ISPCON attendees said that David Isenberg's arguments about net neutrality ignore the reality of how regular sized ISPs buy and sell connectivity.

by Alex Goldman ISP-Planet Managing Editor [May 31, 2006]

When laws are poorly written, they can put ISPs at risk. Laws written to protect individuals against monopolies can instead be used by those monopolies to restrict the very competition they were meant to protect.

Donny Smith of Jaguar Communications did not feel he could summarize his objections to the keynote speech of David Isenberg in a single question, but after a few minutes, as the hall cleared, he knew where to begin.

"Have you ever gotten transport for free?" he asked other ISP owners. Nobody present had.

The exclusive club of top tier ISPs may peer traffic within its exclusive membership for free, but the majority of the ISPs and CLECs in the U.S. pay to connect their traffic to the large networks, even if they are facilities-based ISPs, CLECs, or WISPs.

Smith's point was that bandwidth has a price. The telcos must either restrict access or charge a usage based fee. In order to avoid the latter, they will need to do the former.

Smith added that rights of way, though public, also carry a stiff price tag, even though some neutrality advocates assume that they are given away for free.

Facts obscured by politics
This fact is, unfortunately, caught up in the net neutrality debate. Those on the neutrality side argue that bandwidth is virtually free, while the telcos would perhaps like to charge the cost of each DSLAM to every user connected to that DSLAM in order to determine the amount of money users should pay them in order to justify investment.

Telco lobbyists recently made headlines with the claim that internet video could bring down the internet. Video will not bring down the backbone, but it could clog subscribers' connections. ISPs in the U.S. are not, generally, building high bandwidth connections to households.

But the lobbyists' real fear is that internet video could destroy their revenue model. Whereas European customers in some nations pay usage pricing (see European ISPs Meter Broadband—Should We?), U.S. customers have come to expect to avoid usage pricing.

When an ISP meters usage, it faces to unpalatable options when a user reaches their limit. It can either cut off service until the user refills their meter, or it can present the bill later, perhaps giving the user a nasty surprise.

Martin Geddes recently argued (see Skeptical About Net Neutrality) that the net neutrality fight could be avoided, and that, instead, advocates should adopt regulation clarifying pricing and billing.

However, the FCC's Truth in Billing regulation is notable for its failure to actually enable customers to understand their phone bills. Smith told us that his offerings tend to have a headline price that's higher than the Bell's, but an actual price that's lower, because his headline price lacks only sales tax (and local tax, where it applies). He can offer telco-style pricing, but, where possible, prefers not to.

As to Internet2, Smith said he could obtain a T-1 from it for several thousand dollars (before transport). We looked on the Internet2 website, and were unable to find even a suggestion that anyone could obtain commercial access to the network, at any price.

Just the facts, Jack
Isenberg believes that the technology of the future will provide a telecosm that will obviate the need for restrictions.

Those building their own facilities, CLECs building fiber networks and WISPs building wireless networks, worry that net neutrality will restrict their right to do business. Smith worries that if consumers start using multiple gigabits each per month, he will be asked to pay the bill. WISPs worry that common carriage laws will force them to open their networks to other ISPs.

Geddes' suggestion that pricing be regulated is a good one—if the regulation can be done well.

Everyone might agree on Isenberg's contention that we need time to experiment, and his admission that net neutrality is merely a stopgap, not a solution to the problem.

— End