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Does Your House Need a Tail?

November 25, 2008 by

Thus far, the debate over broadband deployment has generally been between those who believe that private telecom incumbents should be in charge of planning, financing and building next-generation broadband infrastructure, and those who advocate a larger role for government in the deployment of broadband infrastructure. These proposals include municipal-owned networks and a variety of subsidies and mandates at the federal level for incumbents to deploy faster broadband.

Tim Wu and Derek Slater have a great new paper out that approaches the problem from a different perspective: that broadband deployments could be planned and financed not by government or private industry, but by consumers themselves. That might sound like a crazy idea at first blush, but Wu and Slater do a great job of explaining how it might work. The key idea is “condominium fiber,” an arrangement in which a number of neighboring households pool their resources to install fiber to all the homes in their neighborhoods. Once constructed, each home would own its own fiber strand, while the shared costs of maintaining the “trunk” cable from the individual homes to a central switching location would be managed in the same way that condominium and homeowners’ associations currently manage the shared areas of condos and gated communities. Indeed, in many cases the developer of a new condominium tower or planned community could lay fiber along with water and power lines, and the fiber would be just one of the shared resources that would be managed collectively by the homeowners.

If that sounds strange, it’s important to remember that there are plenty of examples where things that were formerly rented became owned. For example, fifty years ago in the United States no one owned a telephone. The phone was owned by Ma Bell and if yours broke they’d come and install a new one. But that changed, and now people own their phones and the wiring inside their homes, with your phone company owning the cable outside the home. One way to think about Slater and Wu’s “homes with tails” concept is that it’s just shifting that line of demarcation again. Under their proposal, you’d own the wiring inside your home and the line from you to your broadband provider.

Why would someone want to do such a thing? The biggest advantage, from my perspective, is that it could solve the thorny problem of limited competition in the “last mile” of broadband deployment. Right now, most customers have two options for high-speed Internet access. Getting more options using the traditional, centralized investment model is going to be extremely difficult because it costs a lot to deploy new infrastructure all the way to customers’ homes. But if customers “brought their own” fiber, then the barrier to entry would be much lower. New providers would simply need to bring a single strand of fiber to a neighborhood’s centralized point of presence in order to offer service to all customers in that neighborhood. So it would be much easier to imagine a world in which customers had numerous options to choose from.

The challenge is solving the chicken-and-egg problem: customer owned fiber won’t be attractive until there are several providers to choose from, but it doesn’t make sense for new firms to enter this market until there are a significant number of neighborhoods with customer-owned fiber. Wu and Slater suggest several ways this chicken-and-egg problem might be overcome, but I think it will remain a formidable challenge. My guess is that at least at the outset, the customer-owned model will work best in new residential construction projects, where the costs of deploying fiber will be very low (because they’ll already be digging trenches for power and water).

But the beauty of their model is that unlike a lot of other plans to encourage broadband deployment, this isn’t an all-or-nothing choice. We don’t have to convince an entire nation, state, or even city to sign onto a concept like this. All you need is a neighborhood with a few dozen early-adopting consumers and an ISP willing to serve them. Virtually every cutting-edge technology is taken up by a small number of early adopters (who pay high prices for the privilege of being the first with a new technology) before it spreads to the general public, and the same model is likely to apply to customer-owned fiber. If the concept is viable, someone will figure out how to make it work, and their example will be duplicated elsewhere. So I don’t know if customer-owned fiber is the wave of the future, but I do hope that people start experimenting with it.

You can check out their paper here. You can also check out an article I wrote for Ars Technica this summer that is based on conversations with Slater, Wu, and other pioneers in this area.

Filed Under: Broadband Tagged With: ,

Could Use-Based Broadband Pricing Help the Net Neutrality Debate?

January 17, 2008 by

Yesterday, thanks to a leaked memo, it came to light that Time Warner Cable intends to try out use-based broadband pricing on a few of its customers. It looks like the plan is for several tiers of use, with the heaviest users possibly paying overage charges on a per-byte basis. In confirming its plans to Reuters, Time Warner pointed out that its heaviest-using five percent of customers generate the majority of data traffic on the network, but still pay as though they were typical users. Under the new proposal, pricing would be based on the total amount of data transferred, rather than the peak throughput on a connection.

If the current, flattened pricing is based on what the connection is worth to a typical customer, who makes only limited use of the connection, then the heaviest five percent of users (let’s call them super-users as shorthand) are reaping a surplus. Bandwidth use might be highly elastic with respect to price, but I think it is also true that the super users do reap a great deal more benefit from their broadband connections than other users do – think of those who pioneer video consumption online, for example.

What happens when network operators fail to see this surplus? They have marginally less incentive to build out the network and drive down the unit cost of data transfer. If the pricing model changed so that network providers’ revenue remained the same in total but was based directly on how much the network is used, then the price would go down for the lightest users and up for the heaviest. If a tiered structure left prices the same for most users and raised them on the heaviest, operators’ total revenue would go up. In either case, networks would have an incentive to encourage innovative, high-bandwidth uses of their networks – regardless of what kind of use that is.

Gigi Sohn of Public Knowledge has come out in favor of Time Warner’s move on these and other grounds. It’s important to acknowledge that network operators still have familiar, monopolistic reasons to intervene against traffic that competes with phone service or cable. But under the current pricing structure, they’ve had a relatively strong argument to discriminate in favor of the traffic they can monetize, and against the traffic they can’t. By allowing them to monetize all traffic, a shift to use based pricing would weaken one of the most persuasive reasons network operators have to oppose net neutrality.

Filed Under: Broadband Tagged With: , , ,

Verizon Violates Net Neutrality with DNS Deviations

November 12, 2007 by

While many of us were discussing Comcast’s partial blocking of BitTorrent Traffic, and debating its implications for the net neutrality debate, a more clear-cut neutrality violation was apparently taking place on Verizon’s network – a redirection of Verizon customers’ failed DNS lookups, to drive traffic to Verizon’s own search engine.

Here’s the background. Suppose you’re browsing the web and you mistype an address – say you type “fredom-to-tinker”. Your browser will try to use DNS, the system that maps textual machine names to numeric IP addresses, to translate the name you typed into an address it can actually connect to across the Net. DNS will return an error, saying that the requested name doesn’t exist. Your browser (if it’s a recent version of IE or Firefox) will respond by doing a search for the text you typed, using your default search engine.

What Verizon did is to change how DNS works (for their residential subscribers) so that when a customer’s computer looks up a DNS name that doesn’t exist, rather than returning the name-doesn’t-exist error DNS says that the (non-existent) name maps to Verizon’s search site. This causes the browser to go to the Verizon search site, which shows the user search results (and ads) related to what they typed.

(This is the same trick used by VeriSign’s ill-fated SiteFinder service a few years ago.)

This is a clear violation of net neutrality: Verizon is interfering with the behavior of the DNS protocol, in order to drive traffic to its own search site. And unlike the Comcast scenario which might possibly have been justifiable as legitimate network management, in this case Verizon cannot claim to be helping its network run more smoothly.

Verizon’s actions have two effects. The obvious effect is to drive traffic from the search engines users chose to Verizon’s own search engine. That harms users (by overriding their choices) and harms browser vendors (by degrading their users’ experiences).

The less obvious effect is to break some other applications. DNS lookups that have nothing to do with browsing will still be redirected, because the DNS infrastructure has no way of knowing which requests relate to browsing and which don’t. So if some other application does a DNS lookup and the result should be a not-found error, Verizon will cause the result to point to a Verizon server instead. If a non-browser program expects to see not-found errors sometimes and has a strategy for dealing with them, it won’t be able to carry out that strategy because it won’t see the errors it should be seeing. This will even cause browsers to misbehave in some circumstances.

The effects of Verizon’s neutrality violation can be summarized simply: they interfer with a standard technical protocol; they cause harm on the whole, in part by breaking unrelated services; and they do this in order to override consumer choice by shifting traffic from consumer-chosen services to Verizon’s own services. This is pretty much the definition of a net neutrality violation.

This example contradicts at least two of the standard arguments against net neutrality regulation. First, it shows that violations do happen, and they do cause harm. Second, it shows that at least sometimes it’s easy to tell a harmful violation apart from legitimate network management.

But it doesn’t defeat all of the arguments against net neutrality regulation. Even though violations do occur, and do cause harm, it might turn out that the regulatory cure is worse than the disease.

Filed Under: Broadband Tagged With: , ,

Comcast and Net Neutrality

October 24, 2007 by

The revelation that Comcast is degrading BitTorrent traffic has spawned many blog posts on how the Comcast incident bolsters the blogger’s position on net neutrality – whatever that position happens to be. Here is my contribution to the genre. Mine is different from all the others because … um … well … because my position on net neutrality is correct, that’s why.

Let’s start by looking at Comcast’s incentives. Besides being an ISP, Comcast is in the cable TV business. BitTorrent is an efficient way to deliver video content to large numbers of consumers – which makes BitTorrent a natural competitor to cable TV. BitTorrent isn’t a major rival yet, but it might plausibly develop into one. Which means that Comcast has an incentive to degrade BitTorrent’s performance and reliability, even when BitTorrent isn’t in any way straining Comcast’s network.

So why is Comcast degrading BitTorrent? Comcast won’t say. They won’t even admit what they’re doing, let alone offer a rationale for it, so we’re left to speculate. The technical details of Comcast’s blocking are only partially understood, but what we do know seems hard to square with claims that Comcast is using the most effective means to optimize some resource in their network.

Now pretend that you’re the net neutrality czar, with authority to punish ISPs for harmful interference with neutrality, and you have to decide whether to punish Comcast. You’re suspicious of Comcast, because you can see their incentive to bolster their cable-TV monopoly power, and because their actions don’t look like a good match for the legitimate network management goals that they claim motivate their behavior. But networks are complicated, and there are many things you don’t know about what’s happening inside Comcast’s network, so you can’t be sure they’re just trying to undermine BitTorrent. And of course it’s possible that they have mixed motives, needing to manage their network but choosing a method that had the extra bonus feature of hurting BitTorrent. You can ask them to justify their actions, but you can expect to get a lawyerly, self-serving answer, and to expend great effort separating truth from spin in that answer.

Are you confident that you, as net neutrality czar, would make the right decision? Are you confident that your successor as net neutrality czar, who would be chosen by the usual political process, would also make the right decision?

Even without a regulatory czar, wheels are turning to punish Comcast for what they’ve done. Customers are unhappy and are putting pressure on Comcast. If they deceived their customers, they’ll face lawsuits. We don’t know yet how things will come out, but it seems likely Comcast will regret their actions, and especially their lack of transparency.

All of which – surprise surprise – confirms my position on net neutrality: there is a risk of harmful behavior by ISPs, but writing and enforcing neutrality regulation is harder than it looks, and non-regulatory forces may constrain ISPs enough.

Filed Under: Broadband Tagged With: , ,

Greetings, and a Thought on Net Neutrality

October 3, 2007 by

Hello again, FTT readers. You may remember me as a guest blogger here at FTT, writing about anti-circumvention, the print media’s superiority (or lack thereof) to Wikipedia, and a variety of other topics.

I’m happy to report that I’ve moved to Princeton to join the university’s Center for Information Technology Policy as its new associate director. Working with Ed and others here on campus, I’ll be helping bring the Center into its own as a leading interdisciplinary venue for research and conversation about the social and political impact of information technology.

Over the next few months, I’ll be traveling the country to look at how other institutions approach this area, in order to develop a strategic plan for Princeton’s involvement in the field. As a first step toward understanding the world of tech policy, I’ve been doing a lot of reading lately.

One great source is The Creation of the Media by Princeton’s own Paul Starr. It’s carefully argued and highly readable, and I’ve found its content challenging. Conversations in tech policy often seem to stem from the premise that in the interaction between technology and society, the most important causal arrow points from the technologies into the social sphere. “Remix culture”, perhaps the leading example at the moment, is a major cultural shift that is argued to stem from inherent properties of digital media, such as the identity between a copy and an original of a digital work.

But Paul argues that politics usually dominates the effects of technology, not the other way around. For example, although cheap printing technologies helped make the early United States one of the most literate countries of its time, Paul argues that America’s real advantage was its postal system. Congress not only invested heavily in the postal service, but also gave a special discounted rate to printed material, effectively subsidizing publications of all kinds. As a result much more printed material was mailed in America than in, say, British Columbia at the same time.

One fascinating observation from Paul’s book (pages 180-181 in the hardcover edition, for those following along at home) concerns the telegraph. In Britain, the telegraph was nationalized in order to ensure that private network operators didn’t take advantage of the natural monopoly that they enjoyed (“natural” since once there was one set of telegraph wires leading to a place, it became hard to justify building a second set).

In the United States, there was a vociferous debate about whether or not to nationalize the telegraph system, which was controlled by Western Union, a private company:

[W]ithin the United States, Western Union continued to dominate the telegraph industry after its triumph in 1866 but faced two constraints that limited its ability to exploit its market power. First, the postal telegraph movement created a political environment that was, to some extent, a functional substitute for government regulation. Britain’s nationalization of the telegraph was widely discussed in America. Worried that the US government might follow suit, Western Union’s leaders at various times extended service or held rates in check to keep public opposition within manageable levels. (Concern about the postal telegraph movement also led the company to provide members of Congress with free telegraph service — in effect, making the private telegraph a post office for officeholders.) Public opinion was critical in confining Western Union to its core business. In 1866 and again in 1881, the company was on the verge of trying to muscle the Associated Press aside and take over the wire service business itself when it drew back, apparently out of concern that it could lose the battle over nationalization by alienating the most influential newspapers in the country. Western Union did, however, move into the distribution of commercial news and in 1871 acquired majority control of Gold and Stock, a pioneering financial information company that developed the stock ticker.

This situation–a dynamic equilibrium in which a private party polices its own behavior in order to stave off the threat of government intervention–strikes me as closely analogous to the net neutrality debate today. Network operators, although not subject to neutrality requirements, are more reluctant to exercise the options for traffic discrimination that are formally open to them, because they recognize that doing so might lead to regulation.

Filed Under: Broadband Tagged With: , , , ,