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A potential Net neutrality win-win-win

Rules addressing communications over distances would improve the situation for network operators, consumers, and content providers alike, argues public-policy executive Paul Misener.

Editors' note: This is a guest column. See Paul Misener's bio below.

The Net neutrality debate remains polarized, with broadband network operators opposing consumer groups and Internet content providers. Even the current discussion of legal authority for regulation elicits hyperbole, and many observers assume that final resolution of the issue will entail a win for one "side" in the debate and a loss for the other.

Although such a zero-sum game existed when Congress was considering competing versions of Net neutrality legislation a few years ago, there now is a real opportunity for an outcome in which network operators, consumers, and content providers all would be better off than they are today. This would be a win-win-win result, without compromise.

Radical solutions to Net neutrality, one way or the other, are politically impossible today. Neither the imposition of substantial common-carrier regulation nor, for example, permission to block lawful Web sites could be accomplished in Congress or at the Federal Communications Commission. Heavy government intervention is unwelcome, and the fundamental openness of the Internet obviously has been good for consumers and innovation.

Either a middle-ground approach will be reached or, as since 2006, nothing will happen except more debate. I believe that the adoption of wise middle-ground rules would be--for all stakeholders--better than continuing to do nothing.

There have been nearly four years of Net neutrality detente in which--despite a lack of clear, complete, enforceable laws or regulations on the subject--two realities are manifest: there have been very few incidents that might be considered "violations" of Net neutrality, and network operators have not deployed innovative new services that consumers and content providers would be willing to purchase. Each of these realities deserves attention.

First, there have been almost no Net neutrality violations. Opponents of Net neutrality rules say this record demonstrates that regulation is unnecessary--that Net neutrality is "a solution in search of a problem." But actually, the threats of legislation (since 2007) and FCC regulation (since 2009) have kept the network operators on their best behavior.

Moreover, Net neutrality has become a populist consumer issue in a way that few FCC issues ever have (try Web-searching the terms "Net neutrality" or, more humorously, "series of tubes"). So, it's hard to imagine policymakers adopting laws or rules that would condone popular notions of Net neutrality violations.

Second, the legal/regulatory uncertainties have, understandably, dissuaded network operators from making investments in new technologies and services that might subsequently be found to violate Net neutrality. Unfortunately, some observers seem to think that this uncertainty hurts only the network operators and their suppliers, but consumers and content providers also are suffering, albeit unwittingly, from the lack of new services that might otherwise be available.

Why should one Web site be able to pay for better performance when others do not or cannot pay? The answer is simple...If paid performance enhancement for some content is equally available and does not degrade the performance of other content, then it should be permissible.

In sum, although the continuing detente of no rules (generally good for network operators) and no violations (generally good for consumers and content providers) may appear beneficial to all parties, the fact that innovative new services are not being sold by network operators means that all three classes of stakeholders could benefit from new rules.

The basis for a win-win-win solution to this longstanding impasse can be found in current practices that address the fact that, despite the Internet's ubiquity, physical distance still matters to Internet communications: the further apart the source and destination, the greater the number of nodes a communication must traverse, and the higher probability of traffic congestion and resulting data packet loss, delay, or variable delay. For some applications, such as text e-mail or simple file transfers, such impediments are hardly noticeable, but for other applications, such as streaming video and Internet telephony, they easily may render the communication unusable.

The challenges of distance are addressed in at least three ways today. Consider an Internet content provider who runs a Web site from his office in Los Angeles. If most of his customers are located in the New York City area, streaming video on his site may not perform well for them, as a result of the great distance. What can he do? He can pay to move to New York, taking with him the servers on which his Web site sits. Alternatively, he could pay to lease a private telecommunications line from Los Angeles to New York in order to circumvent the congestion of the many Internet nodes between his site and customers. Lastly, he could pay to have his Web site hosted or cached on someone else's server located in the New York area.

Whichever of these three options he pursues will require spending, will reduce the distance and number of nodes between his content and his customers, and will result in his Web site performing better than it did before. Notably, his Web site also will end up performing better for New York consumers than other Los Angeles-based Web sites whose operators are unwilling or unable to invest the same way.

But why isn't this a violation of Net neutrality? Why should one Web site be able to pay for better performance when others do not or cannot pay? The answer is simple: the improved performance of this Web site has not come at the expense of any other Web sites, and the same enhancements were available to everyone else. One site paid for performance enhancement, but others didn't suffer degradation.

If paid performance enhancement for some content is equally available and does not degrade the performance of other content, then it should be permissible. And, following this principle, in addition to moving, leasing private lines, and edge caching, Internet content providers (and consumers) should be able to purchase "quality of service" or "managed services" from network operators on the same basis--equal availability and no harm to other content.

At a recent conference, this approach to Net neutrality was described, and another speaker remarked that, at a completely full network bottleneck, it is impossible to favor some content without degrading other content. This is right, but only in a static network, i.e., one that is not growing.

If a network operator merely carves up the currently available pie of network capacity, then at points where there currently is not enough capacity to completely handle current traffic, deliberately allocating some of that inadequate total capacity to particular content will reduce the capacity available to other content. However, it's a universal policy goal to encourage the deployment of new broadband capacity. If some or even all of newly available capacity were dedicated to particular content, then all content would be treated at least as well as, and likely better than, before (for the same reason that building a new highway alleviates traffic on nearby small roads).

At the same recent conference, another participant prefaced a question with a statement to the effect that there is no simple outcome to the Net neutrality impasse. This is wrong.

Despite the continuing polarized debate, all three major groups of stakeholders--network operators, consumers, and content providers--would be better off with clear, balanced rules that prohibit harmful discrimination among content but also allows network operators to provide performance enhancement on equal terms, so long as it does not degrade the performance of other content. This would be a win-win-win solution, without compromise.