Ed Gubbins, a seasoned telecom reporter, had a piece a bit back that’s worth looking over. The story, Neutrality and municipalities, looks at the net neutrality debate with an eye toward its effect on the development of municipal broadband. Overall it’s pretty fair though it does have a pretty serious conceptual flaw. The article confuses “net neutrality” –the question of whether certain content providers should be allowed to be favored over others by the owners of the pipe that comes into your home– with “structural separation” –question of whether the owners of the pipe should be allowed to provide content at all. The current net neutrality debate was set off when ATT & BellSouth chairmen asserted a right to charge content providers like search engines (Google, Yahoo) and VOIP (net phone providers like Vonage) special fees for better-than-best-effort service. No one is suggesting that BellSouth not be allowed to sell phone service or Cox no longer sell cable! That would be structural separation. All that is being suggested for private providers is that they not be allowed to favor certain providers (including themselves) over others on the Internet side of their networks.
So setting up an implicit equivalence between the structural separation issue that’s been active in municipal debates and the newer net neutrality debate involving the phone companies is pretty profoundly unfair to municipalities since it sets up dual standards for public and private providers with the public providers seemingly being held to a radically higher standard.
In one place the author shows that he does posses an understanding of the difference between the two ways of encouraging competitive services:
…even wholesale municipal network models don’t necessitate net neutrality. It’s conceivable, at least in theory, that municipalities could seek to defray part of the cost of their broadband networks by following AT&T’s lead, charging content providers for premium use of networks. Baller acknowledged this strategy was possible but said he hadn’t heard of any municipalities discussing or considering it.
He’s right, but needs to make the contrary explicit as well: a retail model like LUS’ (and BellSouth’s and Cox’s) can still embrace the sort of net neutrality that phone companies want to kill. –If the company involved is willing to do so. The example Gubbins could have used was Lafayette. LUS has declared a policy of IP (Internet Protocol) neutrality. It declared early in the fight that it wouldn’t block ports. Packet prioritization –which is what is at stake in the net neutrality debates the phone companies have started–really doesn’t make sense in LUS’ context. Such issues only arise when local congestion makes makes providing a special “fast lane” for priviledged content noticeably faster for consumers (otherwise content providers would have no reason to pay the extra freight charge). LUS’ fiber to the home network simply won’t have the sorts of local congestion issues that make prioritization appear useful.
But now back to the article itself. The main thrust of the piece is to wonder whether the concerns raised by the phone companies” declared intent to begin charging extra to improve the speed of some products will make the municipal alternative more attractive.
The story does a good job of dealing with some of the real-world constraints on the practical application of structural separation to municipal broadband projects; after discussing the large scale, wholesale, Utopia model in Utah:
But the Utopia model isn’t for every town. One of the rare qualities that accounts for its success, Baller said, is the scale it achieved by harnessing the collective scale of 11 cities. As the network promises to ultimately reach more than 450,000 customers, service providers are confident they’ll make a profit, even if they have to split the market several ways. Some other cities that tried to replicate the wholesale network model haven’t been able to pull it off because their modest populations don’t hold the same enticement for service providers. For example, even with a population of more than 100,000, Lafayette, La., couldn’t make wholesale economics work, Baller said, nor could Bristol, Va. Both were forced to adopt retail models for their muni networks. In Grant County, Wash., where the law prohibits municipalities from offering retail service, a wholesale municipal network took on 35 service providers, which fractured the market too much to make it lucrative for them.
It’s nice to see an actual, empirically-based analysis of the real economics that are at issue in the wholesale model (even if it is unfortunately confused with network neutrality).