Interconnection: Or How Big Broadband Kills Net Neutrality Without Violating 'Net Neutrality'

from the routing-around-the-problem dept

For years now, every time the net neutrality debate starts getting really confusing, Tim Lee comes along and puts it all into useful perspective. Six years ago, there was his exceptionally useful position paper on net neutrality for the Cato Institute. A couple years ago, he wrote another great piece for National Affairs magazine that deftly explained why the internet wasn't competitive and why that's a problem. Now working for Vox, he's put together a great piece that explains the technical difference between the interconnection fights and the net neutrality battle -- but also explains how the end result is basically the same.

There has certainly been plenty of discussion about Netflix's recent interconnection deals -- starting with Comcast back in February, and Verizon just recently. As we noted back in February about the Comcast/Netflix deal, it wasn't really a net neutrality issue, because it was about interconnection, but we were equally worried about how this really demonstrated the monopsony power of major broadband providers. Lee's latest Vox piece dives much deeper into that distinction, and highlights some key insights:
  1. These are not technically "net neutrality" violations. The animated graphics in the Vox piece do a great job explaining why. Just go look.
  2. But that might not matter, because the end result is basically the same.
  3. Because of that, this is a really effective way for the big broadband providers to pay lip service to net neutrality, while getting exactly what they want anyway.
  4. The real problem, as always, is too much market power by the big broadband players, allowing them to do an "evil" thing almost no one thought they would do.
To explain the first point, you basically have to recognize that with the interconnection issue, Comcast and others aren't technically "favoring" Netflix (or anyone) on their own network, but are rather setting up deals that favor that content off their network, but right up until it hits the last mile. And they're doing this by purposely letting their connection to other transit providers pile up. And that's why the end result is the same, but allows Comcast to technically be correct that they're not violating net neutrality, while creating the identical end result for most of the major players:
Comcast says it wasn't deliberately degrading the performance of Netflix traffic, which would have been a violation of network neutrality. But that implies that every website that used the same transit provider as Netflix was experiencing similar performance problems. That's obviously bad for Comcast customers, and it's also bad for startups that are trying to become the next YouTube or Netflix. If the only way to get excellent service on America's largest broadband networks is to negotiate a private connection directly to those networks, smaller companies with less cash and fewer lawyers are going to be at a competitive disadvantage.

In other words, those public transit links that were providing Netflix with subpar service could become the de facto slow lanes on Comcast's network, while private, direct connections could become the fast lane.
It's a neat trick. Comcast doesn't have to favor or disfavor any particular traffic. It just conveniently neglects to do the most basic things to make sure traffic flows smoothly from the various transit players -- and then offers to negotiate direct deals with big players to bypass third-party transit providers. Thus, it's not "favoring" anyone on its network. It's just creating a situation that favors those who pay up to access its network.

And, again, the FCC doesn't seem to recognize this at all. Tom Wheeler has been fairly explicit that he doesn't view the interconnection issue as relevant to this discussion yet. And the various rules that are being fought over won't have any impact one way or the other on interconnection. And, as Lee's article describes, part of the reason all the commotion has been focused "over there" on "net neutrality" rather than "over here" on "interconnection" is because the very idea of Comcast doing what Comcast has been doing these past few years just seemed impossible to consider not too long ago:
One reason for this is that Comcast's hardball tactics are relatively new. According to Wu, "we never thought much about" interconnection issues when the concept of network neutrality was developed in 2002. That was "mainly because it seemed like, 'Why would anyone do that?'" It was generally assumed that consumer ISPs would always buy enough transit to serve their customers' needs.

Wu worked in Silicon Valley prior to 2002. And he says he remembers that "solving a joint technical challenge" — that is, making the internet work as well as possible — "was the predominant motivation of the engineers." That's still true in most parts of the internet. But some of the largest ISPs now seem to view declining network performance not as a technical problem to be solved so much as a source of leverage in business negotiations.
That last line is worth repeating: Big ISPs view declining network performance as a source of leverage, rather than a technical problem.

And the only reason they can do this is because of the tremendous market power they have. And, once again, as we've argued for over a decade, that demonstrates the real heart of the problem: the lack of real competition in the broadband space. Either way, it's yet another must read if you're trying to understand the state of play today.
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Filed Under: broadband, fast lanes, interconnection, monopoly power, net neutrality, power
Companies: cogent, comcast, level 3, netflix

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  1. identicon
    John Thacker, 5 May 2014 @ 2:59pm

    But that implies that every website that used the same transit provider as Netflix was experiencing similar performance problems. That's obviously bad for Comcast customers, and it's also bad for startups that are trying to become the next YouTube or Netflix.

    Actually, sort of not. The only reason this works against Netflix is because Netflix is singlehandedly responsible for such an enormous fraction of all Internet traffic at once. Any startup would be invisible in the midst of all that network traffic-- all they'd have to do is avoid picking the transit provider (Level 3) that serves the behemoth Netflix and as a result constantly promises bandwidth it can't deliver.

    What actually hurts startups is that Internet transit tends to be priced metered / by actual sustained throughput (95th percentile), but in a way that the unit price decreases the more you guarantee that you'll use. So the big guys pay a smaller rate as their volume increases.

    Now, consumer ISP access is priced very differently, which is another part of the problem. Unlike Internet transit, it's not priced at actual sustained throughput, but on the basis of a theoretical maximum throughput, which might be achieved to some sites, but many sites it can't be achieved-- and it couldn't be achieved regardless of what your ISP does, and you wouldn't even necessarily want to achieve your max throughput anyway. Unfortunately, though, that also means that if your service degrades to certain sites, there's no way to tell nor does it immediately cost your ISP any more. But any way of measuring actual throughput or sampling it (which is what happens in Internet transit) is functionally equivalent to metering, which everyone, including me, hates.

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