Public policy is often set in the courts, and we have both a current and an impending example of court action on our networking industry. As is always the case, the issues may be decided in law but not necessarily in the eyes of those with interest in the matters.
The Supreme Court dealt what most observers think will be a death blow to Aereo, the company who used little subscriber-specific antennas to receive TV broadcasts for re-streaming over the Internet. The Justices ruled the company’s model to be a violation of copyright, which I’ve said from the first was my view as well. Had the decision gone the other way, I think over-the-air TV and even content production would have been hurt. There might have been another jump in Internet video traffic and further risk to Internet performance.
Aereo demonstrates that putting something on the Internet doesn’t make it free, or legal. It’s just one piece of a long-standing battle between the forces of rampant consumerism (“I want what I want and I want to name the price, which will likely be zero”) and what global regulatory authorities have long called the “health of the industry”. It won’t be the last battle either.
There’s a healthy dose of self-centeredness in a business model like this; you have to believe many in Aereo knew in their hearts that this wasn’t likely to work, and the argument that it should comes down to saying that if you are clever in how you infringe on copyright you can beat the rap. What’s at least a related question is whether it’s reasonable to build a business on delivery of a service over a medium that has cost but not price—the unlimited-usage Internet model. The Supreme Court isn’t ruling on that now, but the FCC and the DC Court of Appeals have been dancing on the issue—net neutrality—and eventually it’s likely to end up in the Supreme Court too.
Where things stand now is that the Courts have told the FCC that most of the stuff they wrote into the original neutrality order would be fine if the FCC hadn’t previously said that ISPs weren’t common carriers. The regulatory authority is there, but only for that category of provider. That leaves the FCC with the choice of either declaring the ISPs to be common carriers and subjecting them to all the telcom regulations, or abandoning some of the neutrality policies.
The FCC’s straw position here is that there’s nothing wrong with “fast lanes” or with ISPs charging content providers for carriage. That position isn’t popular in many venues, but the fact is that the FCC can’t do anything else unless either it regulates ISPs as common carriers or Congress amends the Telecom Act. There’s fear that ISPs would start charging every content provider for carriage, and the content providers would then pass it along in their prices. There’s fear that the inability of startups to pay for carriage would strangle innovation. There’s fear that without some check, ISPs will simply abandon unlimited usage, a trend that was emerging just a year or so ago.
The fundamental problem here is that we’re talking about the Internet, which is not only a best-efforts service for which no specific standard of service quality exists, we’re talking about a network where the QoE depends on a bunch of things that the customer doesn’t even know about. How do we deal with this variability in setting policy?
Let me cite a personal example here. I changed computers recently, and with the new system I’d noticed I was having some annoying delays in loading pages and picking up emails under some conditions. Since the old system was still hooked up, I could compare the two and see that the old one did better, which is hardly what you’d expect when you get a new system. So I looked at the Internet setup on the two systems, and what I found was that on the old one I’d overridden my ISP’s (Verizon FiOS) DNS with Google’s and on the new I’d forgotten to make that change. My performance shot up as soon as I switched to Google DNS. I’d had problems with Verizon’s DNS before, and that’s why I’d gone to Google in the first place. So your ISP can regulate your traffic flow, in theory, simply by delaying your DNS decodes. I’m not saying Verizon did that, only that my experience proves that it would be possible. Can you imagine writing an FCC order that would deal with that sort of thing and getting it past the Supreme Court?
The business relationships involved in Internet service are also often opaque. Most Internet users don’t realize that content providers pay for CDN services so their stuff is cached closer to the user and can be delivered with a better QoE. In most cases it would probably be up to the CDN provider to pay access ISPs for carriage, which some already do. So here’s the question; if it’s OK for content providers to pay for CDN services without violating neutrality, why is it not OK for them to pay ISPs? Should all ISPs do their own CDN services and refuse to support the big public CDNs, or should the ISPs charge the big CDN guys? In the end, if we want good video delivery we have to be willing to pay somebody to get it as long as there’s capital investment needed to insure it. Should we let content players pay ISPs for carriage and forget CDNs completely, cutting out the middleman? You can see the point; it’s not easy here either.
There is always a risk in trying to set policies to guide an industry in any direction but where natural market forces will take it. Obviously there is a risk that too little neutrality, too much copyright protection, would stifle innovation. There’s also a risk that too much neutrality and too little copyright protection would erode investment by limiting the chance of profitable returns. I happen to agree with the Aereo decision and with the current (apparent) turn in neutrality policy, but I do have concerns with how we’re going about it. Rather than have Internet issues turn on legal interpretations, we need to have legislation that balances the factors effectively and explicitly. Given the Washington dysfunction, though, that may be too much to hope for.