This article originally appeared in the October 2010 issue of INTERNET TELEPHONY

U.S. local access and middle mile communications are a monopoly or, at best, a duopoly.  Clearly some regulation is appropriate. But network neutrality is a poor substitute for the rights we had throughout most of the 20^th century and it’s a poor match for what VoIP needs.

Network neutrality is about allowing any application to run over an Internet connection.  It mandates open access via an undifferentiated IP connection to the Internet – a layer 3 connection.  Until the late 1990s, we had open access to lower layer connections (layer 2 and even lower) at regulated rates of return; for example, T1 lines and even bare copper alarm circuits.

Which layer is important because open access permits innovation. The Internet itself could not have emerged without open access to lower layer facilities like T1 and modems on voice circuits. But by fighting for network neutrality, we’re ceding access to lower layers, effectively giving up on future innovation at those layers. Yes, T1 lines are still available. But with today’s unregulated monopolies, T1 pricing remains tied to the early 1990s cost of voice circuits, despite 15 years of innovation and Moore’s Law progress.

Internet telephony benefits from lower layer access because we benefit from priorities.  Within the enterprise, we use Ethernet priorities or DiffServ to give priority to VoIP traffic. Internet access services don’t support priority, so we purchase two separate Internet access links, or we use an Internet access link plus a SIP trunk, or we contract with a CLEC that leases a T1 line on which it can prioritize voice over Web browsing.  Network neutrality doesn’t help VoIP because it only applies to undifferentiated layer 3.  We need a market where there is open access (at reasonable rates) via layer 2 or below. Then we’d have options for priority on access circuits, and we’d see competing carriers offering services we could use.

Of course open access at layer 2 is exactly what we had in law and in regulation in the U.S. for most of the 20^th century. It came in the form of common carriage and regulated rates of return, and it applied to T1 trunks and to voice telephony. Today, many countries mandate open access to ADSL lines at layer 2. In each case, a vibrant market has evolved with many ISPs offering a variety of layer 3 services. The result is lower costs for Internet connectivity and, when other regulatory issues don’t intervene, lower costs for VoIP.

There is a real value in fostering innovation at as many levels as possible. But network neutrality means ceding hope for innovation below layer 3. Let’s not give that up.