Monash net neutrality 2202 2012Presentation Transcript
Network NeutralityHistory and Future Monash University 22 February 2012
Author:• Oxford Bibliography of Internet Law – Oxford UP, 2012• Network Neutrality: A Research Guide – in Handbook Of Internet Research (Elgar, 2012)• Internet Co-regulation – Cambridge UP, 2011• Net Neutrality: Towards a Co-regulatory Solution – Bloomsbury, 2010
Net Neutrality: European and Comparative Approaches• Network neutrality growing policy controversy,• 2 elements separated: – present net neutrality lite debate and – the emerging net neutrality heavy – concerned with fibre access networks in future.
The problem in a graphic
Or for rival video providers...
As opposed to synchronous surfing
In this talk• I explain its past,• explore the legislation and regulation of its present, and explain that• economics and human rights will both play a part in its future.
Nothing in regulation is new
Telcos never liked the Internet• AT&T’s Jack Osterman reacting to• Paul Baran’s 1964 concept of the Internet:• ‘First it can’t possibly work, and if it did,• damned if we are going to allow the creation of a competitor to ourselves.’
Net neutrality permanent feature of telecoms law• It is a debate which – has existed since 1999 – will grow in importance as• Internet matures & service quality increases• demand on the network for – more attractive fixed and – mobile/wireless services.
Late 1990s debate• ‘Internet changes everything…’• But barriers to entry enhanced by tipping effects – Information Rules, Shapiro/Varian – The Innovator’s Dilemma, Christensen – The Sources of Innovation, von Hippel (1988)• Microsoft trial – bundling Windows with Explorer/Media Player• Recognized monopoly problems: Google too?• Fragile innovation ecosystem with dynamic feed-back loops
Common Carriage not new• Began with obligations on inns/boats• Determined by public function of networks• Continued into modern networks• E.g. Railways and telegraphs• 1844 Railway Regulation Act – Setting both emergency access (‘kill switch’) – AND Parliamentary trains• FRAND end-to-end access at set cost
The future is not assured
Everyone’s doing it
Facebook advert for neutrality• $100billion business built in 6 years – 845million users – Not permitted in China/Iran/N.Korea• Rupert Murdoch bought MySpace 2005 – His revolutionary new idea: paywalls• So who’s on the right side of history?
NORMS FROM ABOVE
1999• Network Neutrality debate began in 1999• Mergers: cable TV and broadband companies• AT&T/MediaOne and AOL/TimeWarner• Lessig and Lemley FCC submission: – ‘The end of End-to-End’• Before ‘Code and Other Laws…’• Fear of closed duopoly model
2000s Debate• 2002-4 US ‘Title II’ telecoms competition removed by courts, Republican FCC – Brand X case, Triennial Review• Lessig and Wu write to Congress 2002: – fear cable-TV business model – Wu coins term ‘net neutrality’ 2003• FCC introduces 4 ‘Net Freedoms’ 2005 – Not including enforcement of same! – Congress fails to legislate 2005-6 – 2008 – Obama campaigns w.net neutrality
Discrimination and Net Neutrality Non Discriminatory regime Quality Charging(QOS discrimination) (price discrimination) Blocking
Telecoms law• More than just competition law• Are ISPs all engaged in similar practices? – All discriminating against innovative users – Blocking gamers and P2P file sharers – Are they all doing it for security reasons?• Vertical integration and discrimination? – US Comcast (2008) and – Madison River (2005) cases – are easy FCC competition cases
One- Two- and Many-Sided Markets
Supply and Demand Possibilities 1 FTTH Excess supply ADSL2 and VDSL 8-50Mb/ s Peer-to-Market peer videocapability Peer-to-peer music Excess demand ADSL Content demand 512Kb/ s Network supply Inflexion point 0 Time
Four types of market failure: legitimacy for regulators to act1. Market power – As in Comcast (2008) and Madison River (2005)2. Lack of information/asymmetries – Ofcom work on easier switch between ISPs3. Quality of service – Claim of P2P and gamers that they are blocked4. Provision of public goods – Welfare loss through lack of innovation – Much more complex and far-sighted Lessigian view
A Different Debate for EuropeNet neutrality must be assessed within the particularcontext of European markets and legal regimes:• Different competitive landscape for networks – Services competition based on telco infrastructure – Strong policies favouring wholesale access• Different legal protections – Limited regulatory distinctions between communications networks and services – Backstop protection for market failures
Key Policy Concerns• Service available to consumers – What kind of QoS should consumers expect to get when they purchase ‘basic’ broadband Internet access? – Will consumers be able to access the applications that they want via the broadband and mobile Internet?• Discrimination/monopoly rents – To what extent can network operators treat differently the traffic of particular content or application providers? – When can network operators charge for QoS on different terms to similarly situated providers?
What ‘good’ looks like– Continuity in end-to-end architecture (and therefore reach) • to sustain investment cases and promote innovation– Effective competition at the ‘right’ level in the value chain • to allow competing operators to innovate (particularly at the transmission layer)– Environment in which consumers will prosper: 1. User choice and control 2. Information transparency 3. Ease of switching– Transparency and non-discrimination from network providers: • Treatment of content type • Access pricing– Existence of effective remedies and processes which enable NRAs to • act quickly and decisively against unfair discrimination in a fast-moving market
market tackle NN concerns?• Framework relies on healthy competition to police NN: 1. competition (incentives to invest) lacking in some markets 2. not clear flexibility broadband providers have to offer 1. different levels of QoS or to offer a choice of broadband services 3. consumers need accurate information about services received • information transparency not effective in the past • consumers (especially vulnerable) not well-informed or motivated to switch • Consumers’ flexibility to switch (not 18-month contracts)
anti-NN behaviour addressed?The effectiveness of NRAs in tackling anti-NN behaviour will depend on:• Ability of NRA or complainant to prove discriminatory behaviour – poor customer service be distinguished from discrimination?• How the 2009 Framework is transposed• Speed and effectiveness of NRA decision-making• Notifying proposed measures (including non-SMP remedies) – which Commission may vetoIn SMP markets,• does SMP analysis take place before non-SMP remedies can be applied?
2009 –10 FCC, CRTC and European Commissionintroduce vague broad principles of non-discrimination 2011-12 devil lies in the detail…
Net neutrality laws – Netherlands: Law of 6 March 2012 – Chile and Finland: as part of universal service• Regulation in – United States – FCC Open Internet Order Sept ‘11 – Canada – CRTC rules 2009, not implemented• co-regulation in Norway – 2009 agreement• self-regulation in Japan, United Kingdom• and many other European countries – E.g. France 10 Principles
US FCC Order 2011, challenge 2012• FCC Report and Order (2010) Preserving the Open Internet, – 25 FCC Rcd 17905• FCC Report and Order, In The Matter Of Preserving The Open Internet And Broadband Industry Practices, – GN Docket No. 09-191, WC Docket NO. 07-52, FCC 10-201 § 21-30 – Published 22 Dec 2010, appeared Federal Register 23 Sept 2011• In Re: FCC, In the Matter of Preserving the Open Internet, Report and Order, FCC 10-201, 76 Fed. Reg. 59192 (2011),• Consolidation Order - Judicial Panel on Multidistrict Litigation, Oct. 6, 2011 – http://commcns.org/sOFyyT
• GN Docket No. 09-191 Broadband Industry Practices WC Docket No. 07-52• ‘In the Matter of Further Inquiry into #Two Under-Developed Issues in the Open Internet Proceeding Preserving the Open Internet’,• Andersen et al (2010) Comments on Advancing Open Internet Policy Through Analysis Distinguishing Open Internet from Specialized Network Services.
DIRECTIVE 2009/136/ECNew Articles 20 and 22, Recital 26:• Consumer protection/citizen rights NOT SMP • http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:337:0011:0 036:EN:PDF• Requirements to notify customers & NRAs – But will need civil society activists – To detect discrimination – To notify higher-end consumers of problems• Added to interoperability requirements• Article 5 Interconnection Directive
Article 22: Quality of service1. Member States shall ensure that NRAs are• able to require networks and/or services to publish• comparable, adequate and up-to-date QoS information2. NRAs may specify the QoS parameters to be measured• content, form and manner of information published,• including possible quality certification mechanisms,• end-users...comparable reliable user-friendly information3. In order to prevent the degradation of service,• Member States ensure NRAs can set QoS requirements.
NRAs shall provide the Commission• ... with a summary of the grounds for action,• the envisaged requirements and• the proposed course of action.• This information shall be available to BEREC• The Commission may... make comments or recommendations...• NRAs shall take the utmost account of the Commission’s comments or recommendations when deciding on the requirements.
Declaration: Neutrality 2009/140EC• The Commission attaches high importance to preserving the open and neutral character of the Internet,• taking full account of the will of the co-legislators• now to enshrine net neutrality as a policy objective and• regulatory principle to be promoted by NRAs – Article 8(4)(g) Framework Directive• strengthening of related transparency requirements – USD Articles 20(1)(b) and 21(3)(c) and (d)• safeguard NRA powers to prevent service degradation• hindering or slowing down of traffic over public networks – USD Article 22(3) – http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:337:0037:0069 :EN:PDF
Commission will monitor closely• the implementation of provisions in the Member States,• introducing a particular focus on how the ‘net freedoms’ of European citizens are being safeguarded – in its annual Progress Report to Parliament and Council.• Commission will monitor the impact of market and technological developments on ‘net freedoms’• reporting to Parliament and Council before end-2010 – on whether additional guidance is required, and• will invoke its existing competition law powers – to deal with anti-competitive practices that may emerge.
Kroes: BEREC given key role by EC EC is not leading in evidence gathering –for BEREC: – "At the end of 2011, I will publish the results, including any instances of blocking or throttling certain types of traffic." If that produces evidence of widespread infringement - only Madison River Skype blocking? – recommend setting EU guidance rules • "more stringent measures...[in] the form of guidance." "If this proves to be insufficient, I am ready to prohibit the blocking of lawful services or applications.”• I think that means guidance 2012 - regulatory action 2013, if ever.
BEREC response 2010• EC (2010) consultation on the open Internet and net neutrality in Europe • http://ec.europa.eu/information_society/policy/ecom m/library/public_consult/net_neutrality/index_en.htm• BoR (10) 42 BEREC Response at – http://www.erg.eu.int/doc/berec/bor_10_42.pdf• “blocking of VoIP in mobile networks occurred – Austria, Croatia, Germany, Italy, the Netherlands, Portugal, Romania and Switzerland”
Incidentally it’s not net neutrality...• It’s ‘the open Internet’• In both EC consultation and FCC Order
BoR (11) 40 Rev1• Draft Work Programme for BEREC 2012• NRAs’ regulatory remedies available• to address potential discrimination issues, – link to the quality of service issue – possible IP interconnection market analysis in 2012
BEREC overview situation of European markets• BEREC investigation task from Commission – regarding switching issues and – traffic management practices – implemented by operators.• thorough investigation request – dedicated task force, together with Commission• results consolidated and published by Feb 2012?
Quality of Service requirements• Regulatory Framework: competence for NRAs to set QoS minimum requirements.• What is meant?• When should NRAs set minimum requirements and what should those be?• Harmonised minimum QoS requirements – could avoid creating inefficiencies for operators, – costs ultimately paid by consumers.
2012 further guidelines for NRAs– Methods available for measuring and assessing • network and application performance, • including by the end users themselves.– E.g. NRAs can promote or provide tools – end users control or monitor quality achieved – (including contractually agreed parameters).
Discrimination:• Prioritisation implicitly is discrimination,• number of aspects should be taken into account• to evaluate negative consequences for – level of competition, innovation and end users’ interests.• 2011, economic analysis of potential and theoretical effects of discriminatory behaviour.
IP interconnection• current IP interconnection agreements – peering/transit, – which may affect net neutrality issues.• analysis competition/technological developments• in particular contribute to economic analysis.
BEREC NN Deliverables:1. Detailed guidelines on Transparency; 1. (depending on outcome of the public consultation):2. Guidelines on Quality of Service Requirements;3. Completion of BEREC Reports on discriminatory issues;4. Report on IP interconnection;5. Inquiry results on traffic management practices.
Deadlines for BEREC 2012• Results of inquiry on traffic management Q1/2012• Discrimination report – public consultation Q2/2012, adoption Q3/2012;• Transparency – Q3/2012;• QoS guidelines – Q3/ 2012;• IP interconnection – final report Q3/2012;
December 2011 documents• BEREC Christmas present!• Dense information documents:• BoR 53(11) Quality of Service• BoR 67(11) Transparency, at – erg.eu.int/documents/berec_docs/index_en.htm
Three wise monkeys‘We have received no complaints’ is NOT‘I have not listened to any complaints’.• Some regulators are: – Seeing no evil – Hearing no evil – Speaking no evil.• BEREC analyzing the problem sensibly!
Neutrality ‘Lite’• Common carriage• Quality of service guarantee• Lowest through-put guarantee – Not maximum speed – 2Mbps is universal service broadband definition – Should be feasible with LTE• No blocking of rival applications/P2P• FRAND for premium content – FRAND can mean exclusivity in narrowband networks – Al Franken’s fears: everything goes premium – And video’s future is on CDNs – is this network?
Framework for Solving Problem• Consumer and competition harm – Misleading advertising – Deceptive trade practices – Stymying competition in downstream market – Vertical integration• Freedom of speech and innovation – Blogs and YouTube videos – allow consumers their content – P2P – future of distribution – PSBs – distribution of publicly funded content
NN Regulation light as possible, but effective:1. Information regulation – to require service providers to inform consumers2. Continual monitoring and surveillance3. Timely evidence-based intervention – to correct harmful and unjustified discrimination where necessary
NN enforced via reporting requirements:1.incentive for market players, and2.co-regulation or formal regulation – if insufficiently unanimous cooperation.• Market actors & self-regulatory bodies in – dialogue with regulators and consumers.This is preferable and lighter-touch:• NOT government regulation• OR non-regulation.
Managed services FRANDFairReasonable andNon-discriminatoryAccess• means Murdoch, Berlusconi and Disney – can’t cut exclusive deals to freeze out competitors• Universal service must also be considered• As well as Public Service must-carry
Broadband Internet a mess
Road to nowhere –break the circle of disinvestment and disincentive
Private Internet Censorship• This is shorthand for what ISPs have to do• ISPs are not evil – they’re capitalists• Regulators are meant to regulate capitalism• Innovation does not take place at ISP layer• Do they innovate more than Skype/Google/ Facebook?• If so, why do voice phone calls still exist?
ISP as secret policemen?
PHORM secret trials 2006/7• Press Release IP/09/570 – Article 5(1) of Directive 2002/58/EC – Article 2(h) of Directive 95/46/EC• Press Release IP/10/1215• No court case before CJEU against UK• UK Regulation Of Investigatory Powers Act 2000 – Section 1a And Schedule A1 • Regulation of Investigatory Powers (Monetary Penalty Notices and Consents for Interceptions) Regs (SI 2011 No.1340)• Investigation of Unintentional Electronic Interception: Monetary Penalty Notice, Exercise Of Powers Under • http://www.intelligencecommissioners.com/docs/Interception_Co mmissioner_Guidance_RIPA.pdf
European Data Protection Supervisor (2011)• Concerned that traffic management would result in exposure of users’ personal data – Including IP addresses• ‘Opinion on net neutrality, traffic management and protection of privacy and personal data’ – http://www.edps.europa.eu/EDPSWEB/webdav/si te/mySite/shared/Documents/Consultation/Opini ons/2011/11-10-07_Net_neutrality_EN.pdf
Deep Packet Inspection Policy• US Congress hearings 2008:• http://energycommerce.house.gov/cmte_mtg s/110-ti-hrg.071708.DeepPacket.shtml
Losing liberty?• ISPs important intermediary limited liability• Based on their wise monkeys role• Behavioural advertising – PHORM• Blocking and filtering• Throttling on non-transparent basis• Removes 2000/31/EC Art.12-14 exemption• Freedom of expression vital to democracy
Book launched Feb-March 2010 100,000 downloads first 2 months Canada (McGill) UK (Oxford) Brussels Author@Google71 Check against delivery participants only
2011 articles• ‘Three Wise Monkeys’ –www.globalpolicyjournal.com/• ‘Mobile Net Neutrality’ –ejlt.org//article/view/32• More ssrn.com/author=220925 • www.essex.ac.uk/law/staff/profil e.aspx?ID=832