TDP - Let Network Providers Manage Their Networks

[PDF]

Before the
Federal Communications Commission
Washington, D.C. 20554

In the Matter of:

Broadband Industry Practices

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WC Docket No. 07-52

COMMENTS OF HANCE HANEY
DIRECTOR & SENIOR FELLOW - TECHNOLOGY & DEMOCRACY PROJECT
DISCOVERY INSTITUTE

Neither the petition for declaratory ruling of Free Press et al.[1] nor the petition for rulemaking of Vuze, Inc.[2] make a compelling case for the Commission to embark on what would surely be a complicated and contentious rulemaking process. Petitioners invite the Commission to micro-manage a dynamic industry, pick winners and losers and jeopardize network security.

I. REGULATION TO PREVENT NETWORK MANAGEMENT WOULD DISCOURAGE INVESTMENT IN NETWORK CAPACITY

Free Press et al.’s petition for declaratory ruling asks the Commission to prohibit network management which consists of blocking or degrading any application.[3] Since it’s impossible as a definitional matter for network providers to prioritize some traffic without “degrading” other traffic, Free Press et al. in effect is asking the Commission prohibit most, if not all, reasonable network management.

In the absence of unlimited bandwidth, network management is necessary to prevent, for example, degradation to latency-sensitive telephone and streaming video competition via the Internet, or to ensure that public safety providers can communicate in an emergency or that patient vital signs can be monitored remotely without interruptions.

Free Press et al. claim there are a number of non-discriminatory network management tools which would still be available to network providers:

[T]hey could readily set dynamic quotas for each user on the loop[,] … charge by usage, provide more bandwidth to all users, or actually offer high symmetric broadband speeds.[4]

With the exception of charging by network usage, all of the non-discriminatory alternatives Free Press et al. proffer would require massive investment in more network capacity and/or set-top boxes.[5]

Network providers are making such investments, but their ability to invest turns on the perceived likelihood their investments will generate a profit. Investment will dry up if Wall Street perceives there’s a possibility broadband networks are on a trajectory toward further regulation.

This isn’t the 1960s or the 1970s. Rate-of-return regulation and monopoly franchises are things of the past. Free Press et al. and others may not be aware that network costs can no longer be recovered from captive ratepayers, or that competition makes cross-subsidization highly risky. It’s plain to see that no one is investing in the legacy phone network, which is still highly regulated.

If Free Press et al. and others assume network providers can be forced to invest in new capacity if they aren’t allowed to practice network management – and that they won’t invest if they are – then Free Press et al. and others are delusional. Network providers want to invest in the face of strong competition, but the prospect of further regulation makes them skittish.

With respect to Free Press et al.’s suggestion that network providers could charge according to usage, it should be obvious that during periods of peak usage congestion is still a possibility that would require network management. The current “all-you-can-eat” policy of most network providers actually benefits customers who transfer massive files in the absence of congestion, such as overnight. If they’re a little patient, they get to pay nothing extra.

Even Vuze, Inc. agrees that network providers ought to be allowed to practice network management for the benefit of their customers:

While network operators certainly should have the ability to engage in reasonable network management, without clear rules and greater transparency, Vuze and other content distribution companies will have no assurance that a redesigned distribution mechanism will be acceptable to network operators.[6]

Of course, nothing prevents Vuze from meeting with network operators to resolve questions collaboratively in advance. And if this were any other industry, that’s what they’d have to do. But since the Commission is apparently willing to consider invitations to micro-manage a fast-changing industry that it has a poor track record of predicting, companies like Vuze would be fools not to file them.

It ought to be clear from the implementation of the 1996 Telecom Act that it’s not possible for the Commission to act as market referee without spawning a torrent of additional regulation, costly lawsuits and years of uncertainty.

II. DISCLOSURE COULD UNDERMINE NETWORK MANAGEMENT, THWART LAW ENFORCEMENT AND JEOPARDIZE NETWORK SECURITY

Free Press et al. and Vuze, Inc. also request the Commission declare it’s a deceptive practice for network providers to degrade particular applications without prior disclosure.[7]

Detailed disclosure of network management practices could lead to a host of unintended consequences. For one thing, it could facilitate modifications to the BitTorrent protocol which would defeat legitimate and necessary traffic management.

You have to understand that Comcast is playing a cat and mouse game with BitTorrent. And if you look into the details of how BitTorrent is engineered, it’s fairly obvious that concealment of BitTorrent streams from traffic shaping and admission control and other sorts of network management technologies is an explicit goal of the project. Every concealment method that you can think of is used by BitTorrent to escape detection by the kind of network management systems that people like Comcast have to run. So to the extent that Comcast is transparent, they’re simply making themselves vulnerable to a new version of BitTorrent that can escape whatever techniques they’re employing.[8]

The Commission must also consider whether there are similar implications for competition, law enforcement and national security. Petitioners ignore these obvious questions, and the Commission failed to ask them in the Public Notices.[9]

III. PETITIONERS FURNISH A FLIMSY JUSTIFICATION FOR INTERVENTION BY THE COMMISSION

Vuze, Inc.’s petition makes it clear that network management as it is practiced by Comcast and potentially others has resulted in little harm to the company.

Vuze has been required to modify its technical systems and alter the way it does business through implementation of a number of counter-measures. And while Vuze has been able to minimize any serious impact on its service, it has been forced to engage in constant guesswork – since the tactics are largely hidden – and to play a “cat and mouse” game with network operators in order to maintain superior service for consumers.[10]

Vuze repeats the unfounded claim, heard so often, that “network operators exert unfettered control over their users’ ability to communicate.”[11] However, even if it can’t quite make the connection, the company acknowledges this isn’t true when it observes, “we have detected their efforts to interfere with the seeding process.”[12]

Free Press suggests that the “reasonable network management” exception swallows the “rules” in the Commission’s Policy Statement[13] regarding broadband access:

[I]f intentionally “delaying” an application conformed to the Policy Statement, the Policy Statement would mean nothing. A network provider could “delay” applications until the year 2009, or 3009, without violating this principle of the Policy Statement.[14]

But Free Press et al.’s argument is rather absurd since no rational person would conclude such a delay is reasonable.

The petitions contain no specific allegation of anticompetitive conduct, asserting only that it’s possible as a hypothetical matter.

[T]he content they are degrading is likely perceived as a threat to their dominance in the market for electronic distribution of video content.[15]

Comcast has an economic incentive to undermine competitors to its cable video-programming distribution.[16]

Any commercial entity is free to file its own lawsuit or to contact the Antitrust Division of the Department of Justice if it feels it’s a victim of anticompetitive behavior. If Vuze and other entities are concerned that antitrust enforcement is costly and uncertain, the Commission’s Enforcement Bureau already offers expedited complaint procedures not available in other industries.

IV. NO ONE IS ENTITLED TO SEND OR RECEIVE ILLEGAL CONTENT OVER BROADBAND NETWORKS

Network providers are under no obligation to transport illegal content. NBC Universal cites one court’s finding that “90% of works available on one of the networks was shown to be copyrighted.”[17]

Although petitioners cite specific legal uses of peer-to-peer file-sharing technology, they don’t deny that a significant portion violates someone’s valid copyright.

An interesting question – one that is beyond the scope of these petitions, to be sure – is whether network providers can continue to play a passive role with respect to the content they allow onto their networks when technology is rapidly eroding a traditional rationale for carrier immunity – the sheer impossibility of monitoring traffic for copyright infringement.

In any event, it would be unfortunate if, as a result of new restrictions on network management of the kind petitioners advocate here, the only tool network providers are left with to prevent congestion is to aggressively monitor for illegal content and block it.

CONCLUSION

The Commission should deny the petitions of Free Press et al. and Vuze, Inc. for the reasons stated herein.

Respectfully submitted,

/s/

Hance Haney
Senior Fellow
Director - Technology & Democracy Project
Discovery Institute

1015 15th Street, NW
Suite 900
Washington, D.C. 20005
Feb. 13, 2007

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[1] Petition for Declaratory Ruling of Free Press et al., WC Docket No. 07-52 (Nov. 1, 2007).
[2] Petition for Rulemaking of Vuze Inc., WC Docket No. 07-52 (Nov. 14, 2007).
[3] Free Press at 32-33.
[4] Free Press at 29.
[5] “Harold and Kumar go to Comcastle: Save the Internet contests Laws of Physics,” by Richard Bennett, The Register (Nov. 6, 2007) (“The angels apparently believe there's a magic “quota” knob inside each cable modem owned or rented by each Comcast subscriber, but that's not the case. These modems can take a hard cap at boot time, but after that they lack a mechanism to prevent them from issuing excessive numbers of upstream transfer requests. That's undoubtedly a flaw in the definition of the DOCSIS protocol, but it's one that isn't going away simply because we may earnestly wish it would.”)
[6] Vuze at 14.
[7] Free Press at 14; Vuze at 14.
[8] Richard Bennett, “The Comcast Kerfluffle” (podcast), Tech Policy Weekly (Oct. 25, 2007).
[9] Comment Sought on Petition for Declaratory Ruling Regarding Internet Management Policies, WC Docket No. 07-52 (Jan. 14, 2008); Comment Sought on Petition for Rulemaking to Establish Rules Governing Network Management Practices By Broadband Network Operators, WC Docket No. 07-52 (Jan. 14, 2008).
[10] Vuze at 11.
[11] Vuze at 12.
[12] Vuze at 10.
[13] Appropriate Framework for Broadband Access to the Internet over Wireline Facilities, Policy Statement, 20 FCC Rced. 14986 (2005).
[14] Free Press at 17.
[15] Vuze at 14.
[16] Free Press at ii.
[17] Comments of NBC Universal (Jun. 15, 2007) at footnote 4.