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Two Tier Internet: Already Here

In an interview back in November, SBC (now AT&T) CEO Edward Whitacre started a firestorm. He implied that since SBC owned the fast pipes into people’s homes, they could control the Internet access that those people received. The networking public and media immediately began worrying about a “two-tier” Internet or “partial” Internet access where SBC customers could not access some content (or not access them quickly or effectively) unless that content provider paid SBC.

The Internet has succeeded largely because of its end-to-end nature (making it possible to deploy new, interesting applications without reconfiguring the network) and because of it’s universality. Whitacre’s comments seem to affect both principles, although it’s tough to say. Since the firestorm about this is still brewing, it seems worth walking through the arguments more carefully to figure out: is Whitacre proposing a two-tier Internet, and is that a problem?

[I’m going to refer to the newly merged SBC/AT&T as SBC in this piece, in part because Whitacre was chair of SBC when he made the offending comments and in part because I just can’t think of AT&T as a residential services provider yet. ]

First, let’s look clearly at what Whitacre said:

How concerned are you about Internet upstarts like Google (GOOG ), MSN, Vonage, and others?

How do you think they’re going to get to customers? Through a broadband pipe. Cable companies have them. We have them. 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?

The Internet can’t be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! (YHOO ) or Vonage or anybody to expect to use these pipes [for] free is nuts!

It’s easy to see what many people are concerned about. There are at least three disturbing implications:

  1. SBC can selectively control the Internet content that users access via SBC-owned Internet pipes
  2. SBC can selectively control the quality or speed that users have access to via SBC-owned Internet pipes
  3. SBC’s pipes are not paid for unless both the end-user pays for them and a content provider pays for them.

The last of these arguments is interesting but best left for another time. The essence of it is that cable companies have always had business models that are predicated on people paying for access to content. Telephone companies have always envied the revenue from video content available to cable companies. As the phone companies build out packet-switched networks capable of delivering video content, they want to get the same premium revenue stream as cable companies. They’re concerned that “free” content on the Internet is threatening to do away with that. That is the backdrop against which the rest of this discussion takes place.

Most of the debate around this issue has centered around the first two possible interpretations of what Whitacre said, and has conflated them. Let’s try to make a clear distinction.

The first argument takes two different forms: access to content at all across the Internet (which is what Whitacre seems to be implying) and some sort of premium access to that content. The first is deeply concerning, probably fraudulent and violates at least a few FCC regulations. When SBC sells “Internet access” on DSL or fibre, it cannot selectively block content for reasons unrelated to the network health or security. For example, it can’t block Vonage (specifically mentioned in the quote) because the FCC has already levied fines against a telco who tried that. Although blocking VOIP is common in other countries, it appears to be illegal in the US. SBC also probably can’t block specific websites or video content, because they are advertising “High-speed Internet” which customers presumably don’t understand to mean “High-speed to some parts of the Internet.” Blocking specific content because those providers didn’t pay to offer it would probably give both consumers and content providers solid cause for legal action.

So that leaves the performance aspect of the question. I think this is a non-issue. As Iljitsch van Beijnum, a respected routing technologist points out, “Support for treating packets with different needs accordingly has been in the IP protocol since its inception some 25 years ago.” And he’s right. There are many, many examples of this already. Comcast and Cox both offer voice services on their network that they claim (plausibly) to be more reliable than Vonage because they do not touch other Internet networks. Yahoo! for a long time offered video streams of 700Kb/s to SBC customers and only 300 Kb/s to other customers (because they had active capacity planning and management with SBC and an aggressive joint-marketing deal to boot). Yahoo! now has similar deals with other residential services providers to get faster access to their content. This stuff is not out of the ordinary at all. I think the rest of van Beijnum’s argument about QoS and bandwidth overutilization is completely wrong, but I’ll write about that another time. SBC can clearly offer faster, higher-bandwidth, more reliable service for some Internet based services if they choose to.

So is a two-tier Internet coming? From a performance perspective, it’s already here. Any carrier can offer a “normal” quality of service (speed, latency, jitter, whatever) to everything and an “enhanced” quality of service to some special things. Clearly content providers can do the same thing. This is not new, it’s not fraudulent, and it probably doesn’t threaten the growth of the Internet. End-users will still be able to engage in all kinds of creative activities on their fast pipes with little hindrance.

But from a content perspective, Whitacre is dreaming (or I’m having a nightmare) if he thinks that SBC will successfully be able to restrict access to Google’s applications, or vonage VOIP services, or ebay’s garage sale. The market will probably not permit it (as I tried to convincingly state in this entry). And even if the SBC can use local monopoly power to enforce it, the regulators won’t allow it.

But Whitacre can’t possibly be as inane as he sounds in this quote, right? He can’t possibly be suggesting something fraudulent and in violation of regulations that would simultaneously diminish the value of the Internet service to the customer that SBC has built. Well, odds are good that he is not that inane and did not, in fact, suggest that at all, in spite of what the quote says. The context missing around the quote is that it probably refers specifically to Project LightSpeed video access–SBC’s advanced fibre-to-the-home network that is supposed to have IPTV and a bunch of other neat stuff on it. If that’s what he meant, then the argument of restricting access is analogous to satellite companies not offering Google a free channel–it’s obvious and uninteresting. It’ s a special case of the “premium services aren’t free” mentioned above.

Although we must remain ever-vigilant, for the moment we can relax. The Internet is safe for another day.

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