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
    My Name Here, 5 May 2014 @ 1:04pm

    Not So Simple

    It's a great story, but it really isn't as simple an issue as it is painted.

    One of the things you have to deal with here is that net neutrality doesn't really exist to start with. The basis of the internet is peering and exchange, and not all ISPs exchange directly with everyone else on the net at the exactly same level. Some companies use one provider more than the other, and larger companies even run their own networks and transit in some cases. Some companies peer with every provider available, others rely on a more limited number of peers.

    Since not all content has exactly the same connectivity to your ISP, everyone has a different experience online. My ISP might support more of HE.NET, yours might use, and a third might get most of it's connectivity from Level3. If the server(s) you are trying to reach peer more with Level3 and your ISP more with HE.NET, then you may find yourself getting slower response than someone on an ISP that peers directly onto level3.

    What Netflix is doing, albeit grudgingly, is paying for the transit and paying the ISP to accept to peer with them. They have reached a point where the amount of traffic they are trying to push through the regular ISP peering is more than the ISPs are willing to pay for or are able to obtain, and in fact are degrading the performance of all sites using the same peering. Yes, Netflix is buying a faster connection, but it is the same result as the ISP buying more connectivity to support them. The only question is who is paying - either you pay with higher ISP bills, or Netflix pays (and charges you at some point) to get better connectivity.

    The plus of all of this is that the ISP's existing peering arrangements end up working better, sites that were slower because Netflix was overloading a peer point get better response, and everything gets better. There is no loss of service, just an improvement.

    No traffic is blocked. No services are lost. A non-Netflix subscriber actually benefits. A Netflix subscriber benefits. It's pretty much all pluses, because it's the original service plus more, not less. You don't lose anything, as a consumer you only gain.

    The biggest long term issue faced by ISPs is the overload of their internal network. That is not such a big issue for the moment, but if more streaming services or IPtv type services come online, they may find themselves unable to accept any more peering because they cannot handle the traffic internally. Perhaps this will be a driver for higher speed networking at the ISP level.

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