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May 28, 2006

Why Net-Neutrality Matters to Cleveland and the Nation

Earlier this week, I took the story of an innovative university and its commitment to work to develop a 21st century connected community on the road (again). The presentations about Case Western Reserve University and Cleveland's OneCommunity were well received. Both in Boston at the Kennedy School of Government's Executive Education program and in Tucson at a 275 person public sector summit organized by Cisco the question of Cleveland's OneCommunity "position" on net neutrality came up from the audience. In response, I think I managed to say something fairly innocuous.

Then I started to do some thinking and research. I was surprised at how little of the so-called debate on net neutrality has been framed in meaningful ways that allow mainstream netizens to get their arms around this critical public policy issue. I've organized some thoughts that are outlined below. The preview of my conclusion comes down to this: legislative attempts to re-engineer the core anatomy of the Net are an ill-conceived agenda. This agenda is advanced by a handful of powerful, short-sighted private corporate interests. Their proposed actions advanced, by powerful politicians, will have both intended and unintended consequences. Monopoly-like pricing (and profits) are the intended consequence of this legislative agenda on next generation network services. The unintended consequences of their actions will further erode any semblance of a national broadband policy, further eroding our capacity to leverage broadband to address real social policy goals, including supporting research and development and the redevelopment and economic sustainability of our cities. Indeed, in the end, another unintended consequence will likely be the demise of the telecommunication and cable players who are advancing this very policy agenda. I conclude that net neutrality, embodied in Cleveland's OneCommunity initiative, is very important to us here in northeast Ohio, especially if we imagine a future for our region. My reasoning follows ....

There's a real battle brewing in Washington D.C. On the face of it, this one appears to have little to do with peace in Middle East, homeland security, hurricanes, or immigration policy. Even though it's not grabbing front page headlines (although the PD did have a very good editorial position), the debate over something called 'Net Neutrality' may be viewed by future generations as the most important public policy decision made by the Congress in 2006. Indeed, in our connected world, the beltway discussion about net neutrality has everything to do with domestic and foreign policy, global competitiveness, and emergency preparedness. Finally, the debate over net neutrality is at the very heart of the most important economic development strategy left for cities like Cleveland and regions like northeast Ohio. So, while we may believe that somehow we are not touched by other domestic and foreign policy issues net neutrality is really about our very future.

Here is the legislative angle. Congress is overhauling the telecommunication act in what will be known as the "Communications Opportunity, Promotion and Enhancement Act of 2006 (HR 5252)." It is sponsored by Commerce Committee Chairman Joe Barton (R-Texas), Rep. Fred Upton (R-Mich.), Rep. Charles Pickering (R-Miss.) and Rep. Bobby Rush (D-Ill.). Over the last decade, a coalition called SavetheInternet has sought to include language in this new legislation to keep open, network access to all services on the Net. Others, like the "handsofftheinternet" have responded by suggesting that "Network neutrality regulation would threaten to slow the massive new broadband investment that telephone and cable companies have just recently begun to make in preparation for offering a vast array of new video and data services to consumers." What these interests and their supporters want is the right to have legislatively guaranteed rights to segment the available network capacity on terms, other than, one interoperable protocol for all. And so the battle lines are drawn.

In the beginning, as Vint Cerf, American engineering icon and internet architect (now Google evangelist), might say ... "the remarkable social impact and economic success of the Internet is in many ways directly attributable to the architectural characteristics that were part of its design. The Internet was designed with no gatekeepers over new content or services. The Internet is based on a layered, end-to-end model that allows people at each level of the network to innovate free of any central control. By placing intelligence at the edges rather than control in the middle of the network, the Internet has created a platform for innovation." This was Cerf's message during his visit to Cleveland earlier this month.

In the beginning, commercial network operators were an afterthought because the Net, as we knew it, was independent infrastructure supporting research, experimentation, and defense communication needs. Of course, over the past nearly two decades, and certainly since the 1996 revisions to the Telecommunications Act, commercial network operators are very much central to the way in which the consumer and most businesses in the United States have experienced the Internet.

So, how did we get from there to here? And why are we on a collision course?

David Isenberg, a former 12 year employee at AT&T Labs in a largely overlooked entry makes a series of very insightful deductions that help to provide insight on the culture and deep business DNA of the telecommunications companies. His work also helps us understand why the telecommunication companies are trying, again, to aggressively advance what I would call a "containment strategy" in both attempting to protect an outdated business model and impose order and hierarchy on the Internet (which as Cerf points out does not recognize nor accede to hierarchy or order).

According to Isenberg, the classic telephone company value proposition, embodied in today's telephone network, holds:

* that expensive, scarce infrastructure can be shared to offer premium priced services,
* that talk - the human voice - generates most of the traffic,
* that circuit-switched calls are the "communications technologies" that matter, and
* that the telephone company is in control of its network.

Telephone companies still behave as if these assumptions hold despite:

* up to several thousand-fold declines in key infrastructure costs over the last two decades,
* a 20 year double-digit annual growth rate in the volume of data traffic, so that the volume of data traffic is now overtaking the (also growing, but more slowly) volume of voice traffic,
* the many different data types that now travel over the telephone network (despite the fact that the network is not optimized for all these data types),
* the many different types of "communications technologies," from television to Ethernet, that are not part of telephone network architecture, and
* the Internet, which, because it makes the details of network operation irrelevant, is shifting control to the end user.

The Intelligent Network, as the telephone companies call the old central switch world, is a straight-line extension of the four assumptions above - scarcity, voice, circuit switching, and control. Its primary design impetus was not customer service. Rather, the Intelligent Network was a telephone company attempt to engineer vendor independence, more automatic operation, and some "intelligent" new services into existing network architecture. However, even as it rolls out and matures, the Intelligent Network is being superseded by the Internet, which is, in general terms, a Stupid Network,

* with nothing but dumb transport in the middle, and intelligent user-controlled endpoints,
* whose design is guided by plenty, not scarcity,
* where transport is guided by the needs of the data, not the design assumptions of the network.

This is exactly how Cerf and his colleagues designed the Internet and places it in to direct and unavoidable conflict with the so-called Intelligent Network design. When asked about his take on the debate, Cerf said, “(e)nshrining a rule that broadly permits network operators to discriminate in favor of certain kinds of services and to potentially interfere with others would place broadband operators in control of online activity. Allowing broadband providers to segment their IP offerings and reserve huge amounts of bandwidth for their own services will not give consumers the broadband Internet our country and economy need.”

How would you like to have a 1 Gigabit/s connection from your home to the Internet for $100/month? How about 60 channels of IPTV for $7.26/month or 20 Mb/s DSL for $17.93/month or pervasive VOIP (81%) at costs 50% less than in the U.S. or mobile phone plans averaging under $15/month. Some free market fantasy? No, this is the story in France and Sweden, two of the most “big” state economies of Europe. Their story is informed by a public commitment to a national broadband policy and then placing incentives that move both entrepreneurs and force the larger competition to respond. The result is a framework for public policy innovation and solutions that provide consumers with value and opportunity.

Of course, we do not have the same public policy environment as Europe. In the case of both Sweden and France however, most of the changes in IP services have come to pass since 2000. There is a high probability that the United States will have no united, integrated broadband policy anytime soon. The alternative is a different public policy framework. The future of advanced networks and application development and deployment is at the “edge” of the network. National networks like Abilene and NLR are critical transportation services for education and research. Regional providers like the pacific northwest gigapop and the third frontier network in Ohio are vital to carrying traffic between geographically connected population centers and of course connecting our public higher education institutions. These networks and their peering relationships connect to nearly any point on the globe. Both national and regional optical networks are critical and both make innovation possible. However, there are real limits to the tradition and heritage of these next generation networks. They are all offerings developed for and by and limited to, in large measure, the needs of (higher) education. While the multiplexing technology of optical networking allows for dozens of networks on single network infrastructures, most national and even regional stakeholders owner/cooperatives do not have a vision on how to extend their networks. Indeed, from my experience, the intra-organizational politics and governance challenges within the higher education community are sufficiently complex and arcane that most find it difficult, if not impossible, to imagine extending the network to other traditional silos. On the issue of net neutrality these networks are all squarely lined up in favor of net neutrality. Good thing they are. The future of advanced, visual learning and research environments will need massive amounts of experimental, research, and production capacity so as to provide opportunities for national collaboration. From a global competitiveness perspective, no legislative agenda should be implemented that leads to trade off between the future of our nation’s R&D and the profits of our private telecommunication providers.

However, the true value of the network comes together as coalitions of local interests seeking to maintain, retain, improve, or attract talent and support innovation at the edge of the network. Twenty years from now, looking backwards, the difference between those who “make it” and those who do not will be highly correlated to how a community organizes to connect its public services, its commitments to democratic process, schools, colleges and universities, healthcare, museums, libraries, and centers of research, innovation, and economic development. Connecting communities with contiguous geographies becomes the work of regional networks and for them net neutrality matters to meet that mission. However, the real focus and value of the networked economy and society is positioning communities to compete from positions of strength within the global economy. It will be painfully obvious twenty years from now that instead of thinking that the competition was down the inter-state highway the reality is that both competition and cooperation are global in character. How we reach out and touch communities and local economies around the world that need our good, services, insights, and shared practices (and we there’s) is the single most important shift in our local (and statewide) paradigm if we are to succeed. Within communities like northeast Ohio, left to their own, there is a very low probability that national (global) telecommunication players will lead the coalition building and public policy development of a community that is ready to net. Indeed, if the telecommunication and cable providers think about the medium to long run (rather than quarterly reports to Wall Street), they too will realize the highly advantageous value of a community organizing and articulating its own interest in the information age. Growing the demand for technology-based adoption and applications from health care and education to commercial services and entertainment is the long term future of the Net. Anything that rate limits that activity by creating limits to the unfettered use of the internet is most unfortunate, especially now, especially in regions like northeast Ohio.

Former Shell Group Planning Head, Arie deGeus, in his master work, "The Living Company" (Harvard, Boston, 1997), examined thousands of companies to try to discover what it takes to adapt to changing conditions. He found that the life expectancy of the average company was only 40 years - this means that telephone company culture is in advanced old age. De Geus also studied 27 companies that had been able to survive over 100 years. He concluded that managing for longevity - to maximize the chances that a company will adapt to changes in the business climate - is very different than managing for profit.

Community networks, like OneCommunity, connected to regional and national fabrics of networks is the future of a public policy framework that has a chance to work in the United States. Indeed, it is the only likely framework that will lead to the repositioning of our competitive position in the world economy. Our ability to confront challenges on both the domestic and foreign fronts, both natural and those made by men and women are almost all going to be approachable in the 21st century by intelligent community-based activities to bring value to the so-called stupid network which should remain so without interference from either public or private interests.

Lev Gonick
Cleveland, OH
May 28, 2006

Posted by lsg8 at May 28, 2006 03:12 PM and tagged Bytes 

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