Net Neutrality Advisory Group Needs More Data, Offers ‘Tentative’ Conclusions in First Report

"There is considerable variance and experimentation in the market by ISPs,” the committee wrote on data caps, cautioning that it could only reach “tentative” conclusions. Caps “do not seem to be affecting a large number of US users now,” but “the situation may change in the future, as user habits, supplier experimentation, vendor policy, and applications all change,” the group said. The situation “yields no easy answers in general, and, at a minimum, merits further monitoring,” it said.

Lack of data makes analysis difficult, the group said. “It’s very difficult to draw conclusions about whether high end users would switch from wireline broadband providers with a lower cap to ones with a higher cap. This lack of data about even the user population, let alone their behavior in the marketplace makes it difficult to draw conclusions about the role of data caps in competition."

"It was pretty striking how the theme of the report was, ‘We don’t have a lot of information,'” said Michael Weinberg, vice president of Public Knowledge. “The FCC has been pretty uninterested up until now in actually asking questions and getting the kind of information that would help really evaluate the impact of things like data caps."

Focusing on “openness” in the mobile broadband ecosystem, the mobile broadband working group encouraged the FCC to “consider all of the interactions between different actors” -- even those not subject to the Open Internet rules. The commission should “pay attention to new trends, such as HTML5 and Wi-Fi offloading,” which could both “increase competition as they impact the mobile landscape,” the group said. “Transparency, education, and competition will all contribute to a healthy mobile broadband ecosystem.”

The advisory group drew three main conclusions from its case study of AT&T’s restriction of Apple’s FaceTime mobile videoconferencing application. “Blocking an application from some users under a certain pricing plan could stifle the vibrancy of the mobile application market,” the group said. However, “AT&T’s approach of permitting FaceTime on either Wi-Fi or within shared data plans was a logical way of managing network congestion,” it said. “Encoding video frames at lower bit rates and adapting to changing network conditions (which Skype, unlike FaceTime, was capable of doing) is central to the use of video or voice calling applications."

The specialized services subgroup, which had long struggled to define what a specialized service is (CD May 8 p3), warned that the term’s malleability could confound FCC rules. The commission exempted specialized services from its net neutrality rules, and that could pose a concern, the group said: “Broadband providers might label services as specialized services that would normally be labeled as Internet access services to evade Open Internet rules.” The group cautioned that broadband providers might also “stop expanding network capacity allocated to broadband Internet access service to allow more space for specialized services."

In contemplating future rules, the commission should consider three “high-level principles,” the group said: that its regulation not create a perverse incentive for operators to “move away from a converged IP infrastructure”; that a service not be able to “escape regulatory burden” -- or acquire a burden -- by moving to IP; and that proposals for regulation be “tested” by applying them to varying technologies used for broadband.

"The public interest would be better served if the commission -- perhaps aided by the Open Internet advisory committee -- conducted a bona fide and peer-reviewed market analysis of the broadband market, and the larger Internet sphere, rather than trying to build important public policy on the shifting sands of data-free vagaries and philosophically-driven observations and recommendations,” said former FCC Commissioner Robert McDowell, a visiting fellow at the Hudson Institute. “What is there to fear from extracting and analyzing honest and enlightening data?”

"The report seems to underscore, among other things, that our initial notions of net neutrality -- pro and con -- have understandably been proven naive in a relatively short time,” said Medley Global analyst Jeffrey Silva. “Behind the labels of net neutrality and open Internet lie a cosmos of complexities and conundrums that we've only begun to understand relative to real-world events and policy application in a dynamic internet space.” Everyone’s views are limited by what is known today, but the Internet “is in perpetual motion and constantly evolving in a way that invites disruption in the market,” Silva said. “Any policy -- light-handed or otherwise -- may end up having a short shelf-life and require periodic reassessment over the long run."

The advisory group also recommended a “voluntary open Internet labeling program” to help consumers compare services. “Many consumers are confused about how and why to choose a particular wireless service provider,” the group said. Labels could also provide access to test sites and third-party analyses, it said. The group suggested that label data, to be published on the ISP’s website, include self-reported data on upload and download speed to a consumer’s modem, as well as the average monthly price over 36 months.

"While in one sense the committee’s report seems short on specific recommendations and long on an encapsulation of different viewpoints, this is not surprising given what the co-chairs characterize right up front [as] the committee’s ‘diverse membership,'” said Free State Foundation President Randolph May. But that’s not necessarily a bad thing, he said. “Getting the divergent perspectives on the table is probably as much as can and should be expected. I would have been much more concerned if, say, the working group on data caps had suggested the FCC ought to adopt a more activist, pro-regulatory position, which it did not. I'm pleased the committee was more modest rather than more dogmatic."

"Actual data is critical,” Weinberg said. Public Knowledge has never said usage-based billing can’t be justified, but it comes down to paying close attention to what’s been happening, its motivations and its impacts, he said. But “those are things that can only be determined if you have data.” PK asked former Chairman Julius Genachowski two years ago to directly ask ISPs about data caps -- how are they set, evaluated, and what conditions would cause them to change, Weinberg said. “Even having that baseline information would be incredibly helpful to the discussion,” he said. “But the FCC has never asked those questions.”