House Commerce Takes on Paid Prioritization, an Essential Tenet to the Open Internet

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On April 17, the House Energy and Commerce Subcommittee on Communications and Technology will hold a hearing on paid prioritization -- an issue that is central to the net neutrality debate. While most internet service providers (ISPs) have claimed that they have no plans to block or degrade traffic once the Federal Communications Commission's 2017 net neutrality repeal Order goes into effect (exactly when that will be remains TBD), commitments (or lack thereof) not to engage in paid prioritization have remained a moving target. These commitments are shifting with the political winds, and ISPs are including plenty of wiggle room to allow them to argue they haven’t misled consumers if they eventually choose to offer prioritization deals.

To be clear at the outset: A ban on paid prioritization is essential for meaningful net neutrality protections. Some of the most likely threats to the open internet come from paid prioritization -- ISPs speeding up some internet services at the expense of others. Because paid prioritization is a zero-sum game, speeding up some traffic means other traffic is, by comparison, slowed down. Not only that, not everyone can even be “prioritized.” If everyone is prioritized, no one is, which would eliminate the value proposition for anyone willing to buy prioritization. To make matters worse, ISPs have resurrected long-debunked talking points -- that content delivery networks (CDNs) which, through physical upgrades to network facilities, make the internet work better for everyone -- are no different than paid prioritization, and that paid prioritization is critical for latency-sensitive applications like autonomous vehicles and remote surgery. Those issues will be discussed more below.

A Ban on Paid Prioritization Is Essential

At its core, paid prioritization is about an ISP using its market position as gatekeeper to consumers to extract tolls from websites and applications that users want to access. On the internet, all traffic travels as fast as the network permits. Paid prioritization imposes artificial and arbitrary limits on the speed of some traffic in order to prioritize traffic that has paid a toll. It is inefficient and unnecessary from a traffic management standpoint, and the only rationale for imposing paid prioritization is to shake down websites and applications (that consumers are already paying ISPs to access).

Prohibiting paid prioritization has long been a key component of net neutrality protections that ensure consumers are able to access the websites, content, and applications they want, without ISPs playing the role of gatekeeper. Those interested in keeping the internet free and open have raised concerns for more than decade about the incentives of ISPs to engage in paid prioritization, and the likely harms. In 2005, Ed Whitacre, then-CEO of SBC (the baby Bell that would soon absorb AT&T and assume the mothership’s name) famously said ISPs should require websites and internet applications to pay to reach users (in addition to continuing to charge users for internet access). Just a year later, Senators Ron Wyden (D-OR) and former Senator Olympia Snowe (R-ME) introduced the bipartisan Internet Freedom Preservation Act of 2006, which, among other things, prohibited paid prioritization by ISPs. As my colleague Harold Feld has explained, “Internet fast lanes were never, ever acceptable to anyone who actually supported real net neutrality.”

Unfortunately, current legislation introduced by Rep. Marsha Blackburn (R-TN) and Sen. John Kennedy (R-LA) explicitly allows ISPs to engage in paid prioritization by making clear the FCC should have no authority over Broadband Internet Access Service (BIAS) other than to prevent the blocking or degradation of lawful internet traffic (click here for Public Knowledge’s take on why the Blackburn/Kennedy bills are not serious attempts at protecting net neutrality, and here for our statement upon introduction of the Blackburn bill in December 2017).

Prohibiting paid prioritization ensures the internet remains a free market where users can access the sites and content they want without ISPs introducing anti-competitive and anti-consumer pay-to-play schemes for traffic that flows over the last mile network. If ISPs introduce paid prioritization schemes, incumbents and dominant firms will simply crowd out competitors with fewer resources, making the internet a less dynamic place for users to access knowledge, communicate with others, and engage in economic activity. The largest dominant ISPs could effectively impose a cable-style business model on the internet -- forcing websites and applications to essentially negotiate carriage-type deals with each provider, otherwise risking losing those ISP’s customers to competitors willing and able to pay. This is why venture capitalists have previously said that the risk of paid prioritization imperils financing for startups. And, contrary to the fanciful ISP talking point that startups would benefit from paid prioritization, advocates actually representing startups have explained that such representations reflect “a deep misunderstanding about startup economics,” and that it is absurd to think that startups that typically run on threadbare budgets could outbid the world’s largest companies for priority access.

Additionally, a ban on paid prioritization incentivizes investments in network deployment and upgrades to improve speed and capacity for all traffic. On the other hand, permitting paid prioritization gives ISPs perverse motivation to monetize artificial scarcity and limit network performance, while disincentivizing network investment and upgrades.

To convince an edge provider there is value to purchasing paid prioritization, an ISP needs to demonstrate that paying the toll will offer significant performance improvements -- improvements that will increase revenue for the edge provider over the alternative of not paying for prioritization. This dynamic ensures that ISP financial incentives point toward allowing the non-priority, or “slow lanes” to remain slow and congested compared to the prioritized, or “fast lanes,” so that there is a demonstrable value proposition for websites and applications without the ISP incurring costs. This dynamic will harm small businesses and startups that seek to challenge incumbent firms. Not only will smaller firms be unlikely to have the resources to pay for prioritization, but ISPs that engage in paid prioritization will have incentives to underinvest in their networks -- avoiding expenses -- when they can create new revenue streams for existing infrastructure by just manipulating edge provider traffic and extracting tolls instead.

What About CDNs? Haven’t I Heard Somewhere That the Largest Edge Providers Already Prioritize Their Traffic by Using CDNs?

Some stakeholders in the net neutrality debate make the misleading argument that the use of content delivery networks (CDNs) by some edge providers already allows the largest internet platforms to speed up delivery of their content. They make this argument to support the deceptive claim that ISP paid prioritization arrangements are pro-competitive. This argument typically and conveniently fails to explain what exactly a CDN is, how they work, and how ubiquitous they are. Equipped with that knowledge, the ISP logic falls apart.

For more depth on how a CDN works, click here. But, in brief, use of a CDN entails storage of servers with content close to, or even within, the last mile ISP’s point of interconnection. By storing content geographically close to the last mile network of an internet user, CDNs help all internet traffic travel more efficiently by allowing CDN-stored content to travel over fewer networks (and network miles), reducing use of internet backbone networks, and freeing up capacity and improving delivery of traffic not stored in CDNs. Importantly, CDNs do not deliver content to end-users: They connect to the last mile ISP, which then transmits data to the end user. Even content using CDNs inside of an ISP’s facilities is at the mercy of ISP manipulation at the interconnection point or over the last mile.

CDNs can be private (like those operated by Netflix, Google, or Facebook), or owned by third parties, like Akamai, Limelight, CloudFlare, Incapsula, Jetpack, etc. Some ISPs themselves sell CDN services. And, contrary to ISP talking points, CDNs aren’t just used by the biggest technology platforms or streaming video providers. Third-party CDNs are often, and increasingly, used by small businesses, and there are a number of providers that offer a free CDN. Simply put, CDNs are ubiquitous and handle an increasing amount of internet traffic. As Cisco has explained, CDNs have become the main way streaming video content reaches last mile ISPs. Seventy percent of all internet traffic will use a CDN by 2021, up from 52 percent in 2016.

Further, unlike with paid prioritization, which monetizes scarcity and makes it profitable for ISPs to delay network upgrades and investment, use of CDNs helps the entire internet to operate more efficiently, and frees up capacity for traffic that doesn’t utilize CDNs. When content providers -- whether video streaming services, retailers, or nonprofits -- use CDNs, they do not impose any cost or de-prioritize other traffic. Paid prioritization necessarily degrades the performance of some sites and applications to benefit prioritized traffic. Paid prioritization is a zero-sum game -- obviously, not everyone can be “prioritized,” and any traffic that is not prioritized is, by comparison, throttled.

Lastly, whether edge providers use a CDN or send traffic over the internet backbone, all traffic must interconnect to the last mile ISP’s network and travel over that network to reach end users. CDNs don’t allow content to skip ahead of other traffic over the last mile.

But I’ve Heard Some Stakeholders Say Paid Prioritization Is Important for the Development of Remote Surgery or Autonomous Vehicle Applications.

Yes, we’ve heard that argument too, and it has always been misleading and wrong. In reality, both the 2010 and 2015 iterations of net neutrality protections allowed ISPs to engage in “reasonable network management” practices. Under reasonable network management, ISPs are permitted to take necessary technical steps to ensure that all types of applications can work as intended on the network. Are you using a real-time app or service? Then it makes sense for those services to work in real time, while email does not need to appear in your inbox instantaneously. Net neutrality prevents against unreasonable discrimination, but the network working as intended is not only reasonable, it is expected. What if a level of reliability and service above the public internet that we all use is needed? Hospitals, businesses, and governments have purchased this sort of service from network providers for years using guaranteed quality of service business data services connections. Between these offerings and the reasonable network management allowance in net neutrality rules, these sorts of services are covered.

Contrary to claims that paid prioritization would have benefits for healthcare applications, telehealth and telemedicine experts have explained that the FCC’s decision to scrap net neutrality protections endangers telehealth expansion in rural America. Additionally, the end of net neutrality puts ISPs, rather than consumers or entrepreneurs, in the driver’s seat for how markets like autonomous vehicles and the internet of things develop.

For the House Commerce Hearing and Beyond

As Congress examines this issue, it must understand that there is not a technical need for, nor is there workable business model for paid prioritization that isn’t harmful to the open internet. Paid prioritization is inherently discriminatory and necessarily involves some traffic being throttled relative to “fast lane” traffic. Unlike actual network improvements like CDNs, paid prioritization is a zero-sum game that does nothing to improve overall network performance. Because paid prioritization is antithetical to internet freedom, ISPs must not be allowed to use their gatekeeper position to distort the open internet by prioritizing some kinds of traffic over others.

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