Net Neutrality, News International and the Future of Open Information

13 Jul

This might seem slightly left field under the circumstances but the recent shameful revelations about the practices of the News of the World – and more importantly the increasing concerns about the possible distorting influence of News International on UK public life – have led me to think again about my concerns in terms of net neutrality.  Essentially the governments decision not to act on this issue last year left me deeply troubled and in many ways recent events have only crystalised this concern (as I will discuss later in the post).  Before getting to that, however, I’d like to discuss the issues of net neutrality more generally in order to set the scene.

ISPs Are Not the Web

In the link above an article in the Telegraph asks whether the Web should be ‘treated as a utility’.  This question falls into the usual trap of shaping completely the wrong context through a lack of precision.  Whilst the ‘Web’ (as in the myriad of sites available) is obviously not a utility due to its diversity, ISPs (including telecoms, mobile and media companies) clearly should be as they provide a purely infrastructural service that’s analogous to water pipes.  As such they should recognise that they do not have a ‘relationship’ with me, they are not my ‘trusted service provider’ and I don’t want them to ‘manage my experience’ on my behalf.  More broadly, questioning whether the ‘Web is a utility’ displays a lack of precision that often clouds the debate, since access (i.e. unhindered connectivity without any kind of gate keeping for commercial purposes up to the bandwidth allowance I pay for) should be a utility whereas the Web itself is an open ecosystem rich in services that I want to evaluate and configure for myself without interference or hindrance.   They’re different – and that’s the whole point.

Increasing Interference

Essentially the issue is that internet providers are increasingly trying to act as ‘portals’ to the Web and bundle all kinds of content and services with my network connection in order to find new revenue opportunities.  The problem is that having the independence to assist me in finding things I would actually like (irrespective of commercial interests) is a business model that exists in a completely different economic sphere to that of acting as the dumb pipe that enables me to get the bandwidth I need to gain access to such content and services (i.e. relationship business models vs infrastructural business models).  As a result they provide value in totally different ways.

I expect to trust a “relationship business” to be focused on my specific interests and benefits and to recommend the best possible services irrespective of where they come from – to be trusted they have to be independent.  In a financial sense think of MoneySavingExpert.com or perhaps your GP in a more personal scenario.

Conversely I expect an “infrastructure business” to provide me with a reliable utility at the lowest possible cost and otherwise stay out of the way.  Think electricity or water suppliers who have to provide service without discrimination and where the capital requirements are huge and they need to concentrate on efficiency and economies of scale (and so don’t have time for building individual relationships).

Importantly, allowing unfettered growth of ‘vertically integrated’ providers who can mix these two – as we appear to have been doing – is a recipe for disaster.  Building an infrastructure business is generally capitally intensive, hard work and low margin – even though the business model is highly reliable and sustainable for those that succeed.  On the other hand, subverting a privileged position as a gateway to the Web in order to drive customers towards economically attractive content and services (from the provider or selected paying content partners) is substantially easier.  The future danger is that using anti-competitive practices to squeeze a captive group of consumers into increasingly walled gardens to monetise their attention will become an alternative to investment in the network (or at least a lucrative adjunct).  Furthermore if bandwidth issues continue to become proportionally worse due to an explosion in service demand unmatched by network growth these practices could slowly expand to give preference to websites and services that are commercially attractive to the provider rather than to the consumer, leading providers to charge extra for – or even entirely block – competing services.  And they’ll justify this using crazy arguments.

Crazy Infrastructure Providers

To show the absurdity of the attempts of infrastructure providers to start managing my experiences, imagine if electricity providers started to say they were going to prioritise power to Sony televisions over Tesco branded ones (because Sony shared revenue with them) or water suppliers were going to prioritise water for flushing toilets to certain bathroom brands for the same reason.  Perhaps the electricity company would use the excuse that Tesco had contributed to a rise in television sales by providing low cost sets and were therefore acting as ‘parasites’ on ‘their’ network by creating a demand for electricity without paying anything towards the cost of providing it.  And what if electricity providers had the gall to use what should be a source of shame – i.e. the disgraceful fact that they were so incompetent at managing a utility that there had to be rationing and brownouts – to justify shaping such rationing in a way which maximised their own profits – by only allowing power to the televisions manufactured by ‘carefully selected partners’ – rather than the benefits to consumers.  To match the gall of ISPs and mobile providers, however, I guess they would have to go even further and insist that customers take expensive television sets with restricted channel availability as a condition of getting an electricity service at all.

Breaking the Chain

The underlying reality is that a utility provider should have no role in determining the use to which consumers put the commodity they provide – and allowing them to mess with it (at best) only leads to anti-consumer behaviour and a suppression of innovation.  This is the core of the argument about net neutrality – organisations which are effectively utilities should have no right to influence what we do with the capacity we pay for; any other BS about bandwidth or different types of content is a red herring.  While people who use more bandwidth should undoubtedly have to pay more (perhaps a lot more to fairly reflect usage) this has nothing to do with net neutrality – the core argument is that having paid for their bandwidth they should be allowed equal access to all services on the Web without discrimination and not be forced – through various obvious and subtle means – to use only those services that meet with the approval of – or maximise the profits of – their infrastructure provider.  Rather than concentrating on taking the easy option and prioritising profitable content or restricting our choices to bolster their revenue sheets, such companies should be focusing all of their attention on providing their actual utility value proposition and overcoming the issues that they claim force shaping in the first place (i.e. creating sufficient capacity).  At the very time that we need a new digital platform for wealth creation that accelerates knowledge flows and replaces declining and vanished industries, it is ridiculous that we stand by and watch telecoms companies, ISPs and mobile providers preparing to test anti-competitive behaviours for short term gain rather than condemning, cajoling and engaging them in dialogue about how we can work together to help them provide the competitive infrastructure the country desperately needs to generate wealth.

In this context I believe we need a definitive commitment to net neutrality from the government backed by codes of practice to ensure separation of these different businesses.  Essentially companies should be forced to split their businesses into wholly independent organisations concentrating on infrastructure and relationships (i.e. content aggregation) separately to protect consumers; in essence I should be able to subscribe to the best infrastructure provider to get my bandwidth and then when online – and via the open Web – register for the ‘relationship’ or ‘content’ services of BT / Sky / Vodafone / Whoever if I deem that they deliver sufficiently attractive services in these business types.  To be successful such services would need to bring content of specific interest to my attention or else I would be more likely to go to other relationship and content providers.  The essential point is that I should be able to choose these things independently should I _want_ a trusted provider to give me a portal that helps me to navigate the Web or find interesting content (in my case I find them all worthless and annoying).  I shouldn’t have them a) forced upon me as a by-product of needing something else (i.e. a connection) and b) prioritised over things that might actually be better for me.

The Bigger Picture

Bringing this all the way back to my original point, many people question the extent to which net neutrality is really an issue for equal opportunities, democratic society and truly open markets.

I genuinely believe that there is a serious issue at stake here.  Moreover it is one that could have a devastating effect on the future openness of society, the competitiveness of our businesses and the long term health of our nation.

Whilst it may be true that companies like BT, Sky or Virgin would always give equal promotion to their competitors’ content and services (and make it easy for us to access whatever we decided was best without penalty or hindrance) we can never be too vigilant in protecting our rights; should gate keepers start to distort our access – and the incentives to do so could be high in a non-separated model – they would have huge power to shape perception within their ecosystem, subtly denying us basic freedoms to choose and turning us into passive consumers of the most lucrative commercially chosen messages and content.  If we use traditional media as an historical precedent, it is even feasible that such companies could prioritise the political content and messages of the party whose policies best reflect the interests of the provider.  While this may sound alarmist the increasing revelations about News International are demonstrating the distorting influence that powerful media groups can have on decision making by politicians due to their overwhelming ability to influence the opinions of large sections of the population.  In the non-digital sphere, however, people can at least choose other newspapers, radio stations or television channels.  What happens, though, when all of your media is delivered electronically through a single pipe by a provider with an economic interest in driving you towards particular content and services?  At that point it would be like having a road with high embankments that only allowed you to walk to shops that sold a particular newspaper or at least made it very hard for you to do otherwise without considerable effort and expense.  When you consider the oft quoted ‘tyranny of the default’ it is easy to see that even small barriers can make a big difference in shaping people’s behaviours – and the dangers of exclusion and exploitation are particularly prevalent for the most vulnerable.

People who are not technology savvy or do not have the money or knowledge to realise they are being manipulated or to overcome the subtle blocks put up by providers’ “content appliances” and traffic shaping practices will be easy targets, leading to an unacceptable imbalance of power between large providers and a large constituency of consumers.  In the current climate are we really sure that business ethics are a sufficient protection against such potential abuse?

At the same time whilst often positioned as some kind of ‘liberal’ or ‘anti-market’ cause the reality is that net neutrality is a deeply market-oriented concept, creating a level playing field for businesses, a platform for innovation and a barrier to uncompetitive behaviour by large incumbent organisations who could use their power to distort the market through cross-subsidy or outright prioritisation of their other services.  In this sense net neutrality provides powerful protection against market as well as societal manipulation.

Taking Action

There is currently a real danger that we will see increasing fragmentation of the Web and a growth of walled gardens driven by commercial interests (e.g. across electronics companies, social networks, content providers and telecoms companies), cutting people off from other areas of the internet and serving the needs of particular organisations rather than those of consumers and society.  The strength and the power of the Web lies in its diversity and its essentially democratic nature; anyone can create content and services and be on an equal footing with anyone else, creating a platform that supports free speech, debate and wealth creation.  Failing to protect the principles of equal access and guard against the potential manipulation of access by service providers could destroy one of the most vital and liberating platforms for learning, collaboration and wealth creation the world has ever seen.

The current events surrounding News International provide us with an opportunity to step back and think deeply about the ways in which we can foster an open and fair society; my belief is that we should extend this thinking into the realm of the digital world that we will increasingly be inhabiting and not simply stop at dealing with a single newspaper, media group or industry.  If the opportunity has existed for powerful media groups to distort public debate in the age of ‘old media’ then how much greater are the opportunities for them to do so in a digital age where information flow is increasingly consolidated into a single pipe?

Effectively separating commercial interests between the provision of access and the provision of content seems to me a key weapon in creating an open society and market.  To do otherwise merely provides the platforms and incentives within which vertically integrated media companies can pursue the subversion of access as a feasible and attractive strategy.

Net neutrality for me is a core principle in securing freedoms – both social and commercial – by forcing infrastructure providers to respect this split as we increasingly move beyond traditional media and into the digital age.  To stand aside and allow people to prioritise content, manipulate behaviour and disrupt the business of competitors – by not holding ISPs to their infrastructural responsibilities and allowing vertical integration across business types – is a dangerous game that risks the benefits of the Web for individuals, businesses and ultimately society.

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