We have
touched on the subject of
Network Neutrality (NN) before. We all sense without words what is right and what is wrong when your operator starts interfering with your broadband connection but that is not adequate for lawyers and judges. They need written laws.
A couple of days ago I had the pleasure of meeting a prominent and well-articulated UK telecomlawyer who gave a presentation on the state of affairs in the UK in telecoms and broadband. One of his remarks on Network Neutrality triggered my reponse.
One of the dogmas of economic theory is that price discrimination is good. If there is more value you can ask a higher price. The result of all this is an efficient allocation of resources. One example often cited is the price of a seat on an airplane. Hardly anybody on the same plane pays the same price. If you can charge more for seats in front of the plane, do so, nothing wrong with that.
Based on this theory some people (like this lawyer [update: no, he does not agree, he just referred to the position I just learned]) say that traffic shaping, prioritizing traffic and price discrimination by the operator is another example of efficient allocation of resources, therefore a good thing.
Unfortunately not all price discriminations are benevolent. There is a thin line between allocation and extortion where a lot of laws have been crafted to protect us from the mob. The same applies to broadband, we just need to define these laws in a new technological context.
Let me give you an example in another network: electrical power connections to your home. Price discrimination can be found everywhere. The powerlines come in different sizes and qualities (maximum Amps, 1 phase or 3 phase etc.). Kilowatthours of power have different prices. We even dream of smart grids: our home appliances (as a group) negotiate with the power company on price in real time, as the company tries to reduce peak power demand and flatten out demand variations by using a pricing mechanism.
Nobody will see anything else than efficient allocation of resources.
Until extortion rears its ugly head. Suppose the power company , using the smart grid, can determine when you want to turn on the airconditioner on a hot day. The value of that airconditioner is high, so they decide to raise the price of electricity used for that purpose.
We all will scream murder, this is a racket to extort citizens. The wrong kind of price discrimination, crossing the thin line by artificially creating scarcity.
The same applies to broadband. We have broadband connections in many different qualities and prices, price discrimination abound. And yes, there may be congestion on the line or higher up in the network (although rumors of the exaflood bringing the Internet to its knees by increased traffic are
greatly exaggerated or untrue). The TCP/IP protocol in the standard implementation has a back-off mechanism to cope with congestion which works quite well, treating all packets equal. No problem with that.
The line gets crossed when the operator starts to interfere and creates artificial scarcities within the connections to discriminate (e.g. raise) prices. A publicly known policy of an operator to support VOIP (low latency for these type of packets) is fine, slowing down competitors VOIP and prioritizing your own is extortion. Raising prices for better bandwidth is fine, letting you pay more for accessing Google is extortion.
We need laws that force operators to publicize their policies for managing traffic so we can scrutinize them. We need laws to forbid anyhting that crosses the line between allocation and extortion. No mob on the Net.
Hopefully we get more lawyers and politicians who cross the line from digital ignorati to digital immigrants before it is too late.
