Network management

[Commentary] The current network neutrality regulations set forth in the 2015 Open Internet Order (2015 OIO) prohibit Internet service providers (ISPs) from blocking or throttling lawful content or engaging in paid prioritization of Internet traffic. These three “bright line rules” cover a wide swath of ISP practices and are intended to promote competition and ensure quality service transmission for content providers and end users. At the same time, however, they fail to consider more nuanced issues that complicate achieving these outcomes.

Christopher Yoo, Professor of Law, Communication, and Computer and Information Science at the University of Pennsylvania Law School, and founding director of the Center for Technology, Innovation, and Competition, makes the case for one such issue in his recent work, “.” This post is the sixth in a series featuring the contents of a recent special issue of the Review of Industrial Organization, organized by the Technology Policy Institute and the University of Pennsylvania’s Center for Technology, Innovation, and Competition. Yoo argues that, contrary to the FCC’s claim in the Order, practices like zero rating can stimulate competition among infrastructure providers and edge services. He contends that zero rating should not be prohibited but rather handled on a case-by-case basis. He supports these claims with economic theory, competition theory, and a number of case studies featuring zero rating.

[Romzek is a 2017 Google Policy Fellow and Research Associate at the Technology Policy Institute. Wallsten is President and Senior Fellow at TPI]

Recently, Verizon was caught and subsequently admitted to throttling all video traffic on its network. July 25, the company is finally addressing the potential network neutrality issue. Verizon said that its actions represented “reasonable network management,” which is an exception carved out under the 2015 net neutrality rules. "Video optimization is a non-discriminatory network management practice designed to ensure a high quality customer experience for all customers accessing the shared resources of our wireless network,” a spokesperson said.

It’s pretty expected that Verizon would argue this. It said last week that its video throttling was a matter of “network testing” that would be “completed shortly,” and speeds since appear to have returned to normal. The trouble is, the order is a little vague on what constitutes “reasonable network management,” since the commission assumed it might take many different forms. But it has a handful of guidelines of what might and might not violate the exception. One important limitation: the practice must be “primarily motivated by a technical network management justification rather than other business justifications.”

T-Mobile said a new report from Ookla indicates its LTE network continues to provide the fastest average download speeds among major US wireless carriers. And the carrier made a point of noting that Verizon's and AT&T's networks have slowed since the bigger carriers have jumped aboard the unlimited bandwagon. T-Mobile CTO Neville Ray claimed in a blog post that fresh Ookla data “based on millions of real-world customer experiences” using the Speedtest app shows that T-Mobile’s network ranked first in speed and LTE availability.

An Ookla representative said that the data has yet to be published but that Ookla reviewed T-Mobile’s claim before Ray’s post was published. “The real news is how dramatically both AT&T and Verizon’s networks have caved since making unlimited available to their customers—all while T-Mobile’s network has continued to soar,” Ray wrote before referring to a chart T-Mobile created based on the data. “That chart? That’s what it looks like when carriers jump into unlimited without doing the hard work to make sure their networks are ready. In that chart, you can see that Verizon has plunged all the way down to third place behind AT&T on network speed. That’s just in the first full quarter since offering unlimited.”

This study evaluates the estimated impact of the Federal Communications Commission’s recent efforts to remove barriers to investment into next-generation wireless and wireline broadband networks, and thereby to accelerate the transition from legacy copper networks to next-generation services.

We estimate that these proposed changes could have a significant impact not only on new wireless and wireline broadband infrastructure investment, but could also positively impact job creation, economic output and consumer welfare. Our models forecast that with these new rules in place, up to an incremental 26.7 million premises would become economical to serve with next generation networks, driving up to $45.3 billion in capital investment. This investment would be made by incumbent service providers across the country and is expected to take place over at least five years.