The debate over net neutrality, hitherto an American affair, has moved on to Europe. British Minister for Communications Ed Vaizey said in a speech that ISPs should have more freedom to prioritise traffic. The BBC, one of the most popular players on the web in the UK thanks to its iPlayer (catch-up TV), protested against the statements, Dutch head of the BBC Future Media & Technology unit Erik Huggers said. The BBC announced it will develop an application showing end users if traffic is being pinched. It is hightly unlikely that the BBC will pay ISPs for the iPlayer to enjoy traffic priority over other services.
The debate over net neutrality (NN) is particularly complex. Even a definition of the term often leads to disagreements. But in essence, it means that all ISP services and applications are equally handled. If ISPs are allowed to throttle, prioritise or even block traffic, then a conflict of interest could arise when a provider affiliated with an ISP takes precedence over other providers. But even if there is no conflict, prioritisation can have undesirable consequences. Providers with deep pockets (such as Google) will always win over providers with less, especially start-ups. And that can put innovation at risk. Opponents to NN argue that the subscriber is always free to choose another ISP, but that argument does not seem realistic. Consumers are not so quick to react and, even more importantly, broadband is increasingly part of a triple play package. And what do you do then if one service is the best at ISP X and another service the best at ISP Y?
At the root of the matter lies the popularity of the flat fee and unlimited packages, combined with fierce competition, with the consequence that ISPs are losing their pricing power. They then turn to providers of over-the-top services (like Google) in order to bring in some money, but that seems completely unjustified. Google, but also Apple and Facebook, have made major investments in infrastructure, including data centres, and so already pay to make their content available. ISPs will have to continue looking to subscribers for more money. The ease with which opponents to NN say that subscribers need only find another ISP, could be turned upside down: if broadband revenues are too low and do not cover costs, all you have to do is increase prices for end users.
In the US, the debate on NN took on an extra dimension in August when Google (!) and Verizon thought they should jointly advise the FCC on the subject. Basically, it came down to this: NN should not apply to mobile networks, and for fixed networks, should also exclude 'managed services'. In this scenario, Google TV enters the broadband spectrum part and Verizon’s own TV and video services are offered using a protected part of the spectrum.
NN is a sensitive political issue, with telecom operators deploying the full extent of their lobbying powers. The days when NN could be put to the side with reference to illegal peer-to-peer file sharing are pretty much over, because (legal) video applications now overshadow P2P. Operators therefore no longer refer to the illegal nature of much of the internet, but to network congestion.
Whether and where congestion occurs, is the question. In general, it is reasonable to allow ISPs to apply some form of traffic management but one must wonder in what way they can do this and remain neutral. Clearly, prioritising does not help as it does not reduce internet traffic. Supporters of NN can be happy to have the BBC on their side, because when it comes to pricing power and market power, the corporation is a force to be reckoned with.
