Recently I had an opportunity to speak about Network Management issues for the Blandin Foundation’s webinar on Broadband Policy. The webinar was part of the Blandin Foundation’s continuing effort to help create a broadband vision and strategy for Minnesota. A summary of my presentation follows.

Any discussion on network management these days must include a discussion on net neutrality. Why? Because limiting access to certain types or sources of content is one way to ease resource demands across a network.

What is net neutrality? Net neutrality is the idea that access to content on the Internet should be equal and fair, regardless of the access method or the provider of access. This sounds simple, but it’s not.

A neutral network is free of restrictions to all Internet content and is also free of restrictions on the equipment used to access the content.  A partially non-neutral network would be a cellular phone company.  They restrict what equipment you use to get access to the content. You typically must buy a phone they provide. A neutral network will let you use any equipment you choose when connecting to the network.

What’s the big deal? When Internet access companies are also content providers, net neutrality issues come to the forefront. A great example of this is Time Warner. Time Warner owns and produces content as diverse as Bugs Bunny videos and CNN. They also own Time Warner Cable. If you’re a Time Warner Cable subscriber, chances are that you will have unrestricted access to Bugs Bunny videos, but if you subscribe to DSL from a phone company, Bugs Bunny videos may not even be available to you. Now take the Time Warner Cable subscriber who wants to watch a video on the Fox News website.  Fox News is a direct competitor of CNN. Is it in the best interest of Time Warner Cable to restrict or filter the access to the Fox News website in order to get their subscribers onto their own website (CNN)?

But the market will win, right? Maybe. It is obvious that not all content will be owned by one access provider. That’s not the issue with net neutrality. Net neutrality is about allowing unfettered access to all types of content, regardless of ownership, viewpoints, opinions, or criticisms. It’s my opinion that net neutrality can be legislated, but access providers will find ways to show preferential access to certain types of content no matter what the regulations say, thus bypassing regulations. The reason Access providers will bypass regulations is simple, the demand for bandwidth is skyrocketing.

 

 

Unprecedented demand for bandwidth. Access providers are seeing explosive growth in bandwidth utilization. Access providers are supplying larger connections and oddly enough, consumers are using them. The old adage is, “On the Internet, content is king and the king is damned fat”. 

Recently the iTunes store started offering both high definition and standard definition formats for episodes of this season’s television shows.  You might say hurray, but the Access providers are saying OUCH! A standard definition episode might be 300 Megabytes, but a high definition episode will be anywhere from 1 gigabyte to nearly 3 gigabytes.  iTunes is only 1 reason Access providers have seen a huge jump in bandwidth utilization over the last 18 months.  

We at ipHouse have seen a 35% increase in the bandwidth utilization from our individual accounts over the last year. During that time we have transferred over 4 petabytes (4,000,000,000,000,000 bytes) of email, pictures, videos, songs and who knows what else. When I divide this into my subscriber base, the numbers are staggering. It means that every single one of my subscribers is downloading 1 Megabyte of data every day, even when they’re not online!  But this is not a true representation of what is really happening on the network. Statistics show that most subscribers are downloading less than 200 kilobytes a day. 

The majority of bandwidth is being consumed by a few individuals who are transferring an unprecedented amount of data. These individuals pay their bills on time, do not utilize tech support and are advocates in the market place by praising us to their friends. Still, they’re consuming a large amount of technical resources… We categorize the top 5% of our individual subscribers as “excessive” utilization users, regardless of other business metrics.

“Excessive” utilization? Access providers are focusing on these heavy users, creating their own definitions of excessive utilization. This month excessive utilization might be 250 gigabytes. Next month it might be more, less, or the same. The Access provider holds all the cards when it comes to defining Excessive utilization. The Access provider can restrict when a subscriber can get full or limited bandwidth, what services are available (for example, bit torrent or file sharing), and how many bytes can be transferred in a given period. Access providers are already providing Quality of Service on their networks, so restricting “excessive” utilization is just another metric that becomes automatic. 

Coincidently, Quality of Service also creates what appears to be a neutral network while still meeting the business objectives of having preferential content delivered to subscribers. By defining the Quality of Service for a given set of content, or services, it becomes easy to show Net neutrality, while delivering something completely different.  Net neutrality only works when bandwidth is not limited or when bandwidth paid for on a consumption basis which leads me to…

Time based vs. consumption based markets. Consumers of services are used to two basic billing models. The first is flat rate but time based.  We are all familiar with this model. You can rent a movie for 24 hours for 99 cents. The second model is a variable rate, but purely consumption based. The water company or the electric company charge based on a small but measurable variable rate and the consumer pays for the amount of service consumed. There is also a hybrid model of time and consumption. An example of the hybrid model is a car rental that is a $39 dollars per day PLUS mileage.

Access providers had originally chosen the hybrid time/consumption model, as an example – $19.99 for 100 hours per month. The heavy costs to provide the service were tied to acquiring and supporting customers, not in the technical resources the customers used. Access providers quickly abandoned the hybrid model for fixed rate service offerings with “unlimited” access. Access providers quickly learned that the demands of some subscribers would heavily tax the infrastructure they share with other subscribers. Limiting the heavy users proved problematic as those subscribers cried foul and demanded that the Access provider provide what they were sold.  Access providers have no choice but to either jettison “Excessive” users or bill those users based on what they consume. It’s probably too late to change the model one more time and I doubt subscribers would be accepting of a model based purely on consumption.  Instead Access providers are looking for ways to offer “full spectrum” services while limiting what is being consumed in some fashion. The cable operators that provider Internet access were the first to move in this fashion.  AT&T recently joined the pack in limiting the data transfers available with each access account.

The underlying question is, can the demands of more and more bandwidth by subscribers be in concert with network neutrality?

The marriage of network policy and business objectives The answer to the above question is YES – IF subscribers are willing to pay for it.  I believe that the typical Access provider wants to offer neutral access to content.  Most Access providers do not own content and are interested in allowing their users unfettered access to content. The problem is who is going to pay for the bandwidth? Some access providers are forming alliances with content providers to support their bandwidth needs. These alliances can create sticky situations for the Access providers though. I think the better answer is simple Quality of Service offerings that manage the bandwidth demands on the network.  By keeping this issue as a technical problem, a technical answer can be found. If bandwidth demand becomes a financial issue, then the logical course of action is to implement a hybrid time/consumption billing model. While a small number of subscribers may be dismayed by the new billing model, only the excessive users will actually be impacted. But what about access to content regardless of where it originates and how much bandwidth it uses? This raises the question of regulation of Access providers… 

Regulation preventing access to networks, prevents network neutrality. Most small Access providers are not worried about getting access to the content kings of the Internet such as Google/YouTube, but Access providers are worried about the old media empires restricting access to content.  Regulation now prevents small Access providers (like ipHouse) from accessing the cable and phone company physical networks for providing network access to our subscribers.  Since we’re locked out of the telecom side, the next logical step is for the content companies, (who own the cable companies) to restrict content access to their own Internet access subscribers.

Time will tell, but net neutrality is a war that is likely to be lost by consumers and small Access providers. Even though most of the individuals battles are winnable, the small Access provider just doesn’t have the resources to win this war, even if we have legislation on our side.

 

I was also asked to talk about managing data content as an Access provider. within the following topics:

File sharing / Individual Privacy: Should access providers become data managers? I think this question is best asked, why should Access providers become data managers for content owners? I cannot find an analogy in any of the historical media distribution systems that is similar to the models that have been proposed for Access providers. One model makes the Access provider responsible for their subscribers’ file downloads, with the Access Provider paying the Content Owner for all downloaded media. That’s similar to the old C.O.D. model used for shipping chattels.   Why on earth would Access providers want to collect revenues for a third party?

Another model is a $5.00 per month ISP tax for music. The Access provider collects a tax and sends the revenue to someone to be distributed to someone else, thus adding a middle man. Huh? Do they think Access providers are a replacement for the jukebox companies of yesteryear?

The answer is no. Access providers are not data managers for Content Owners, nor should they become data managers by legislation. Still, stranger things have happened.  It’s been more than a decade since the Internet Revolution and people are STILL trying to figure out how to munge their old business model, be it music distribution or classified ads, into the Internet connected world.

Who would pay for such management? Ok, lets say either model gets some foothold. Access providers are acutely aware of bandwidth and resources required to shape bandwidth as it is delivered to subscribers. The infrastructure required to measure file downloads is technically available, but the cost to implement such a system is not worth the costs when divided into the number of subscribers. Assuming the Access provider is collecting transfers or a flat tax, who will pay the Access provider for the infrastructure to measure and tabulate the data? Adding systems adds costs and managing data is not a cheap cost.  So the question should really be, why are old world Content Owners forcing their old business model into the new world? Update the business model and the question of who will pay becomes moot.

What about the privacy of subscribers?  Who will protect them? Part of the problem with monitoring subscribers use of Internet access is just the “Big Brother” aspect of snooping into innocent and private communications. What do Access providers do when they stumble upon a discussion about a possible transportation strike or a shortage of a flu vaccine? Are Access providers responsible for monitoring the activities of their subscribers? Are telephone companies responsible for the drug deals that are setup via the telephone network?  

Today, Access providers are bound by existing law to protect consumer information and are treated as publishers and as carriers without liability to the content that traverses their networks. Assuming Content Owners get their way, this will all change and your tastes and interests will become just another metric Access providers will have in their database. Access providers need to manage their subscribers to the benefit of their own business, not the business of Content Owners.

Where does that leave net neutrality?  As much as you might think that Content Owners want net neutrality, think again.  Dedicated partnerships between Content Owners and Access providers might force subscribers to pay for content, fully to the benefit of Content Owners and logically, Access providers can restrict the choice of the content available.  Legislating net neutrality might be a good thing or it might not. Consumers need to speak out and make sure their voices are heard before they don’t have a way to speak out.  

Peace.

-Bil