On the side of neutrality

A conflict of interest over traffic charges threatens the web's long-term potential, warns Wendy M G

If you want the internet to do something new, you build an application and make it public; you don't need permission from any authority. This "network neutrality" is what has fuelled the remarkable growth of the net. By contrast, to add a new feature to the conventional telephone network, you needed BT's permission - a situation that continues with today's mobile-phone operators. The result: the telephone network changed very little for decades.

The open model of the internet, on the other hand, has produced email, the web, instant messaging, VoIP (internet telephony), streaming audio and video, file-sharing and social networks. You don't have to like these technologies to appreciate the flexibility and innovation that the open network has brought us.

The old net of course clings to this openness with a near-ideological fervour. The argument against it, spearheaded in the US by AT&T and the cable company Comcast and in the UK by Virgin Media and Tiscali, is largely economic. If, the argument goes, these large suppliers of bandwidth are not paid to deliver audiences, or can't discriminate among types of traffic to lessen the load on their networks, what incentive is there for them to invest in upgrades?

Until recently, net neutrality was regarded as a US issue, kicked off in December 2005 when the head of AT&T told Business Week he wanted to charge companies such as Google, Yahoo! and Vonage for delivering traffic to their sites. AT&T had of course a vital interest in hobbling Vonage; as a VoIP provider, Vonage, like Skype, was selling very low-cost phone calls that directly undercut AT&T's business. What finally kicked the issue off in the UK was the advent last December of the BBC's iPlayer, which created a surge in demand from customers who wanted to watch streaming video.

Yet the claim of demand-induced poverty seems ridiculous. As a friend said, incredulously: "You're making a product that everyone loves and wants more of, yet you can't make any money selling it?"

One problem is that internet service providers, particularly bulk operators, have driven the cost of broadband down to uneconomic levels. But Virgin Media, like AT&T, has a conflict of interest, in that carrying freely accessible streaming video from the BBC and Google's YouTube is a direct threat to its cable TV business. Long term, Virgin and AT&T's positions are a violation of the principle that content owners should not be allowed to own the means of distribution.

On 8 July, the EU's new telecoms package seemed to embrace the principle of network neutrality cautiously by listing circumstances under which a national regulator might intervene. But if media and telecoms keep consolidating, these provisions won't go far enough to protect consumers' rights and freedoms.

Becky Hogge is away

This article first appeared in the 28 July 2008 issue of the New Statesman, Money rules: Why cash now counts more than class