US telcos need to build their arguments for managed net

OvumLast week, new Federal Communications Commission chairman Julius Genachowski gave a speech proposing that ‘net neutrality’ principles be enshrined in US regulation, and even that they be extended to wireless networks in some form.

The speech and the muted response to it from carriers has highlighted the fact that operators have done a poor job of articulating the argument against net neutrality and for a managed Internet.

Web players have dominated the net neutrality debate in consumers’ minds

The debate over net neutrality has so far been defined by those that created the term, namely web players such as Google, eBay, Amazon, Skype and others. They have argued that a ‘neutral’ Internet would foster openness, innovation and investment, and that it would give consumers (rather than broadband providers) the right to choose which web services and applications succeed or fail.

Broadband providers have struggled to formulate their response to these arguments, and have focused on arguments that centre on their own businesses, such as the need to preserve investment, the perceived ‘unfairness’ of the current broadband business model under which successful web players ‘use their pipes for free’, and so on.

The result has been a lack of popular support for the broadband providers and an overwhelming range of support for the web players among consumer groups, but also among the people in the best position to do something about it. President Obama made net neutrality a campaign issue, and it is already clear that Chairman Genachowski intends to pursue the issue strongly.

In his speech he picked up many of the themes and arguments used by the Open Internet Coalition and others lobbying for net neutrality. The web players appear to have won the argument.

Telcos need a change of strategy now, while there is still time

Chairman Genachowski will shortly kick off a consultation process that will invite members of the public and other interested parties to comment on the proposals for both wired and wireless networks. As things stand at present, it is likely that almost all the input will be on the pro net neutrality side, with the sole exception of the broadband providers themselves and one or two free-enterprise groups.

As such, telcos need a change in strategy, and it must come before this process is too far gone to influence it. That change needs to come in the form of arguments that centre on the impact that strictly enforced net neutrality rules would have on consumers, not the impact they would have on carriers’ bottom lines. The web players’ strategy has combined consumer-friendly messaging with scare tactics designed to create a sense of impending doom about what will happen if net neutrality laws are not imposed.

The only way to combat those arguments is to talk to consumers – not regulators – about the impact net neutrality would have on them, and the way in which it would negatively impact their ability to use the Internet as they see fit.

A managed net would proactively prioritise applications

One of the challenges of arguing against net neutrality is that the term has such positive overtones and it’s almost impossible to create an alternative that doesn’t sound either clumsy or nefarious. But what telcos should focus on is the ability they have to manage the Internet experience on behalf of their users – in other words, the ‘managed net’. Congestion is almost inevitable as peer-to-peer file sharing is eclipsed by video downloading and streaming as the major source of traffic.

The key question is therefore how broadband providers can best manage this problem to proactively prioritise some applications while exposing other applications and services to the effects of congestion. Several models present themselves: individual customers could pay a premium to have all their traffic prioritised; application providers and broadband providers could partner to prioritise their traffic for a premium to be shared between the two; broadband providers could universally prioritise voice, video and other latency-sensitive traffic over non-latency sensitive traffic; and so on.

However, all of these models require management, which would appear to fall foul of the principles outlined by Chairman Genachowski. Of course, prioritisation already exists in the case of corporate VPNs, CDNs and even IPTV services that accelerate and/or prioritise traffic on the Internet today, but it makes sense to spread that net much wider in future. By focusing on these issues rather than corporate investment issues, telcos have a much better chance of connecting in meaningful ways with consumers and winning converts to their cause.

 

 

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