23rd February 2014 marked one of the saddest days since the invention of the Internet. On that day Netflix signed a deal with Comcast which will see the latter give higher preference to the formers streaming traffic on their network.
Since the invention of the Internet, it has operated as a neutral network as far as how traffic is handled is concerned. A router doing routing on the Internet did not care if the packet it was routing was from a server at MIT or a server hosting the content of a secondary school in my village, the two packets were treated as equals limited only by the bandwidth the two institutions have purchased to their servers and their servers processing ability. The Internet was an equal opportunity network.
Up to now, the US Federal Communications Commission (FCC) has classified ISP’s as Information Service Providers and not as Telecommunications providers and thus have not been subject to common carrier regulations. That effectively meant that the general US regulatory framework that governed the transmission of data over networks did not apply to ISPs. However, a citizen petition to the White House called for Internet providers to be treated more like telephone companies, which would give FCC more oversight power. It collected 105,572 signatures, prompting a response from the Obama administration. Last week, FCC announced that it would write new net neutrality rules to prevent telecommunications companies from blocking, slowing or otherwise discriminating against web content. Last month, a federal appeals court threw out the FCC’s 2010 net neutrality rules after a legal challenge from Verizon. The court said the FCC has some authority to protect consumers and regulate Internet service provides but declared the 2010 rules invalid because the agency had failed to classify the Internet as a “common carrier” service like telephones that could be regulated more like a public utility. This then set the stage for yesterdays sad event.
What does this mean to the Internets’ future?
Up to now, internet access to any website or content was limited to a very large extent by the throughput of your link to the Internet. However, from now on content owners can pay ISPs to give their traffic higher priority on their networks to the end users. This will lead to two problems.
- It will kill innovation. Right now ceteris paribus, an Internet start-up in Nairobi has the same opportunity to make it big as a start-up in Shenzen, Lahore, Silicon Valley, London or Johannesburg. This is because the ISPs do not care how much money these start-ups have in their bank accounts, their traffic is treated equally. With the commencement of ISPs now asking content providers to pay for their traffic to get preference on their networks, it means that only those who can afford it will get their traffic to their target audience/market. For the poorer lot, their traffic will now be sent on a ‘best effort’ basis with no guarantee of delivery.
- It will spur anti-competitive tendencies by big operators and content providers. Apple can spend some pocket change to buy a tier 1 carrier such as Verizon or AT&T, this way, all iTunes traffic and traffic to Apple app stores will be treated preferentially on their newly acquired network with traffic to say Google’s play store being slowed down or blocked completely. We could also have a scenario where Apple pays carriers much more money to give their traffic preference, something Google might not be willing to do because they do not make any significant revenues off their Google play app stores.
- On the other end of the spectrum is the end-user consumer who because the content provider is not paying the ISP for priority of their traffic will now be asked by the ISP to foot the bill. So in the example above where Google is not paying for priority of Google play store traffic, the end-user might be asked by the ISP to pay a premium for a better Google play store experience. The burden will now shift to the end-user. This will then lead to a ‘tiered’ Internet service offering by ISPs where you no longer just buy Internet pipe but you now have to choose what you want to access and pay a premium for it.
So what then happens is that the Internet will no longer be this neutral network where a user can download an app from Google app store with the same speed as from the Apple app store. The catch however is that many of the ISPs end users outside the USA deal with are tier 3/tier 4 ISPs who peer with tier 2 and tier 1. With content providers paying tier 1 ISPs for preferential treatment, me walking to my ISP in Nairobi to pay for a better experience will not work because my tier 3 ISP in Nairobi gets to the said content and traffic via a tier 1 ISPs such as Verizon and AT&T. Even though the global dependence of tier 1 peering has been reducing in the last few years, their role on the overall performance of the Internet cannot be underestimated, they still control the infrastructure on which most of the Internet runs on.
Those who are calling this a simple paid peering agreement are wrong as a peering agreement involves the exchange of traffic and preferred routes at layer 3 of the OSI model and not the speeding up or preferential treatment of traffic at layer 7 which is what this deal is about.
If you had just enough electricity to either heat your house during winter or power your PC and give you an Internet connection, what would you chose?
In a recent survey, a group of Americans were asked this question and 63% of them chose the Internet connection over staying warm. In another case, a man dug up his neighbor’s lawn to pass a fiber cable to his house and when the neighbor sued him for damaging his well-manicured lawn, the defendant said that Internet was a utility service and therefore had right of way, the courts however thought otherwise and asked the defendant to pay for the damage done. Some ISPs in Kenya have faced difficulties when laying fiber to the building as landlords demand monthly fees for hosting the ISPs cables in the buildings, ISPs have been adamant in paying this monthly ‘rent’ because they argue that companies like Kenya power or the water distributors do not pay a similar consideration to the landlords to deliver their services to the tenants. The ISPs want the landlords to treat their Internet cables as utility cables and not charge for their routing in the buildings.
The question that arises is if Internet connectivity can be considered a public utility like water and electricity. A public utility can be defined as “a business that furnishes an everyday necessity to the public at large.” electricity and water are all considered public utilities. In strictly legal terms, there is also a regulatory component in the public utility definition, but here I am concerned with the “everyday necessity” portion. In a utility service like electricity, I want to flip a switch and expect electricity and consume it in quantities that will satisfy my need but at the same time leave enough available to satisfy other people’s (the public) needs too.
I believe the answer to the question on if the Internet is a public utility depends on many factors. The first is geography. In as much as Africa has made great strides in as far as Internet penetration is concerned, we are still very far compared to our European or Japanese counterparts when it comes to not just availability of the Internet but its use also, its one thing to have internet available and another to use it. Statistics show that Africa contributes just about 2% of total Internet traffic and less than 0.1% of the content. Africa is still fighting hunger and disease and lack of clean water, to try classify the Internet as a utility might seem insensitive and counter productive. or is it?
In the rest of the developed world, penetration in some countries is close to 100% (with Norway at 97% and Monaco at 100.6%) compared to Africa’s Highest penetration rate of 51% in Morocco and lowest in South Sudan at 0%. It might seem counter intuitive to classify Internet as a utility in South Sudan for example. However, if this is done, it might actually spur its penetration levels.
The reasons for declaring it as a utility are different for developed and developing countries. Whereas the developed country population is already hooked to the Internet and use it for their daily lives, In developing countries it’s still a luxury and not many can afford it. However, more and more people from developing countries are spending a bigger chunk of their incomes to gain connectivity.
Declaring The Internet as a utility in a developed country will be mostly to spur usage while in a developing country doing so will only spur penetration. The problem however that will arise in both developed and developing countries is that all public utilities must be closely regulated. When the FCC in the US attempted to declare the Internet as a public utility in 2010, it faced a lot of opposition because of the raft of regulatory measures it had put in place. At stake is how far the FCC could go in dictating the way Internet providers manage traffic on their multibillion-dollar networks. The FCC said that its intentions were misunderstood and all it wanted was to guarantee net neutrality. The issue of net neutrality arises from the fact that some ISPs were giving higher preference to traffic from their own services or friendly partners and less priority to traffic from rival networks, eg Comcast was giving video traffic from its sister companies higher priority than traffic of a similar nature from say Netflix or YouTube. Again, the issue of if Comcast is justified in doing this is a discussion for another day.
So the answer to if the internet can be classified as a public utility depends on so many factors. My opinion is this: for the sake of increasing penetration levels, it should be classified as a utility but should be devoid of the close regulation imposed on other utilities such as water and electricity. This is because unlike water and electricity which lack distinct differentiators from one supplier to another (clean water is clean water, 240 volts AC is 240 volts AC), the Internet has unlimited ways in which value addition and differentiation can be done. a regulatory framework to manage this value addition can be cumbersome and self-defeating and market forces should be let to determine which ISP wins the market.
Wikipedia defines Network neutrality (also net neutrality, Internet neutrality) as a principle proposed for user access networks participating in the Internet that advocates no restrictions by Internet service providers (ISP’s) and governments on content, sites, platforms, the kinds of equipment that may be attached, and the modes of communication.
Tim Bernes Lee who invented the Internet says this of net neutrality:
If I pay to connect to the Net with a certain quality of service, and you pay to connect with that or greater quality of service, then we can communicate at that level.
This therefore means that if I pay my local Kenyan ISP to connect to the Internet at say 4Mbps and another user in the USA also does the same, both of us should therefore enjoy equal access to all content on the Internet without hindrance of any kind. If i host a website that is accessible via my 4Mbps line to the internet and the user in the US also hosts his own website then the quality of access of both websites should be equal, neither mine or his should be slower.
Those against net neutrality say that if i want my website to be accessed better and faster, i need to pay more money to my ISP to do that, failure to which traffic to my website via my 4Mbps link will be treated with bias with respect to those who have paid.
All this brouhaha about net neutrality came from large traffic carriers such as sprint, level3, BT, Verizon etc who argued that companies such as Facebook, yahoo and Google are using their infrastructure to make money while they get a raw deal. This led to an ISP such as Verizon partnering with Google and Verizon agreeing to give Google traffic more priority over their network than say traffic from yahoo. This means that if your ISP is Verizon or peers to Verizon then your experience when accessing yahoo will be different from when accessing Google. This effectively creates a ‘private Internet’.
Where is the danger in this? you may ask. In the joint statement by google and Verizon where they try to deny that they want to privatize the Internet, (available here), somewhere in between the many lines of legal mumbo-jumbo, they say:
“This means that for the first time, wireline broadband providers would not be able to discriminate against or prioritize lawful Internet content, applications or services in a way that causes harm to users or competition.”
This effectively creates a loophole for throttling unlawful content on the internet. This is because they do not have the mandate to define what is lawful and wha is unlawful. The organizations or governments operationalizing this have a free hand to define lawfulness of content. MySpace traffic will now be deemed unlawful by say Facebook friendly ISP….. get the trend?
If for example Saudi Arabia decides all Christian websites are unlawful then Saudi ISPs can throttle access to these websites in Saudi Arabia. If the US government decides a website such as Wikileaks is unlawful, they can go ahead and instruct all American ISPs (translated most ISPs in the world) to throttle traffic to Wikileaks because ….. wait for it… it’s coming……… they do not pay the ISP to carry its traffic. Internet censorship will have found a back door to the world! This would also mean that if Facebook pays level3 to prioritize its traffic, it kills off competition from MySpace because MySpace experience on a level3 network would be poor.
The network owners have argued that Network Neutrality is unnecessary because there is sufficient competition in the broadband market to deter bad behavior. They argue that if Verizon degraded access to a site or discriminated against the use of one service in favor of another, they would anger customers who would move to another network operator in the area.
Consumers must have robust competition and multiple choices for this theory to work. But such competition or choice does not exist in Africa, and it isn’t likely to exist in the foreseeable future. This is because most ISPs in the continent end up connecting to the same backbone cable to the internet that peers to the same big provider in US and EU :-(. There is insufficient competition between different technologies and ISPs to produce any kind of deterrent should one operator block our access to the free-flowing Internet. This leaves the African user in a very bad situation.
What does this mean to African Internet content and users?
Africa is a net content importer, this means that majority (over 99%) of all Internet content viewed in Africa comes from outside Africa. This was occasioned by the fact that our local backbone infrastructure was and continues to be poor to effectively host content locally. lack of local content, bandwidth scarcity and unreliable power supply have made the continent a net consumer of traffic rather than a generator. The situation is so bad that even our local media houses who produce close to 100% local news have to host their websites and portals in the US or Europe. African ISPs peer to European or American Tier 2 ISP networks who eventually peer to tier 1 ISPs such as Verizon and sprint who are adversely mentioned in deals with companies such as Google on preferential traffic treatment.
Africa recently joined the rest of the world on the internet by laying high-capacity submarine fiber optic cables. This is not only expected to provide faster access to foreign content, but is also aimed at availing African content to the world and Africa in general. The lack of IXP’s means that the African user still accesses most of the local content via the internet in Europe or the US. With the lack of net neutrality, Africa-originated traffic will not be treated equally on the internet playing field as say traffic from Google or Microsoft. This is because the latter will be paying millions of dollars to have their traffic receive preferential treatment from the large data carriers. This, coupled with the fact that the continent produces slightly less than 2% of the total world traffic, will mean African content will be nearly invisible on the Internet.
The result of this is stiffed growth of local content and general development of the continent. With the legacy telecoms systems also turning into the ubiquitous IP on which the Internet is based, African telecoms traffic (primarily voice) to the world will also be disadvantaged shutting off the continent from the world once more.
Sadly, the continents industry players have been very silent on the matter. There has not been a single conference/meeting of minds on the continent to discuss/advocate net neutrality. Only the South African government has tried to discuss it but not from the general perspective of throttling non-paying traffic from providers but from the consumer perspective.
This silence makes me get the feeling that the absence of net neutrality will be good for despotic African governments who will ride on the wave and ban access to information that will pose a threat to their rule and hold on power. I hope i am wrong.
African ISPs/ content developers and consumers need to speak out for net neutrality. Local NGOs that are very vocal on issues such as human rights should also come out and advocate for a neutral internet because thanks to it, they were able to communicate to the world when governments curtailed their freedom of speech. NGOs in America are doing it such as here, here, here and here.
Here in Kenya we are so busy laying infrastructure (fiber, 3G, LTE etc) and talking politics that we forget the fundamental threat to the very cause of the telecoms revolution in the country. Let us do all we can to protect the public Internet from going private.