Will the FCC’s vote ensure an open Internet? An interview with Vishal Misra

The Federal Communications Commission (FCC) voted Thursday to reclassify the Internet as a telecommunications service, and not as an information service as had been done previously. The move will allow the FCC to use Title II provisions of the Telecommunications Act to regulate Internet service providers (ISPs) such as Comcast, Verizon, and AT&T in the same way phone companies and other utilities are currently regulated.
Tom Wheeler, chairman of the FCC, is promising to take a light hand to regulations, using the model of wireless voice to show a service can be regulated but still thrive. The decision nevertheless is strongly opposed by the cable companies.
The vote is intended to protect net neutrality after a federal appeals court last year struck down a 2010 FCC order requiring ISPs to abide by net neutrality rules and treat all web traffic equally. Without strong power to regulate ISPs, the FCC feared a two-tiered Internet, where companies with the means to pay get fast lanes while those that can’t pay have to make do with a lower quality of service. This concept of paid prioritization goes against the long-standing principle that everyone and every website have equal access to the Internet, while also posing a threat to innovation by making it harder and more expensive for startups to compete with established and richer companies.

A second, less publicized vote on Thursday overruled two state laws limiting deployment of broadband networks funded by municipalities. Though this vote, which was in response to petitions from cities in North Carolina and Tennessee, received less press coverage than the net neutrality vote, its impact could arguably be greater by forcing cable companies to compete on price and service. According to Vishal Misra, competition may do more to guarantee an open, accessible Internet than any regulatory actions.
Misra is an associate professor of computer science at Columbia with expertise in networking and has paid particular attention to net neutrality and the economics of the Internet. He is widely cited and often consulted for his opinions on the Internet and net neutrality. Two papers co-authored by him are particularly relevant to the recent FCC votes. On Cooperative Settlement Between Content, Transit, and Eyeball Internet Service Providers (2008) predicted the rise of paid peering, the very thing the FCC hopes to avoid with Thursday’s vote to reclassify the Internet. The Public Option: A Non-regulatory Alternative to Network Neutrality (2012) uses game theory to show how the introduction of a public-option (or municipal) ISP works to align the interests of both customers and ISPs, and does so without regulations. Both papers are summarized in Net neutrality is all good and fine; the real problem is elsewhere.
Question: What is your opinion of the vote ruling?
Vishal Misra: The vote went along expected lines, 3-2 Democrat-Republican split. There was some concern in the last couple of days with one Democrat commissioner expressing reservations about some aspects of the proposal but I guess it got taken care of.
Do you think regulation will be successful in maintaining a free and open Internet?
VM: I am skeptical about it. I have long held the view that “network neutrality” is a symptom and the real problem is lack of competition at the last mile. These new rules are designed with the lack of competition as a given and then ways to maintain a “neutral” Internet under that scenario. A much better approach would be to attack the actual problem and create more competition. The bright line rules that the FCC has outlined, namely “no blocking, no throttling and no paid prioritization” aren’t the actual real problems, I am afraid. We have to address market failure, not put band-aids around it.
Misra appeared on the BBC World News program Global with Matthew Amroliwala on February 5, 2015, to speak about the FCC proposals for net neutrality. Clip courtesy of the BBC.
Currently, US consumers pay higher prices for Internet service than do consumers in many other countries. How will Thursday’s ruling affect Internet pricing and performance here?
VM: Not only do the US consumers pay more, they get slower speeds than in a lot of other developed countries. I am afraid this ruling does very little to address that issue as there is very little pro-competition in the ruling that I have seen so far. Competition, or rather the lack of it, is the real issue as I said.
When it comes to accessing the Internet at 25 Mbps—not particularly fast, but adequate—three out of four Americans do not have a choice between providers.
In fact I think the ruling might even hurt. The network shouldn’t discriminate but it should be allowed to differentiate and that is a subtle difference. Providing specialized services is a way for ISPs to generate more revenue that should offset some costs to the consumers. For instance gamers might want a low latency service and they would be willing to pay for it, but that would require the ISPs to treat those packets differently. Does the current ruling prevent that? What about a hospital that has a broadband connection and wants to prioritize streaming video conferences with offsite doctors over all other traffic? Can interesting new services be built on top of a “neutral” Internet?
Last year Netflix made special deals with Comcast and three other ISPs, agreeing to pay more to guarantee fast download speeds. What happens to these deals under the new FCC rules? Will Netflix be able to stop making these extra payments?
VM: This is the issue of paid peering. What Netflix paid for in its deal with Comcast was not a fast lane in the Internet, but a special arrangement whereby Comcast connects directly to Netflix’s servers to speed up content delivery. Conventional net neutrality bans fast lanes in the last mile. In the Netflix-Comcast deal, Netflix’s content Netflix traffic arrives faster at the last mile because it gets moved onto an uncongested (paid-for) on ramp, whereas all the other traffic goes over the public Internet.
I don’t think paid peering is being banned by the new rules so it is not clear what becomes of the deals Netflix has made both with Comcast and other ISPs. The FCC has said that it will take a close look at peering arrangements so it is possible, but in my mind that is beside the point. In a competitive environment ISPs should be bending over backwards to have the best possible service of Netflix (or any other site) for their customers, not use their captive customers as leverage to extract revenue from content providers.
Until there is real competition among ISPs and until US consumers have a real choice when it comes to choosing where they buy Internet service, Internet service is going to suffer and quality will continue to decline relative to the service available in countries where ISPs do compete. The FCC vote on allowing municipalities to expand their service will do more to improve Internet service than any regulation the FCC can impose.