The Strange Nostalgia for Telco Regulation

Reading through dozens of posts reacting to the Verizon Communications-Google net neutrality framework, I am stuck by one thing. Amid the predictable grumbling about a Google sellout, there is a surprising, and to me disconcerting, desire for common carrier regulation of broadband services. Perhaps most over the top: A Huffington Post article by paul Loeb suggesting that common carrier regulation of voice service is the only thing that keeps Verizon from censoring our phone calls.

I hope that this fondness for old-fashioned telco regulation is coming mainly from folks too young to remember the bad old days. I’ve certainly been around long enough to remember the era of heavy-handed regulation, and it was not pretty. More important, it was anything but innovative.  I remember when a really fast internet connection–1.4 Mb/second–was a T1 and it cost somewhere north of $1,500 a month. And that was after AT&T got competition from the likes of UUnet.

Common carrier regulation of voice calls worked, to the extent that it did, because all voice calls are, in a fundamental sense, the same, and common carriage is designed for the transport of commodity goods. Everyone got the same miserable 2.4 kilohertz of bandwidth for voice–come to think of it, we still do. All the network had to do was set up a circuit to complete the call and tear it down when the call terminated.

Data packets on the internet are very different. Some, such as video, need high bandwidth and low latency. Audio can get by with less bandwidth, but is ever more sensitive to latency. Text can afford to get by with lower bandwidth and higher latency without suffering unduly. On wireline networks we can get around these management issues with a surfeit of raw bandwidth. On increasingly important wireless networks, where bandwidth will be scarce for the foreseeable future, some  measure of network management is going to be needed.

Network management necessarily means that some packets, by type of packet, not be source, be prioritized over others. Trying to marry network management with common carrier rules would produce a regulatory nightmare. The winners, ironically, would probably be Verizon and AT&T. whatever their other deficiencies, they have a deep understanding of common carrier regulation.

Why anyone would want such a world is beyond me.  Given the fact that none of the nightmare posited by the more ardent net neutrality advocates have come to pass–it’s been two years since Comcast got caught messing with BitTorrent and they were stopped not by regulators but by a public outcry–there seems to be a strong argument for keeping a light regulatory touch, and certainly not the dead hand of common carrier regulation.

P.S.–Why is anyone shocked, shocked to see Google acting in what it perceives as its self-interest. That’s what soulless corporations do, even if “don’t be evil” is their motto.

2 Responses to “The Strange Nostalgia for Telco Regulation”

  1. Tom Zeller Says:

    Wow. I really disagree with you on this one. One power of the internet is that everyone is equal. To block or degrade service to any but paying “big boys” is anathema to the Internet as an innovation engine. Traffic management for QoS is a red herring issue. That’s not the problem anyone is worried about. It’s the discrimination based on source. I think its naive to think once the power to do this is established that it won’t be abused. Furthermore, we need a Carterphone decision on cell phones which would free up innovation and put downward price pressure on the handset. Admittedly there have been lots of choices, but the number of companies that can establish a relationship with the telcos is low compared to the number who could produce compatible handsets.

    • swildstrom Says:

      Again, I have to ask: What is the problem for which common carrier regulations would be the solution? I agree that blocking or degrading service is unacceptable, but where has it happened? There have been a minuscule number of cases, most notoriously Comcast-BitTorrent and none of them are recent. If the fears of net neutrality regulation advocates come to pass, action would be required but common carrier regulation, or even the FCC’s less draconian “third way” reclassification seems a drastic step to deal with a problem whose existence is entirely speculative.

      Wireless Carterfone, as Tim Wu calls it, is a great idea in theory, but it won’t do much good until we have a lot more technical convergence of wireless networks in the U.S. Of the four major national networks in the U.S., no two use the same technologies on the same frequencies. Verizon runs CDMA/EV-DO at 800 and 1900 MHz, Sprint runs CDMA/EV-DO at 1900 MHz and WiMAX at 2500; AT&T runs GSM/EDGE/HSPA at 850 and 1900 MHz. and T-Mobile runs GSM at 1900 and HSPA at 1700 and 2100. The bottom line is that there are no handsets that can fully operate on all four networks; there is partial compatibility between Verizon and Sprint and between AT&T and T-Mo. One good first step would be prohibiting SIM locks on phones sold without carrier sunbsidies and require free unlocking when the initial contract period is over. But this would mainly make it easier and cheaper to use U.S. phones internationally; it won;t help much at home because of the technical incompatibilities. (Most GSM phones provide for 900/1800/1900 MHz voice service and 2100 MHz 3G data service for international compatibility.)

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