Balancing Net Neutrality and Broadband Expansion

Balancing Net Neutrality and Broadband Expansion

Net Neutrality holds that companies must provide Internet service treating all data sources equally. The debate has been over  giving preferential treatment to content providers who pay for faster transmission, creating a two-tier web in which they can block or impede content representing competing products or high bandwidth consumption.

Currently Internet users can gain access to any website on an equal basis. The Federal Communications Commission has come out in favor of keeping things that way, but the ability to do so has been in doubt since a federal appeals decision in April 2010 restricted its authority over broadband service.

FCC Chairman Julius Genachowski wants to apply a limited set of provisions to regulate the transmission component of broadband access services. This would allow ITSPs, ISPs, cable companies and other providers to continue to change and implement variable pricing models without filing tariffs. The status quo would be maintained where the existing approach to the practice of not regulating broadband prices or pricing structures would be reaffirmed.

In the case of Comcast, treating different applications and services unequally or in a prejudicial manner would end. They would not be able to selectively slow down traffic they considered disruptive to their network or competitive to their cable or VoIP offerings. Over-the-top VoIP would become a protected service along with gaming, on-demand video and other broadband-consuming applications. Of course, there is a downside to this. Heavy consumers would have the potential to hog available capacity, thereby reducing the quality of service for the occasional or lower-capacity user. This can be addressed in multiple ways by the ISPs. The key to their various options lies in the phrase “undue or unreasonable prejudice.” Carriers are not prevented from charging different prices for broadband consumption, and where last year I was clearly reluctant to support such tiered pricing, I have modified my position.

It is important to move forward in establishing and enforcing the concept of net neutrality. However, it is also imperative to understand the cost of doing so.  Whereas most industry observers have accepted that the cost to develop communications infrastructure in rural areas in the US is higher than in cities, it is important to do so. Expanding broadband nationwide is good for the economy, society and security. Consequently, any statement defining net neutrality must accept that the cost of providing services to high-bandwidth users is greater, and that cost should be covered by competitive market pricing models rather than through public subsidies. The goal of net neutrality must not obstruct efforts to improve and expand broadband deployments.

In Japan the average advertised broadband speed is 93.6 megabits and the cost per megabit is one-fourth that of the US. The average advertised broadband speed in the US is 8.8 megabits with only Canada having a higher per megabit price among the G7 (Canada, France, Germany, Italy, Japan, UK and US). Interestingly, while Japan can boast 100-megabit speeds for residential users and SMBs across the country, fewer than 10% of high-speed lines in the US exceed 10 megabits. This is the digital divide that remains for the most part unaddressed by the FCC and Congress.

The US needs to promote and nurture a competitive environment that delivers access and faster broadband. Our measurement for success should be the G7 and not the entire world where our rankings overstate our achievements and obfuscate our failures. Broadband access, penetration/adoption rates and speed should be the three elements of any strategy to improve our global broadband position. And while I understand that as part of stimulating our economy we are going to spend $7.2 billion expanding broadband into rural, unserved and underserved markets, it will do little or nothing to address our fundamental needs as a nation.

Our priority should be improving broadband access in underserved areas and improving the speed. This effort would position a vast majority (90%) of the country to be more competitive regionally, nationally and globally. It would benefit the economy by providing jobs, supporting the deployment of new services and applications and excite a new generation of entrepreneurs.

Net Neutrality is a needed objective. I’ll face the following months or years with my fingers crossed. After all, the individuals involved are politicians with their own motivations and interests. Odds are they will not match with the IP community and therefore it is our responsibility to inform and communicate our priorities to them