Open Internet Discussion Paper: Executive Summary

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The beauty of the Internet is its promise of unlimited accessibility. Any consumer with an Internet connection and a computer may be able to visit any web site, attach any device, post any content, and provide any service as long as he or she does not interfere with the rights of others to do the same.

While this right is universally praised, it is no longer required for broadband services. Because of recent Supreme Court and FCC rulings defining broadband networks as unregulated “information services,” the operators of broadband networks are under no legal obligation to keep their networks open to all Internet content, services and equipment. Broadband providers now have the same authority as cable providers to choose which services and equipment may be provided and used.

A. The Potential for Discrimination.

As a result of these recent regulatory changes, it is doubtful that the Internet of the future will remain open and accessible to all. Network operators now have the right to adopt conflicting and proprietary standards for the attachment of consumer equipment, making it difficult for manufacturers to build and consumers to purchase devices that work with broadband services, especially broadband video services. Network operators have the right to manipulate traffic with the goal of steering consumers to certain web sites over others. Network operators have the right to operate their own VOIP services, while blocking unaffiliated VOIP traffic.

Several parties - equipment providers, on-line application providers, VOIP providers, and consumer and public interest groups, including Public Knowledge - are now asking Congress and the FCC to restore the historic policies of openness. These groups are seeking enactment or adoption of an enforceable rule to ensure the Internet remains open and accessible.

B. Responses to the Objections of the Network Operators.

Broadband network operators, who consist almost entirely of cable and telephone companies, object to this call for legislation or regulation. They raise three arguments: 1) they allege that regulation will stifle the deployment of broadband networks; 2) they allege that examples of blocking are extremely few in number and that network operators have no incentive to alienate their customers by blocking lawful traffic; and 3) they argue that they must have the ability to manage their networks to avoid congestion on the network, filter spam and prevent other illegal uses.

This paper responds to each of these objections by the dominant network operators as follows:

The paper summarizes the long legal history supporting openness and duties to serve that provided the cornerstones of telecommunications policy for several decades. The paper finds that network operators have spent billions of dollars in investment capital under these nondiscrimination rules in the past and that an open regulatory regime actually promotes future investment.
The paper reviews the examples of blocking or interference by network operators and finds that they are increasing: a telephone company admitted to blocking a VOIP provider; a wireless company maintains it does not have the capacity to carry VOIP traffic, while at the same time developing its own VOIP service; an equipment manufacturer is marketing “filtering” technology designed to block VOIP calls; gaming manufacturers are having difficulty gaining the approval of network operators to attach equipment to the network. Cable operators have in the recent past restricted consumers’ uses of virtual private networks, barred home networking, required use of certain “home” pages and blocked streaming video applications.

While network operators claim these examples of discrimination are few in number, they represent a disturbing trend that is likely to increase because of the economic incentives of the network operators. Both cable operators and telephone companies today are more than just passive providers of transmission capacity; they also own and provide services, applications and equipment that use their own pipes. For better or worse, network operators are allowed to own both the “conduit” and the “content”. As a result, they have natural economic incentives to engineer the network to favor their own content and equipment over that of other providers that they do not own.
Finally, the paper reviews the network operators’ claims that mandating openness constrains the network operators’ rights to manage their networks to prevent illegal conduct. It finds that the network operators’ network management rights are not in conflict with the principle of openness. Historically, network operators’ management rights have always been recognized and protected even when nondiscriminatory access has been mandated by statute or regulation, and there is no reason that their rights to prevent congestion, spam and other illegal uses will be thwarted by policies ensuring an open Internet.

C. The Benefits of Openness

In contrast to the minimal burden on network operators, the paper finds enormous societal and economic benefits from ensuring that the Internet is open to all users, content and equipment. Broadband networks are fast becoming the essential lifeline of our economy and society, carrying everything from on-line commercial transactions; Internet dating services; news and information on current events through on-line newspapers, journals, and blogs; local and national advertising; telemedicine and distance learning; and videoconferencing. It is not far-fetched to imagine that broadband networks will one day take the place of public libraries, newspapers, banks, broadcasters and many other sources of information and entertainment and e-commerce. To allow the cable and telephone industries, which are becomingly increasingly concentrated in the hands of a few large corporations, to have unchecked control over our access to these sources of information, entertainment and commerce is cause for great concern.

It is certainly understandable for network operators to resist regulation and argue that government action will retard their productivity. Public policy-makers, however, must look beyond the microeconomic impacts on individual corporations and examine the macroeconomic effects on society as a whole. Focusing only on the impact on the network operators, for instance, overlooks the billions of dollars invested every year at the “edge” of the network by the high-tech computing industry, the on-line commerce industry, the gaming industry, the news and information industry, and the research community.

D. Conclusion

Given the tremendous importance of broadband networks to our future economic growth, our high-tech manufacturing sector, and our First Amendment rights to information free of censorship or control, the paper concludes that the benefits of requiring an openness policy for broadband network operators far outweigh the minimal burden on network operators.

Unfortunately, the currently pending legislative proposals fall short of what is needed to ensure that the Internet remains open. The paper concludes by calling upon Congress and the FCC to adopt a strong and enforceable policy to ensure that the Internet remains open and accessible.

This paper is divided into the following sections: