The skinny on Net neutrality (FAQ)

Net neutrality is dwarfing all other policy debates in the communications sector these days.

The issue has stirred the passions of liberal groups that see the fight for specific Net neutrality rules as one that pits big corporate interests against the average consumer. These groups have been lobbying Washington policymakers hard ever since President Obama took office.

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These groups claim that without new rules to preserve the Internet's openness, the Net as we know it will soon no longer exist. They say big service providers, such as AT&T, Comcast, and Verizon Communications are looking to turn the Internet into a cable-like system where consumers pay big fees to access online content. The groups warn that the open Internet of today will be replaced by a network of haves and have-nots, where people willing to pay additional fees will get access to better quality content and those unwilling to fork over extra cash will be relegated to a ghetto Internet filled with slow-moving content and flooded with advertising.

A recent joint proposal from Google and Verizon, which offered suggestions to policymakers on how to word Net neutrality regulation, only stoked the fire. These big corporate interests are willing to agree on some rules for to keep the Net open, but they are only willing to go so far.

To help readers better understand what this debate is really about, CNET has put together this FAQ.

What is Net neutrality?
There is no clear definition of the phrase "Net neutrality." But to most people it simply means that Internet users should be able to have unfettered access to content and services on the Web. In other words, broadband service providers should not be allowed to monkey with the traffic to block certain content or slow it down.

Are there any laws or regulations that currently keep the Internet "open"?
No, there have never been enforceable rules or laws written to specifically tell broadband providers what they can and cannot do on their networks. Some legislation has been proposed, but all efforts up to this point have failed. The Federal Communications Commission has written Net neutrality principles (PDF), but they aren't official rules. The FCC is currently considering official rules that it says it would be able to enforce.

But the FCC's authority has been called into question after a federal court ruled that the FCC did not have a legal basis to reprimand Comcast for slowing down certain types of traffic on its network. Some people think that Congress needs to pass legislation to give the FCC more authority.

What do Google and Verizon have to do with the Net neutrality debate?
Google and Verizon have created a proposal for policymakers at the FCC and lawmakers. This is simply a proposal. FCC officials and lawmakers, who are considering drafting new legislation on the issue, can choose whether to take these suggestions into consideration.

The two thorniest issues in the Google and Verizon proposal are whether broadband service providers can charge extra for certain applications that run on their networks and whether wireless networks should be excluded from Net neutrality regulation.

So if there aren't any rules in place now, does that mean that the current Internet is not open?
Again it depends on what your definition of "open" is. Most consumers would say they don't have any problems. Their broadband service provider doesn't block or slow down traffic on their connections. They are free to surf the Web and use any Internet-enabled application on their land-based broadband connections. They can watch streaming video and make phone calls using third-party voice over IP services, like Skype.

So in that sense, the Net is open. But that doesn't mean that broadband service providers are not prioritizing and managing traffic.

Regardless of whether they offer service over a fiber or copper line in the ground or over the airwaves, broadband service providers must manage their networks. Internet Protocol, which is used to shuttle information around the Net is what's called a "best effort" protocol. It sends packets of information across the network, and all these bits of information travel at different speeds and sometimes along different paths. The different packets are then re-assembled once they reach their destination. This is a very efficient use of network resources. But just like cars traveling on a busy highway, some packets get stuck behind other packets when there is a traffic jam.

People don't notice the delay with text-based packets, such as ones containing e-mail or Web page data. But when they contain time-sensitive data, such as packets for a voice call or video stream, getting some of those packets hung up in traffic means that calls can sound wonky and that videos can buffer and stall.

To ensure that all traffic gets through in a timely manner, network operators use management techniques and technologies to act like traffic cops that direct time-sensitive traffic ahead of other types of traffic.

Network operators have been using these technologies for years. And as their network infrastructures get more congested with more Internet traffic, they will likely need to rely on these traffic management techniques even more. Companies such as AT&T and Verizon say new rules that restrict their ability to prioritize traffic hamper their efforts to manage their networks and keep traffic flowing for all subscribers.

But what about broadband service providers who say they want to charge for differentiated services?
Broadband service providers already charge different rates based on how much bandwidth you use. That is why people who subscribe to a 756Kbps DSL service pay $15 a month and people who subscribe to a 50Mbps broadband service pay close to $100 a month. People pay more for more bandwidth because it is supposed to give them a better Internet experience.

What's more, service providers have always sold managed services to large companies, which pay huge fees for private access to a carrier's Internet infrastructure. These companies have very strict contracts with service providers guaranteeing them very specific levels of service.

Verizon and AT&T also already offer managed TV services using their Internet infrastructures. Verizon's Fios TV uses its fiber network to provide IP-based video-on-demand content for its subscribers, and AT&T's U-verse service is completely IP-based and delivers a managed video service to its subscribers.

But what AT&T and Verizon are talking about doing is charging different rates to carry specific types of applications, such as video. And that is what's different.

Can you give me an example of a service that would require an extra fee?
Let's say a rural hospital wants to offer a service that allows doctors in more-populated areas to examine patients remotely via a high-definition 3D video service. The hospital could spend lots of money to set up a dedicated link to other hospitals or to particular doctors, but that's not practical because it's extremely expensive.

Instead, it could use Verizon's existing Fios broadband network. But sending this bandwidth-intensive traffic over the network without any priority could still cause quality issues, so Verizon could offer a managed service that allows the HD 3D video stream to use its infrastructure and get high-priority through the network, so it runs smoothly.

Verizon could charge the hospital, which would likely charge the patient, for the use of this service.

That doesn't sound so bad. So what are Net neutrality supporters so afraid of?
There is concern that without formal rules of the road, broadband providers could abuse their power. So instead of using their management techniques simply to keep traffic flowing, they might use them to slow or block traffic from competitors to encourage consumers to use their own services more.

For example, say your broadband provider offers a streaming video service. It might be tempted to give its service priority in the network over a competitor's streaming video service. So while a competitor's video service would stutter, the broadband provider's service would fly through the network and provide superior quality.

The other fear is that broadband service providers would make deals with content and application developers and that every Net-based service would charge consumers for a better experience. The only services left on the public Internet would provide crappy, slow, and ad-laden content.

Do you really think this could happen?
Anything is possible. The phone and cable companies have a history of trying to control access to services and content. But I think that a competitive market, rather than regulation is better for keeping these companies in check. These companies just want to make money. So if they can still make money while serving the interests of consumers, then that's a win-win for everyone.

In a competitive market, consumers get a better quality product. That's because service providers must constantly innovate and cut prices to ensure subscribers don't leave their service for a competitor.

More regulation often leads to lawsuits, which keeps lots of lawyers busy and employed. I'm all for giving lawyers work, but lawsuits also cause market uncertainty, which slows investment in and innovation of new services. So that doesn't necessarily serve consumers.

While it's true that some consumers have access to only one broadband provider, nearly 70 percent of Americans have access to at least two broadband providers, according to the Pew Internet and American Life Project.

I think a better approach to prevent broadband providers from violating Net neutrality principles is to get Congress and the FCC to focus more on encouraging competitors to offer alternative services to current broadband service providers. The National Broadband Plan offers some suggestions for how to do this, such as encouraging new wireless broadband service providers to get into the market.

As for a premium Internet, you have to remember that broadband providers want consumers paying for managed services and their broadband services. If they don't dedicate enough resources to offering a satisfactory broadband experience, customers will go to a competitor.

You said earlier that the Google and Verizon proposal excludes wireless. Why do Verizon and other operators, such as AT&T, think wireless should be excluded?
AT&T and Verizon have long argued that wireless networks are different from wired broadband networks.

"Wireless networks simply cannot provide the same amount of capacity as wireline networks (i.e., DSL and cable)," Joan Marsh, a vice president for federal regulatory affairs at AT&T, wrote in a blog post. "Fiber is to a wireline network what spectrum is to a wireless network, and as a transmission medium, the two simply do not compare. The theoretical top speed of a LTE carrier is 100Mbps. By contrast, theoretical transmission speeds on fiber can reach as high as 25,000,000Mbps. The...extra zeros tell the story."

The other argument is that the wireless broadband market is still emerging and therefore slapping new rules on now would hamper innovation.

In a recent e-mail, Tom Tauke, Verizon's executive vice president of public affairs and policy, explained that Verizon has already agreed to openness rules as part of its bid to win spectrum licenses in the 700MHz spectrum auction.

"The FCC at that time indicated that if one major provider operated an open system, then the market would force all providers to do so," he said. "The evidence clearly shows that this is happening, and there's no need to put another set of rules on top of the policy already in place and now being implemented."

At the Technology Policy Institute's Aspen Forum in August, Tauke went on to explain that there has never been "one instance where a wireless carrier was blocking access to an application."

"But they're being blocked. Why?" he asked. "The operating systems are blocking them...Those who run application stores make decisions about what goes in and what doesn't go in those stores."

Tauke and others have also argued that there is more competition in wireless with five or six competitors in some markets.

What do you think of these arguments?
I agree with the wireless industry that mobile networks are limited in terms of capacity. But what I don't understand is why rules, which would allow for these networks to be reasonably managed, can't also apply to wireless.

Copper access lines, which are what is used to deliver most cable modem and DSL broadband services, are more capacity constrained than fiber optic links, such as what Verizon has deployed with Fios. But we don't have two sets of rules and regulations based solely on the type of physical connection used to transmit data.

Wireless is essentially another medium for transmitting Internet data. It will never match the capacity and speeds of fiber, but neither will copper. Still, wireless network speeds are increasing. And soon consumers will truly be able to substitute a wireless broadband connection for one that is accessed by copper or fiber in the ground. So why shouldn't the two networks be on equal regulatory footing to ensure that one type of business is not favored at the expense of another?

The wireless broadband market is still evolving. And I agree that unforeseen consequences may arise from new rules on these services. But it's also unknown what affect these rules will have on the traditional broadband market.

Tauke makes a good point that the openness clause in the 700MHz auction was supposed to provoke other wireless carriers to be more open. And maybe it has. But the problem with this is that it's only one band of wireless licenses. Verizon doesn't have to adhere to those same rules for its 3G service, which uses different spectrum licenses. Now, Verizon argues that its network is open, that subscribers can download any app that doesn't harm the network, and that they can go to any Web site from their phone's browser. But this is true of broadband subscribers on Fios and DSL services.

Lastly, wireless operators argue that their market is competitive and therefore does not need new rules to ensure that everyone plays nicely. This is probably the best argument against Net neutrality for wireless networks. But again just how competitive the wireless market is has been called into question. The FCC said in a recent report that the wireless industry is more concentrated than it has been previously. And the Government Accountability Office has also suggested that wireless competitiveness be studied further.

So at the end of the day, I'm not sure why wireless should be treated differently than wireline services when it comes to rules and regulations. Apparently, the FCC is also unsure about this. Last month, the agency opened a new 55-day window to ask for more comments on whether rules should apply to wireless networks.

What happens next?
Nothing will likely happen until after the congressional elections in November. The FCC's new rule-making proceeding has reopened the issue up for comment. So advocacy groups, broadband service providers, and anyone else interested in this issue will have a chance once again to argue for or against Net neutrality rules for wireless networks. The FCC hasn't indicated what stance it will take, but previously Chairman Julius Genachowski has been in favor of applying rules to wireless networks as well.

And it seems that he wants to make sure that adopted rules stick.

"As we've seen, the issues are complex, and the details matter," he said in a statement. "Even a proposal for enforceable rules can be flawed in its specifics and risk undermining the fundamental goal of preserving an open Internet."

It's unclear what the FCC will ultimately decide with regard to applying Net neutrality rules to wireless, but it seems that changes in wireless data pricing from AT&T and Leap Wireless, which now charge based on usage, might sway the FCC in the direction of including rules for wireless.

"The emergence of these new business models may reduce mobile broadband providers' incentives to employ more restrictive network management practices that run afoul of open Internet principles," the commission said in its notice asking for more comments.