Say it ain’t so, ETNO: Dangerous proposal a threat to net neutrality

3:51pm | 16 October 2012 | by Access Policy Team, English

UPDATE: The Conference of European Posts and Telegraphs (CEPT) determined on October 17/18 that the ITU is not the appropriate forum to discuss ETNO's proposals. This decision renders the ETNO proposal politically dead in Europe, however it has not yet been officially withdrawn. However, governments in other regions may still endorse it, and a number of other troubling proposals at the upcoming WCIT in December. Check out our ITU page to learn more about them here.

When the world’s governments convene for the World Conference on International Telecommunications (WCIT), they will debate whether to expand the mandate of the International Telecommunication Union (ITU) to include aspects of internet policy. Specifically, WCIT delegates will approve changes to the International Telecommunication Regulations (ITRs), an international treaty traditionally concerned with telecommunications interoperability, and these negotiations have the potential to affect the internet’s openness and the exercise of human rights online.

One of the most controversial proposals was submitted this past June by ETNO (the European Telecommunications Network Operator's association), an ITU sector member, which if passed, would establish a tiered service model for internet traffic. The current delivery approach in the internet is “best-effort implementation”, which means that service providers make their best effort to deliver the content between networks, without having to negotiate with any actor in the middle. A shift to a tiered business model would mean that operators would agree on a traffic contract with the content service providers in order to reserve capacity in the network to guarantee a specific level of performance.

Put another way, when a user visits Netflix or uses Skype, their internet service provider will (supposedly) make a best effort attempt to provide a connection to these services. Under the model proposed by ETNO, websites and online applications would have to negotiate specific contracts with service providers in order to have their content delivered, potentially on a "per click basis" which would fundamentally alter the architecture of the internet.

According to Luigi Gambardella, the head of ETNO, “these commercial agreements are based on the value of the information, not the bits”. The fact that content and service providers will have to pay fees in order to reach users, not only creates additional economic barriers, but would also force companies to decide which destinations are or are not worth paying for.

Free as in free speech

Neutrality proponents base their stance on the idea that the open, non-discriminatory nature of the internet has been its most essential feature and the very condition for its great success so far. While the internet has been based on this neutral model to date, ETNO and some others argue that the future of internet services and broadband infrastructure depends upon departing from this model. But there is a way of preserving the non-discrimination principle, while at the same time promoting fair evolutionary competition in a market-driven environment.

The apparent incompatibility between these two goals lies with a mistaken assumption (well-known already in other circles, such as free software or copyright discussions); namely, that asking for the internet to remain free is asking for not paying for it. So let’s be clear about this: net neutrality is about freedom of connection, not about cost-free access. In fact, users have always paid for connecting to the internet and they have been doing so according to their needs and their possibilities.

The internet is a huge array of many different networks -- a “network of networks.” What has given rise to its explosive success is precisely the open and non-discriminatory nature of such arrangements, which makes possible a many-to-many communication paradigm unprecedented in history.

However, as the commercial buildout of the internet since the 1990s shows, net neutrality has not inhibited the market forces that lead to growth. If up to now market forces have been able to support a largely neutral internet, what’s to worry about?

Here’s what’s changed: Today, with the advent of new content services that require much more broadband capacity -- consider that Netflix accounts for 32.7% of all North American internet traffic -- carriage operators are seeing their sector affected by the explosion of the content industry and want them to “carry the can” for the reducing returns of its business model. And they are doing so using the same language. that content providers used ten years ago (and to a degree during the more recent SOPA/PIPA debate too), arguing that the structure of the internet should change according to market changes. Put another way, we see the same rhetoric overlaying similar pretentions: “remake the internet before the internet remakes us.”

A question of balance

In the current debate, European telecoms argue that this scenario of an open internet is no longer economically efficient, given the growing demand for internet-based content and applications. They also claim that there is a need for “Quality of Service” (the ability to provide different priority to different applications, users, or data), although we are not aware of any economic calculations that suggest this is the case.

Indeed, a recent report commissioned by Skype, BBC, Yahoo and others argued that it is an error to see the growth of internet-based content demand and traffic as a problem (that policy makers should be dealing with) rather than an opportunity (from which everybody, including telecoms and content platforms, can benefit). Instead, it is argued that development of rich content and applications is what is driving the internet to grow, as it generates a virtuous circle in which 'the more end-users are attracted to rich content and applications, the more value is generated for access providers, and the stronger incentive for investment in enhanced networks”.

Yet, some large companies that are now seeing their business case put into jeopardy, are not giving due regard to the beneficial effects of net neutrality on users, startups, and the openness of the internet. Unsurprisingly, they are exerting their influence within the government and government agencies to ensure their interests are protected. Those new “principles” that ETNO “wishes to see introduced” into the ITRs will ultimately be protecting a small sector of business, while conflicting with longstanding principles of internet governance that have had profound benefits to society so far.

As Joe McNamee (EDRi) and Dimitar Ganchev (member of the Internet Society’s Board) have underlined, the success of the internet depends on the “end to end” and net neutrality principles which keep the internet open and competitive. One need only look at the T-Mobile/Truphone case, to see how experimentation in this policy area, for the profit of a few companies, can prove dangerous. Once broadband carriers are allowed to discriminate between different types of internet traffic, it increases the likelihood of a dangerous loophole, one that will allow them to use their market power to favor their own products and services over competing ones. The recent struggle between Comcast and Netlfix in the US exemplifies this kind of abuse.

Ultimately, the ETNO proposal is likely to allow telecoms to obtain more revenue from content and platform providers, but not to increase internet access, as companies will probably be reluctant to invest in user communities that are less profitable, be they less developed countries or not-for-profit entities. Indeed, violating net neutrality will definitely represent a significant hurdle for entrepreneurs and/or innovators with less capital or financial resources to sustain their growth. Eventually we must ask ourselves which values we want to use and manage the internet. If we agree that certain values, such as openness, decentralization, and neutrality have been integral to internet architecture and growth from the start, we must guard against any private interest which threatens to defeat this obvious public gain.