Overview of Network Overview of Network NeutralityNeutrality
Kyle D. DixonKyle D. DixonSenior Fellow & Director, Federal Institute for Regulatory Law & Senior Fellow & Director, Federal Institute for Regulatory Law & EconomicsEconomicsThe Progress & Freedom FoundationThe Progress & Freedom Foundation
Presented to the California Foundation on the Environment and the Presented to the California Foundation on the Environment and the Economy Roundtable Conference on Telecommunications and Economy Roundtable Conference on Telecommunications and Advanced TechnologiesAdvanced Technologies
May 4-5, 2006 May 4-5, 2006
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Overview of Network NeutralityOverview of Network Neutrality
What is network neutrality?What is network neutrality? Increasing complexity of the conceptIncreasing complexity of the concept Public policies and proposalsPublic policies and proposals
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What is Network Neutrality? – Out with What is Network Neutrality? – Out with the Oldthe Old
Traditional Communications Networks
Telephone Cable Video Broadcast
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What is Network Neutrality? – In with the What is Network Neutrality? – In with the NewNew
Network Infrastructure
Internet Protocol
Applications, Content and Devices
Broadband IP (“Edge”) Networks
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What is Network Neutrality? – The What is Network Neutrality? – The OpportunityOpportunity
TraditionalTraditional
NetworksNetworksBroadband IPBroadband IP
NetworksNetworks
IntramodalIntramodal
CompetitionCompetition
E.g., telecom E.g., telecom resale, UNE-p, resale, UNE-p, leased accessleased access
E.g., voice, E.g., voice, video or data video or data
content, content, applications, applications,
etc.etc.
IntermodalIntermodal
CompetitionCompetitionMinimalMinimal Existing and Existing and
potentialpotential
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What is Network Neutrality? – Early What is Network Neutrality? – Early ConceptionConception
Origins in “open access” debate (i.e., Origins in “open access” debate (i.e., choice of ISPs on cable modem service)choice of ISPs on cable modem service)
Consumer perspectiveConsumer perspective: freedom to use : freedom to use broadband to access content, broadband to access content, applications and devices of their choiceapplications and devices of their choice
Company perspectiveCompany perspective: broadband : broadband networks may not “discriminate” in networks may not “discriminate” in favor of their own or affiliated content, favor of their own or affiliated content, applications or devicesapplications or devices
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Increasing complexity – Increasing complexity – Blocking/DegradationBlocking/Degradation
BlockingBlocking – not allowing certain data – not allowing certain data traffic to reach end user (e.g., blocking traffic to reach end user (e.g., blocking voice packets or ports)voice packets or ports)
Denying interconnectionDenying interconnection – refusing to – refusing to link networks physicallylink networks physically
Re-routingRe-routing – manipulating routes taken – manipulating routes taken by certain data trafficby certain data traffic
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Increasing complexity – Network Increasing complexity – Network ManagementManagement
Quality of serviceQuality of service – adjusting network – adjusting network performance for specific applicationsperformance for specific applications
SecuritySecurity – preventing viruses, spam, etc. – preventing viruses, spam, etc. Spectrum reservationSpectrum reservation – on broadband – on broadband
connection for affiliated content, applicationsconnection for affiliated content, applications Traffic shapingTraffic shaping – limiting bandwidth available – limiting bandwidth available
for specific applications or end usersfor specific applications or end users ““Acceptable useAcceptable use” policies” policies ““CachingCaching” – storing content nearby” – storing content nearby
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Increasing complexity – Premium Service Increasing complexity – Premium Service FeesFees
PrioritizationPrioritization – speeding delivery of data – speeding delivery of data for extra fee to consumer or service for extra fee to consumer or service providerprovider
Tariffed tieringTariffed tiering – offering – offering content/applications providers fee content/applications providers fee schedule for improved deliveryschedule for improved delivery
““Access chargesAccess charges” – charging ” – charging content/applications providers to deliver content/applications providers to deliver traffic to end users over “last mile”traffic to end users over “last mile”
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Increasing complexity – Limits on Increasing complexity – Limits on NetworksNetworks
Technical feasibilityTechnical feasibility Commercially sustainable (e.g., Commercially sustainable (e.g.,
avoiding “bypass” on other networks or avoiding “bypass” on other networks or dodging intended constraints)dodging intended constraints)
Acceptance by governmentAcceptance by government
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Increasing complexity – Limits on Increasing complexity – Limits on NetworksNetworks
Likely to Prohibit:• Blocking• Denial of interconnection
• Re-routing traffic• Access charges
Case By Case:• Virus, other security• Spectrum reservation• Traffic shaping
• “Acceptable” uses• Caching
Probably Allow:• Quality of service• Prioritization of traffic
• Tariffed tiering
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Public Policies and Proposals – The FCCPublic Policies and Proposals – The FCC
Net Neutrality Policy StatementNet Neutrality Policy Statement Codifies commitment to openness Codifies commitment to openness andand
competition among broadband networkscompetition among broadband networks Limited where harm to network, law Limited where harm to network, law
enforcement needsenforcement needs Rejects industry-wide rules at this timeRejects industry-wide rules at this time
Bell Merger ConditionsBell Merger Conditions Temporary, limited to merging Temporary, limited to merging
companiescompanies
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Public Policies and Proposals – The FCCPublic Policies and Proposals – The FCC
TraditionalTraditional
NetworksNetworksBroadband IPBroadband IP
NetworksNetworks
IntramodalIntramodal
CompetitionCompetition
E.g., telecom E.g., telecom resale, UNE-p, resale, UNE-p, leased accessleased access
Voluntary Voluntary access to access to content; content;
agency can agency can intervene if intervene if necessarynecessary
IntermodalIntermodal
CompetitionCompetitionMinimalMinimal
Regulation Regulation could thwart could thwart investment, investment, consumer consumer
choicechoice
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Public Policies and Proposals – CongressPublic Policies and Proposals – Congress
CongressCongress Several bills address net neutralitySeveral bills address net neutrality Approaches vary: Approaches vary:
monitoring/enforcement of Policy Statementmonitoring/enforcement of Policy Statement abuse of “market power” testabuse of “market power” test specific prohibitions with exceptions reflecting specific prohibitions with exceptions reflecting
evolving concept of “neutrality” his timeevolving concept of “neutrality” his time Division on this issue may complicate Division on this issue may complicate
statutory reform generallystatutory reform generally
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Stay tuned . . .Stay tuned . . .
Kyle D. Dixon, Senior FellowThe Progress & Freedom FoundationPhone: [email protected]
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