Anxiety over net neutrality grips SuperComm

As he took the stage Thursday morning to deliver his keynote address at the Supercomm convention, AT&T Operations CEO John Stankey said he felt like he was at a "funeral" for the broadband industry.

The reason for this gloomy assessment was today's unanimous vote by the FCC to start a rulemaking process that could result in a network neutrality rules being codified into law."

"I feel like something sad is going to happen at the FCC today," he said glumly.

Although most companies at this year's Supercomm did not offer such apocalyptic assessments, they did express anxiety or reservations about how net neutrality could impact their businesses. The big worry from the ISPs' perspective is that the FCC is considering rules that would bar carriers from favoring certain types of content or applications over others or from degrading traffic of Internet companies that offer services similar to those of the carriers."

[ FAQ: What the FCC's net neutrality vote is all about ]

The reason that many carriers have come out in opposition to these proposed regulations is that they're worried that the rules will relegate them to the status of "dumb pipes" that are unable to effectively make money on value-added services. Additionally they claim that net neutrality regulations will restrict their abilities to effectively manage their networks. Major Internet companies such as Google, Facebook and eBay, meanwhile, have strongly supported net neutrality principles because they fear that incumbent carriers will favor their own content over their competitors' or that they'll create tiered services that will deliver some content at high speeds at the expense of other content.

Since Supercomm is an event tailored specifically for ISPs and broadband equipment vendors, it's unsurprising that some high-profile speakers and vendors expressed concerns about the FCC's proposals. Verizon Communications CEO Ivan Seidenberg, whose company today released a joint statement with Google offering qualified support for some open Internet initiatives, said that the push for net neutrality was due to a fundamental misunderstanding on the nature of the Internet. Seidenberg particularly attacked the idea that carriers should be considered "dumb pipes" whose sole job is to neutrally push traffic from content providers.

"There is a false dichotomy out there right now that network providers like Verizon and application providers like Google occupy different parts of the Internet," he said. "That is an analog idea in digital universe. It understates the role of sound network management practices and it ignores the real benefits that smart networks deliver."

Stankey pushed a similar theme during his keynote address and said that while innovation from content and application providers was important, it shouldn't overshadow the important work that carriers do in upgrading their networks to increase capacity and efficiency.

"There is an equal amount of innovation required at the physical layer, it's not just at the application layer," he said. "There are problems to be solved in infrastructure that require incredible amounts of intellectual property, research and development and capital."

But while the two major telecom companies at Supercomm expressed firm opposition to net neutrality rules, other providers and vendors took more of a nuanced approach. Ted Wietecha, a corporate communications manager at Qwest, said that his company "supports the open Internet" and that it was still watching the rule-making process "very closely."

Meanwhile Suraj Shetty, the vice president of worldwide service provider marketing for Cisco, said that while he understood content providers' concerns about telecom carriers picking winners and losers through a tiered system, he said that in his experience carriers aren't looking to degrade their competitors' traffic.

"They're worried about other companies getting preferential treatment, but that's not really what the industry's looking at," he said. "It's more that the industry wants to make sure that one type of application doesn't end up killing another type of application."

Doug Webster, Cisco's director of service provider marketing, echoed Shetty and said that carriers are generally more concerned with improving end user experience than with blocking their competitors' content. But in order to make that user experience optimal, Webster said that carriers ought to be allowed to offer tiered services.

"None of the providers we've talked to have an intention of [blocking or slowing competitors' traffic]," he said. "Mostly they're trying to figure out how to best deliver the experience that their customers are demanding. In order for a high quality video experience to work, for instance, they need a lot of network intelligence."

One reason why some vendors are taking a wait-and-see approach is that many aspects of the new proposed rules are still up in the air. For instance, FCC chairman Julius Genachowski has said  that nothing in the proposed rules would stop carriers from ensuring that "very heavy users do not crowd everyone else out" during peak traffic hours. Additionally, Genachowski has indicated that he is open to flexibility in applying net neutrality rules to carriers' managed services and to their wireless networks, acknowledging that both are significantly different from standard broadband connections.

These concessions could go a long way toward pacifying net neutrality critics such as the CTIA wireless association, which today said that it was "pleased that Chairman Genachowski and the commission acknowledge that 'wireless is different.'" The Telecom Industry Association, meanwhile, said today that it "has been a long-time supporter of access to content over the Internet... so long as such activity does not cause harm to the network" and that it was "ready to collaborate with the FCC" to "ensure that rules be crafted in a way to promote investment and innovation."

The key for most ISPs, then, will not be the vote to begin rule-making held today but the final draft of the rules that will come out next year. And despite their anxieties about how those rules might affect them, the major telecom associations are for the time being hoping to influence the rule making as it plays out.

This story, "Anxiety over net neutrality grips SuperComm" was originally published by Network World.

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