With Barack Obama’s election, we’re likely to see a revival of the network neutrality debate. Thus far the popular debate over the issue has produced more heat than light. On one side have been people who scoff at the very idea of network neutrality, arguing either that network neutrality is a myth or that we’d be better off without it. On the other are people who believe the open Internet is hanging on by its fingernails. These advocates believe that unless Congress passes new regulations quickly, major network providers will transform the Internet into a closed network where only their preferred content and applications are available.
One assumption that seems to be shared by both sides in the debate is that the Internet’s end-to-end architecture is fragile. At times, advocates on both sides debate seem to think that AT&T, Verizon, and Comcast have big levers in their network closets labeled “network neutrality” that they will set to “off” if Congress doesn’t stop them. In a new study for the Cato Institute, I argue that this assumption is unrealistic. The Internet has the open architecture it has for good technical reasons. The end-to-end principle is deeply embedded in the Internet’s architecture, and there’s no straightforward way to change it without breaking existing Internet applications.
One reason is technical. Advocates of regulation point to a technology called deep packet inspection as a major threat to the Internet’s open architecture. DPI allows network owners to look “inside” Internet packets, reconstructing the web page, email, or other information as it comes across the wire. This is an impressive technology, but it’s also important to remember its limitations. DPI is inherently reactive and brittle. It requires human engineers to precisely describe each type of traffic that is to be blocked. That means that as the Internet grows ever more complex, more and more effort would be required to keep DPI’s filters up to date. It also means that configuration problems will lead to the accidental blocking of unrelated traffic.
The more fundamental reason is economic. The Internet works as well as it does precisely because it is decentralized. No organization on Earth has the manpower that would have been required to directly manage all of the content and applications on the Internet. Networks like AOL and Compuserve that were managed that way got bogged down in bureaucracy while they were still a small fraction of the Internet’s current size. It is not plausible that bureaucracies at Comcast, AT&T, or Verizon could manage their TCP/IP networks the way AOL ran its network a decade ago.
Of course what advocates of regulation fear is precisely that these companies will try to manage their networks this way, fail, and screw the Internet up in the process. But I think this underestimates the magnitude of the disaster that would befall any network provider that tried to convert their Internet service into a proprietary network. People pay for Internet access because they find it useful. A proprietary Internet would be dramatically less useful than an open one because network providers would inevitably block an enormous number of useful applications and websites. A network provider that deliberately broke a significant fraction of the content or applications on its network would find many fewer customers willing to pay for it. Customers that could switch to a competitor would. Some others would simply cancel their home Internet service and rely instead on Internet access at work, school, libraries, etc. And many customers that had previously taken higher-speed Internet service would downgrade to basic service. In short, even in an environment of limited competition, reducing the value of one’s product is rarely a good business strategy.
This isn’t to say that ISPs will never violate network neutrality. A few have done so already. The most significant was Comcast’s interference with the BitTorrent protocol last year. I think there’s plenty to criticize about what Comcast did. But there’s a big difference between interfering with one networking protocol and the kind of comprehensive filtering that network neutrality advocates fear. And it’s worth noting that even Comcast’s modest interference with network neutrality provoked a ferocious response from customers, the press, and the political process. The Comcast/BitTorrent story certainly isn’t going to make other ISPs think that more aggressive violations of network neutrality would be a good business strategy.
So it seems to me that new regulations are unnecessary to protect network neutrality. They are likely to be counterproductive as well. As Ed has argued, defining network neutrality precisely is surprisingly difficult, and enacting a ban without a clear definition is a recipe for problems. In addition, there’s a real danger of what economists call regulatory capture—that industry incumbents will find ways to turn regulatory authority to their advantage. As I document in my study, this is what happened with 20th-century regulation of the railroad, airline, and telephone industries. Congress should proceed carefully, lest regulations designed to protect consumers from telecom industry incumbents wind up protecting incumbents from competition instead.