protected from the Government, as the Government must also follow the law of the land.

Let’s flip it around.  As a society, we have agreed that if you are the victim of a crime, you will take your grievance to the government and file a claim in court.  As a plaintiff, you also are protected by the laws of the land and due process.  This is how even a single individual can take on a corporation and win.  There is DUE PROCESS for each side, Plaintiff and Defendant that as a society, we have all agreed upon using.

The process of using the governmental courts to settle disputes is what our society has agreed upon for longer than I know without Googling it.   If you feel like an individual or a corporation or even the government has wronged you, you must take your claim to court.

So why are corporations looking to ISP’s to become the enforcers of copyright law? The Anti-Counterfeiting Trade Agreement is being manipulated into a Copyright enforcement act.  But isn’t the enforcement of violated law the job of Government?

If you feel your copyright has been violated, file a claim in court!

There is a push for ISP’s to become the monitor, the snitch, and the enforcer.  That’s not what we’re good at.  I hate to say this, but isn’t that the job of Government?

Lions and tigers and bears!  Oh My!

This is my 4th post to this blog and I am seeing a recurring theme.  I feel like the future of the Internet is at stake.  I don’t know what the outcome of this treaty will be, but I’m hoping that some smart people start looking at this issue RIGHT AWAY and make sure EVERYONE is required to follow due process.

Peace.

-Bil

On Monday, April 27, the wise and knowing Minnesota Department of Public Safety (MDPS),  Alcohol and Gambling Enforcement Division (AGED) delivered written notice to 11 telephone / Internet service providers demanding they “prohibit access to all Minnesota-based computers to nearly 200 online gambling websites.”  Here’s a link to the press release. 

Ok, this is the Internet we’re talking about, right?  You know, the Information Superhighway?

I am guessing that these 11 respectable companies are recognized as Common Carriers by the great state of Minnesota.  That must be the only criteria for being selected for this list, otherwise, we at ipHouse would have received a request too.  Just for the sake of clarity, as of this posting, we have not received a request from the AGED.  But if we had received a request, we would have asked for some kind of legal backing.  And that’s where this falls down.  The great state of Minnesota is relying on the Wire Act of 1961 to enforce this ridiculous request.  

What I can’t see is how this request can be enforced, even using the Wire Act.  Before I snicker at any enforcement discussion I’ll put that question aside and just wait and see.

Now, as a citizen, I understand that the Minnesota Department of Transportation does not expect the companies who build our roads and bridges to enforce the speed limits on the roads they build.  Further, we would never expect or request these same construction companies to do vehicle contraband inspections at the state border.  So, WHY ON EARTH does the Minnesota Department of Public Safety  think that they should conscript the builders of the Internet (Information Superhighway, get it?) to do their enforcement?    Why not go after the people who are committing crimes instead of the people who build the roads?  You don’t task road builders with catching drunk drivers, do you?

John Willems is the director of AGED and I can’t help but wonder  what he was really thinking when he said this:

“In broader context, the long-running debate on online gambling continues to raise significant issues, including absence of policy and regulation, individual rights, societal impact, international fair-trade practices, and funding for criminal and terrorist organizations.”

Does he really think that Joe the Plumber is betting on the Red Sox and innocently funding Al-Qaeda?   Come on.  Isn’t the whole terrorist thing a little over used? 

I agree that there is a long running debate on gambling in our society.  But it’s not just online gambling.   To me, the issue of gambling in our society PALES in comparison to some of the other issues Mr. Willems mentions; individual rights and international fair trade practice.  If Minnesota is going to remain competitive in the WORLD, we cannot be xenophobicly locking down our borders to international trade across any of our transit ways, be it by water, air, rail, road or Internet.

Now, as you look at these various transit ways, all of them EXCEPT the Internet have a specific geographic nexus.  Nearly all transit ways have ports of entry and it’s easy to see geographic boundaries between nations and states.  It’s pretty easy to understand the nexus of a shipment of goods coming across the St. Lawrence sea way is the port of entry at Duluth harbor.  It’s all very black and white.  But the Internet is in as gray area and different because the NEXUS of the transaction is vague.  What is the nexus of a Minnesotan purchasing software from Belgium or India?  What happens when part of the software is written in China?    The nexus of Internet transactions are VAGUE.

It appears that Mr. Willems has defined the nexus of online gambling is at the individual users computer, right here in Minnesota.  If that’s right, then Mr. Willems should target the individuals who are committing the crimes.  Why not go to the credit card companies and ask them to report all the transactions between the citizens of Minnesota and these 200 gambling websites?  Because he can’t afford to.  It’s easier for him to push on the road builders instead of all the motorists who use the roads.

We all know that as citizens of Minnesota have REAL problems that need REAL attention.  Like drunk driving and alcohol addiction.  Like air pollution and lung disease.  If Mr. Willems wants to protect the citizens of the great state of Minnesota, maybe he should focus on some of the more pressing problems facing the state.

I’m a firm believer in regulating things to protect our society.  Regulating polluters so future generations can enjoy the outdoors seems obvious to me.  Regulating alcohol sales to prevent underage drinking, I’m all on board.  So why not legalized and regulated online gambling?  It could be a revenue source for the state just like the other areas that Mr. Willems has under his jurisdiction.  Mr. Willems, why not be progressive and start regulating online gambling like you do with bricks and mortar gambling?  

Whatever the outcome Mr. Willems, just don’t ask me to collect your revenue for you.  I’m neither an enforcer nor a tax collector.  I’m a road builder.  

Peace.

-Bil

One big issue at hand is, what happens to the data that you create when using the Internet.  “Data I create?  I don’t create any data when I’m on the Internet…do I?”  Yes, you do.

Currently when you do any of the following, you are likely creating data that can be tracked.

You create data…

• When you make searches at Google.
• When you look at movies at Netflix.
• When you check scores at ESPN.
• When you read customer reviews on Amazon.
• When you search for someone on Facebook.
• When you watch a video on Youtube.

All of these are innocuous, but together, they create a profile of you, and can reveal some very private data.

Let’s start with the first item:  Search terms.

Lets stipulate that the actual search term you use on a search engine is private data, similar to a request you make at the library or at a book store.   To follow on, it’s strongly possible that the results that are sent to your browser are private data.  Today, it requires a search warrant to see the contents of your computer hard drive so I can infer that the results from the search engine are private data.

“Whew, I’m safe, right?”

Nope.  In order to use the search engine, it’s possible that you’ve given “consent” to use the data you supplied and have waived any privacy rights you may have had. Further, the search results are logged before they are sent to you.  This creates a big gray area for data privacy that is not currently protected.  And from the content providers point of view, It’s NOT private data.

This goes for all type of data you send across the Internet.  The search requests you make, the stock quotes you review, the movies you download, the books you buy.  The list goes on and on.

“Wait a minute, why would someone even WANT this data?”

The motivation for companies to keep your privacy intact is two fold.  Penalties from regulatory bodies and the all important revenue.  If a company will face a penalty or lose revenue, they will likely keep your privacy intact.  But if they analyze the situation, they may conclude that selling the data is more financially beneficial than protecting your privacy.  This is not new to data that companies hold, but it’s new in context to the online world in which we live in.

Today, much online content is “free”, with only the hidden cost being you accept some loss of privacy.  We are so used to clicking “accept” that we’ve lost track of the value of what we are giving up.  It’s compounded by the good track records of the companies that are collecting data.   So far, their use of the data has not directly affected us, so who cares if someone knows what movies we like?  ”So really, nothing bad has happened so far, right?”

Right.  But that’s because the data is broken into chunks that are hard to combine.  I would guess that Travelocity and Orbitz and Expedia don’t share too much data because there is probably not an financial model that makes it profitable.  But let’s take another model and see what happens… Comcast has an on demand video solution, as does Apple and Netflix.  Should Netflix and Apple be worried that Comcast is going to start reviewing what their visitors are doing?  Does Comcast wants to have the online video business for themselves?

Luckily or not, each website you visit has only a piece of your online escapades.  The New York Post does not know what articles you read at the Washington Times.  Fidelity can’t see what stocks you traded at Etrade.  From the content providers point of view, you’re a statistic only when you visit them.

Which leads me to the next thought.  The ISPs’ point of view.

Above, I talked about data collection from each web site being possibly harmful.  That’s nothing.  Really.

The real loss of privacy will come when ISPs’ start collecting data on your browsing habits.  Think about it.  As much as Google knows what you’re doing when you visit Google, your ISP really knows what you’re doing at every website you visit.  And they can read your mail (like Google) and track your IM conversations and capture your VOIP calls… They know all that you do online and everything else about you.  SCARY.

Thankfully today, ISPs’ do only a little TRAFFIC monitoring.  ISPs’ legitimately monitor traffic to:

• To protect their revenue (keep customers online and happy).
• To protect their assets (network).
• To protect their customers (SPAM filtering).

Most ISPs’ don’t monitor the CONTENTS (data) of the traffic they manage except to comply with regulation and law enforcement.  Really, most monitoring is often “look at header info and discard”.  It’s important here for me to point out that any data collected by ipHouse is not held in order to create profiles of users.

Traditionally, ISPs’ have NOT monitored data because it was just too hard to do.   But that’s all changed.  Deep Packet Inspection technology has advanced to the point of being able to transparently evaluate traffic for specific patterns and usage without impacting the consumer experience.  This allows the ISP to deliver “tailor made” content to users.  Remember Travelocity not seeing Orbitz or Expedia data?  Forget that.  The ISP can now sell all travel related “traffic” from its subscribers to the highest bidder. Or bidders.

Deep Packet Inspection technology allows the management of traffic and/or data according to a set of policies that promote security or revenue or censorship or whatever.  The ISP sets the policy according to their desires.  “Really? My ISP can just monitor my data if they want to?”  Yes.  But there may be existing law that prevents the monitoring of data and that needs to be proven.

If the existing law is shown to not be applicable to ISPs’, it might make a lot of sense (and dollars) to monitor customer data.  But all things have a cost.  One anticipated cost is that spying wouldn’t be done just for profit.  How long would it be until ALL data is monitored and reviewed?  If ISPs’ monitor data, should they block data based on some policy for decency or obscenity? Who’s policy would that be?  Should ISPs’ be responsible for any and all security or ethical breaches (by whos standards?) that occur because of the data on their network?   Should ISPs’ send all suspicious activity to some authority for review?  Data monitoring could become mandatory.

So, should ISPs’ monitor thier customer data?  I say no. This is MY ethical position.  It’s ethically wrong to spy on people.   Further, I feel it is ethically wrong to profit from spying.  ISPs’ should NOT monitor data for profit or for government.

The power and beauty of the Internet is in its ability to bring people together across cultures, faiths and boundaries.  Once one group or government starts dictating “inappropriate” content, the Internet becomes simply a tool for that organization to push their own agenda and the “one world” quality of the Internet is lost.

Peace.

-Bil

Thoughts for comments:

• Privacy is not a technical issue and should not be addressed by ISPs’.
• ISPs’ should remain neutral to content of the data streams they manage.
• Our society should rethink privacy from a contextual integrity perspective.
• Online Privacy == Network Neutrality

Further Reading:

Paul Ohm : The Rise and Fall of Invasive ISP Surveillance

Daniel Solove : Understanding Privacy

Any discussion on network management these days must include a discussion on net neutrality. Why? Because limiting access to certain types or sources of content is one way to ease resource demands across a network.

What is net neutrality? Net neutrality is the idea that access to content on the Internet should be equal and fair, regardless of the access method or the provider of access. This sounds simple, but it’s not.

A neutral network is free of restrictions to all Internet content and is also free of restrictions on the equipment used to access the content.  A partially non-neutral network would be a cellular phone company.  They restrict what equipment you use to get access to the content. You typically must buy a phone they provide. A neutral network will let you use any equipment you choose when connecting to the network.

What’s the big deal? When Internet access companies are also content providers, net neutrality issues come to the forefront. A great example of this is Time Warner. Time Warner owns and produces content as diverse as Bugs Bunny videos and CNN. They also own Time Warner Cable. If you’re a Time Warner Cable subscriber, chances are that you will have unrestricted access to Bugs Bunny videos, but if you subscribe to DSL from a phone company, Bugs Bunny videos may not even be available to you. Now take the Time Warner Cable subscriber who wants to watch a video on the Fox News website.  Fox News is a direct competitor of CNN. Is it in the best interest of Time Warner Cable to restrict or filter the access to the Fox News website in order to get their subscribers onto their own website (CNN)?

But the market will win, right? Maybe. It is obvious that not all content will be owned by one access provider. That’s not the issue with net neutrality. Net neutrality is about allowing unfettered access to all types of content, regardless of ownership, viewpoints, opinions, or criticisms. It’s my opinion that net neutrality can be legislated, but access providers will find ways to show preferential access to certain types of content no matter what the regulations say, thus bypassing regulations. The reason Access providers will bypass regulations is simple, the demand for bandwidth is skyrocketing.

Unprecedented demand for bandwidth. Access providers are seeing explosive growth in bandwidth utilization. Access providers are supplying larger connections and oddly enough, consumers are using them. The old adage is, “On the Internet, content is king and the king is damned fat”. 

Recently the iTunes store started offering both high definition and standard definition formats for episodes of this season’s television shows.  You might say hurray, but the Access providers are saying OUCH! A standard definition episode might be 300 Megabytes, but a high definition episode will be anywhere from 1 gigabyte to nearly 3 gigabytes.  iTunes is only 1 reason Access providers have seen a huge jump in bandwidth utilization over the last 18 months.  

We at ipHouse have seen a 35% increase in the bandwidth utilization from our individual accounts over the last year. During that time we have transferred over 4 petabytes (4,000,000,000,000,000 bytes) of email, pictures, videos, songs and who knows what else. When I divide this into my subscriber base, the numbers are staggering. It means that every single one of my subscribers is downloading 1 Megabyte of data every day, even when they’re not online!  But this is not a true representation of what is really happening on the network. Statistics show that most subscribers are downloading less than 200 kilobytes a day. 

The majority of bandwidth is being consumed by a few individuals who are transferring an unprecedented amount of data. These individuals pay their bills on time, do not utilize tech support and are advocates in the market place by praising us to their friends. Still, they’re consuming a large amount of technical resources… We categorize the top 5% of our individual subscribers as “excessive” utilization users, regardless of other business metrics.

“Excessive” utilization? Access providers are focusing on these heavy users, creating their own definitions of excessive utilization. This month excessive utilization might be 250 gigabytes. Next month it might be more, less, or the same. The Access provider holds all the cards when it comes to defining Excessive utilization. The Access provider can restrict when a subscriber can get full or limited bandwidth, what services are available (for example, bit torrent or file sharing), and how many bytes can be transferred in a given period. Access providers are already providing Quality of Service on their networks, so restricting “excessive” utilization is just another metric that becomes automatic. 

Coincidently, Quality of Service also creates what appears to be a neutral network while still meeting the business objectives of having preferential content delivered to subscribers. By defining the Quality of Service for a given set of content, or services, it becomes easy to show Net neutrality, while delivering something completely different.  Net neutrality only works when bandwidth is not limited or when bandwidth paid for on a consumption basis which leads me to…

Time based vs. consumption based markets. Consumers of services are used to two basic billing models. The first is flat rate but time based.  We are all familiar with this model. You can rent a movie for 24 hours for 99 cents. The second model is a variable rate, but purely consumption based. The water company or the electric company charge based on a small but measurable variable rate and the consumer pays for the amount of service consumed. There is also a hybrid model of time and consumption. An example of the hybrid model is a car rental that is a $39 dollars per day PLUS mileage.

Access providers had originally chosen the hybrid time/consumption model, as an example – $19.99 for 100 hours per month. The heavy costs to provide the service were tied to acquiring and supporting customers, not in the technical resources the customers used. Access providers quickly abandoned the hybrid model for fixed rate service offerings with “unlimited” access. Access providers quickly learned that the demands of some subscribers would heavily tax the infrastructure they share with other subscribers. Limiting the heavy users proved problematic as those subscribers cried foul and demanded that the Access provider provide what they were sold.  Access providers have no choice but to either jettison “Excessive” users or bill those users based on what they consume. It’s probably too late to change the model one more time and I doubt subscribers would be accepting of a model based purely on consumption.  Instead Access providers are looking for ways to offer “full spectrum” services while limiting what is being consumed in some fashion. The cable operators that provider Internet access were the first to move in this fashion.  AT&T recently joined the pack in limiting the data transfers available with each access account.

The underlying question is, can the demands of more and more bandwidth by subscribers be in concert with network neutrality?

The marriage of network policy and business objectives The answer to the above question is YES – IF subscribers are willing to pay for it.  I believe that the typical Access provider wants to offer neutral access to content.  Most Access providers do not own content and are interested in allowing their users unfettered access to content. The problem is who is going to pay for the bandwidth? Some access providers are forming alliances with content providers to support their bandwidth needs. These alliances can create sticky situations for the Access providers though. I think the better answer is simple Quality of Service offerings that manage the bandwidth demands on the network.  By keeping this issue as a technical problem, a technical answer can be found. If bandwidth demand becomes a financial issue, then the logical course of action is to implement a hybrid time/consumption billing model. While a small number of subscribers may be dismayed by the new billing model, only the excessive users will actually be impacted. But what about access to content regardless of where it originates and how much bandwidth it uses? This raises the question of regulation of Access providers… 

Regulation preventing access to networks, prevents network neutrality. Most small Access providers are not worried about getting access to the content kings of the Internet such as Google/YouTube, but Access providers are worried about the old media empires restricting access to content.  Regulation now prevents small Access providers (like ipHouse) from accessing the cable and phone company physical networks for providing network access to our subscribers.  Since we’re locked out of the telecom side, the next logical step is for the content companies, (who own the cable companies) to restrict content access to their own Internet access subscribers.

Time will tell, but net neutrality is a war that is likely to be lost by consumers and small Access providers. Even though most of the individuals battles are winnable, the small Access provider just doesn’t have the resources to win this war, even if we have legislation on our side.

I was also asked to talk about managing data content as an Access provider. within the following topics:

File sharing / Individual Privacy: Should access providers become data managers? I think this question is best asked, why should Access providers become data managers for content owners? I cannot find an analogy in any of the historical media distribution systems that is similar to the models that have been proposed for Access providers. One model makes the Access provider responsible for their subscribers’ file downloads, with the Access Provider paying the Content Owner for all downloaded media. That’s similar to the old C.O.D. model used for shipping chattels.   Why on earth would Access providers want to collect revenues for a third party?

Another model is a $5.00 per month ISP tax for music. The Access provider collects a tax and sends the revenue to someone to be distributed to someone else, thus adding a middle man. Huh? Do they think Access providers are a replacement for the jukebox companies of yesteryear?

The answer is no. Access providers are not data managers for Content Owners, nor should they become data managers by legislation. Still, stranger things have happened.  It’s been more than a decade since the Internet Revolution and people are STILL trying to figure out how to munge their old business model, be it music distribution or classified ads, into the Internet connected world.

Who would pay for such management? Ok, lets say either model gets some foothold. Access providers are acutely aware of bandwidth and resources required to shape bandwidth as it is delivered to subscribers. The infrastructure required to measure file downloads is technically available, but the cost to implement such a system is not worth the costs when divided into the number of subscribers. Assuming the Access provider is collecting transfers or a flat tax, who will pay the Access provider for the infrastructure to measure and tabulate the data? Adding systems adds costs and managing data is not a cheap cost.  So the question should really be, why are old world Content Owners forcing their old business model into the new world? Update the business model and the question of who will pay becomes moot.

What about the privacy of subscribers?  Who will protect them? Part of the problem with monitoring subscribers use of Internet access is just the “Big Brother” aspect of snooping into innocent and private communications. What do Access providers do when they stumble upon a discussion about a possible transportation strike or a shortage of a flu vaccine? Are Access providers responsible for monitoring the activities of their subscribers? Are telephone companies responsible for the drug deals that are setup via the telephone network?  

Today, Access providers are bound by existing law to protect consumer information and are treated as publishers and as carriers without liability to the content that traverses their networks. Assuming Content Owners get their way, this will all change and your tastes and interests will become just another metric Access providers will have in their database. Access providers need to manage their subscribers to the benefit of their own business, not the business of Content Owners.

Where does that leave net neutrality?  As much as you might think that Content Owners want net neutrality, think again.  Dedicated partnerships between Content Owners and Access providers might force subscribers to pay for content, fully to the benefit of Content Owners and logically, Access providers can restrict the choice of the content available.  Legislating net neutrality might be a good thing or it might not. Consumers need to speak out and make sure their voices are heard before they don’t have a way to speak out.  

Peace.

-Bil