Transcript Wireless Network Neutrality Overview A Presentation at the WIK Consult International Conference Network Neutrality – Implications for Europe Bonn , Germany 3 – 4 December 2007 ‘ Rob.

Wireless Network Neutrality
Overview
A Presentation at the
WIK Consult International Conference
Network Neutrality – Implications for Europe
Bonn , Germany
3 – 4 December 2007
‘
Rob Frieden, Professor of Telecommunications
Penn State University
[email protected]
Web site : http://www.personal.psu.edu/faculty/r/m/rmf5/
Blog site: http://telefrieden.blogspot.com/
The Network Neutrality Debate
Highlights the Stakes in Next Generation
Network Development

NGNs will converge technologies and services probably
relying on wired and wireless IP-centric conduits.

To recoup the cost of network upgrades and to exploit new
NGN capabilities, network operators will seek to change terms
and conditions relating to access, interconnection, pricing and
service provisioning.

The crux of the Net Neutrality debate juxtaposes consumer
protection (and accommodating users’ service expectations)
with diversifying ISP business plans.

Ironically, the Apple iPhone highlights carrier limitations on
handsets and network access even as this phone offers greater
versatility.
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The Network Neutrality Debate
Highlights the Stakes in Next Generation
Network Development (cont.)

ISPs need to diversify services without adversely impacting
the Web’s accessibility, competitiveness, synergies and
serendipity.

The wireless net neutrality stakes may exceed wireline, in light
of increasing reliance on wireless networks and a regulatory
classification closer to conventional telecommunications
services than information and value added services.

Despite qualifying for more regulatory scrutiny, wireless
network operators masterfully have avoided the kinds of
regulatory obligations net neutrality would impose.
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Two Wireless Neutrality Issues
1)
What contractual rights can wireless carriers
reserve regarding subscribers’ use of their
handsets? (focus on the handset)
2)
What nondiscrimination access requirements
must wireless carriers satisfy? (focus on the
wireless network)
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Wireless Net Neutrality
Hype

Advocates for and against net neutrality have overstated their cases: “curtains for the free
world” vs. “a solution in search of a problem.”

The concept of wireless net neutrality has entered the debate belatedly, probably because
most consumers remain enthralled by the benefits of mobile radiotelephone service,
despite mediocre performance.

Net neutrality advocates want to apply longstanding wireline telephony policies that
separate service from handset sales, and allow end users to use any device to access any
carrier, service, content source and application.

These advocates tend to frame the issue as a referendum on whether the Internet will
remain open, nondiscriminatory and able to contribute to national productivity,
economic opportunity and innovation through “best efforts,” end-to-end connectivity.

Wireless net neutrality opponents frame the initiative as shameful government
intervention in a fully competitive, robustly innovative and properly self-regulating
industry.
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How does this threat to Internet freedom affect you?
Small businesses—The little guy will be left in the "slow lane" with inferior Internet service, unable to compete.
Innovators with the next big idea—Startups and entrepreneurs will be muscled out of the marketplace by big corporations that pay Internet providers for the top
spots on the Web.
Bloggers—Costs will skyrocket to post and share video and audio clips—silencing citizen journalists and putting more power in the hands of a few corporate-owned
media outlets.
Google users—Another search engine could pay dominant Internet providers like AT&T to guarantee another search engine opens faster than Google on your
computer.
Ipod listeners—A company like Comcast could slow access to iTunes, steering you to a higher-priced music service it owns.
Online shoppers—Companies could pay Internet providers to guarantee their online sales process faster than competitors with lower prices—distorting your choices as
a consumer.
Telecommuters—When Internet companies like AT&T favor their own services, you won't be able to choose more affordable providers for online video,
teleconferencing, Internet phone calls, and software that connects your home computer to your office.
Parents and retirees—Your choices as a consumer could be controlled by your Internet provider, steering you to their preferred services for online banking, health
care information, sending photos, planning vacations, etc.
Political groups—Political organizing could be slowed by a handful of dominant Internet providers who ask advocacy groups to pay "protection money" for their Web
sites and online features to work correctly.
Nonprofits—A charity's website could open at snail-like speeds, and online contributions could grind to a halt if nonprofits don't pay Internet providers for access to
"the fast lane."
What They've Got Planned
The threat to an open internet isn't just speculation -- we've seen what happens when the Internet's gatekeepers get too much control. These companies, even, have
said as much about their plans to discriminate online.
Ed Whitacre of AT&T told BusinessWeek in late 2005:
Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So
there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?
It's Already Happening
Such corporate control of the Web would reduce your choices and stifle the spread of innovative and independent ideas that we've come to expect online. It would
throw the digital revolution into reverse. Internet gatekeepers are already discriminating against Web sites and services they don't like:

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In 2004, North Carolina ISP Madison River blocked their DSL customers from using any rival Web-based phone service.
In 2005, Canada's telephone giant Telus blocked customers from visiting a Web site sympathetic to the Telecommunications Workers Union during a
contentious labor dispute.
Shaw, a major Canadian cable, internet, and telephone service company, intentionally downgrades the "quality and reliability" of competing Internet-phone
services that their customers might choose -- driving customers to their own phone services not through better services, but by rigging the marketplace.
In April, Time Warner's AOL blocked all emails that mentioned www.dearaol.com -- an advocacy campaign opposing the company's pay-to-send e-mail scheme.
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This is just the beginning. Cable and telco giants want to eliminate the Internet's open road in favor of a tollway that protects their status quo while stifling
new ideas and innovation. If they get their way, they'll shut down the free flow of information and dictate how you use the Internet.
Wireless Net Neutrality
Reality for Carriers




This debate is about wireless firms’ profit maximization and
whether they can avoid becoming commodity providers with
limited profitability even as they must commit to costly
network upgrades.
Wireless carriers want to retain the ability to discriminate on
price and quality of service, to lock handsets and lock-in
subscribers and to offer walled garden access to content.
Such discrimination can customize service, but also reduce the
surplus accruing to heavy volume and peak time users on “all
you can eat” plans.
The carriers claim that governments need to create incentives
for NGN investment, or at least eliminate disincentives.
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Wireless Net Neutrality
Reality for Carriers (cont.)



In reality the carriers want captive subscribers who
must pay for access to content and enhancements to
basic network access.
Put another way wireless carriers consider network
neutrality as limiting their ability to operate
“intelligent” networks (instead of “dumb” pipes).
Both wireline and wireless carriers want to find ways
to apply two-sided telephony pricing to Internet
access: end users pay for network access (preferably
metered), plus content and applications providers also
pay for network access inside the Internet cloud.
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Telephony and Internet Models
Telephony
Cost Causation
The caller usually triggers a complete
end-to-end network setup using facilities
provided by the originating carrier and
other carriers secured by the originating
carrier.
Traffic measurement and tracking
Internet
Cost Causation
Traffic types and routing vary making it difficult to
use traffic flows for determining who should pay;
conduit and content merge.
Traffic measurement and tracking
Metering and tracking likely.
Possible, but does not necessarily indicate which
party initiated the link and who benefits. Upstream
and downstream flows often asymmetrical.
Parties
Parties
Agree on a multilateral basis to divide
cost and share toll revenues based on ITU
Recommended model.
A connectionless protocol where many carriers may
be involved in switching and routing packets on
“best efforts”model; evolved from zero cost peering
to a commercial hierarchy of peers and clients.10
Wireless Net Neutrality
Reality for Content/Application Providers

Net Neutrality would foreclose, or limit the ability of carriers to accommodate the
need for “better than best efforts” traffic routing, a desirable feature for video
streaming, P2P networking, real time gaming and VoIP.

On the other hand, how carriers partition their networks and program NGN routers
(through “packet sniffing” ostensibly to “shape” or “manage” traffic) for premium
and regular service can degrade service for regular users even in the absence of
congestion, e.g., forged TCP reset packets.

Content and application providers have benefited from not having to pay a
surcharge to ride on networks, in addition to the peering or transit arrangement
secured by ISPs.

Access tiering favors established and ISP-affiliated ventures, able to afford
surcharges, and disadvantages small, new firms.
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Wireless Net Neutrality in Spectrum
Allocation and Operating Rules

NRAs also may implement wireless net neutrality principles when allocating spectrum
and establishing operating rules.

In the U.S. the FCC, in response to a campaign by Google and other content providers,
established an “Open Platform” requirement for a 22 MHz block of choice “beachfront”
700 MHz spectrum made available for auction in the conversion from analog to digital
broadcast television, scheduled to occur by February 17, 2009.

The winning bidder must allow consumers to use the handset of their choice for
downloading and using any applications, subject to certain reasonable network
management conditions that allow the licensee to protect the network from harm.

The FCC rules do not adopt Google’s suggestion that wireless carriers must offer
wholesale service rates to third party resellers, e.g., ISPs and content provides like
Google, and agree to interconnect with them at any technically feasible location.

The complex FCC rules also appear to abandon even the limited network neutrality rules
if bidding does not exceed a specific multi-billion dollar reserve price.
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Wireless Net Neutrality Issues

Locking handsets by blocking access to competitors (by frequency, transmission format,
firmware or software); in the U.S. carriers lock even GSM handsets, so changing SIM
cards will not work.

Carriers can use firmware “upgrades” to “brick” (render inoperative) third party
firmware and software; at the very least the warranty evaporates.

Carriers disable handset functions, e.g., bluetooth, Wi-Fi access, Internet browsers, GPS
services, email clients.

Carriers block specify format for accessing memory, e.g., music, ringtones, photos.

Carriers block or attempt to thwart access to third party content and applications
(software).


Walled garden access favors video content of affiliates and partners.
Proprietary, non-standard interfaces make it difficult for third parties to develop
compatible applications and content.
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Wireless Net Neutrality in Practice

National regulatory authorities may implement some wireless network neutrality
principles, based on successful wireline experience, e.g., separating service from
handset sales.

However, wireless carriers have effectively lobbied for the status quo based on
assertions that the market is robustly competitive, lock-ins protect subscriber
privacy and make it possible to offer subsidized handsets and net neutrality would
stifle innovation and investment.

Consumer protection laws may require wireless carriers to pro-rate early service
termination charges.

Wireless carriers may not be able to continue foreclosing used handset markets if
one carrier or reseller offers a lower month-to-month plan for subscribers who bring
their own handset.

Consumers may grow less tolerant of carrier-imposed handset restrictions in light of
increasing appreciation that lock-ins typically only serve carrier profit
maximization goals.
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Implications for Europe

European Community concerns about consumer protection and carrier market
power may trigger consideration of wireless network neutrality “safeguards.”
Already it appears that NRAs will not permit all of Apple’s iPhone restrictions that
apply in the U.S.

Handset manufacturers may show greater reluctance to capitulate to carrier
demands, e.g., disabling handset features and exclusive distribution arrangements,
particularly in markets where consumers expect to pay higher prices for feature rich,
unlocked phones.

Google’s handset and service models may disrupt the status quo.

Maturing core service markets and slower than anticipated demand for 3G services
will force carriers to adopt new pricing and service models, including bundling
wireless with other services.

Europe’s comparatively robust Mobile Virtual Network Operator sector amplifies
the need for innovation and the likelihood of lower ARPU.
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