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Network Neutrality: The Origins, Politics and Implications of New Rules for an Open Internet

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Presentation for participants in MSU’s Institute of Public Utilities (IPU) Annual Regulatory Studies Program Camp NARUC, East Lansing, Michigan, 18 August 2015.

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Network Neutrality: The Origins, Politics and Implications of New Rules for an Open Internet

  1. 1. Network Neutrality: Origins, Politics and Implications of New Rules for an Open Internet William H. Dutton with R.V. Rikard Quello Professor of Media and Information Policy Quello Center, Michigan State University Follow @QuelloCenter Presentation for participants in MSU’s Institute of Public Utilities (IPU) Annual Regulatory Studies Program Camp NARUC, East Lansing, Michigan, 18 August 2015.
  2. 2. The James and Mary Quello Center • Established in 1998 in honor of FCC Commissioner James H. Quello • Seeks to seeks to stimulate and inform debate on media, communication and information policy for our digital age • Follow the Quello Center online at: • http://quello.msu.edu • Twitter @QuelloCenter
  3. 3. Outline of Session: • Network Neutrality • The Origins and Context of New Rules • Selected Issues and Conflicts • The Politics of Net Neutrality • Implications of Net Neutrality • Broader Implications of a Shift toward National Policy and Regulation
  4. 4. Defining Net Neutrality: SNL’s Panel
  5. 5. Network Neutrality is: “Boring” John Oliver, but truly complex Open Internet? Battle for the ‘Last Mile’? Public Utility, available to all? Internet’s First Amendment?
  6. 6. John Oliver: ‘All data must be treated equal.’ 1 Jun 2014
  7. 7. John Oliver: proposing a better label for Net Neutrality, 1 Jun 2014
  8. 8. FCC’s Rules for Open Internet, Net Neutrality: No blocking (of lawful content) No throttling No paid prioritization, access tiering, ‘fast lanes’ No unreasonable interference Transparency
  9. 9. Multiple Relations to be Governed Content Providers •Back-end •Interconnections •Peering Broadband Providers •Throttling •Blocking •Managing Consumers
  10. 10. Origins and Context of Neutrality
  11. 11. The Rise of the Internet Over the Past Decade Many Economic, Social & Democratic Potentials of the Internet and Social Media, such as for a Fifth Estate Apparently Unstoppable Progress of the Internet and related ICTs, such as Social Media - Internet (85% in North America; 26% in Africa)* - Social Media (52% Facebook in North America; 10% in Africa)* - The New Internet World (East Asia & Global South) - Continuing Innovations: Twitter, LinkedIn, Tumblr, WhatsApp, WeChat, Pinterest, Instagram, Google+, Snapchat, Periscope, Beme, … - More innovations: Mobile Internet, iWatch, the first Selfie Election in US, Mobile Payments, … *Source: http://www.internetworldstats.com/america.htm [24 July 2015]
  12. 12. Cord-Cutting Shift to Internet and Mobile
  13. 13. Vision of Open Internet with all Services Sharing the Same Lane to the HH http://www.theopeninter.net
  14. 14. Vision of Services on Fast and Slow Lanes to the HH http://www.theope ninter.net
  15. 15. Fears Around the Last Mile: Few Large Players • A Key Bottleneck • Concentrated Industry • Lack of Competition • 82% US HHs one provider Incentives to Favor • Bundled Cable Services • Ownership of Content • On Demand, Pay TV Business Model Light Regulatory Regime • Reliance on Market • Referee Lacks Authority
  16. 16. Is Oliver’s Logic Problematic? All ‘data’ must be treated equally? or Unit of data would be the byte, so should all ‘bits’ be treated equally? A return to historical inequalities across services?
  17. 17. Inequalities of the Analog Era Consumers have paid the most for narrowband telecommunications services, a telephone call Consumers have paid the least for broadband, high-bandwidth services, such as TV, as in free, advertiser supported TV If all bits treated equally, consumers should pay more for video, i.e., higher bitrates?
  18. 18. Historical Uses of Differential Services Toll Roads: finance construction Tiered Services of Rail, Airlines Diamond Lanes on Freeways
  19. 19. European Network Neutrality US No Fast Lane EU Two Tiers
  20. 20. Shifting FCC on Access to Last Mile 1980: Computer II Inquiries • Telecom Regulated – basic transmission • Cable Unregulated 2005: Wireline Broadband Order • DSL Telecom Access Requirements Unregulated • Cable Modems Remain Unregulated 2015: Network Neutrality • DSL access regulated • Cable Modem access regulated
  21. 21. FCC on Access to Last-Mile Market Regulation
  22. 22. FCC on Access to Last-Mile ‘Inappropriate Utility-Style Regulation’ ‘Bold Action to Protect Open Internet’ Waters, R. ‘Internet Groups in Tricky Position over US Net Neutrality’, Financial Times, 12 February.
  23. 23. Alternative Paths to Competition* • ISPs and Cable/Telco • Content and Cable/Telco Structural Regulation (vertical integration) • mandatory standardization of TCP/IP • mandatory interconnection • competition focused on price and scale Network Neutrality: • proprietary protocols • exclusivity agreements with providers Network Diversity: *Yoo (2005): 9.
  24. 24. The Politics of Network Neutrality The Redneck Review Blog
  25. 25. Legal-Institutional Politics of Net Neutrality Independence of FCC (Non)Partisan Communication and Internet Policy Industry and Lobbyist Access Separation of Powers
  26. 26. Telecom Industry Cable Industry Big Network Operators Internet Industry Content Providers Advocacy Groups Digital Activists Proponents and Opponents of Network Neutrality
  27. 27. Republicans Democrats Proponents and Opponents of Network Neutrality
  28. 28. Politics of Net Neutrality Neutral, Rational-Legal Analysis? Power of Grassroots (Internet Users)? Partisan Politics (“power grab”)? Rising Power of Internet Industry, Silicon Valley? Tech Populism?
  29. 29. 0 10 20 30 40 50 60 70 80 90 100 SearchFrequency Google Search Queries for “Net Neutrality” (2004 – May 2015)
  30. 30. 1/18/2014 5/17/2014 9/13/2014 11/15/2014 2/28/2015 4/18/2015 0 10 20 30 40 50 60 70 80 90 100 SearchFrequency Google Search Queries for “Net Neutrality” (June 2013 – May 2015)
  31. 31. 0 10 20 30 40 50 60 70 80 90 100 SearchFrequency Net Neutrality Digitial DivideGoogle Search Queries for “Net Neutrality” “Digital Divide” & “Open Internet” (2004 – May 2015)
  32. 32. 0 10 20 30 40 50 60 70 80 90 100 SearchFrequency Net Neutrality Digitial Divide Google Search Queries for “Net Neutrality” “Digital Divide” & “Open Internet” (June 2013 - May 2015)
  33. 33. Normalized Google Search Frequency for Net Neutrality in the United States (2004 – March 2015)
  34. 34. Normalized Google Search Frequency for Net Neutrality by U.S. City (2004 – March 2015) Washington DC 100 San Jose, CA 63 Portland, OR 55 New York, NY 54 Austin, TX 53 Philadelphia, PA 53 Pittsburgh, PA 52 San Diego, CA 47 San Francisco, CA 47 Alexandria, VA 46 Seattle, WA 45 Boston, MA 42 Los Angeles, CA 41 Louisville, KY 41
  35. 35. Normalized Google Search Frequency for Digital Divide in the United States (2004 – March 2015)
  36. 36. Normalized Google Search Frequency for Open Internet in the United States (2004 – March 2015)
  37. 37. Top Google Search Terms Related to “Open Internet” (2004 – March 2015) open internet explorer 100 internet explorer 100 open the internet 40 windows internet explorer 20 internet wont open 10 internet explorer 7 10 open ports 5 microsoft internet explorer 5 open dns 5 internet explorer 11 0 open range internet 0 wide open west 0 open vpn 0 internet explorer problems 0
  38. 38. Implications: Careful What you Wish For? • Incentives to invest in alternative networks • Value of media stocks • Advertising revenue for cable and TV Market Concentration? Increase/Decrease: • Consumer Choice • Quality and Speed of Services • Competition Last Mile Services? More or Less: • Take-up by other nations • Clash with Britain’s focus on blocking pornography, child protection Other Implications:
  39. 39. Unintended Impacts (J.J. Nadler 2015): Regulation of Prices, Terms and Conditions Universal Service Interconnection State Regulation International
  40. 40. Moral Panics: Social Media & the Internet
  41. 41. Global Trends Driving Regulation Internet & Social Media Regulation Significance of the Net Digital Divides Trust Bubble + Snowden Moral Panics? (Social Media) ‘Left Out’ of Policy National Policy & Regulation
  42. 42. Broader Implications? Clarion Call for Politicians to ‘Do Something’ Blind Regulators and the Internet (Indian Parable) Lack of an Appropriate Regulatory Model Image from: http://www.jainworld.com/literature/story25i1.gif
  43. 43. Appropriate Regulatory Models? (Proportionate to Offense) Speech? Press? Post? Data Custodian? Telephony, Common Carrier? Cable? Broadcasting?
  44. 44. Governing a Global Ecology of Choices National Governmental Policy & Regulation Industry, ISP, SNS Policy & Regulation User Self- Regulation (Learning & Education) Bilateral & Multilateral Treaties, Inst. Tech Populism Multistakeholder, Multilateral Global Internet Governance
  45. 45. The Coming Decade Last Decade’s Narrative: Technical Innovations The Next Decade’s Narrative: Policy, Regulation & Governance Risk: Undermining the Vitality of the Internet and Social Media, and their Democratic and Societal Potential
  46. 46. What Can be Done? Analytical, Empirical, Policy Research Develop More Appropriate Regulatory Model(s) Education of Users & Regulators
  47. 47. Summary & Conclusion • Great Complexity and Uncertainty • Historical Shifts of Positions • Host of Issues • Underplayed Role of Tech Populism • Uncertain Outcomes • Need for Research, Challenge Conventional Assumptions
  48. 48. Network Neutrality: Origins, Politics and Implications of New Rules for an Open Internet William H. Dutton with R.V. Rikard Quello Professor of Media and Information Policy Quello Center, Michigan State University Follow @QuelloCenter Presentation for participants in MSU’s Institute of Public Utilities (IPU) Annual Regulatory Studies Program Camp NARUC, East Lansing, Michigan, 18 August 2015.

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