Net Neutrality: Joost's view
We looked at the issue of net neutrality and asked if abandoning the principle could adversely affect competition and innovation in the UK. In the piece we heard from the BCC and from Gilles BianRosa CEO of Vuze
We also recorded an interview with Mike Volpi CEO of Joost, which I've included in full below. He presents a nuanced view of the issue: while he accepts Ofcom's view that competition among ISP's is key, Volpi raises questions about how competitive the ISP market is in the UK.
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I should also add, in this context, the statement given to us by the Department for Business, "This issue is part of the wider debate about the future of broadband and the government has asked Francesco Caio to look at the barriers to investment in next generation access. He will be looking at how the market might cater for increasing consumer demand for bandwidth and the factors that might affect decisions over upgrading infrastructure. It is though too early to comment on likely outcomes."
When we came off-air, listener Chris Hall sent a thoughtful analysis of the issue. Chris thinks net neutrality is a good thing but raises some interesting issues, principally who is going to pay:
Why should the ISP support a video service that is not prepared to pay to reach its customers? Suppose I decide to go into the mail-order aggregate business. Should I expect Royal Mail to deliver gravel by the lorry load at their expense?
The issue of who pays for the increased demand is of course central to the debate. The full text of Chris's email is in the comments it's a good starting point for a discussion, I hope you'll join in.
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Chris Hall emailed iPM with his views - thanks Chris.
Net Neutrality is a Good Thing.
However, no ISP can provide indefinite bandwidth at a trivial fixed price.
Current pricing is based on an assumption of general use, based essentially on history.
New services, such as on-demand audio and (shudder) on-demand video are entirely capable of breaking existing networks if enough people use them, concurrently.
The problem is that the economic model is broken. The ISP has to fund the network to transport all this new traffic, but is, currently, not compensated either by the content provider or by the customer.
The customer has the benefit of new services. The provider of the services has some return. There is no benefit to the ISP -- unless you count the obvious satisfaction of building ever larger networks while the market drives income per customer downwards.
Something has to give.
If the ISP is to be Net Neutral, the answer appears to be for them to implement per customer use restrictions based on current load and recent customer behaviour. So a customer who contributes to congestion by making large demands at busy times gets throttled back.
It's important that such traffic management is entirely blind to the nature of the traffic.
The effect of this would be to limit how much a given customer can use high-bandwidth services -- at times a heavy user might find the bandwidth available to them is insufficient to support video (say). But that seems fairer than penalising all customers for the behaviour of a bandwidth hungry minority.
Mind you, there's a first mover disadvantage here. The first ISP that is frank with its users about the limits of their network is likely to lose customers.
Also, the equipment necessary to provide such traffic management is not cheap, and currently not necessary.
So... who is to pay for Net Neutrality ?
And... why should the ISP support a video service that is not prepared to pay to reach its customers ?
Suppose I decide to go into the mail-order aggregate business. Should I expect Royal Mail to deliver gravel by the lorry load at their expense ?
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I think Chris's point is well made, but falls down on the point that is quoted in the main post. The BBC do pay, probably quite a lot, to their service provider to get this stuff out there. Others do too. If the creator of a new service has to pay every ISP in the world in order for their idea to be viable, then that is the end of innovation. The answer, or part of it, is for ISP to be required to say exactly what people are getting for their money. They should probably also improve their networks, and if that means people have to pay more, then so be it - people should get what they pay for (which they currently don't, for the most part - unlimited very rarely means 'without any limits'), but should also pay for what they get.
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I regret I cannot comment on which content providers contribute toward the cost of their traffic or whether they do so on a realistic basis. It would be interesting to know !
I agree that the customer has paid for some capacity, so should be able to access some quantum of high bandwidth sites, without further cost to themselves or the site. Conversely, users operating within their paid-for capacity should not be adversely affected by heavy users.
There should not be barriers to introducing new services. But at some point a service has to pay its way, either directly or by its users paying more. Innovation is a Good Thing. Innovation that is uneconomic is looking for a free lunch.
I agree that a grown up discussion is required on the subject of what the ISP expects to provide for x pounds/month. "Unlimited" has never really meant that you could run your connection to capacity all day every day -- the jargon for that is "fair use".
To date an "unlimited" provider would take no active steps to shape traffic, and relied on the magic of traffic aggregation to keep peak traffic to an economic level. As use of video-on-demand grows, that model breaks down.
In the end, the answer to the question "who will pay for Net Neutrality" is "the customer".
No change there.
What has changed is that video services require more capacity than the customer is used to paying for.
This is a step change.
The ISP business has been able to offer flat rate services (avoiding the cost of metering and billing) because most customer's use has been modest, in turn because most services demands have been relatively modest and have grown relatively gradually.
The miraculous ability to provide ever increasing capacity at ever reducing price is about to meet a nasty reef.
However, would you want to be the first ISP to come out ?
Further, implementing a fair and reasonable metering and shaping (and billing) scheme is tricky, engineering-wise and cost-wise :-(
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I've worked in the internet field for over a dozen years, and took part in very high bandwidth trials in the late 90s which sought to see how individuals and businesses might use virtually unlimited capacity. We got it wrong, in a sense, as the trial focused on ways of interworking, especially conferencing and video post-production, whereas the world has flocked to passive on-demand TV.
At the time it seemed likely that the last-mile connectivity limits would be the bottleneck, with national and international backbones developing almost embarrassing levels of bandwidth: however even then some of us were wondering just how the economic model would work should demand begin to outstrip core capacity.
It is entirely impractical for content originators to pay for the loading they place on ISPs - there are far too many of the latter and monitoring the actual amount of traffic from each originator over each ISP's cables would be ludicrously complex.
Remember that ISPs have income from both sides of the Web: they charge for hosting sites as well as for delivering to end users. As long as they charge high-volume sites appropriately and - crucially - providing that their peering agreements with other ISPs make commercial sense for all concerned - then the problem reduces to pricing for consumers.
ISPs have nearly all been guilty of promising broadband users more than they are willing to deliver, at prices which are more about market share than about service provision. They must cap their users, and make the caps obvious. They must also offer proper, high-volume tariffs to those who want them, at realistic prices.
I use a small ISP which does exactly this, and to whom I am willing to pay a bit more than the current market minimum. They do proper support as well, which is another aspect of honest service delivery, and another very good reason for digging deeper each month
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