AT&T Agreed to Prevent Discrimination Against Online Video Competition

More than a year after Netflix said it will discuss an agreement with AT&T, this seems to be no longer necessary (see "Netflix: First we take Comcast, then we take AT&T and Verizon; How Much it Costs?" - here).

Marguerite Reardon (pictured) reports to CNet that "To win regulatory approval for its $49 billion bid to buy satellite TV provider DirecTV, AT&T has agreed to stricter Net neutrality rules and a promise to expand its fiber-optic-based broadband network to more customers.

..Details of the conditions have not been released. But in a statement, Wheeler said that "the conditions will build on the Open Internet Order already in effect." Specifically, AT&T has agreed to prevent discrimination against online video competition by agreeing not to "exclude affiliated video services and content from data caps on its fixed broadband connections." In other words, if AT&T imposes a data cap, it's not allowed to exclude its own content from these caps while other services are counted in the cap.

To ensure that AT&T is not discriminating against other services like Netflix, which offer similar streaming video service over broadband networks, the company has agreed to submit to the FCC all "completed interconnection agreements." These agreements are commercial arrangements between companies that exchange Internet traffic. Netflix has complained publicly that other broadband providers, such as Comcast and Verizon, have forced it to pay fees to deliver its streaming video service to consumers. In the current Net neutrality order, the FCC for the first time said it would examine these deals on a case-by-case basis if complaints are filed"

See "AT&T agrees to stricter Net neutrality rules to get its DirecTV deal approved" - here.

FCC: "No blocking, no throttling, no paid prioritization"

It seems now that next month's Net Neutrality FCC rules will not allow any traffic management intervention (except, most probably the traditional "reasonable network management" for congestion control).

Alina Selyukh and Malathi Nayak report to Reuters that "Comments by Federal Communications Commission Chairman Tom Wheeler at the Consumer Electronics Show in Las Vegas appeared to show he leaned toward regulating Internet service providers (ISPs) more strictly under Title II of the U.S. communications law, as Obama has suggested .. "We're going to propose rules that say that no blocking (is allowed), no throttling, no paid prioritization," Wheeler said [skip to 18:40' in the video below].

He said companies' behavior should be measured against a yardstick of whether it is "just and reasonable," referring to a standard often applied to public utility companies to make sure they do not hurt consumers or competition". 

See "FCC chief seen siding with Obama on net neutrality" - here.

In line with the New Net Neutrality: Netflix Adds Verizon to its Peers

After Netflix signed its first agreement with Comcast (see "Comcast and Netflix - BFF ("no preferential network treatment")" - here) ad reported "Netflix Reports Slower Speeds for Verizon" (here) it was reported that they are also in talks with AT&T and Verizon (See "Netflix: First we take Comcast, then we take AT&T and Verizon; How Much it Costs?" - here).

Sam Gustin reports to the TIME that "Netflix has reached a paid-peering-interconnection agreement with Verizon, both companies confirmed to TIME on Monday"

As can be seen from Netflix ISP Index charts (for Verizon FIOS and Verizon DSL), service has been deteriorated in recent months, although some improvements is seen in March. As the "New Net Neutrality" allows to prioritize traffic (see "FCC: New Net Neutrality? Just be "Commercially Reasonable"" - here), there should not be any regulation problem with such arrangement.  

Joris Evers, Netflix spokesperson, told TIME: “We have reached an interconnect arrangement with Verizon that we hope will improve performance for our joint customers over the coming months".

Goodbye, Net Neutrality; Hello, Net Discrimination http://t.co/w0KXSJI1Wj from Tim Wu via @NewYorker
— Joris Evers (@jorisevers) April 24, 2014

FCC: The Next Gen Net Neutrality

The FCC's had to do something after losing the Net Neutrality case to Verizon and the immediate effects it had (see related posts below).

Chairman Tom Wheeler [pictured], presented a new set of Net Neutrality rules:

"In its Verizon v. FCC decision, the United States Court of Appeals for the District of Columbia Circuitinvited the Commission to act to preserve a free and open Internet. I intend to accept that invitation by proposing rules that will meet the court’s test for preventing improper blocking of and discrimination among Internet traffic, ensuring genuine transparency in how Internet Service Providers manage traffic, and enhancing competition. Preserving the Internet as an open platform for innovation and expression while providing certainty and predictability in the marketplace is an important responsibility of this agency". 

Related posts:

• Netflix: "Unfortunately, Verizon successfully challenged the U.S. net neutrality rules"  - here
• The Post-Net Neutrality Era - Does Verizon Shape Netflix and Amazon?  - here
• Netflix Reports Slower Speeds for Verizon - here

See "Statement by FCC Chairman Tom Wheeler on the FCC's Open Internet Rules" - here.

Netflix: "Unfortunately, Verizon successfully challenged the U.S. net neutrality rules"

In the 2013 annual report to its shareholders (here), Netflix challenges the recent ruling on Net Neutrality (if nothing else works, "more regulation would clearly be requires").

Netflix believes that ISPs will not discriminate Netflix subscribers - and will actually work together with them on improving QoE (in order to go up in Netflix ISP chart? - see "Netflix CDN Customers have More Fun" - here).

Netflix also suffers from another aspect of Net Neutrality data caps (see "Netflix CEO: "Comcast no longer following net neutrality principles"" - here).

"Unfortunately, Verizon successfully challenged the U.S. net neutrality rules. In principle, a domestic ISP now can legally impede the video streams that members request from Netflix, degrading the experience we jointly provide. The motivation could be to get Netflix to pay fees [see "FCC Chairman re-defines Net Neutrality: "we're going to see a two-sided world"" - here] to stop this degradation. Were this draconian scenario to unfold with some ISP, we would vigorously protest and encourage our members to demand the open Internet they are paying their ISP to deliver.

The most likely case, however, is that ISPs will avoid this consumer-unfriendly path of discrimination.
ISPs are generally aware of the broad public support for net neutrality and don’t want to galvanize
government action.

Moreover, ISPs have very profitable broadband businesses they want to expand. Consumers purchase higher bandwidth packages mostly for one reason: high-quality streaming video. ISPs appear to recognize this and many of them are working closely with us and other streaming video services to enable the ISPs subscribers to more consistently get the high-quality streaming video consumers desire. 

In the long-term, we think Netflix and consumers are best served by strong network neutrality across all networks, including wireless. To the degree that ISPs adhere to a meaningful voluntary code of conduct, less regulation is warranted. To the degree that some aggressive ISPs start impeding specific data flows, more regulation would clearly be needed" 

Net Neutrality is "a Dead Man Walking"

Are we about to see stronger Net Neutrality in the US?

Marvin Ammori [pictured], a Future Tense Fellow at the New America Foundation and a lawyer who represents technology companies on internet policy issues, thinks not.

"Net neutrality is a dead man walking. The execution date isn’t set, but it could be days, or months (at best). And since net neutrality is the principle forbidding huge telecommunications companies from treating users, websites, or apps differently — say, by letting some work better than others over their pipes — the dead man walking isn’t some abstract or far-removed principle just for wonks: It affects the internet as we all know it".

"the second most powerful court in the nation behind the Supreme Court, the DC Circuit [here] - is set to strike down the nation’s net neutrality law, a rule adopted by the Federal Communications Commission in 2010 [see "Net Neutrality Approval Reopens US Market for DPI and Policy Management" - here]. Some will claim the new solution “splits the baby” in a way that somehow doesn’t kill net neutrality and so we should be grateful. But make no mistake: Despite eight years of public and political activism by multitudes fighting for freedom on the internet, a court decision may soon take it away".

"Of course, despite everything the judges suggested during the two-hour argument, it’s possible that they offer net neutrality a reprieve. Given how sticky this morass is, there’s one simple way for you to judge the opinion: If the court throws out the non-discrimination rule, permission-less innovation on the internet as we know it is done. If the nondiscrimination rule miraculously survives, then, for now at least, so too will freedom on the internet"

See "We’re About to Lose Net Neutrality — And the Internet as We Know It" - here.

[France]: Free's Traffic Management does not Discriminate

   

ARCEP, the French regulator, is happy with its ability to monitor ISPs for non conformance to Net Neutrality rules (see "France Implements Monitoring System to Track QoE and Net Neutrality" - here).

This follows a complaint it got against the relations between Free (ISP) and Google (with which the French government has its own issues - see "France Vs. Google (Weapon: bandwidth management)" - here) and inquiry made by ARCEP, trying to understand if users or applications were discriminated.

The agency announced it ".. closes the administrative inquiry involving several companies, including Free and Google, on the technical and financial terms governing IP traffic routing. If the inquiry did not reveal any discriminatory practices in the terms governing interconnection and IP traffic routing between the two companies, it did confirm the relevance of ARCEP’s monitoring of these issues, and its goal of providing internet users with clear information on the quality of internet access services in France" 

".. Over a six-month observation period, the enquiry made it possible to ascertain:- that traffic between Free and Google is relayed both directly, via peering, and indirectly through paid interconnection involving several international transit providers;- that Free’s interconnection and IP data traffic routing capacities are congested during peak hours, as use of the most bandwidth-hungry applications continues to rise. This is an issue that all ISPs are having to contend with. The inquiry did not reveal any discriminatory practices in the terms governing interconnection and IP traffic routing between the two companies".

".. The inquiry did not reveal that Free was employing traffic management techniques on its network that differentiated traffic routing conditions based on the type of content, its origin, its destination or the type of protocol used"

See "Net neutrality" - here.

The EU Takes its time with Net Neutrality: It is Important, but Let's Monitor and Study First

The EU's TRANSPORT, TELECOMMUNICATIONS and ENERGY Council published a document summarizing its current work and consolations on Open Internet (Net Neutrality). Not for the first time (here), the EU does not see an urgent need to do something, despite the concerns presented.
   

Among other things, the council says that:

• It recognizes the "The importance of preserving the open character of the Internet" and "The need to encourage investment in new network infrastructures by both the public and private sector"
   
• It notes the "The existence of some concerns, in regards to Discriminatory forms of traffic management and treatment of data, in particular throttling of data and blocking of content, applications and services", "Price transparency and quality of service, in particular the discrepancy between advertised and actual delivery speeds for an Internet connection"  and "Network congestion, mainly as a result of growing data streams"
   
• It underlines the "The importance of ensuring efficient transparency" [here] and "The importance of addressing the issues of discrimination and degradation of service that may arise from certain traffic management practices"
   
• And it invites the Commission to "Monitor, jointly with BEREC, the issue of traffic management to allow for a smooth flow of proportional, necessary and transparent traffic management practices that do not affect net neutrality" and "Continue studying, with the support of BEREC's investigations, any aspects of net neutrality where significant and persistent problems are substantiated, including charges and conditions that mobile operators impose on VoIP users as well as throttling of content, applications and services"

See "Council conclusions on the open internet and net neutrality in Europe" - here.

Research Claims: Net Neutrality Increases the Incentive to Expand Infrastructure Capacity

       
The main debate over Net Neutrality is whether or not ISPs will be allowed to prioritized and/or discriminate content. Current US rules (which will become effective next week) do not allow "unreasonable discrimination: fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic" (here).

Many carriers said they should charge either the content owners ("they are using our network for free") or subscribers (by offering a premium service) in order to allow future investments in network infrastructure (and increase revenues).

One example - Telecom Italia CEO Franco Bernabe said (October 2010, here): "The mismatch between investments and revenue is set to compromise the economic sustainability of the current business model for telecom companies". See more quotes from French Government, Telefonica, DT, Orange(FT),  Verizon and Telekom Austria.

A research by H. Kenneth Cheng, H. Kenneth Cheng, University of Florida - Warrington College of Business Administration, Subhajyoti Bandyopadhyay University of Florida - Warrington College of Business Administration and Hong Guo (pictured), University of Notre Dame analyzes whether the above ideas are economically-justified, and allowing ISPs to charge content provider for content prioritization will incentivize them to invest in expanding their network infrastructure, as they say, or not.

The conclusion: "we find that the incentive to expand infrastructure capacity for the broadband service provider and its optimal capacity choice under net neutrality are higher than those under the no net neutrality regime except in some specific cases. Under net neutrality, the broadband service provider always invests in broadband infrastructure at the socially optimal level, but either under- or over-invests in infrastructure capacity in the absence of net neutrality"

See "The Debate on Net Neutrality: A Policy Perspective" - here.

Tekelec CMO: "If the consumers want to continue to have access to VoIP or video services, then they have to allow some degree of ‘discrimination’ "

    

Susie Kim Riley, founder and CTO of Camiant and since the acquisition by Tekelec serves as its CMO, was interviewed by Susana Schwartz from Connected  Planet about next generation Services, policy management and the debate with the FCC on Net Neutrality.

  

See the article [with the provocative title] "Telcos, Google & academia — the plot thickens!" - here.

Some [again, provocative - but very true!] quotes:

• "some “ivory tower” academics are applying theory rather than real-world economic and free-market knowledge to push regulators to heavily regulate the industry because they are convinced that operators would definitively block any type of “competing” traffic or applications, even if it meant losing subscribers and losing revenues."
   
• "If the consumers want to continue to have access to VoIP or video services, then they have to allow some degree of ‘discrimination’ so that packets tied to dynamic services get to a destination before non-crucial packets like those associated with e-mail"
   
• ".. She and others are proposing is a “two-sided business model," perhaps most aggressively championed by STL Partners’ Telco 2.0 initiative [here]  – in which service providers would be given the ability to work with third parties in non-discriminatory two-sided business approaches [chart below]. Discrimination has to be viewed in a more balanced way so that operators are allowed to do what is “reasonable” in managing network resources and allow room to make some revenue off of the broadband services the service providers are enabling"
   

• “You can subsidize the experience for users by allowing app developers and OTT players to work with access providers in such a way that they can allocate bandwidth for more personalized and innovative services without forcing operators to eat the costs of enabling it to happen,”

All from the point of view of the vendors in this space, of course .. !

Related posts:

• Skype: We Will Charge 3G Calls to Ensure QoS Stays High (Net Neutrality?) - here
• Skype to EU Carriers: "The Network is not Yours" - here
• Dish Networks Fights for Net Neutrality - here
• Plans for a New Forum: Broadband Internet Technical Advisory Group - here
• Google's Vint Cerf on Net Neutrality - Good for the Rich Content Providers? - here