The Federal Communication
Commission’s 2015 Open Internet
Order contains a ban on “paid
prioritization,” or agreements that allow a content provider to pay an Internet service provider for priority treatment in a “fast lane” to jump around
congestion on the Internet. I described in a May 2017 FSF Perspectives how paid prioritization arrangements
are very common in many markets and usually lead to pro-consumer benefits.
While the Open Internet Order prohibits Internet
Service Providers (ISPs) from charging for prioritization, other FCC policies
encourage prioritization arrangements, so long as other government agencies are
the ones given access to the fast lane. There is a lesson here for the
government that it ought to recognize with regard to private sector
prioritization arrangements on the Internet.
Prioritization
arrangements can have benefits for consumers and the general public, and it is
entirely appropriate for the FCC to provide for favorable access for government
emergency and disaster responders. But the same logic applies to at least some private
services on the Internet, which are likely to be delayed or deterred so long as
the rigid prohibition against paid prioritization remains in place.
The FCC majority in the
2015 Open Internet Order argued that having a fast lane for those willing to pay for
it would place their competitors in the “slow” lane at a disadvantage.
Moreover, they asserted that without this ban, ISPs would have the incentive to
make the slow lane even less attractive by avoiding investing in it, so that
firms in the slow lane would eventually be forced to pay to move to the fast lane.
Thus, the 2015 FCC adopted the following prohibition:
No Paid Prioritization.
Paid prioritization occurs when a broadband provider accepts payment (monetary
or otherwise) to manage its network in a way that benefits particular content,
applications, services, or devices. To protect against “fast lanes,” this Order
adopts a rule that establishes that:
A person engaged in the
provision of broadband Internet access service, insofar as such person is so
engaged, shall not engage in paid prioritization. “Paid prioritization” refers
to the management of a broadband provider’s network to directly or indirectly
favor some traffic over other traffic, including through use of techniques such
as traffic shaping, prioritization, resource reservation, or other forms of
preferential traffic management, either (a) in exchange for consideration
(monetary or otherwise) from a third party, or (b) to benefit an affiliated
entity.
As
then-Commissioner Ajit Pai pointed out at the time, the FCC adopted this blanket ban
on paid prioritization even though ISPs
had not adopted paid prioritization in any meaningful way. The effect on
capital investment of the 2015 order, which included the paid prioritization
ban, has been the opposite of what the 2015 FCC majority predicted, because
broadband investment is down significantly since the Open
Internet Order was implemented. Indeed, Free State Foundation Research
Associate Michael Horney has estimated that in
2015 and 2016 investment declined by $5.6 billion.
On a page titled “Priority
Telecommunications Services,” the FCC website explains how it views the importance of certain prioritization programs:
Often
times, it is necessary to either prioritize the provisioning of new
communications services or prioritize the restoration of services that have
been damaged or otherwise are not functioning. This is especially true in
disaster situations when numerous outages may occur at once or systems become
overloaded by demand. This topic introduces three major priority service
programs that have been established by the Federal government in order to
provide prioritized system access for designated users or to allow for
prioritized installation/restoration of services. The Federal government
administers these priority communications services that are provided by the
wireline and wireless telecommunications carriers and are necessary to promote
the nation's security and emergency preparedness (NS/EP) functions.
One of the three
programs described above by the FCC is the Telecommunications Service Priority (TSP)
program, which is authorized by the FCC and administered by the Department of
Homeland Security (DHS) Office of Emergency Communications. The TSP program is
a paid prioritization arrangement. According to DHS:
TSP is a fee-based program and organizations pay their
telecommunications vendor for the services. TSP set-up and recurring costs vary
depending on 1) the type of service requested (provisioning or restoration), 2)
the telecommunications vendor providing the service (e.g. AT&T,
CenturyLink, Sprint, Verizon, etc.), and 3) the geographic location requested
for the provisioning or restoration service.
Prioritization
arrangements can have benefits for consumers and the general public, and
nothing herein is intended to be criticism of the current FCC policies giving
favorable access to government emergency and disaster responders. As emergency services and public safety evolve, government
agencies may want to have even greater access to paid prioritization available to
them for government functions such as Amber alerts, severe weather
alerts, and Homeland Security warnings.
But the same logic
applies to at least some other services on the Internet, which are less likely
to be widely available so long as the rigid prohibition against paid prioritization
remains in place.
For example, telemedicine
is an emerging private application that may require prioritization in order to
become widely available and accepted as reliable. Telesurgery now allows
specialized surgeons in one location to operate on patients in completely
different locations. The emerging market for telesurgery can give patients in
small hospitals or remote areas access to highly-skilled specialists who
otherwise would not serve those areas. According to a recent medical
journal article:
The ultimate goal
of telerobotic surgery is to replicate the normal process of surgery from a
distance. The success of telesurgery (or any aspect of telemedicine for that
matter) depends largely on how faithfully and without incident remote
activities duplicate their on-site equivalents. Because of its direct impact on
surgeon performance, a frequent metric in real-time telesurgery research is
that of system delay (citations omitted).
Autonomous vehicles and interactive
e-learning are other examples of applications in their early stages of
development that require a high
level of end-to-end reliability.
Investors may be unwilling to take the risk of investing in these applications
if they cannot be assured of reliable prioritized broadband connections. The
FCC’s prohibition against charging for paid prioritization may well prevent
these services from developing, as well as other new applications that no one
is yet anticipating.
As FCC Commissioner Michael O’Rielly recently stated, “Even
ardent supporters of net neutrality recognize, as I've said before, that some
amount of traffic differentiation or ‘prioritization’ must be allowed or even
encouraged.” Moreover, to the extent
the Open Internet Order is
suppressing capital investment broadband infrastructure, that is infrastructure
that is not available for government first responder needs.
Whatever policy the FCC
adopts as part of its present proceeding, it should not be a rigid ban against paid
priority arrangements for private Internet uses, which precludes arrangements
that offer tremendous potential health, safety, and economic benefits. The
government actually authorizes priority arrangements, and recognizes their
value, in various emergency, public safety and related contexts. It should
not adopt a blanket ban on such arrangements that would prevent their
development in other contexts that would prove valuable to consumers.
Posts
