IP Democracy: For Congress: What if IP Services Don't "Connect to the Internet?"

In an email, Mike Bookey, author of “America at the Internet Crossroads,” raises an intriguing question about the Internet Freedom and Nondiscrimination Act of 2006, introduced yesterday by members of the House Judiciary Committee.

Mike sees a significant “loophole” in the bill’s network neutrality protections. He bases this on a careful reading of the bill’s language (always a good idea with legislation) and some creative thinking about company strategies. The language in question is found in two related provisions of the bill:

Section 28(a)(1) It shall be unlawful for any broadband network provider to fail to provide its broadband network services on reasonable and nondiscriminatory terms and conditions such that any person can offer or provide content, applications, or services to or over the network in a manner that is at least equal to the manner in which the provider or its affiliates offer content, applications, and services, free of any surcharge on the basis of the content, application, or service;

That long sentence is arguably the heart of the net neutrality provision. As it seems to clearly state, its protection applies to “broadband network services,” which are defined in another part of the bill:

Section 28(d)(3) the term ‘broadband network service’ means a 2-way transmission service THAT CONNECTS TO THE INTERNET [Mike’s emphasis] and transmits information at an average rate of at least 200 kilobits per second in at least one direction, irrespective of whether such transmission is provided separately or as a component of another service;

Mike then asks what I think is a good question:

How does the law prevent the following situation? The cable or telco access network provider walls off 99% of its private bandwidth from the Internet. This walled-off bandwidth is used to sell telco and cableco services and services from providers that agree to pay them premiums. The remaining 1% of the bandwidth used to connect end users to the Internet is non-discriminatory, and therefore satisfies the law. The effect of this situation is to starve the public Internet of bandwidth and render service providers on the Internet non-competitive.

Though I think the numbers Mike uses are purposely exaggerated to make a point, I’m inclined to think that his analysis of the language is on the money and that such a scenario would be legal under the proposed bill.

And since the top players in a still-consolidating tier of broadband access providers are all developing their own private backbones, it does seem that a more moderate and gradual version of Mike’s scenario could unfold.

Operators might, for example, begin by migrating some of their existing commercial arrangements (e.g., cable VOD) to IP delivery on a walled-garden IP service tier. All of these would be delivered end-to-end without travelling over the Internet. Operators could then begin to negotiate commercial “access-tiering” arrangements with more and more service providers, while simultaneously shifting more and more of their IP bandwidth to walled-garden services that also don’t travel on the Internet.

Over time, as Mike suggests, the effect would be “to starve the public Internet [i.e., service providers not paying premium carriage fees] of bandwidth and render service providers on the Internet non-competitive.”

Some folks might not consider this a problem, but I’d guess that most net neutrality advocates would, unless Mike and I are missing something.

Posted by Mitch Shapiro on May 19, 2006 4:38 PM to IP Democracy