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Comcast gets lost in the supermarket - February 14, 2008

The public policy case for allowing Comcast to throttle upstream BitTorrent traffic--as opposed to the business case spelled out in my previous post--rests on a mixture of paternalism and flawed analogies. The paternalism is supplied by Comcast itself, which argues in its 80-page filing with the FCC that without vigilant management of its network, users would be hapless prey to spammers, viruses and other digital ills:

No one can seriously question whether customers expect their service providers to protect them from spam, phishing, computer viruses and worms, Trojan horses, or denial of service attacks. Without network management, such malware could neither be identified nor arrested before inflicting huge costs on users. At the same time, customers do not want messages from friends caught by spam filters, or downloaded applications blocked by anti-virus software. Broadband service providers constantly re-evaluate their network management practices to ensure that they are using the best available technologies to deliver the quality and reliability their customers expect and deserve; Comcast monitors, evaluates, and tweaks its network on a daily basis.

It then goes on to argue that it also needs to protect the majority of its users from the predations of bandwidth-hogs like BitTorrent users:

Without network management, the success of new applications and services that are sensitive to interference caused by network congestion-- such as Joost, iChat, and Veoh -- is likely to be impaired. It is because of network management that most of the existing Internet content, application, and service providers, especially these and other “over-the-top” providers, are able to develop business models on the assumption that their applications and services will not be crowded out by congestion caused by hugely bandwidth-intensive protocols and software.
[snip]
Simply stated, there is nothing “neutral” about a network that is not managed. An unmanaged network simply means that users who make disproportionately resource-intensive demands on the network can crowd out fellow users. An unmanaged approach would adversely affect far more users than the few currently affected by commonly-used network management technologies. That is why all network providers must manage bandwidth in some manner.

Targeting those "bandwidth-intensive protocols," therefore, is not just logical but for the good of all. Such paternalism is a sure sign that there's not enough competition in a market.

Consumers ought to be able to make choices about how their networks are managed, and to shop for the supplier who best meets their choices. The fact that, as a practical matter, most consumers can't breeds exactly the sort of paternalistic attitude reflected in Comcast's comments, and more generally in monopoly service providers. In the absence of competition, some sort of countervailing force is needed to make sure consumers don't have too many choices made for them.

The flawed analogies come from ideological supporters of Comcast and are most clearly invoked by Ken Ferree, president of the Progress and Freedom Foundation think-tank in Washington and former chief of the FCC's Media Bureau:

In general, the use of some form of traffic differentiation, discrimination, or channeling is non-controversial; indeed, we take the application of these traffic management tools for granted.

For example, it would surprise or offend very few to learn that airlines charge more for seats during peak travel periods, or that subway fares are higher during rush hours. Price discrimination in these cases is an accepted mechanism for shaping demand to accommodate available system capacity. Nor are we generally put out by the fact that the supermarket offers express checkout lines for shoppers with fifteen or fewer items. It strikes us as inherently fair that light users of the checkout resources available get favored treatment so that those whose usage requires more intensive checkout services do not delay them.

Similarly, when a busy signal greets our attempt to call home on Mother’s Day we do not file a complaint at the FCC, the “singles” lift lines at ski resorts do not incite consumer riots, and early-bird specials at chain restaurants are all but de rigueur. Those who provide services to the public generally use some tool to shape demand for the benefit of all users.

He then goes on to argue that private network operators should be free to discriminate among users at they see fit, without interference from the government.

The cold reality, however, is that discrimination is the nature of network management. Whether the service provider is charging more for certain kinds of access, favoring certain traffic, or limiting the service available to any particular user, maintaining a network that can meet the access needs of the vast majority of subscribers at any given time requires some kind of demand shaping. The underlying question is: who is to decide how to best protect the network from overload and ensure the highest quality of services for the most users?

In a market system, and pretermitting Constitutional limitations, that decision is – and should be – left to the service provider. Although individual strategies or mechanisms may differ, whether it is price discrimination, traffic channeling, favored access, or temporary service denials, service providers generally have a free hand to implement a traffic management protocol that will best meet their customers’ demands. The right to make that kind of determination is fundamental to the private ownership of property.

But the government imposes limits on discrimination by private operators all the time. Few people may be put out by the fact that supermarkets offer express checkout lines to shoppers with 15 items or fewer. But no one would tolerate a store offering express service based on race or gender. Societal standards reject such discrimination and the government enforces those standards by prohibiting race or gender-based discrimination in public accommodations.

Booking a flight on the Wednesday before Thanksgiving may be harder than other times of the year, but airline tickets are sold on a first-come, first-served basis. We wouldn't accept an airline throwing fat people off the plane in order to accommodate thin people at the last minute, even if the thin people impose a smaller burden on the airline's system because of their lower weight.

No one complains to the FCC when they get a busy signal on Mother's Day. But they would if the phone company unilaterally decided some people had called their mother enough recently and were just getting in the way of light phone users.

Society sets standards all the time, and the government enforces them by regulating private operators. There's nothing philosophically different about society decided that communications networks should be open and neutral and then seeking government support for those standards.

That's the public policy question that needs to be addressed. Framing it in either apocalyptic or inapposite terms doesn't really get us closer to an answer.
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