Connected Research

Union policy research in the 21st century

Posts Tagged ‘Net neutrality

OK, on with the show

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Though before we do, some interesting reaction to the overnight events picked up via TIGMOO by Anna Rose at Unison Active, as well as by Tom over at labour and capital.

In what is otherwise, given its timing, likely to be one of my more immediately unread posts in the one year (next week!) that this blog has been functioning, I did find this week that there were some interesting things happening in the world of regulatory broadband policy, both in Australia and in Italy, and in the world of net neutrality, in the US, which reflect some aspects of why the blog exists.

In Australia, the centre-left government has published a A$25m (£15m) report commissioned by McKinsey and KPMG that says, essentially, even if Telstra, the former incumbent, doesn’t decide to throw in its lot with the government’s plans for an initially publicly-owned national broadband network company, NBN Co can still go ahead on its own as a viable commercial entity (see here [registration required; limited viewing time] and, when that runs out, here for the basic news story].

Such a conclusion is really no great surprise, and perhaps its most important function is the practical assistance it will provide the government in its continuing negotiations with Telstra on the folding of its assets into NBN Co (although whether that’s a suitable use of public money is a different matter) – both that and the re-starting of structural separation discussions in the Australian parliament, scheduled for next week. The government’s intention to create a ‘Telstra 2’, having not so long ago sold the last one off to a lot of individual (‘mum and dad’) shareholders, with a long-term intent to do the same thing with NBN Co, is the subject of a lively debate, as the comments in The Australian show.

Meanwhile, a proposal for a super-fast broadband network in Italy was made by Vodafone, Wind and Fastweb (the latter two being existing Italian network operators) in Milan today. La Repubblica originally broke the story on Tuesday (you’ll need to speak Italian or else have a good translator – or else, if you’re quick, see either here and/or here for an English language version). The consortium of three want to spend €2.5bn on building a 100Mbps fibre network in Italy over the next five years – but che sorpresa, they want to build it only in the 15 major towns and cities. At the launch, it was also made clear that, over 5-10 years, the network could be extended in an €8.5bn investment to all towns with more than 20,000 inhabitants (representing around half the Italian population). Former incumbent Telecom Italia, which was invited into the project and which has always welcomed the notion of joint partnerships (provided that it keeps its finger on its existing network), has its own €7bn investment plans over three years but deployment so far has been somewhat relaxed.

Cynicism aside, any investment in high-speed broadband is welcome – but it does need to be part of a nationally- planned advance in fibre installation, and one that extends high speed broadband provision on an equitable basis right throughout the country: to rich and to poor; to urban and to rural; to young and to old. Where the market is allowed to dictate investment in nationally-important infrastructure, the end result can only be inequity, exclusion and a widening of the social and digital divides as a result of the inevitable cherry picking that will occur. Leaving the poor old incumbent to pick up the pieces for the rest is hardly reflective of a level playing field, while the concept of social justice – as well as that of evenly-spread economic development – deserves better treatment.

An interesting parallel between Italy and Australia is also that Agcom, the Italian regulator, has been looking at the creation of a separate, new company responsible for the country’s next generation broadband infrastructure.

Finally, in the US the Federal Communications Commission has made progress with its response to last month’s legal ruling against its sanctioning of Comcast for traffic management policies. I blogged about this here. The danger of the ruling was that an inability of the FCC to take action in this way, because broadband internet access is classed under US regulation law not as a telecoms service but as an information service (and thus subject to a different, lighter regulatory regime), left it unable to guarantee net neutrality – i.e. the freedom of internet users not to be subject to the ‘management’ of their surfing by their ISP. This impasse in turn seemed to threaten the FCC’s ambitious National Broadband Plan.

What the FCC has done, according to the BBC – a bit of a lighter read than the FCC’s own statement – is to develop a ‘third way’ (just like 1997 all over again!) which classifies the ‘transmission component’ of broadband access as a telecommunications service while taking a principled non-intervention approach to much of the rest of broadband access. The Chair of the FCC was at pains to point to the ‘narrow and tailored… cautious’ approach, and the need to overcome the difficulties posed to the National Broadband Plan by the legal decision, but even this limited compromise appears to have left the two Republicans on the FCC behind. Here, the Chair’s view is likely to be supported by the two Democrats, indicating it will thus prevail, but ISPs themselves already appear (according to the BBC report) rather unhappy.

These three highly separate, but highly linked, stories highlight the problems of regulating broadband access both in an environment of seeking control of the technology so that it serves the interest of the people, and in free market situations in which competition is supposed to prevail but which doesn’t necessarily always support the interests of the consumer, both taking place in the context of a neo-liberal dominated world view. You might wonder – just as bond markets opening in the middle of election night, as results are starting to come in, and subsequently with its intermittent results, was thought to be newsworthy as part of the BBC’s online internet coverage – just how we’ve got into this mess.

A lack of strategic thinking is one reason – and it’s clear that only strategic thinking can get us out of it.

The ‘Google tax’ and net neutrality

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It is being reported that Vodafone is to ask the European Union to take action so as to ‘facilitate bilateral agreements between telecom operators and online content providers like Google’ – essentially, to allow network operators to charge content providers, such as Google, YouTube and, probably, the BBC’s iPlayer, additional fees in relation to the network demands placed by the users of such services.

Operators would rather charge content providers than consumers, but it would seem that some network operators have started to realise that the ‘all you can eat’ model – under which bandwidth comes at a flat rate (except, perhaps, for usage caps on really high users) – is not a viable economic model in a scenario of the rapid growth in bandwidth consumption we are experiencing. More and more for less and less is never a particular sound economic model. Clearly, in such a situation of heavy retail competition, essentially preventing operators from starting to raise prices, or to alter pricing structures in accordance with consumers’ capacity usage, operators need to look for alternative sources of revenue – and content providers represent it. (How we’ve got into this mess in the first place is a different blog post altogether.)

Were they to succeed, then this is likely to lead to a further commercialisation of the internet, in terms of how the content that you read, or view, is paid for (though, to be fair, such a commercialisation is proceeding apace anyway via new advertising models), with network operators essentially wanting their own slice of this action.

On the face of it, the reference to the need for EU action looks a little odd – there is nothing to stop operators coming to such bilateral agreements amongst themselves and, in a free market, that’s probably the more preferable response (where, of course, content providers are prepared to play ball, which they may well not be).

The other difficulty, of course, is the reference to the principle of net neutrality, according to which network operators should carry net traffic on an open, non-discriminatory basis. (Roger Darlington reviews the issues of net neutrality very well in his monthly column for Connected, the magazine of the Connect Sector of Prospect, which you can also read online here.) Starting to charge content providers for network quality, or levels of consumption (as measured by capacity usage), starts to affect how the net operates since content providers, under the commercial pressures of such agreements, are likely to want to see ‘their’ traffic prioritised by those with whom they have reached such agreements. Indeed, such prioritisation is likely to be included within any such agreements on charging. The upshot will be changes to how the net operates, and is experienced, some of which may well be invisible to the naked eye – a problem for those supporting a liberal internet and likely to lead to such principles being heavily compromised.

The original source for this post reports that Vodafone is making its push via a shortly-to-be-finalised submission to an EU consultation on net neutrality. This is a bit strange, since the last I saw from the EU on this issue was this (part of last year’s EU telecoms package) which, in Annexe 2, does talk of the importance of preserving ‘the open and neutral character of the net’ and seeking to enshrine net neutrality as a policy objective for member states. I can’t find a reference to an open consultation on this on the appropriate pages of the EU portal, although we know from Ofcom’s annual plan for 2010/2011 that some activity will be taking place (A1.77) – while Roger’s piece also refers to a UK discussion and consultation on net neutrality taking place ‘later this year’ (and, evidently, within the context of EU action).

Such confusion aside, it is clear that operators (the original source cites also Telefonica) are starting to gird their loins for an attack on net neutrality so as to allow them to seek to charge content providers for access (in this context, Project Canvas takes on a new light since it would seem to allow project partners to side-step any such charges). Equally, the EU looks set against such a model, so it could be quite a battle. Consumers will end up paying the price somewhere, although whether that’s a cash-based or a principles-based price (or both) is an interesting question.

Written by Calvin

27/04/2010 at 4:28 pm

FCC loses traffic management case

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The US Federal Communications Commission yesterday lost its ‘open internet’ court case against Comcast, the US cable service provider. The case stemmed from action taken by the FCC when it established that Comcast had been throttling traffic from high-bandwidth file sharing services. The court ruled that the FCC had failed to tie its actions to ‘any statutorily mandated responsibility’ – i.e. that it had no powers to intervene in ISPs’ network management policies and practices in the way that it did – and thus in favour of Comcast’s own arguments.

The case had become something of a cause célèbre for ‘net neutrality’ in the US – the notion that internet traffic should not be restricted in any way by those delivering an internet service – and the FCC was putting a brave face on the decision (statements here), re-stating its ‘firm commitment’ to an open internet and noting that, while the decision had invalidated the FCC’s prior policy approach,

The Court in no way disagreed with the importance of preserving a free and open Internet; nor did it close the door to other methods for achieving this important end.

For its part, Comcast re-iterated its commitment to the FCC’s existing principles of an open internet, saying that its only purpose in taking the case had been to clear its name and reputation.

Some of the reporting focuses on the threat to the FCC’s ability to enforce its National Broadband Plan arising from the ruling, which the FCC may seek to deal with by seeking to have the principle of net neutrality enshrined in law, thus giving it the power to compel ISPs not to throttle traffic. The Commission has acknowledged that some of the recommendations in the Plan may be under threat as a result of the ruling and that it is examining each one to ensure that it has adequate authority. In the meantime, some mature reflection on the implications of the decision and the likelihood of change in a political context can be found here [registration required; limited viewing time]

In the UK, the Digital Economy Bill does contain such a power authorising Ofcom, under direction from the Secretary of State, to assess whether ‘technical measures’, including line speed throttling amongst others, should be imposed on ISPs for the purpose of preventing the use of the internet for copyright infringements, and giving the power to the Secretary of State to act on Ofcom’s assessments (clauses 10 and 11). Much of the attention has been given to clauses 17 (and now 18) of the Bill concerning the issue of what to do over copyright infringement, but it should be noted that this is very much the end of the line and that other measures are envisaged before such a stage is reached.

The DEB thus moves the discussion in this country on net neutrality substantially away from an open internet. However, it does so only in the context of copyright infringements – ISPs will not be able to use the law to prioritise traffic to their own content providers or to slow the connections of traffic headed to alternative providers, which was one of the reasons behind the FCC’s intervention with Comcast in the US. Coincidentally, the sites whose traffic was being throttled by Comcast were peer-to-peer BitTorrent sites.

Policies on an open internet, or on net neutrality, are fine in principle but are always likely to fall behind when the net is used for illegal activity, however much in need of reform and updating the law making that activity illegal apparently is.

Written by Calvin

07/04/2010 at 10:49 am

EU hearing no picnic for Kroes

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European Voice reported yesterday that Neelie Kroes, the Dutch politician who is currently EU Competition Commissioner and who has been nominated to head the new department of the digital agenda, has written to the European Parliament’s industry, research and energy committee to clarify points raised in her hearing, which took place on Thursday last week.

Kroes’s letter is, according to European Voice, intended to stave off concerns over whether she is sufficiently prepared for the job following the ‘disappointment and frustration‘ [registration required; limited viewing time] of the members of the committee over her performance. It has been reported that Kroes was ‘off her game‘ at the hearing, which was also reported as having been one of the tougher ones, no doubt prompted by Kroes’s own reputation, and that Kroes had done herself no favours by sticking to her desk at Competition since the announcement of the new Commission rather than on playing the political game. Kroes’s appearance before the parliament seems to have been marked by a broad-brush, with little details emerging other than a commitment to net neutrality and to free online expression, to tightening up Europe’s diverse online copyright laws and to building a single digital market, and to the principle of mobile roaming, but without a coherent legislative programme tying it all together. To be fair, the brief on the digital agenda is a new one. It has also been suggested that European People’s Party members have been under instructions not to sanction Kroes’s appointment until their own Commissioner nominees had been approved.

The committee has not written its formal evaluation and it has been suggested that Kroes will receive an invitation to a second hearing, likely to be held this morning at 11 am in camera although this had not been confirmed as of last night. Parliament was due to vote on the new Commission on January 26th, although this now looks likely to be postponed until the second week of February following the withdrawal from the process of Rumiana Jeleva, the much-criticised Bulgarian Commissioner-designate.

Written by Calvin

19/01/2010 at 11:29 am

Kroes confirmed in post

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The European Commission has confirmed the rumours of the shift of Neelie Kroes, the Dutch People’s Party for Freedom and Democracy politician, from the Competition policy directorate to a new Digital Agenda brief. Kroes will also become a Vice-President of the Commission (as will Viviane Reding, her predecessor).

The post is designed to provide a greater focus on digital issues from the ‘information society’ brief of the previous role. Much of the online comment about Kroes’s switch is directed towards the apparent downgrading that this is held to represent, pretty much in line with the lowest common denominator-type arguments that accompanied the appointments earlier in November of Herman van Rompuy and Baroness Ashton, but it’s sure that she will bring a tenacity and single-mindedness to the role. Consequently, she may well be a very good advocate for, dare I say, Digital Europe – although whether we need advocacy or practical action at this point to effect a Digital Europe is a moot point. As we’ve seen in the UK, digitalisation is a huge subject touching areas which are the responsibility of several different departments and bringing all that together into a coherent agenda perhaps demands more the skill of a consensus builder than one whose reputation comes with added steel.

Ms Kroes’s appointment – as with each of the members of the Commission – is subject to the approval of the European Parliament at individual hearings due to take place in January.

Written by Calvin

30/11/2009 at 6:44 pm

EU telecoms reform package approved by Parliament

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The European Parliament has approved, by a strong majority across all party groupings, the conciliation procedure agreement reached earlier this month. The reforms will enter into force next month and, following transposition by individual member states, become law across the EU by June 2011.

The principles covered by the package of directives are many but are most recently summarised in the Commission’s press release welcoming Parliament’s vote (where there is also a specific link to the 12 most important of the reforms in the package).

UNI, which works on behalf of 20m workers in the industry worldwide, worked hard and with no little success to gain a union voice and perspective concerning the main provisions of the package and their impact on workers’ rights. It has also welcomed the vote regarding the importance of investment in high-speed broadband services as a major factor in economic growth and employment, not least in a time of recession – as indeed does Connect. Nevertheless, now that the package is in place and regulatory certainty a little more established thereby, it is imperative that European countries and telecoms companies do indeed move swiftly so that its potential benefits as regards investment and jobs can be realised.

Written by Calvin

25/11/2009 at 7:17 pm

Pressure continues to rise over net neutrality

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Seventy two Democrats in the House of Representatives, and the Communication Workers Union of America, have published letters to the US Federal Communications Commission urging caution over the FCC’s proposal to enshrine net neutrality in the US regulatory environment.

The Democrats letter [registration required; limited viewing time] is reported to contrast the ‘growth an application’ under the current regulatory regime of new internet applications with the ‘limited evidence demonstrating any tangible harm’, before concluding that:

We remain suspicious of conclusions based on slogans rather than substance and of policies that restrict and inhibit the very innovation and growth we all seek to achieve.

In its letter, sent last Thursday, the CWA takes a rather more sober and objective perspective, seeking to ensure that, at a time of 10 per cent unemployment, the FCC’s rulemaking in this area ‘does not have an adverse impact on investment and job creation.’ The CWA calls for ‘reasoned discussion amongst all stakeholders’ about the ‘technical requirements of network management and the economics of broadband build-out’, while nevertheless seeking to underline the principle of ‘protecting an open Internet’. Specifically, it calls on the FCC to protect consumers from ‘unreasonable discrimination’ while reminding of the benefits of high-speed broadband and the concomitant traffic management issues, and that revenues from managed services are ‘an essential component of the business case for broadband investment’.

The CWA response is an admirable attempt to square the circle between principle and practice. As I’ve blogged below, I do agree with the line that the economics of broadband roll-out require traffic management policies, although I’m less persuaded of the importance to investment of business models relying, at this stage in the product cycle, on revenues stemming from facilitating preferential treatment for the network providers’ ‘own’ services, whether through traffic management requirements or otherwise. Here, my preference remains for an open internet as the priority and that a non-discrimination rule should be required of network providers in terms of how they manage net traffic.

A draft of the proposal is thought to be circulating amongst FCC Commissioners ahead of the public debate later this week – unlike other leaks in the news today (which appear to have crashed the site in the period immediately before posting this piece), it hasn’t yet made it over to wikileaks – and the Chair of the FCC has already assured network providers that the regulation will not impinge on their abilities to manage net traffic during times of peak demand.

Written by Calvin

20/10/2009 at 2:06 pm