Net Neutrality: A Complex Issue With No Satisfactory Solutions

Yesterday, Chris Byrne had a write-up regarding President Obama’s “stated” support for Net Neutrality. “Stated” is in scare quotes because, as Chris noted, President Obama’s support for this ( much like his “support” for gay marriage) is a limp-wristed attempt to mollify his young, technologically literate base.

Of course, because it’s Obama and there’s a cottage industry dedicated to demonizing him, Ted Cruz had to come out with the stupidest political statement of the year (Non-Dollard/Kincannon Division).

With the mainstream attention these positions will now bring, and with an FCC decision on the issue due in 2015, the issue can no longer be ignored:

Net Neutrality is a major political issue, right now.

Chris Byrne correctly noted, that the lack of competitive options in local internet access is the primary factor leading us into the situation we’re in now. A deeper look into this shows… yeah, it shows we’re screwed either way.At the moment, there are no realistic answers that will satisfy consumers.

The explanation as to why is complex, to say the least.

Keep in mind that as I go through the issues surrounding net neutrality, I will be attempting to take common arguments, and technical background, and break them down into layman’s terms. Although readers of The Liberty Papers tend to skew more educated than most, I understand that not everyone is tech savvy enough to understand much about how the internet works beyond “I go to Google and email shows up!”.

What A Long, Strange Trip It’s Been

Debate about net neutrality has raged in the tech sphere for some time. Reduced to its core, the debate is a simple one: no one should have the right to discriminate against traffic coming across their network… their little section of the internet. Sort of a very large scale game of Telephone where no one is allowed to change the message.

The issue is coming to a head now, because many internet service providers (ISPs) have taken actions which have, at best, raised alarms among those paying attention:

  1. They have started to use their networks as a toll road of sorts, and have demonstrated that they are willing to cripple parts of the internet for those that don’t want to agree to their terms. This isn’t a new development as I noted in 2008. 
  2. As more and more content (particularly bandwidth-intensive entertainment) starts to be consumed online, ISPs are branching out past being backbone providers and have become content providers. The largest example of this is the proposed merger of Comcast and Time Warner which, if approved by the FCC and Justice Department, would grant the new company a very large share of internet customers in the United States.1

The latter point is the one that scares people the most, as it gives companies like Comcast a direct incentive to make, for example, their own video on demand services (Comcast has Xfinity, ATT has Uverse etc…) as appealing to customers as it can be. One of the ways they may do this, is to choke out the traffic coming from competitors (YouTube and Netflix are the two biggest) while putting Xfinity traffic in a “fast lane” with unfettered speeds.

As ISPs such as Cox, Comcast, Verizon and others gain greater control over more media properties, and more broadcasting and news organizations2, they control more of the message, and especially in Comcast’s case, more control over peering agreements (the agreements between core pieces of the internet which let traffic flow).

To put this into layman’s terms, imagine you go into a supermarket, where there are brand names – Wonder Bread, Kellogg’s Corn Flakes, Hellman’s mayo, that sort of thing – and their store-brand equivalents. Now imagine you have to check out the brand names in a separate register, of which there’s one open and it’s far slower than the other, numerous registers for the store-brands. You don’t like the store brands? Tough.

The pressing problem, is that this actually happened in regards to Netflix. Comcast threw all of their corporate muscle into hurting Netflix and making the act of doing business harder, affecting Netflix’s carrier (Level 3) as well, and in the end, it won. That will come back to bite all Netflix customers in the long run. There are other examples of VOIP (Voice Over IP) and VPN (Virtual Private Network; if you log into your corporate office from home, you use a VPN) services with third parties being slowed down or made virtually unusable when there’s been a first party option.

“But customers who don’t like the supermarket can go to a different store!”, many readers will exclaim. The free market works, right?

Yeah, about that…

Shakedown Street

Many local municipalities in America have tried to do what the tiny hamlet of Borwick in the UK is doing: building out their own networks. In Borwick’s case, the government helped them with grants. In America, it’s a different story, as a number of communities (many of which the gloried “free market” has abandoned as they are too small for any real investment) have been outright  blocked by numerous questionably legal or ethical means, from building out their own networks.

There are currently twenty states that have limits (either total bans or legislation intended to make the process all but impossible) on municipalities building out their own networks. The same conservative mindset that blanches when the federal government overreaches its authority has no problems doing it themselves when goosed by heavy industry lobbying. In some cases, the will of the people, voting democratically, were outright superseded by state legislators taking heavy donations from the cable industry.3

“So what’s stopping other companies from competing? If you’re not happy with Comcast, just switch to Cox!” Simply put, there is virtually no competition in bringing the internet to American homes. Seventy-five percent of Americans, including Chris Byrne and myself (my only choice for wireline internet service is Comcast), have one reasonable choice in internet service providers, or two at best. That results in high prices for mediocre service, in relation to both internet speed and customer service and support. Comcast’s customer satisfaction ratings are some of the lowest in America. That’s what happens when there’s a monopoly, and these monopolies are actually created by the states in many cases.

So it’s easy, right? We need to regulate the internet! The federal government must step in!

First off, we’ve seen how badly the states have mangled this issue in reference to their communities. Further, as with anything involving government regulation, be careful what you wish for.

U.S. Blues

The most basic argument made by many net neutrality advocates, is that the government can simply force ISPs to allow all traffic, unfettered, through their network. This is extremely naive, and ignores that some internet traffic is far more bandwidth intensive than other forms of traffic.

Let’s draw another analogy. Imagine someone throws a party in their home. Their home holds 50 people, but they’ve opened up their home to anyone who wants to show up. So a few people show up and they have a great time. Everyone can move around. A few more show up; it’s a little bit tighter, but overall, not a problem. But then some asshole comes in and brings about twenty friends, and then their friends show up, and then that one fat guy who eats all the food and smells comes in and all of a sudden, everyone’s uncomfortable. The easy answer is for the host to throw out the assholes, right? Not so fast; if he’s to throw a party of any kind, he is forced – by the Party Neutrality enforcement people of whatever – to allow anyone into his home. If his home is too small, he’s to invest in a bigger home, or no one can party.

Laid out, this is the reality of network bandwidth. The normal people are typical web traffic, HTTP/HTTPS, like going to Yahoo or TLP. But sharing the network are the guys bringing their buddies – we’ll call this streaming media (Netflix) – and the smelly guy, who we will call BitTorrent. Doug Mataconis made the argument at TLP, way back in 2010, that a court ruling arguing that ISPs could determine what traffic could flow on their networks was the right one; that the host of the party could throw his troublemakers out. If the argument was that simple, it would be correct. But what the ISPs are trying to do, going back to that analogy, is only let his friends in, and charge an high cover to anyone not on the approved list to get in, all the while stating that the house is much smaller than it actually is. What are they going to do? As mentioned above, there’s no other party in town.

So now, the Obama administration is arguing that the internet is no longer a want (an information service, in this context) but instead a need (a telecommunications service on par with phone lines and electricity) and therefore must be classified as such.

This would work! After all, parties are optional, but electricity isn’t. This would force ISPs into a “common carrier” status, similar to what Europe has, where companies would be forced to let competitors use their backbone at a reasonably set price.

The libertarian argument is that anything involving the word “force” is bad, and must be stopped. Personally, I’m unsympathetic to that argument – in terms of service and price, Europe’s and Japan’s internet are simply better than America’s in the vast majority of cases. However, as entrepreneur Mark Andreessen correctly notes, the road to evil – the PATRIOT Act, Dodd-Frank and other problematic pieces of legislation – is often paved with good intentions. One of the unintended consequences of an action like this is that it would add overly onerous barriers to smaller ISPs trying to compete with larger carriers, similar to what a lot of Mom & Pop cell carriers go through in dealing with Verizon; there’s likely little to stop the big boys from simply charging upstarts out of business due to the fact that current common carrier legislation in the United States is extremely complex and cumbersome, even more so than Europe.

Of more pressing concern is the government’s own conflicts of interest, which are far scarier than having to buffer Who Framed Roger Rabbit. The problem with the government regulating the internet is that the government is regulating the internet, and when they get to determine the rules, the consequences turn sinister.

So let’s say we all agree that regular internet traffic – HTTP/HTTPS, ICMP, DNS, SMTP and the rest of the common network ports – is acceptable; these cannot be discriminated. Let’s also say that there are commonly known ports that we know affect streaming services; this is where TCP port 1935 – Adobe’s RTMP port, which YouTube uses for its videos – would fall in.

What about BitTorrent? Oh, sorry, BitTorrent isn’t just bandwidth heavy, it’s also commonly used in the name of piracy. That’s no good. What’s wrong? Why are you using BitTorrent? Do we need to watch you closer?

What about communications of interest to the government, such as anything with heavy encryption? Or Tor?

The government has a direct interest in controlling that kind of traffic – hello, Wikileaks/Edward Snowden/any other whistleblower – and if anyone thinks the federal government will look the other way on these things, they are naive.

This isn’t just a possibility, it’s the reality of current legislation on the books, as Chris Byrne pointed out in 2006. Every single packet, every communication, every image, would be captured and stored – by law – if common carrier became the letter of the law in regards to internet traffic, without a warrant, and it would take just a rubber stamp to get a warrant that would be used to punish anyone the government pleases, whether that’s a kid downloading a movie on The Pirate Bay or a journalist working with a whistleblower who is exposing massive corruption. Cynics can argue we already do that via the NSA, but do we really want to put down a welcome mat?

Hell in a Bucket

In the end, there are no answers satisfactory to anyone who doesn’t own stock in Comcast.

Any solution amenable to both consumers, and liberty advocates, is politically impossible. Whatever is politically possible is unacceptable to either. Anything that any side calls for, carries deep side effects that affect everyone on the other beyond just the scope of the internet, and simply wishing that away doesn’t address that. Likewise, what’s good for business isn’t necessarily good for the American consumer (or the nation as a whole).

The status quo simply isn’t acceptable, but neither are the solutions. It’s highly likely that in the end, the only thing that matters is whether Kang or Kodos win.

1 – Predictably, shares of both companies took a bath after Obama’s announcement. Be mindful that these types of speculative movements in the market typically correct themselves, though.

2 – Comcast bought NBC Universal in 2012, and all of their properties therein. This includes MSNBC and other secondary news channels

3 – An example of this just popped up with regards to hydraulic fracking, as a Texas bureaucrat just outright said that she would not respect the will of the people of Denton, Texas, who just voted to ban fracking. I’ll remember this the next time some idiot starts screaming to secede because he hates government.

Christopher Bowen covered the video games industry for eight years before moving onto politics and general interest. He is the Editor in Chief of Gaming Bus, and has worked for Diehard GameFan, Daily Games News, TalkingAboutGames.com and has freelanced elsewhere. He is a “liberaltarian” – a liberal libertarian. A network engineer by trade, he lives in Derby CT.
  • njlibertarian

    Really great write up, thanks for giving both sides of the discussion!

    The key here, to me at least, is to focus on other issues as much as possible, because this issue is toxic if it becomes the center of attention. We have more important things to worry about, so let’s work on them first.

  • RavenNation

    Count me among those who don’t understand the technical side of things and tend to default to, “is it possible for the feds to actually make something better?” However, this article is helpful; also helpful is Cato’s daily podcast from yesterday which covered this. The interviewee has another take on the Netflix issue, among other things:

    http://www.cato.org/multimedia/daily-podcast/net-neutrality-obama-oatmeal

  • Simon Jester

    “technologically literate”
    Citation needed.

  • Christopher Bowen

    BREAKING NEWS: Young voters, on average, use the computer more and understand the internet better than older voters. Those younger voters tend to vote Democrat, and are brought out by a machine on the left that is more effective at getting out the vote historically than that on the right. I don’t really think this needs an academic breakdown, even Republicans admit this though state that their own machine has improved in that regard.

  • Simon Jester

    BREAKING NEWS: “use the computer more” and “understand the internet better than older voters” != “technologically literate”. I have yet to discuss this issue with a single net neutrality advocate who knows anything at all about traffic shaping, QoS, or the difference between paid and unpaid peering. Checking your email and tweeting your vapid thoughts to followers is not the same as being technologically literate.

  • Christopher Bowen

    In this context, “technologically literate” does not mean an engineering-level understanding of traffic shaping. It just means that they’re more internet savvy than Republicans tend to be. That’s kind of the point: they DON’T understand peering ,DON’T understand network routing principles, and DON’T understand high-end internet traffic, but in the end, that doesn’t matter in the battle over optics. It’s kind of like how a bunch of people think they can diagnose their health issues because they spend a lot of time reading WebMD. Not smart, but it exists.

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