March 15, 2006 4:00 AM PST

Debate heats up over Net neutrality

SAN JOSE, Calif.--Speculation that the two biggest phone companies in the country, AT&T and Verizon Communications, are planning to create a tiered Internet system that would require big bandwidth hogs like Google or Yahoo to pay more for their access has become a hot-button issue in the tech industry.

Increasingly, it's also an issue on Capitol Hill, where some lawmakers are developing rules to maintain so-called Net neutrality--also called network neutrality--and prevent the emergence of a tiered system.

At the Voice over the Net (VON) conference at the San Jose Convention Center on Tuesday, companies on both sides of the bandwidth aisle debated how much Net regulation is needed. But the broader discussion was what exactly Net neutrality means and whether legislators are discussing a solution to a problem that doesn't yet exist.

"I am hopelessly confused about Net neutrality," said Blair Levin, a managing director and regulatory analyst for Stifel, Nicolaus and Co., a financial research company. "I know what the Bells are saying, but it's unclear what they mean."

CEOs from network owners AT&T and Verizon Communications have made comments suggesting they plan to create a system where some companies would have to pay more for their data-intensive use of the Net, which, they argue, slows access for regular customers. But for the most part, details of those plans are still unclear.

On the other side of the debate are companies such as Google, eBay and Yahoo, which are against any companies taking on the role of "IP traffic gatekeeper." They support the idea of federal rules that would further restrict network owners from blocking or restricting traffic.

That idea doesn't sit well with cable companies and phone companies-?namely AT&T and Verizon Communications?-which argue that new regulations could have unintended consequences that would stifle innovation and hurt consumers in the long run. And while they do not support new legislation that has been introduced to protect Net neutrality, they have filed petitions with the Federal Communications Commission to loosen existing regulations to give them more flexibility in what they do with their own network infrastructure.

Cisco Systems, which supplies the phone companies with networking equipment, has joined its telecommunications customers in cautioning Congress about introducing new laws. Last week, Cisco CEO John Chambers wrote a letter to Rep. Joe Barton, a Texas Republican and the chairman of the House Committee on Energy and Commerce. In short, Cisco's position is that no legislation is needed at this time and that phone companies should be allowed to experiment with different technologies within their networks to form new business models and alleviate network congestion.

Robert Pepper, senior managing director of technology policy for Cisco, attended VON and echoed Chambers' thoughts.

"We don't think that new regulation is needed on (Net) neutrality," Pepper said in an interview. "The FCC needs to use the existing policies to punish bad actors and bad actions. Additional regulation could end up hurting innovation rather than helping it."

Bandwidth hogs
The debate is heating up as new applications such as voice and video make their way onto the Internet. These features require a certain quality of service for them to work properly. Network owners argue that these services, which are often offered by other companies, eat up bandwidth.

Cisco believes the phone companies could use their technology to manage their network resources more efficiently and prioritize services for consumers. Today consumers who want access to high-bandwidth applications like video must subscribe to expensive broadband packages. These consumers may not need all this bandwidth all the time, but today they're forced to pay a flat fee for a set slice of Net access.

If network operators were able to provide priority to this video traffic through their network and charge the content providers for this priority, their customers could access their content over lower-speed broadband connections. In this scenario, a tiered service could actually benefit consumers, they argue.

But Google, PacWest Telecom and others, which have written a letter to Rep. Barton urging him to preserve Net neutrality, fear that network operators will abuse their market power and give their own services priority over their competitors. They also fear that the fees they charge competitors will keep some small companies from being able to deliver new services.

"They shouldn't be able to give preference to their own content over someone else's content," said John Sumpter, vice president of regulatory affairs for PacWest. "The solution is a form of Net neutrality that would not allow them to discriminate against other companies' applications."

Representatives from the phone companies say these fears are unfounded because customers would not allow this to happen.

"We have no intention of blocking or degrading other services on our network," said David Young, vice president of federal regulatory issues for Verizon. "We are giving customers what they want, which is fast pipes at a low cost. Anyone who tries to take that away from consumers will be punished by the market."

How Congress will handle Net neutrality is still up in the air. Barton has introduced a draft bill to the House Commerce Committee that would prohibit network operators from blocking or interfering with access of applications on the Internet. And Sen. Ron Wyden, an Oregon Democrat, is working on a measure that will foster "equal treatment" for all Internet content and dispel worries that telecommunications providers will play favorites in the future.

But on Tuesday, Sen. Ted Stevens, the Alaska Republican who chairs the Senate Commerce Committee, said that a proposal to overhaul U.S. telecommunications laws may not require network providers to follow Net neutrality principles.

See more CNET content tagged:
Net Neutrality, regulation, Cisco Systems Inc., John Chambers, AT&T Corp.

38 comments

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It's real simple: ask the telcos to answer 3 simple questions
1 Will you use deep packet inspection to analyze and/or meter customer behavior?

2 Will you offer tiered (e.g., "gold", "silver", and "bronze") Internet packages to customers otherwise operating at the same bandwidth?

3 Will you monitor and/or block voice-over-IP (VoIP), peer-to-peer file transfers, or any other class of communication by customers?

The answers might surprise you...
Posted by MercilessUnicorn (31 comments )
Reply Link Flag
Cisco is a sell-out
I am floored by this one. Cisco sold out to the Man. Cisco knows damn good and well that this is a bad idea but since the big telecommunist companies are their biggest customers, they jumped right into bed with them. So much for Cisco having morals. Well, looks like I am dumping Cisco for my routers and switches. HP, here I come. What a damn shame. Shame on you Cisco.
Posted by thenet411 (415 comments )
Reply Link Flag
We have a tiered system
If I pay for dsl I am faster then dial-up pay for high speed dsl even faster T1 or T4 and you get faster. Google and companies like them allready pay more based on how fast they want people to connect to their servers. And the large networks charge each other based on the bandwith that comes from or goes to other large networks. Their worried about services like VoIP, Peer-to-Peer that is not centeralized but as a consumer I pay for my bandwith and should be aloud to use it as I see fit. They have already once tried to charge users based on bandwith usage rather then a flat rate and the consummer wouldn't have it so know their trying to charge the providers. Hi bandwith users who want vidoe over the net pay for hi bandwith connection that should be good enough.
Posted by aburt46 (21 comments )
Reply Link Flag
Exactly...
It's how water and sewer works. It's how
electricty works. It's how phone service
works...
Posted by Zymurgist (397 comments )
Link Flag
International Impact?
I am fairly new to this topic of what the Bells are thinking about doing... but...

Wouldn't favoring certain content providers adversely affect international traffic? Lets say someone in Austria wanted to take a course on the Japanese language... directly from the source... University of Tokyo.

Well since nearly all internet traffic crosses the good ol'Bell networks... would this Austrian get his service degraded?

Sounds to me like Congress does need to get involved with this and prevent the Bells from spreading peanut butter all over the lines.

To me this would be like saying as long as you are calling someone in California or New York... your call will go through... but if you are calling someone in middle america, you will have to keep trying until we get a line free.
Posted by arluthier (112 comments )
Reply Link Flag
Just don't mess with my PORN!
Just trying to get you attention,

I don't get the argument and believe me I'm trying to. These companies are not building a better network for the betterment of the Internet. They're building it to make more money. You can call them "Gatekeepers" If you wish, but it is their choice to provide better service to higher paying clients.

As for them filtering content, the FCC will no doubt be bombarded with complaints and those guilty of the offense will suffer many long hours in the courtroom in addition to a serious loss of customers.

Picture if you will, being the owner of Google that finds it's content being filtered by its provider or any other provider. How much will Google pay that provider for their bandwidth and will they even pay. Most likely, not.

The Internet was intended to FREE but you can't build roads and not fix the potholes. Our society has proven that given certain freedoms they will abuse those very freedoms thus requiring rules and regulations to be implemented.

What we're talking about is the need of a governing body that's required to put to the people, the ultimate decisions if we want the Internet to remain FREE and not monopolized. The hardest thing for me personally to understand is why with all of our given technologies and abilities we as a people still can not jump on the net and cast our vote on any given subject. For those of us who cant afford the expenses necessary to get onto the net there are several other ways we could make this work. I.e. phone polls, ATMs, and hell, even the good old pony express.
Posted by Turnabuck (21 comments )
Reply Link Flag
Ask RIAA and MPAA instead
The questions are right, but should be asked to those who will demand (as an extension to DMCA) such measures to support their monopoly and copyrights. Those organizations are called RIAA and MPAA, not AT&T, Comcast or Verizon. Wait a little, and all this inspection, tiering and filtering will become a law in order to protect certain strictly non-telecom busineses. Expect enthusiatic support in countries like China, Russia or Iran, too, albeit for slightly different reasons.
Posted by Sceptic22 (3 comments )
Reply Link Flag
Wait a little and you will find the same entities that are telcos will become the same entities that care about the RIAA and MPAA.
Posted by RoboRobert (56 comments )
Link Flag
Why improve when you can degrade the competition
Someone at the Telcos got smart, they realized that the internet is the new media for broadcasting and communicating in real-time, so to position themselves to exploit this coming boom of real-time services voice and video, they are building a business model to get a piece of all the action even though, those packet streams have already been paid for by the end DSL user through a monthly subscription and by the content provider through their payments to their ISP for their bandwidth.

Its already been demonstrated what not having net neutrality laws will allow, a few unscrupulous ISPs have tried to interfere with competing services (mainly degrading or even blocking packets to Vonage) but let me take it a step further to a very possible hypothetical. Mr. DSL customer signs up and pays for ESPN live webcasts, everything is great for a time, video is good, audio is clear. Then come one game day you web cast video basically sucks, there are no net neutrality laws, and since ESPN did not pay the ransom and now every other packet is being dropped, because of network congestion. Even though it worked fine the day or week before. (and yes I aware of lack of QoS over the internet, but lets assume thats not the cause here). So the next day Mr. DSL customer gets an email suggesting that they should try Telcos Live sports channel for free, and amazingly it works perfectly. Mr. DSL customer cancels his ESPN subscription and signs up with the Telcos paid video service. The Telcos already have an advantage in that they can position their content and services servers physically closer to their end users than any competitors (which should lead to a better service) so why then do they also want the right to artificially degrade the services of others?

You want to take about stifle new services&.suddenly any content or service provider that does not pay the Telcos ransom will not be able to compete, plain and simple. Basically we would probably not have Yahoo, Vonage, YouTube, Google or Amazon, (to name a few) and everyone would still be using CompuCom and AOL as their only source for content.

I am not a big fan of government regulations but in this case when the very nature of the internet under siege by greedy network operators, I say we need it, and I will cast my vote in November accordingly. (I hope you do too)
Posted by LarryLo (164 comments )
Reply Link Flag
I understand your point and....
I too am not keen on governemnt regulation but see a need for it with cell phone companies, as well.
I am sick of being forced to sign a lengthy contract to pay ONLY $15.00 for a the best of crappy phones today.
Sure you can buy phones occasionally off eBay or Overstock.com but unlike 2 years ago if you buy a Cingular phone for a T-Mobile contract it is impossible to get the unlock code from Cingular.

Either do away with contracts or do away with this locking the phone system! And bring back the SWEDISH Ericsson cell phones! They ARE built well and not the crap sold today in America.
Posted by pjdw (33 comments )
Link Flag
Mischaracterization of the debate...
Companies are already paying for bandwidth.
Users are also paying for bandwidth. The
providers currently charge based on bandwidth
and SLA.

What providers really want is for companies to
purchase bandwidth for each provider (their
provider, plus the other consumer's). If
companies A and B have ISP's C and D
respectively, and customers at ISP X, they have
to pay charges to their ISPs plus ISP X. If A
and B bought the same bandwidth from C and D,
but A bought 2x bandwidth from X, then customers
of X would see A as being twice as fast.
Basically, the company pays twice for the
service and receives the lower of two bandwidths
as a result. Note that the consumer can pay to
increase his bandwidth, but not to increase the
bandwidth between him and the company he's
dealing with.

It's a scam, really. If the carriers cared about
the consumer or the companies they service,
they'd simply offer metered service with
optional throttling or capping. They have the
ability to do it.
Posted by Zymurgist (397 comments )
Reply Link Flag
Why improve when you can degrade the competition
Someone at the Telcos got smart, they realized that the internet is the new media for broadcasting and communicating in real-time, so to position themselves to exploit this coming boom of real-time services voice and video, they are building a business model to get a piece of all the action even though, those packet streams have already been paid for by the end DSL user through a monthly subscription and by the content provider through their payments to their ISP for their bandwidth.

You want to take about stifle new services&.suddenly any content or service provider that does not pay the Telcos ransom will not be able to compete, plain and simple. Basically we would probably not have Yahoo, Vonage, YouTube, Google or Amazon, (to name a few) and everyone would still be using CompuCom and AOL as their only source for content.

I am not a big fan of government regulations but in this case when the very nature of the internet under siege by greedy network operators, I say we need it, and I will cast my vote in November accordingly. (I hope you do too)
Posted by LarryLo (164 comments )
Reply Link Flag
All we need is an even playing field.
I do not think for a moment that our current internet access is nto a tiered system. Users can optionally pay for Dial Up, High Speed 'lite', High Speed and Uber High Speed from most ISP's nowadays.

The problem arises when your ISP decides to control what access you get to your connection. It is a common practice to throttle or cap users that are excessively downloading.

Is this a fair practice?

If I have optionally selected to pay extra for improved speeds, why should I then be penalized for utilizing my service? The topic of applying a tariff on specific uses of my broadband connection has also come up lately. Should I have to pay a different fee to utilize VoIP services along with my web browsing?

If an ISP choses to place restrictions on the amount of bandwidth I consume in any 30 day period, that is completely acceptable. If I choose to consume that quota over the first week of the month, that should be my choice.

Perhaps the ISP's need to move back to the consumption business model and away from unlimited access, but I certainly do not agree with offering priority at a premium.

Charging me for every Gb of transfer per month would certainly encourage me to use my bandwidth more responsibly, and it would certainly unclog the pipelines if there was a tangable cost to downloading 100 Gig of music and movies every month.
Posted by PiratePete (17 comments )
Reply Link Flag
Telco's oversale the pipes
The Telco's are like airlines: They overbook their pipes.
This will prevent their "triple-play" dreams when they attempt to over real time critical applications like VOIP and especially IPTV. The latency, bandwidth comsumption and retransmissions will prevent IPTV services. Therefore they want to create a high-priority tier for the telco content.
Posted by LittleGazoo (2 comments )
Reply Link Flag
bandwidth hog assertion/net neutrality
It is a major misstatement to suggest that Yahoo and Google are implicit bandwidth hogs. Users find things of interest by way of search engines but the bulk of the bandwidth utilization, if any, then occurs through the sites they discover.
Posted by vcerf (2 comments )
Reply Link Flag
bandwidth hog assertion/net neutrality
My guess is net neutrality is a smokescreen to hide the real issue of wireless assets and licenses in light of impending wireless technologies. "OK, I will give up on net neutrality, just give me the rest of Cingular and Bell South"

I think those fiber rollouts are getting pretty expensive...
Posted by wardross (2 comments )
Link Flag
Perhaps Ma Bell should be consistent
Because that is what we are facing now. In fact, when I defended USWest in 1987 during the first (and only) Triennial Review, there were at least ten major phone/data companies (7 RBOCs, GTE/Sprint, AT&T, and MCI). The RBOCs argued that cellular telephony was going to supplant them. But now they own most of the cell companies and have consolidated into 3 RBOCs (AT&T, which owns or will shortly own BellSouth, SBC, the remnants of AT&T old LD service, and Cingular), Verizon (which owns MCI, of which, during WorldCom/MCI's bankruptcy they complained bitterly), and poor relation Qwest.

If anything, the monopoly tendencies of these mega-giants are even greater than they were in 1984, when AT&T was initially broken up. And they are now flexing their monopoly muscle in the only way that makes assembling such monopolies profitable - price gouging.

And the only real answer that will work is antitrust litigation - it actually worked ten years longer than the '96 Telecommunications Act. So Senator Stevens can talk all about the phone companies' much-desired legislative change, but what is really eneded is regime change - no Republican administration is ging to take the phone monopolies (actually, it's one monopoly working under the aegis of USTelecom and several coalitions) act in the interests of consumers.

And these are the same phone companies who complain so bitterly about states trying to take their fair share of taxation from internet traffic. Hard to feel sorry for them when they want to charge for both ends of the internet.
Posted by gparshal (15 comments )
Link Flag
Yes, I noticed this CNet spin also
The telcos "grssroots" organizations must have put out talking points for the media. The communication infrastructure needs to be a regulated industry. Otherwise, the US is a 3rd-world competitor before we even get started.
Posted by ordaj (338 comments )
Link Flag
Easy Solution to Net Nuetrality
Problem, each side is fearful that the other (phone vs Internet) will make more money. Bottom
line is that greed causes friction.
Solution, create a "socialist" Internet experience and anyone who desires to talk using either audio or visual components rather than current email will receive a set price, no matter who provides for it. They are, after all, only concerned with pleasing the consumer they claim.
I personally could choose the fastest one with the least amount of PHISHING and SC(P)AMMERS.
Posted by pjdw (33 comments )
Reply Link Flag
Phone or Internet
Is this system going to be implemented only for US? one of the user has pointed out the greed creates friction. I feel it is true. It is the war of Phones or Internet. The reasons are very simple, VOIP phones are becoming very famous and probably the telephone companies might not want to loose their revenue. At the end of everything for companies it is only the matter of making revenue.
<a class="jive-link-external" href="http://www.buckleupnow.com" target="_newWindow">http://www.buckleupnow.com</a>
Posted by itispals (56 comments )
Reply Link Flag
Phone company losing revenue
History say what the US does does much of the world follows. Sad statement, isn't it? Vonage
is taking away some business from the lined phone companies. BUT, the smart ones are trying to come up with solutions. Some off pay one price packages. Good start. BUT, I would love to see one offer an all incompasing plan of being able to have one price and number for Internet, home and cell phone. If I get a call on my speaker phone at home on my way out the door then all I need to do is click on the cell, hang up the house line and maintain my call. How would I phone home when I am out and about, you ask? Why, by way of Intercom buzzer to signal someone at home to pick up. What about my husband who is also out? A different button to buzz his cell phone.
But, that may be too easy. ;)
Posted by pjdw (33 comments )
Link Flag
Google and Yahoo
Google and Yahoo are big enough to nip this in the bud. First company that tries to implement this tiered system gets blocked from reaching either Google or Yahoo. Once AT&#38;T, Verizon, etc start losing customers, they'll rethink their position on this. Once enough customers jump ship, their imaginary bandwidth problems will be solved.
Posted by bentonsv (1 comment )
Reply Link Flag
Is CNet being degraded already?
It has been loading awfully slowly lately. Telecos already playing games?
Posted by ordaj (338 comments )
Reply Link Flag
Teleco scam? Not likely . . .
There's nothing more friendly to the internet than imagining a consipiracy of the evil big-business men who own everything. In that sense I'm not surprised to see such talk about how telecos like Verizion are going to destroy the internet, but that's just not true. Show me even one case where a company has done or even plans to cut bandwidth? I know of only one example and the FCC stepped in and prevented it from going anywhere. The conspiracy is an illusion. The internet is too big and no one is powerful enough to reshape it. Free market competition is the key to the future success and development of the internet.
Posted by acarey1 (8 comments )
Link Flag
Telecom SCANDAL. It's a SCAM.
The network has already been paid for. I want the fiber I was promised a decade ago.

www.teletruth.org

The telcos scammers have bought and paid for legislators on every level. Beware fake arguments. Write your congress people.
Posted by ordaj (338 comments )
Reply Link Flag
Telecom CRAP. Some history:
Posted on ZDNet:

A Little History
How about a little history of the internet and the TELCOS. When the internet was first started, anyone remember what it was called?? How about ARPA/DARPA net. This network was built not by the telcos but by the TAXPAYERS of the US. The Telcos (MABELL) was shown this in the early 70's and was offered a chance to get on board. The response back then, what is in it for US??? At the time there was nothing in it for them so they passed. Now fast forward to today. The TELCOS are claiming thet THEY BUILT the netework, WRONG. OUR tax dollars are responsible for the internet as it is today. The TELCOS seem to forget that they HAD the chance back in the internets early day and passed it up. Now the TELCOS want to charge not only it's subscribers, but also the providers for usage. Now there is a thing called a cross connect agreement that the TELCOS have with each other and all of the MAJOR BACKBONE carriers of the internet. So what gives the TELCOS the right to basicly violate the cross connect agreements and charge Yahoo and Google money to provide data that the TELCOS subscriber, who is paying the TELCOS for the service, requested. After all Google and Yahoo pay someother carrier for the bandwidth they use. The cross connect agreement between the carriers covers that. HMMMMM sounds like the TELCOS are double dipping to me. Or are they just being GREEDY. Either way you look at it the TELCOS are just a bunch of cry babies trying to make a buck off of what you and I have already bought and paid for.

Yes, they might own the fiber lines, but guess what, we the taxpayers bought and paid for them also. Back in the 90's with deregulation they were given a bunch of tax incentives to build up their existing network. Now they claim that THEY did all of this at THEIR expense. Did they really?? NO, that was what the tax incentives were for, so they did not pay anything, they were paid to do it.

The TELCOS need to grow up and learn that they can not have it both ways.
Posted by ordaj (338 comments )
Reply Link Flag
Google pays for bandwidth we pay for connection.
Google pays for bandwidth to their host. We pay for the Internet connection (and for bandwidth too) to our ISP. Somebody explain me why add more payers to the equation?
Posted by Starling#27 (3 comments )
Reply Link Flag
Net Neutrality
Maybe it's time for Google and Yahoo and MSN to get togather and form a holding company and just buy the Telco's! Who could argue with that? I agree with all of the folks who say that WE paid for the fiber installations, NOT THE TELCO'S. MA Bell always was a greedy MOTHER, some things never change.
Ted
Posted by tmccarty8 (11 comments )
Reply Link Flag
Tempest in a Teapot
Verizon's David Young has it just right: "Anyone who tries to take [fast pipes at a low cost] away from consumers will be punished by the market." And by "market" I'm sure he doesn't mean Wall Street, he means the consumers.
Posted by NJSolly (5 comments )
Reply Link Flag
It's not that fast and it's not that cheap.
A lot of other countries get 100 mbps at a lot lower cost. Face it, the US is a 3rd-world country in this regard.
Posted by ordaj (338 comments )
Link Flag
Telcos want to double-dip
A BellSouth executive has said that they want to charge Google, Yahoo, etc. for their bandwidth use (Article: <a class="jive-link-external" href="http://*******.com/95wdq" target="_newWindow">http://*******.com/95wdq</a>).

Problem is that Google isn't the one using that bandwidth on the BellSouth network. The customer at the browser, that's hitting Google is! And, lo and behold, BellSouth is charging that user for the bandwidth. So, why should BellSouth charge Google?

This is a despicable (IMO) attempt at double-dipping. Charge the end-user for their bandwidth use, and then again, turn around and charge Google for the same bandwidth use.
Posted by pthomsen (2 comments )
Reply Link Flag
More govt. overregulation on my penny
Why are we thinking about government regulations for a problem that does not even exist yet??? Do we not have enough regulations? "net neutrality" can only be achieved by a free market not costly red tape.
Posted by PeterMcDoogs (1 comment )
Reply Link Flag
Live Free or Die
Nothing obstructs innovation quite like government intervention. The internet was born free, just like all of us here in the good ol' USA, let's keep it that way.
Posted by januaryk (2 comments )
Link Flag
Exactly!
Again and again I keep hearing that it is a good idea to solve this problem before it exists, but is that really the answer? The only thing that ever comes from pre-emptive regulation is red-tape, the crippling of industry, and countless lawsuits that pass costs on to consumers and defeat progress. Net neutrality legislation is not the solution.
Posted by acarey1 (8 comments )
Link Flag
Problem DOES exist
There are several broadband providers, including at least one large cable TV company, that are actively degrading SIP based VOIP traffic on their networks. While they are not "blocking" this traffic (and thus avoiding FCC action), they are rendering it virtually unusable in order to protect their own, over-priced, voice offerings.
Posted by lemob (6 comments )
Link Flag
It seems logical for users....
... to pay for the bandwidth they use. Heavy users should pay more
than light users. But this already exists in the bandwidth sold to
customer. BellSouth has four levels of DSL, and maybe should add a
superwide fifth level.

So the solution already exists. And if is implemented, at least with
one Telco. Should be the end of the discussion, except for the
flakes who think bandwidth should be free.
Posted by Earl Benser (4310 comments )
Reply Link Flag
 

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