Did Google turn its back on tech and run up the sidelines with Verizon just to plant its flag in future territory ?

Was the proposal aimed at pre-empting the FCC, or just gaming them to forestall regulation ?

Is a compromise between corporations arguing over the spoils of the internet possible ? Or have they jammed the gears of the free market ?

Will ISPs be stretched, squeezed and deformed by consumers and producers, or merely flattened by the FCC ?

Just how much tea should the tillerman get to ferry our internet traffic across the river?

Setting the stage: the Google-Verizon ‘Net-Fest’

On Monday, August 9, 2010, Google and Verizon released a joint Legislative Framework Proposal, offering a “proposed open Internet framework for the consideration of policymakers and the public”.  The following day the two respective CEOs, Eric Schmidt and Ivan Seidenberg, submitted an op-ed piece to the Washington Post to add some narrative background to their initiative, which began:

We have spent much of the past year trying to resolve our differences over the thorny issue of “network neutrality.” This hasn’t been an easy process, and Google and Verizon are neither regulators nor legislators. But as leaders in our respective fields, we have searched for workable public policies that serve consumer interests and create a climate for investment and innovation. What has kept us at the table and moving toward compromise was our mutual interest in a robust Internet and our recognition that progress would occur only when players from across the Internet space work together.

This naturally has generated quite a bit of reaction from multiple points on the compass. The ElectronicFrontier Foundation weighed in thusly.

Update: Richard Whitt, Google’s Telecom and Media Counsel in Washington, D.C. has posted some “Facts about our network neutrality policy proposal” on Google’s Public Policy Blog, prompting this response from Karl Bode at DSLreports.

As popular as it appears to be to bash either Google, Verizon — or both — regarding their joint initiative, the fundamental issues which make the net neutrality debate what it is are not going to go away ultimately without some form of negotiation or cooperation among the major players and their respective back benches — which includes content providers, tech companies, ISPs, the FCC, and the public.

For consumers, watching the positioning and movement of the still-fluid ‘tech-tonic’ plates that impinge on this debate can be a lot like witnessing a battle between Godzilla and Mothra without knowing who the good and bad monsters are — or if there is even that distinction among monsters — and all the while becoming anxious about whether or not the Public Defense Forces will be able to tame the beasts simply with small-arms fire or risk having to blow the entire city out of the water by desperately resorting to far more destructive ordinance. In such ultimate fight club-type struggles it is hard to see clear to optimal outcomes for peace, prosperity, and the public good.

Although it is easy to see some (many?) of the unstated motivations and agendas of Google and Verizon behind their arm-in-arm why can’t we all just get along locker room embrace, it is also true that some degree of industry and private sector cooperation on the question is needed in order to sort out the legitimate concerns on all sides. Hopefully, constructive efforts will converge on a workable solution without requiring that the government play the role of Solomon and threaten to cut the baby in half as well as throw out the bath water.

“Workable solution for whom?” one is quite right to ask, of course. Is it for the corporations sitting across the table with the revenue / expense pie of the huge internet market between them — which they seek to carve up — or for the consumer who provides the demand and ultimately pays for the continued growth and prosperity of a thriving pie-making economy? (memo to self: in my half-baked metaphor, is the ISP the crust and the content provider the filling, or … oh, nevermind )

Both Google and Verizon have something to gain by scratching each other’s backs. Google is much, much more than just a ‘content provider’, of course, and much more than just a ‘tech company’, as they clearly have designs on the communications infrastructure side of the coin that flips traffic into their waiting arms (jaws?). Verizon also seeks to go beyond its role as just a sprawling network of pipes and antennas and grow to manage/sell content, although the bloom has come off of that rose as the competition among the network players has made it table, for the time being, that expansive wish list agenda.

Furthermore, Google and Verizon are just place holders for similar industry players and roles. Apple and AT&T fit the M.O. as well, and are no doubt rubbing their chins as a result of the joint announcement, but they will likely watch to see where the dust settles before venturing further into the mine field.

It would also seem that the ‘proposal’ by Google and Verizon was a foray driven somewhat by game theory, to wit: best to keep the private sector options open to work out mutually optimal solutions to the issue and keep the FCC and the government from having to make a definitive, across-the-board ruling in the absence of visible progress on the matter by the private sector — a ruling which is more likely to be bad for one side or the other, just not clear which.

Fundamentals of the Internet-enabled Economy

Let’s not lose sight of the fundamentals of the internet-enabled economy as we try to decide who to root for (or boo) in the debate, whether the opposing teams or the referees.

1. The Internet is no longer a DARPA science experiment, but has become THE information utility and enabling technology of the modern era;

2. The skyrocketing growth and benefits afforded by this now-ubiquitous infrastructure and services platform which spans the globe are due largely to three primary dimensions of the Internet phenomenon:

(a) The explosion, in general, of applications, services, content, and online information which the platform enables, and which is also fueling and increasing consumer demand and expectations in a chicken-and-the-egg fashion;

(b) The efforts on the part of the infrastructure developers (i.e., ISPs and Telcos) to keep pace with this ongoing and increasing demand and, at the same time, competitively maintain and grow their respective market share;

(c) Rapid technological innovation in the functionality, capabilities and performance of the part of the so-called ‘content providers’ and tech companies in the supply chain to continue to deliver services, web resources, information access, and user experiences to consumers and businesses at the leafy ends of the Internet tree of life.

This business and technology nexus of innovative supply-side vendors and corporations responding to consumer and business demand for any manner and variety of internet-enabled solutions and services is populated by an ocean full of creatures large and small. There are a relatively small number of extremely large ones like Google, and an extremely large number of relatively small ones — the agile and fast moving entrepreneurial startups seeking to carve out their niches and be the next big break-out internet success story.

The smaller Internet and technology businesses and technology vendors have concerns regarding how their fates might be impacted if (and how) a giant like Google happens to willfully or inadvertently rolls over on them. This apprehension, or at least the uncertainty, is one basis for many of the criticisms of Google’s ‘participation’ in the joint proposal with Verizon voiced by some in the tech sector.

3. Quality-of-service, and distinctions between different classes of communication modes, are considerations which were, along with the connect-to-anything-anywhere design cornerstone of the Internet Protocol (IP), factors from the outset in the design of the Internet. The higher-level protocols on top of IP, such as TCP, UDP, and RTP, as well as the many flavors of physical network and data link protocols and network architectures, were developed by computer scientists and communications experts who spent considerable effort to elegantly solve the technical and usability challenges in robust ways.

For example, in the (now disbanded) 802.6 Metropolitan Area Network spec (essentially a token-passing, wide-area bus architecture which time-division multiplexes access to a deterministic network access protocol), access to the network for higher-priority traffic with realtime performance requirements (e.g. interactive telephony) was insured by allocating a portion of the network bandwidth (in the form of designated, reserved time slots) for services with minimum quality constraints. The provisioning of quality of service protections meant that network traffic of this type would not be denied service or minimum-required bandwidth as a result of the network being swamped by less time-critical and longer running data transfer processes and queues.

802.6 has been deprecated and is no longer deployed, due to the advances in bandwidth and higher performance which the IP network is now able to provide via standard [802.3 (ethernet), 802.11 (wireless), 802.14 (cable modem)] data link protocols. There are a host of new link-level protocols which have been specified for new uses, mainly for wireless spectrum in one form or another (see the many varieties of IEEE 802 link-level protocols at http://en.wikipedia.org/wiki/IEEE_802 ) . IEEE 802.23, for example, is a new working group devoted to Emergency Services — clearly an area where quality of service and performance guarantees and priorities are extremely important.

Furthermore, even though the Internet protocol (IP) can be made to (logically) work seamlessly across interfaces to new data link technologies and architectures, it is certainly not the case that any given end-user should expect or demand equivalent performance and services across all data links and end-user interface equipment.

It is also reasonable to expect that such protocols as emergency services, would, if routed for some portion of its network connectivity via IP networks provided by ISPs, have a different quality of service than a long-running, background download of an e-mail archive, for example.

Consumer demand and vendor supply: a growing gap

We should be very careful, in this whole ‘net neutrality’ debate, to — a priori and out of the starting gates — think that ALL uses of the internet communication platform are, or should be, completely and anonymously equal in priority, access, and performance, and furthermore that all services and transports must necessarily be of equal cost regardless of its mode of use .

Clearly, there are some distinctions that can and should be made regarding both quality of service and the associated cost of contracted and/or assured types and priorities of access to communications services across the broad gamut of public, private, emergency, commercial, consumer, recreational, and even national security uses.

4. Consumers and content providers are collectively placing increasing demands on both ends of the collective pipes of the internet infrastructure. That is a simple and obvious fact of life. The providers of that internet connectivity — the cable companies, telcos, and wireless providers — are also in a position to profit by being in the position to provide and charge for that connectivity. Where is the fair balance, and how to achieve it?  How much tea should the tillerman get to ferry us across the river, in other words.

So far, the commercial interests which use the Internet infrastructure to sell and deliver their services, and consumers which avail themselves of same, have been relying upon so-called free market competition to manage the cost/benefits tradeoffs and pricing of internet connectivity and level of service, ranging from dialup to T3.

For the consumer, at the leafy, fruit-plucking end of the sprawling, gateway-connected amalgamation of ISPs who shuttle traffic anywhere around the world, the ‘competitve’ choices usually boil down to choosing between cable, DSL, and – lately – wireless, and — within that — a subsequent choice of price for a certain level of ‘bandwidth’.

Unfortunately, both the competitive choices and the price-for-bandwidth options currently have undesirable artifacts and serious shortcomings for the consumer, a situation which has left, and is increasingly producing, levels of discontent and dissatisfaction among consumers.

For starters, there is usually only one cable company in any one market, since only one company owns the cable, and multiple ISP ‘competitive access’ to the cable is, however desirable, slow in coming and certainly resisted by the cable industry.

Also, even though telcos, such as Verizon with FIOS and AT&T with Universe, are trying to leap out of the bandwidth constraints of DSL and compete more effectively with cable in urban areas, the capital investment required to provide such last-mile, truly broadband point-to-point internet connectivity to the home ( and thereby compete with cable ), is significant, and even more so in rural areas.

Furthermore, regardless of the choice of ISP, price-point choices for levels of internet service predicated on levels of bandwidth are often moot.

In the case of cable company ISPs, it does not much matter if you are signed up for (and theoretically promised) 5 MB/sec if enough people in your neighborhood are saturating the local network segment bandwidth of the cable ( it *is*, after all, a shared-wire, collision-avoidance, ethernet wire protocol, albeit multiplexed into video bands of the cable).

Telcos can deliver more deterministic levels of bandwidth between the central office and the consumer, but their equipment will also ultimately face traffic congestion issues as well, namely in their switches and gateways which must aggregate and route traffic and then interface with the fatter pipes that flow into their wide-area networks.

As for wireless, anyone who has used a mobile phone knows the frustration and miserable experience of poor connectivity and dropped voice calls, regardless if the color of your ‘map’ is blue, red, or any other color. The upsurge in smart phones has added further burdens and bottlenecks to wireless networks, spurring changes in billing plans as well as customer complaints. The prospect of being asked to pay more simply for reliable service is another source of fuel for customer concerns regarding the plans and intentions of ISPs and wireless telcos.

Be careful what you wish for

5. I completely concur with those who would not allow the ISPs to impose arbitrary, and certainly undocumented, decisions about which types of internet traffic to block, restrict, or selectively throttle back in order to manage total demand and maximize the number of satisfied customers (and hence, revenue – their objective function).

However, a very unsatisfactory and unsavory outcome will ensue if we do not recognize that there is a legitimate need on the part of the ISP to be able to provide a consistent level and quality of service as part of a consumer’s contract with an ISP — and allow ISPs the means to provide that quality of service for a price that supports the necessary capital investment required to keep up with the market demand for a given level of supposedly ‘guaranteed’ bandwidth.

Failing a resolution to the ‘net neutrality’ battle that is fair to ISPs as well, we are likely to reap an undesirable and regressive outcome. We will drive the ISPs business models into territory that we will ultimately come to hate (and which is already raising its ugly head): pricing by data volume in lieu of pricing by bandwidth.

If ISPs are forced, one way or another, into being regulated like a public utility such as water or electricity, then we will get similar results: pricing based upon how much informational commodity you send or receive over a slow-growing and under-capitalized set of infrastructure, just like water or electricity.

ISPs and telcos will be able to continue growing revenue with a minimum of capital investment aimed at improving the capacity and system bandwidth of their local and backbone infrastructure. The ISP revenues will simply ride up with the growing traffic and will provide that revenue growth — at least in the short term. The longer-term effects of this business model will be disastrous, and will be a significant drag on the continued growth and capabilities of the Internet, for all parties involved, as well as for the economy as a whole.

Wireless telcos have long had this model for data, and AT&T, reacting to mushrooming demand on its network from iPhones, has rescinded the ‘unlimited’ data plan for new iPhone accounts. Time Warner and other ISPs are already conducting ‘trials’ of measured-data pricing models for residential accounts. This practice is full of pitfalls for content providers and consumers alike, who are of course the camps fervently holding up the banner of zero-tolerance ‘net neutrality’.

An approach to addressing this issue that does allow a degree of cooperation among the major players on both sides, and the recognition of the realities of what is required for different levels of service across the Internet food chain is needed. Absent workable solutions, the consumer will eventually be worse off than before, for any number of reasons.

Yes, the consumer must have a voice that has some weight, and — short of voting with our feet in the currently semi-flawed competitive marketplace — the FCC is the likely, if not exactly first choice, to help provide that voice and keep the players from playing dirty. And yet falling back on the government to somehow omnisciently and optimally pick a live rabbit from the bureaucratic black hat is itself fraught with unintended consequences and precedent.

But the challenge of keeping the growth in the explosive potential and innovative offerings enabled by the Internet in some degree of elastic sync with the connective infrastructure that is capable of keeping pace with that growth is a non-trivial problem, and one that will not be solved by an all-or-nothing campaign which seeks to make any one stakeholder the evil party.

Unless we are level-headed, the ultimate ‘net neutrality’ could well be a very level, but very unsatisfactory, playing field — one where consumers and businesses alike are billed with a simple metric that resembles nothing more than number of bytes transferred X effective speed of transfer. Something like that is sure to give businesses and consumers alike, and the entire internet economy, a migraine headache.

The Internet is not a data storage resource, to be billed based on how many bits or bytes it is asked to ‘save’. Increasingly, the Internet is a temporal experience, whose relative value and reasonable cost to the consumer are driven by any number of factors other than metered bytes.

It would certainly seem that some accommodation to allow different classes and quality of service — where the cost of a certain level of performance for broad classes of service was a fixed cost which could be budgeted and pegged to an assurance of continuous bandwidth appropriate to the type and class of service and desired performance — would be a good thing, whether that service be home wireline streaming video-on-demand, background large file transfer, e-mail, interactive web collaboration, or wireless multi-media access.