The future of media and net neutrality?

The discussion of net neutrality in the US telco landscape has become highly polemicized in recent years.

So much so that it’s now almost impossible to discuss the technical implications and limitations of net neutrality without touching on fundamentally thorny issues of political debate.

While it is easy to bring in wider discussions of basic rights or censorship it should be noted that the concept of net neutrality is primarily concerned with limiting or controlling how internet service providers (ISPs) can manage, monetize and develop their networks. Understandably, many operators in the media industry have been watching the debate in the US very closely.

One internet, many uses

As a society, we’re putting the internet, and the data we carry over it, to a huge variety of different uses. Countless articles online will tell you of the ‘proliferation of data’ due to the Internet of Things, 4K video, machine learning and many other bleeding-edge innovations. Internet traffic is rising at an annual rate of 26%.

As a result of this growth, ISPs around the world should be investing heavily in improving the infrastructure responsible for meeting this demand and delivering the next wave of technological innovation. Video content alone is forecast to be 82% of Internet traffic by 2021.

The requirements of a network capable of delivering an early bulletin board or email service is fundamentally different to one dedicated to delivering live video streams. The fact we can currently even consider doing this over the same internet is a testament to the highly effective architecture of the net and the collaborative, open work that continues to be done by organizations such as the Internet Engineering Task Force (IETF).

This is the result of incredibly innovative engineering and service delivery operating at global scale. But there’s no reason to believe that these requirements won’t continue to evolve in the future. The internet’s reliance on overcapacity to ensure a consistent quality of service, is likely to be unsustainable and expensive in the long run.

The opponents of net neutrality claim innovation is being stifled by the requirement that all service providers to deliver a “lowest common denominator” internet. They argue that ISPs need an incentive, and investment, to upgrade their network infrastructure and provide valuable differentiated services catered specifically for the needs of different providers

The myth of a neutral net

The truth is that net neutrality is something of a myth from a technical perspective. The internet is already a two-tier race for those who have the money.

Lots of industries move data around private networks without resorting to the public internet. They are willing to pay for quality, consistency or specialty because they use it to secure a competitive advantage. This is especially true for sectors such as financial services and digital media. Broadcasters historically avoided carrying anything over a somewhat unreliable public internet, instead investing in private networks to deliver their service. Telcos even created a triple play business out of exploiting their own networks to deliver that same experience to the consumer.

Today, their contemporary competitors, OTT providers such as Netflix, similarly concerned about offering a consistent, quality service to their customers are investing hugely in their internet infrastructure. Cloud computing to make their operations more efficient and both globally and locally scalable, paired with content distribution networks and ‘edge’ computing – placing computing resources closer to the end user – helps to improve bitrate, reduce latency and reduce buffering on streamed video content.

These internet ‘users’ have chosen to spend money on more powerful and scalable network capabilities. This allows media operators to work across geographically diverse platforms, get closer to their consumers worldwide and use network redundancy to overcome inevitable failures. These ‘improvements’ can be conveniently categorized as network management and don’t fall foul of net neutrality because they are theoretically available to anyone, if they can pay. That net neutrality then guarantees their hard won advantage through the last mile to the consumer has more than a whiff of hypocrisy about it! The position becomes more forgivable when it is considered that that last mile is often controlled by dominant competitors.

Nevertheless, these improvements provide a clear example of market forces at work to deliver an improved value proposition and that also make the Internet work better.

An unbundled internet

When considering the rationale for investment in the internet, it’s important to note a key distinction between the internet and other public utilities. Water and electricity are essential elements of public life, but they do not operate as engines of commerce and business in the same way as the internet. Whole swathes of the global economy, not least the media and entertainment industry, have been built on or completely disrupted by the internet.

The truth of the matter is that net neutrality is a sticking plaster over an incredibly and increasingly complex value chain. A differentiated internet, underpinned by an unbundled, transparent payment/supply structure would allow the right services to be offered to the right customers at the right prices.

This is what needs to be considered when deciding on a regulatory framework for the internet. Governments and regulators should focus on ensuring the internet remains foremost a competitive platform for the economy, protecting consumers and promoting innovation.

The risks are high. Get it wrong and innovation could be snuffed out, setting the internet back by decades. Get it right and the internet could go on to become mankind’s greatest achievement.

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Clive Malcher

Clive Malcher is senior vice president, commercial at Piksel, Inc.

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