Taking a neutral view of Net Neutrality, and why it’s important to do so.
No doubt, you have heard about and perhaps read analysis of the FCC Chairman’s submission to his colleagues on the topic of Net Neutrality and Title II. The headlines in social media and traditional media have been set in pretty simplistic and predictable fashion.
One framing is that Net Neutrality is the latest and most pernicious example of the heavy hand of federal regulation that is going to strangle the free market (ObamaCare for the Internet). The other framing is that the Chairman and his two democratic FCC Commissioners are the last great hope to save “us” from the tyranny of oligopolistic giants who have appropriated the language of, and now support the idea of, laissez faire markets.
I don’t believe both of these characterizations are equally flawed but I do believe both framings are flawed.
In 1964 Paul Baran, one of the original inventors of packet switching, juxtaposed three models of network traffic; the then incumbent centralized phone switch, the then emergent hub and spoke model, and the third being the distributed network model. Baran’s model demonstrated that the distributed network model was significantly more resilient than the alternatives. The distributed network-engineering model became the design inspiration for the Internet (capable of withstanding major (nuclear) disruption).
The distributed network model also catalyzed unprecedented innovation at the edges of the distributed network because the network effect of this model did not require permission of any centralized/singular authority to provide services. And so was born hardware and software in the proverbial start-up garage or college dorm room, at the edge of distributed network, and not in the central R&D facilities of Bell Labs.
The disruption occasioned by the distributed network also produced plenty of half-baked code, some of it downright dangerous. Because the distributed network typology did not have a central clearing authority for quality control, spam was no longer cheap food in a can, viruses affected more than human beings, and phishing was no longer a misspelling of the recreation and sport on the lake.
(Next page: The big fish and little fish of the internet sea)
Those of us who grew up in the heady days of the late 80s and early 90s of the distributed networking world were largely convinced that we had found the holy grail. The shortcomings were largely nuisances and could be corrected in the next release of the software code. The upside opportunities were filled with, well, so much upside. The great myth of the 90s was that we were living in a Network economy that was also characterized by Barans’ distributed network.
If there was an assumed linear path from centralized to decentralized in his original path, the truth is that by the early 90s the countervailing path back towards centralization was beginning to gain momentum once again. While most of us were in denial, Apple was the first great exception to the open model of distributed network and product design. There was always a cultish following to Apple’s design and charismatic leadership. The true believers didn’t let the fact that Apple was a quintessential centralized and closed system model get in the way of our love affair.
Today, 40 percent (or more) of the Internet flows through Google and its various related properties, starting of course with search. While Google leveraged the engineering associated with the distributed designs of the Network, it has defended its market position (as has Microsoft, Oracle etc…) with the fervor of an old style oligopolist like General Motors (what’s good for GM is good for America).
Which brings us back to Title II and Net Neutrality. Over the past 30+ years, while we were waiving and cheerleading the emergence of a highly distributed network economy, the actual consolidation of physical network infrastructure has been centralization at a remarkable pace over the same period of time, especially over the last decade. The biggest fish have been engaged in voracious and gluttonous consumption behavior and eating all the next biggest fish.
One might point to the most recent example and political drama around Comcast’s acquisition of Time Warner Cable. But in actual fact, the Net Neutrality debate opened in a serious way when Comcast bought NBC that had bought Universal that itself was a collection of properties. While the FTC did not seek to break up the growing monopoly of content and content distribution, the FCC was asked (as the federal expert agency) what it could do to use its authority to assure that this growing agglomeration of content/distribution companies did not demonstrably harm or clearly constrain the original promise of the distributed network that the FCC became a steward of in 1993 and enshrined in law in 1996. Earlier efforts to use other parts of its authority to assure these goals were challenged in the federal courts and those challenging (incumbent telecom providers, in the main) were successful in getting the courts to roll back the FCC’s assertions.
Under Chairman Tom Wheeler, the FCC has asserted its authority to use a ‘modernized Title II’ to enforce and support openness, challenge the growing tendency towards paid prioritization for content and services to those with market ability to pay, and to protect a competitive marketplace. Title II modernization is about an adjustment to the rules shaping the marketplace. Sustaining a competitive and open network needs rules. Notwithstanding some characterizations and political rhetoric, the rules being proposed will be relatively easy to work with and will lead to stronger, more robust competitive behavior.
I have been a very strong and consistent proponent of an open and neutral network architecture. OneCommunity, in its inception, was an early exemplar of the absolute criticality of disrupting the economics and network realities of oligopolistic behavior here in NE Ohio. As the CIO at Case Western Reserve University, I had very personal, first-hand experience in the completely unacceptable way that the incumbents ‘red circled’ this market offering extremely expensive, painfully slow, and remarkably unreliable services for years and years.
Creating a competitive marketplace, even in the limited way that we have been able to do has helped others across the country join us in that effort and has now rolled up to be a strong, vocal, and extremely effective voice under the banner of the Coalition for Local Internet Choice. I am proud of the fact that I was asked on behalf of OneCommunity to serve on the original advisory committee of CLIC. In my view, this is all good.
Good, but not good enough. At the end of the month, there is a growing certainty that the Chairman’s modernized Title II program will be passed 3-2 by the FCC. It will, no doubt, be challenged in courts. While the case winds its way through legal review and adjudication, the marketplace will remain unsettled and even, in parts, skittish. Even, more than regulation, the general markets really despise uncertainty. I do not think we will see capital walking away from investments in fiber networks. However, the kind of capital continuing to play (and even accelerate its investments) will be the venture segment of capital markets that are prepared to take risks that others are not.
The value of fiber networks will continue to rise because as the courts resolve the authority of the FCC to regulate there is an ever growing probability that the fiber networks will be a safe, regulated, and predictable marketplace for capital to move into and bring more conservative forms of investment.
Title II is also good but not good enough because there is no regulatory authority that alone protects the open Internet. Education, vigilance, advocacy, and catalyzing continuous innovation and opportunity from the edges of next generation networks can only be made compelling and relevant in the local context. That is why we established OneCommunity in 2004. That is why OneCommunity has an important role to play in Northeast Ohio in assuring open and neutral network policy, and why OneCommunity, by mission, will always support network neutrality.
Lev Gonick is Chief Executive of OneCommunity and former CIO of Case Western Reserve University.