Net Neutrality Negates Innovation

By TMCnet Special Guest
Susie Riley, Chief Marketing Officer, Tekelec
  |  November 01, 2010

This article originally appeared in the November 2010 issue of NGN.

The net neutrality debate needs to return to its virtuous origins: delivering the best Internet experience for consumers. Instead, today’s discussion often centers around an academic exercise about the hypothetical scenarios communications service providers could impose on subscribers. The latter approach ignores the economics of good business and Internet innovation, which ultimately are in consumers’ best interests.

 The Evil Operator Myth

As we said in comments to the Federal Communications Commission, our experiences with service providers do not support the notion that they “are intent on nefarious practices based on the exercise of market power over the market for broadband Internet access or the editorial control of content.”

Although technologies can be used for such purposes theoretically, the majority of the focus in the operators’ networks has centered around improving the user experience and service delivery for the overall set of subscribers by actively managing the network resources. 

Service providers strive to attract and retain subscribers, while of course making a profit, so they can further innovate, create new services, and improve their networks. Assumptions to the contrary are unfounded in our experience and make no sense to growing operators’ businesses.

Neutrality Stifles Innovation & Quality

The premise of net neutrality is noble and has good intentions: that all bits should be treated the same, that all should have access to anything on the Internet, and operators should not have any control or say into what consumers can or cannot do. The consequence of restrictive laws, however, could have some severe unintended consequences. The fact is that non-discrimination of traffic would thwart Internet progress, degrade service, and leave operators incapable of meeting future broadband needs. The quality of subscribers’ broadband experiences would be at the mercy of the state of network congestion, and a small minority of subscribers who use the majority of network resources could make service unacceptable for the remaining majority. 

Looking ahead, beneficial services and business models may never be pursued because net neutrality could make them illegal. For example, net neutrality could negatively impact the ability for the following types of services to be ever realized:

·         offering a tier that enables subscribers to view their video content in high definition;

·         offering a tier that enables a parent to block adult content from their child’s online surfing or mobile phone;

·         an ability to momentarily accelerate a download of an important file or movie before a long plane or car ride;

·         an airline offering business and first class passengers free roaming minutes or megabytes for select destinations;

·         an online backup paying for a high-bandwidth upstream data channel for its subscribers to differentiate its service from that of its competitors; or

·         a shipping carrier sharing temperature and other sensor data into wireless-enabled shipping containers with varying levels of latency.

The long-term consequence is that we could be stuck with the status quo – or worse – without giving subscribers new choices or better services. Do we really think that today’s service offerings, and today’s 3G and FiOS (News - Alert) networks, are the best the Internet can ever offer? 

 Re-Focus on the Consumer

By getting to the essence of the original net neutrality goal – what’s best for consumers – both sides can find middle ground. 

We believe that the complexities of managing Internet traffic require operators to have a foundation of differentiating traffic on the basis of quality of service, bandwidth allocation, application types, and other criteria. This also enables consumers to benefit from the inevitable evolution of Internet services and content, understanding that what’s new today will be commonplace in the near future and require traffic adjustments.

At the same time, we agree that transparency is important. Consumers need to know what they’re buying and what the terms and conditions of their agreements mean for broadband speed, cost and availability. Just as service providers have a duty to maximize their networks, they also have a duty to inform consumers about how their approach will affect subscriber experiences.

We believe that regulatory changes should be tailored narrowly to non-discrimination regulations that preclude particularly harmful practices, such as censorship (unless requested by subscribers, such as parental controls) or the provision of anti-competitive favoritism by operators with third parties.

Broad traffic discrimination or service categorization will make consumers suffer and will push the U.S. behind other nations for technological changes and innovation. The result would be inefficient use of scarce resources and a delayed pace of development for the next generation of wireless services for consumers.

Susie Kim Riley (News - Alert) is chief marketing officer of Tekelec ( ). She joined the company from Tekelec’s May 2010 acquisition of Camiant (News - Alert), where she was founder and CTO.

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Edited by Stefania Viscusi