Net Neutrality

Front matter

Towards a Co-Regulatory Solution

Christopher T. Marsden

Towards a Co-regulatory Solution

Index

Net Neutrality: Content Discrimination Quality of Service: A Policy Primer Positive Discrimination and the ZettaFlood

User Rights and ISP Filtering: Notice and Take Down and Liability Exceptions

European Law and User Rights Institutional Innovation: Co-regulatory Solutions The Mobile Internet and Net Neutrality

Conclusion: Towards a Co-regulatory Solution?

105 133 159 181 211 237

VII

3G LTE 3GPP

ADSL

ADSL2+

AT&T

AVMS

AWTs

BBC BEREC

BERT

BPON

BT

CDMA CoE

List of Abbreviations

Third-generation mobile networks, providing voice and data capacity at midband speed above 128 kilobits per second

Third-generation mobile networks Long-Term Evolution

3rd Generation Partnership Project, a collaboration between telecommunications associations to make a globally applicable 3G mobile phone system specification within the scope of the International Telecommunication Union (ITU)

Asymmetric Digital Subscriber Line, technology for sending data over copper telephone wires, using asymmetrical speeds: higher download and slow uploading speed

Asymmetric Digital Subscriber Line 2+, a later higher speed variant of ADSL

American Telephone and Telegraph, formerly a US monopoly telephone company subject to universal service, broken up into Regional Bell Operating Companies in 1982-4, leaving AT&T as long distance provider, since absorbed into an agglomerated regional incumbent provider. In this book, AT&T generally refers to its monopolistic pre-1982 existence

Audio Visual Media Services, New Directive passed in 2007 to regulate audio visual media in Europe (see below TVWF)

Alternative wireless technologies to mobile GSM and UMTS: these include WiFi, wireless local area network (WLAN), RFID and Bluetooth, with longer range WIMAX IEEE 802.16x and other proprietary technologies

British Broadcasting Corporation, a publicly owned and publicly financed broadcaster, see PSB

Body of European Regulators of Electronic Communications, see BERT

Body of European Regulators in Telecom, proposed regulatory body to help implement 2009 European telecoms laws. Other proposals for a similar body include BEREC, EECMA, and GERT

Broadband Passive Optical Network, networks utilizing a lower bandwidth Time Division Multiple Access than Ethernet fibre, and also splitting a single optical fibre between many (typically 32) households

British Telecom, UK incumbent with competitive international operations separately managed under BT Global Services, and former owner of O2 mobile networks internationally (now owned by Spanish incumbent Telefonica)

Code Division Multiple Access

Council of Europe, socio-cultural organization established in 1948, which in part seeks to uphold human rights in the ‘wider Europe’ of both EU Member States and non-members to the east and north,

VIII LIST OF ABBREVIATIONS

CRTC

DivX DMCA

DNS DPI

DRM

DSL DSLAM

DSM

DT

DWDM

E2E

EC

ECD

ECHR

EECMA ERG

ETNO with currently 47 members. See also ECHR. It is also responsible for the Cybercrime Convention of 2001, ETS No.185

Canadian Radio-Television and Telecommunications Commission, the converged federal regulator of broadcasting and telecoms for federal Canada

MPEG-4 based digital video compression format

Digital Millennium Copyright Act 1998 in the United States, a statute which obliges ISPs to take down material whenever they are notified of copyright infringement, under the Notice and Take Down (NTD) procedure

Domain Name System, global address system for Internet hosts

Deep Packet Inspection, means by which ISPs can read into the packets of data they carry to analyse the contents as well as the header, in order to prioritize, deprioritize or even block the packets

Digital Rights Management, method of embedding content standards and policy into computer-readable form, used to enforce copyright conditions

Digital Subscriber Line

Digital Subscriber Line Access Multiplier, the box typically located in the local exchange which provides for typically about 32 households’ Internet access from the backbone network

Dynamic Spectrum Management, technology that can effectively replace DSL to provide faster data transfer using the same copper wiring

Deutsche Telekom, German incumbent operator, also owner of T-Mobile networks internationally

Dense Wavelength Division Multiplexing, an ultra-high-speed broadband technology

‘End-to-end’ policy choice, based on an engineering principle that the early Internet worked best when all packets were routed with the same priority

European Commission, executive body of the European Union responsible for developing and implementing the acquis communitaire, the body of EU law

E-Commerce Directive, 2000/31/EC, which limits ISP liability for packets it hosts or carries over its networks without knowledge of the content

European Convention on Human Rights, more formally the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in 1950 by Member States of the Council of Europe

European Electronic Communications Market Authority, see BERT

European Regulators Group, advisory body set up by 2002 regulatory framework for European telecoms, the grouping of the Member State NRAs

European Telecommunications Network Operators, association of predominantly incumbent network owners

LIST OF ABBREVIATIONS IX

DOCSIS 3.0

GB Gbps GERT GPON GSM

HADOPI

HDTV HSDPA HSUPA ICT IETF

IGF

IMS IP IPR IPTV

European Union, as established in the Treaty of Maastricht 1992. Formerly the European Economic Community (EEC)

European Digital Rights Initiative, a non-profit lobbying group on behalf of national privacy and Internet rights groups across Europe Exabyte: 1,000 petabytes (1 million terabytes or 1 billion gigabytes) Federal Communications Commission, the converged broadcast and telecoms regulator for the United States at federal level

Fair reasonable and non-discriminatory terms, where a monopoly provider of facilities (whether patents and other intellectual property, or physical goods) provides access to its competitors

France Telecom, domestic incumbent in France, also owner of Orange mobile networks and formerly branded as Wanadoo ISP internationally

Fibre-to-the-home: high speed Ethernet-ready transmission wire offered as FTTH (Home), FTTP (Premises) and FTTC (Cabinet — street furniture for telecoms normally available to each neighbourhood, therefore more local than the exchange) varieties

Data Over Cable Service Interface Specification, the third generation of these cable broadband data standards

Gigabyte (1,024 megabytes)

Gigabit per second (1/8th of a gigabyte per second, or 128 MBps) Group of European Regulators in Telecoms, see BERT

Gigabit Passive Optical Network, an evolution of BPON

Global System for Mobile Communication also known as 2G, secondgeneration mobile telephony

Haute Autorité pour la Diffusion des Oeuvres et la Protection des Droits sur Internet (translation: ‘High Authority of Diffusion of the Art Works and Protection of the (Copy)Rights on Internet’), an agency established under the 2009 French Law against copyright infringement, more formerly the ‘loi favorisant la diffusion et la protection de la création sur Internet’

High Definition Television

High Speed Downlink Packet Analysis, a 3G mobile phone standard High Speed Uplink Packet Analysis, a 3G mobile phone standard Information Communication Technology

Internet Engineering Task Force, a self-regulating technical standards body

Internet Governance Forum, United Nations multistakeholder discussion forum initially held in Athens 2006, and to be held annually for at least four years thereafter

IP Multimedia Subsystem, a set of standards for NGNs

Internet Protocol

Intellectual Property Rights

Internet Protocol Television, video programming delivered over

IP networks rather than broadcast (cable, terrestrial and satellite) networks

X LIST OF ABBREVIATIONS

ISOC

ISP

ITU

NGA

NGNs NRA

OECD

Ofcom

Internet Society, coordinating mechanism for Internet standards and policy

Internet Service Provider; company providing access to the Internet for consumers and businesses. The largest ISP in most Member States is provided by the incumbent telco. ISPs often provide content, have ‘portal’ pages which offer news, weather and video reports, dating, chat, search and other functions. Mobile networks are also ISPs International Telecommunication Union, United Nations body established to coordinate global telecommunications, successor to International Telegraph Union founded in 1865

Internet Watch Foundation, UK ‘hotline’ for illegal content reporting established in 1996

Local loop unbundling, the regulated process whereby competitors can access the incumbent telco’s connections from telephone exchanges to the customer premises, using regulated access prices and conditions

Migration Authorization Code, required in the United Kingdom for consumers to switch between ISPs

Megabyte (1,024 kilobytes)

Megabits per second

Member of the European Parliament

Monopolies and Mergers Commission, forerunner to the Competition Commission, the UK general competition tribunal

Multiprotocol Label Switching, a standard set for NGNs

Notice and Take Down, regime by which ISPs can avoid liability for potentially damaging content by removing such content on receipt of notice from a third party

Next Generation Access, the use of new technologies (such as FTTx) to offer high speed connections between subscriber’s premises and the main NGN

‘Next Generation Networks’, all-Internet Protocol (IP) networks

National Regulatory Authority, in reference to independent national bodies established under national law of the Member States of the European Union, which implement the European communications framework. NRA can also be used generically to refer to any national authority, such as the Canadian CRTC or US FCC

Organization for Economic Cooperation and Development, ‘Thinktank’ for developed nations: 30 national members; membership is limited by commitment to a market economy and a pluralistic democracy. Formed in 1961 and grew out of the Organization for European Economic Co-operation (OEEC), established in 1947 Office of Communications Regulation, UK converged regulator of broadcasting and telecoms established in 2002 and operational in December 2003

LIST OF ABBREVIATIONS XI

ONP

P2P

PON

PSB

PVR

Telco

VDSL

Open Network Provision, the principle behind interconnection of telephone networks that helped liberalize European telecoms in the late 1990s. The Directives that established this are known collectively as the ‘ONP Directives’, from 1990 onwards

Peer-to-Peer, usually used in reference to file sharing amongst many peers, an efficient form of many-to-many information sharing as compared to a broadcast model using a central server. P2P is the method of distribution used by Skype, BitTorrent and many other information-sharing programmes

Passive Optical Network standards including Broadband PON (BPON) and Gigabit PON (GPON)

Public Service Broadcaster, granted special licensing conditions ostensibly in exchange for meritworthy, educational and news programming. The United Kingdom has four: the British Broadcasting Corporation [BBC] is publicly owned and publicly financed without advertising; Channel 4 is publicly owned but financed by advertising; two, ITV and Channel 5 are privately owned and advertising-financed.

Personal Video Recorder, a hard drive based recorder in the subscriber’s home (known in the United States by the brand TiVo) Quality of Service, protocols and standards designed to offer guaranteed QoS have been mooted for many years, but none has yet been successfully marketed on the public Internet

Petabyte: 1,000 terabytes (1 million gigabytes)

Radio Local Access Network, including standards with popularized names WiFi or WiMAX

Significant Market Power, measure of dominance in European competition law, with a specific application to telecoms law

Short Messaging Services or ‘texting’, ubiquitous 160-character or less messages sent from GSM mobile phones

Self-regulatory organization, institution designed to provide guidance and enforcement of conduct or content standards, in our case including a broad spectrum from ‘self-organized’ to co-regulatory forms Telecommunications provider, term normally used for incumbent former national monopoly provider. There are also ‘competitive telcos’ — all other providers of switched telecommunications services except the national incumbent

Television without Frontiers, directive of 1989, formally Directive 89/552/EC as amended in Directive 97/36/EC

Universal Mobile Telecommunications System, also known as 3G, third-generation mobile telephony

‘Unbundled network elements’ or the US equivalent to LLU (see above)

Universal Service Obligation, for European consumers the right to a 33 kbps telephone line for European consumers. USO will be upgraded as broadband network speeds increase

Very high speed DSL

XII LIST OF ABBREVIATIONS

VOD

VoIP

VDSL and VDSL2

W-CDMA

WAP

Web 2.0

WLL

ZB

Video-on-demand, provision of video programming at individual demand rather than by an editorial controller in a scheduled sequence

Voice over Internet Protocol, technology to digitize sound in packets sent over the Internet. Its primary advantage is that distance does not affect the cost of the call between two VoIP enabled phones (or computers attached to the phone or a data system)

Very high speed (20—80 Mbps) asymmetrical versions of DSL

Wideband Code Division Multiple Access, a third-generation mobile telephony standard

Wireless Application Protocol, used to enhance Internet use by delivering specially programmed, simplistic and graphic-poor pages over narrowband networks

Social networking applications using blogs, podcasts, wikis, social networking websites, search engines, auction websites, games, VoIP and P2P services. These services, which are based in part on the Ajax mark-up language, makes user-generated and distributed content central to consumers’ Internet experiences

Wireless Fidelity, standard for WLAN designed to Institute of Electrical and Electronic Engineers (IEEE) 802.11a/b/g specification Worldwide Interoperability for Microwave Access, a broadband wireless technology

Wissenschaftliches Institut fiir Kommunikationsdienste GmbH, a telecoms economics research institute based in Bonn, well known for its work on behalf of the EC, German regulators and DT and its subsidiaries, and many other clients

Wireless Local Loop, a broadband mobile solution offered by RLAN technology

The World Wide Web, a set of standards including those for graphical user interfaces using hypertext mark-up languages for displaying Internet information, invented by Tim Berners-Lee, now standardized by the WWW Consortium, a Self-Regulatory Organization

Zettabyte, 1,000 exabytes — future measure of network capacity

XIII

Preface

This book arose from three strands of research that I found myself involved in over the last decade, by my extreme good fortune. They are a European research project on Internet self-regulation at Oxford in 2004; research conducted with Jonathan Cave, Ian Brown, Colin Blackman, Jon Crowcroft and others in Cambridge in 2005-7; an ongoing intellectual engagement with a group of brilliant US lawyers and economists enabled by Viktor Mayer-Schonberger and Kevin Werbach (as well as the Telecoms Policy Research Conference) over a ten-year period.

First, Oxford. I had spent 2003 on self-reinforced sabbatical in Barcelona following the dot-com meltdown (specifically my video-on-demand start-up ShortMedia, with inspirational co-founders Doug Laughlen and Ivan Croxford) and more particularly the grotesque fraud at MCI WorldCom, following which I had resigned on principle in July 2002. The lack of consumer broadband in the period 2000-2 ended the hopes of many for a rich multimedia Internet at that point — there was capital, but no users to consume or help create mash-ups from licit or illicitly distributed content. The chance dropped out of the blue to help Damian Tambini to complete research and write the final report of selfregulation.info, as well as investigate the groundbreaking mobile content Code of Conduct, and help write up the results of ‘Losing Liberty in Cyberspace’ with Christian Ahlert. My thanks to Damian and Christian, to Danilo Leonardi, Marcus Alexander and Louise Scott. That project put me into a short-term research position at the Oxford Internet Institute, thanks to Bill Dutton and Vicki Nash, and from there I met the brilliant Jon Crowcroft, who helped introduce me to the extraordinary work being created at Cambridge. I also thank my colleagues and friends on frequent visits to Tokyo, Adam Peake, Ken Cukier, Motohiro Tsuchiya, Keisuke Kamimura, Izumi Aizu, and others in business and government, as well as those in Seoul, who helped me on my visits to the Far East to understand what leapfrogging is really about.

Second then, Cambridge. There are three strands to this connection. First, Colin Blackman and I had known each other since the late 1990s, and Colin had been very supportive of my early work, publishing in ‘info’, himself publishing a conference review in my start-up journal International Journal of Communications Law and Policy (ijclp.net), and latterly making me Associate Editor of ‘info’ from 2007. This is a good moment to also thank Martin Sims, editor of Intermedia who published my most ‘progressive’ articles in 2003-4. Second, I had met the ‘brilliant mind’ game theorist Jonathan Cave, and had jumped at the chance to work with him at RAND Corporation’s European operation in Cambridge (which itself had a traumatic year after I joined, closing its Leiden headquarters and satellite Berlin offices, and shutting down my Information Society team with the loss of my two line managers!).

XIV PREFACE

By 2006, Jonathan and I had carved out of the chaos a thriving little Internet regulation practice, conducting ground-breaking research on content regulation for Ofcom, for Google, Microsoft, Yahoo! (disappointingly unpublished), the UK Cabinet Office, British Telecom, governments of Japan, Netherlands and Ireland, and the European Commission. In all cases, we investigated net neutrality and explained the cost-benefit trade-offs of regulated ‘walled gardens’ and the open Internet, even though it was never in the brief! Third, Jon Crowcroft re-established my contacts with David Clark and Bill Lehr, to whom I had presented local video-on-demand strategies in 2000 at Massachusetts Institute of Technology, their home base. Dave asked me the implausibly optimistic question: “Where are the Internet-literate social scientists with whom we can conduct trans-disciplinary trans-Atlantic research?’ I found a few, self-servingly including myself, and we did some good work in the Cambridge-MIT Institute Communications Research Network (CMI CRN!), led by the ebullient David Cleevely, with Ian Brown coming on board to conduct critical coordination work on information security. What I know of the link between content regulation and information security I learnt at Cambridge and MIT, and more importantly the bars in-between. I should add thanks to Dave Reed, Mark Handley, Frank Kelly, Emanuele Giovannetti and Eddie Murphy.

Third, the United States, or actually five places: Los Angeles, New York, Harvard, Philadelphia and Rueschlikon, Switzerland. On my ‘exile’ in Barcelona (the best place to be exiled!), I had paid visits to Jon Aronson’s research group at University of Southern California Annenberg School, including Hernan Galperin, Francois Bar and Manuel Castells. There we talked about WiFi deployment and telco and mobile resistance to the prospect of open decentralized Internet models at low cost. Side trips from Los Angeles had previously given me rich experiences at workshops at Stanford (on WiFi and spectrum commons organized by Larry Lessig), and at Berkeley several times (thanks to Mark Lemley and Pam Samuelson). I also paid several visits to Eli Noam and the Columbia Business School, for conferences of the Columbia Institute on Tele-Information. Eli is undoubtedly the most coruscatingly insightful and diverse mind in telecoms policy, and I have always been inspired by his gatherings and conversations. I should add the equally diverse and superb Alex Wolfson, who was at this point at Nokia applying research to reality, and Bruce Egan, who applied himself vigorously in all things. Tom Hazlett, Eli’s long-time sparring partner on the FT New Technology Policy Forum and elsewhere, has been a constant wise source on the ways of the Bells and of the Beltway (whether we agree or especially not). Though it has been a while since heard of, a further member of this eclectic group is the legendary Dennis Gilhooly.

That’s Los Angeles and New York, but mention of Dennis brings me to my formal link to the United States, my residential fellowship at Harvard’s Kennedy School in

PREFACE XV

1999-2000 (yes, nine years is a long gestation for a book), for which I must thank Deborah Hurley. Fortuitously I was there the same academic year as Dennis (working with Jeffrey Sachs) and Herbert Ungerer (at the Weatherhead Center), and between us we put the world of telecoms regulation to rights, and have continued to do so since. I could not mention the Kennedy School without mentioning Jean Camp, a straight-talking colleague and pioneering Internet security researcher, as well as Tony Oettinger and John LeGates at the Programme on Information Resources Policy. As with Eli at Columbia and Herbert at the EC, it helps to have opinions from wise people who knew the Internet way back when, and AT&T when it was still Ma Bell: history matters. Harvard, like Oxford, is the most political of intellectual environments, and I learnt of the secret tunnel that runs from the Kennedy School atrium directly underground to the White House, 100 m away (if you don’t believe me, consider how else they could pull rank on so many White House staff and Secretaries?). Oxford also has one, under the Bodleian ...

So on to Philadelphia, where Kevin Werbach and Andrea Matwyshyn were such great hosts for formidable workshops in 2005-8. Kevin has been a special influence on my telecoms research, with his combination of startling insight and practical application, at Supernova conferences and FCC, an example of how a policy-influencing academic can make a difference. These workshops proved excellent venues to watch spirited discussions of net neutrality between Tim Wu, Chris Yoo, Rob Frieden, Phil Weiser, Rick Whitt, Joe Waz, Susan Crawford, Monroe Price, Ed Baker and others. Note the media law influence of the latter three, and I should mention that Monroe and also Monica Arino were excellent reference points on the connection between global media and Internet policy.

Finally, Rueschlikon. Those of you who have kept awake this far will notice that the Zurichersee is not in the United States. That’s true, but Fritz Gutbrodt of Swiss Reinsurance and Viktor Mayer-Schonberger and Lew Branscomb from Harvard put on spectacular discussions around a variety of innovation and risk issues there for seven years from 2001. As the website tells you: ‘The host and sponsor is Swiss Re’s Rueschlikon Centre for Global Dialogue. The conferences forge a transatlantic bridge to advance dialogue on the central issues of the information economy.’ I don’t know what good things I did in a past life to deserve it, but I was always invited, and had wonderful conversations (almost all after dinner outside their wonderful bar, the best bar in my world) with an incredible list of telecoms and Internet luminaries, including (in no particular order) John Gage, Mike Nelson, Sacchio Semmoto, Niklas Zennstrom, Cory Ondrejka, Brian Thompson, Olaf Lundberg, Yochai Benkler, Larry Lessig, Hal Varian, Philip Evans, Steve Abernathy, Gilles Bregant, Ed Felten, John Seeley Brown, Craig Mundie, Peter Siepel, Thomas Hoeren, John Browning, Peter Cowhey, Takeshi Natsuno, Jonathan Sallet, Ron Burt, Urs Gasser, Joi Ito, Andrew

XVI PREFACE

McLaughlin, Kathryn Brown, Tren Griffin, Lauren Hall, Tim Kelly, Clay Shirky, Hans Peter Brondmo, Dave Farber, Brian Snow, as well as Eli, Herbert, Dave Clark, Kevin et al. (and I’m not even counting one-time attendees!) on subjects such as 2007 ‘Governance of Information’, 2006 ‘Innovative Entrepreneurship’, 2005 ‘Critical Information Infrastructure’, 2004 ‘Openness, Trust, and Sovereignty’, 2003 ‘Network Rising’, 2002 ‘Information, Ownership & Control’, 2001 ‘Convergence’. I have to thank Tom Aust, Kenn Cukier, Bernard Benhamou, as well as Margaritte and Rick Murray for being perfect hosts. Now again, the subject of net neutrality comes up vicariously, interwoven into every subject, and it is this that gives the power to the debate: net neutrality affects and changes everything, it has impact on all other communications policy discussions.

All this travelling brings me back to home, and those I must thank here. First, my colleagues present and past, whose indulgence let me find the time and space to write and think. In no particular order, they include Lorna Woods, Jane Wright, Bob Watt, Sabine Michalowski, Kevin Boyle, Steve Anderman, Audrey Guinchard, Yvonne Cattrall, Hayley Milburn and Liz Harvey at Essex; Martin Botterman, Neil Robinson, Lorenzo Valeri and Constantijn van Oranje at RAND; Damian Tambini at Oxford. I must thank my various co-authors over the years on publications relevant to this work: Damian, Danilo, Marcus, Christian and Vicki at Oxford; Jonathan, Neil, Constantine, Edwin Horlings, Stijn Hoorens, Lisa Klautzer, Bill Lehr, Colin Blackman and Simon Forge, Lorna and Ian Brown when at RAND; Campbell Cowie now of Ofcom; Ivan and Doug at ShortMedia/Re:Think!, Lilian Edwards at Sheffield; Stefaan Verhulst at Markle Foundation. I also have to thank the brave souls who commissioned my consulting reports, including Peter Johnston, Reka Bernat, Alex Blowers, Jonathan Mosedale, Tim Cowen, Jean-Jacques Sahel and Emma Ashcroft. Particular thanks are due to those who know the inside of Ofcom and the European Commission better than I am able: Martin Cave, Tom Kiedrowski, Nico van Eijk, Philip Graf, Peggy Valcke, Herbert and Damian of course, Filomena Chirico, Pierre Larouche, David Levy, Nigel Hickson, Ken Ducatel and Monica Arino. The policymaker perspective on academic debate (and hopefully, vice versa) is absolutely critical to this subject.

It’s a truism, but I could not have done this without all of the above. That said, they’re not to blame for my work, and any errors and omissions are mine alone.

I should also thank the readers of my net neutrality blog, chrismarsden.blogspot. com, for their comments, including Michael Geist, Simon Dean-Johns, Jasper Sliujs, Andres Guadamuz, Monica Horten, Lilian and Ian, as well as uber-mega-platinum blogger James Enck. I am bound to have forgotten someone so integral to my work that they cannot be overlooked, so apologies to whomever that person is! In fact, remind me and I will post your name(s) on the blog.

The final word goes to those whose personal lives have been affected by my appeals for hermetically sealed peace during the write-up! They include particularly my

PREFACE XVII parents and Kenza (plus the entire gang in Montreal), who coped with my writers’ block, frenzied blogging and final editing with more good grace than anyone has the right to expect. My dedication for this book is to them.

Chris Marsden Colchester and Montreal 22 June 2009

Introduction

The topic today is net neutrality. The Internet today is an open platform where the demand for websites and services dictates success. You've got barriers to entry that are low and equal for all comers ... I can say what I want without censorship. I don’t have to pay a special charge. But the big telephone and cable companies want to change the Internet as we know it. They say they want to create high-speed lanes on the Internet and strike exclusive contractual arrangements with Internet content-providers for access to those high-speed lanes. Those of us who can't pony up the cash for these high-speed connections will be relegated to the slow lanes. So here’s my view. We can’t have a situation in which the corporate duopoly dictates the future of the Internet and that’s why I’m supporting what is called net neutrality.’ Barack H. Obama, 8 June 2006 podcast

This is a book about net neutrality. It is intended to be read by the non-technical as well as the technical reader, by the non-economist as well as the economic, and also most definitely by non-lawyers. It is most dense in its economic and legal analysis of telecommunications in the opening chapters, yet those who are not telecoms/Internet? policy ‘wonks’ will find plenty to interest them in later chapters that focus on regulatory agencies, consumer welfare more broadly, media policy and freedom of expression, and political judgments such as the stated opinion of President Obama I have highlighted above. It does not accept the neo-classical price-oriented competition-based analysis which has been prevalent in telecoms policy for the past decade to 2008, preferring instead to analyse from that base, to discover net neutrality to be a problem of consumer and media policy. However, its critique of telecoms policy will provoke (perhaps wry) interest in those still wedded to the concept of telecoms based on the siege warfare over cost-based pricing between incumbent monopolies/oligopolies, competitive market entrants and regulators.

It is an international book, in that it is written by an English lawyer who now preaches? but used to practise,+ but with significant input from study of the European Union> (and European Economic Area) more widely, and with attention paid to North America® and Japan,’ if less so to developing countries. At the end of the book, I expect you to disagree with me, whether you are a traffic prioritization free-market ‘RoundHead’ or an information-wants-to-be-free fundamentalist net neutrality ‘Cavalier’. My argument will be a ‘Middle Way’ between these extreme positions that strikes a balance between intervention and innovation, which inevitably means no-one will be happy, including me. It is not a debate with any easy non-controversial answers.

What is net neutrality? Legalistic and technical definitions will be compared and contrasted throughout the book as it is as much a term of art as a term of science. By way of introduction, I should lay out what it is not: it is not a panacea in the absence of effective inset competition in telecoms markets. In the United States, urban duopoly and rural monopoly telecoms throughout the latter Bush years led to significant fears of gatekeeper control over information flows by Internet Service Providers (ISPs). However, net neutrality is an issue that arises in all competitive and non-competitive information environments that use Internet Protocol (IP) and the public Internet to communicate. World Wide Web (WWW) inventor Sir Tim Berners-Lee puts the problem like this:

Net neutrality is this: If I pay to connect to the Net with a certain quality of service, and you pay to connect with that or greater quality of service, then we can communicate at that level. That’s all. It’s up to the ISPs to make sure they interoperate so that that happens. Net Neutrality is NOT asking for the Internet for free. Net Neutrality is NOT saying that one shouldn’t pay more money for high quality of service. We always have, and we always will. There have been suggestions that we don’t need legislation because we haven’t had it. These are nonsense, because in fact we have had net neutrality in the past — it is only recently that real explicit threats have occurred.®

In short, net neutrality is about the rules of the road for Internet users, and about the relationship between the owners of those roads and the users. Government is asked to make a decision as to which users have priority and whether road charging should be introduced, ostensibly to build wider and faster roads in future.? That is a profound issue, and that brief summary tells you there is plenty of critical detail within this argument that can shift the balance of advantage towards networks or users, and between different players within those groups.

Let’s therefore crudely summarize the argument using the slogan that became the rallying cry for Generation X a quarter-century ago: ‘I want my MTV (Music Television). Users who wish to access video and other high bandwidth content cannot all do so at once over current networks, and probably not over future networks. Currently there is no speed limit for the Internet, nor are there sufficient ‘lanes’ for all users to travel at the speeds they wish (assuming their ‘car’, their Personal Computer or other device, can do so). So if you want your British Broadcasting Corporation (BBC) iPlayer streamed video, or Skype video call, or YouTube clip, or World of Warcraft update, you are in a queue, even if you don’t realize it. In a future with guaranteed Quality of Service (QoS) — a future that has been waiting for 30 years and launched a thousand doctoral theses in computer science and network engineering — you may be able to pay more to get to the head of the queue, or the content provider may pay more to get to you faster, past the other members of the queue whose content providers won’t pay. You may also be lucky enough to get into a queue that moves much more quickly for everyone (such as the university-funded Internet2), or unlucky enough to have to access your content over the slow-or-never mobile or wireless options, which at least offers mobility.