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Network Neutrality: Reconsidering Flat-Rate Internet Access

Later this week, the FCC is expected to release details of a newly proposed policy addressing network neutrality. These rules, motivated primarily by a desire on the part of the Obama administration to encourage openness and innovation on the Internet, are also mired in intense political debate, some of it ideological but much of it driven by a corrupt system of campaign finance. Corporate donors are staking out their turf and finding compromise won't be easy.

Most tech savvy people understand that the purest form of net neutrality, in which "all packets are treated equally" is a practical impossibility in an era of converged time-sensitive network applications. On the other hand, only naive or disingenuous parties would suggest that a laissez-faire regulatory approach is appropriate for service providers, whose financial motivations and near-monopoly status drives their policies and practices. These are the same folks who believe AT&T blocked Skype on the iPhone because they were concerned about the potential negative impact on current customers. Right.

While much of the historical debate about net neutrality focuses on encouraging non-discriminatory practices amongst wireline Internet service providers, the most fascinating aspects of this debate revolve around wireless providers. On wired networks, performance is mostly an exercise in simple economics. If you want better service, you can throw money at the problem. The same is true of carriers. If we expect them to offer low-cost Internet access services, we have to give them license to manage these services in an appropriate manner.

That doesn't mean they should be able to make arbitrary decisions that prevent customers from accessing new services offered by Google or some other innovative cloud services provider, but it does mean that they may need to define and implement packet prioritization policies that sometimes adversely impact other companies. Here's a simple analogy: if a transportation company built a facility adjacent to your neighborhood that resulted in continuous congestion that impeded your car's access in and out of your neighborhood, would you stand up on the side of road neutrality?

This debate really gets interesting when we add mobility to the equation. Anyone who has tried to use an iPhone in Manhattan during peak usage periods understands the powerful reality that bandwidth on mobile networks is a scarce resource. I don't have much sympathy for AT&T, which has clearly oversubscribed its network. They understood the network load characteristics of the iPhone, which consumes bandwidth in inefficient ways. The company is licensing new spectrum and building out more cells, but it can't possibly keep up with increased demand.