Friday, February 18, 2011

A consumer charter for net neutrality, transparency and pricing

Internet service is one of the consumer utilities that the majority of people in wealthier countries now subscribe to. In some areas landline Internet service is a monopoly, like water, electricity or natural gas; in other areas it is a duopoly supplied by your choice of cable-TV or phone company (DSL or fiber). As such, the providers have a lot of market power. There are some factors reducing the market power: One can subscribe to satellite Internet, although this is expensive; and one can use 3G or 4G cellular service, but this has limited bandwidth and is also expensive. Regulators require some providers to share their lines on a wholesale basis, but this is not universal.

I think Internet service should be subject to more competition and the providers should be held to high standards. Consumers should know they will always benefit from net neutrality,  have fair and competitively priced services, and be able to transparently see information about all aspects of their service.

In the following I consider small business owners to also be consumers, provided their main business is not network services. By 'quality of service' I am referring to the combination of factors such as the throughput (amount of data per unit time), latency (delay in having data sent or received), and jitter (variability in that delay). By ISPs, I include not just landline, but also wireless and satellite providers, unless I state otherwise.

As a consumer of Internet service here's what I would like to see all ISPs provide:

1.  Full access to the Internet: A consumer should be able to access any server on any IP address on the Internet,  should be able to use any DNS server to resolve any valid domain, and should be able to use any protocol supported by both the server and the Internet Engineering Task Force. Exceptions to this can only be made with the consumer's explicit consent, such as to protect children from inappropriate content, to prevent accidental access to dangerous sites like those that perform phishing. Rationale: Allowing ISPs to judge the appropriateness of Internet sites gives them too much power. There are certainly dangerous and illegal sites out there, but there are alternatives, such as security software and education measures, that are better than turning the ISP into a branch of the police.

2. Fair connection to all services. An ISP should not provide unfavourable routing or quality of service to any particular server or protocol on the Internet. It may provide faster direct connections or caching to popular services in order to speed up its overall service, but in making such arrangements with popular services, payments from services must be arranged only on a cost-recovery basis, and quality of services to other services must not be degraded. Any such arrangements with popular services must be disclosed to all consumers. Rationale: Consumers should be able to choose the services they access, rather than having to put up with what the ISP has chosen to favor.

3. Fair competition in value-added services: An ISP may not charge extra for routing Internet services of any kind to an external provider; this includes VOIP telephony, video services, tethering of one device to another (see my earlier post), and peer-to-peer services. An ISP may provide such services itself at extra cost, but if it does so, then the access to these services must also be available at no extra cost from anywhere on the Internet, and there must not be a reduction in price due to 'bundling' of more than 20% on any such service. Rationale: ISPs want to provide value added content however it is anti-competitive for them to make it faster or cheaper for consumers to choose their particular brand of content.

4. Special service quality for some doesn't affect others: A consumer may make arrangements to pay extra for particular quality of service for a particular application, such as guaranteed low latency and high bandwidth for a telemedicine application. However capacity for such services must be built and reserved separately such that quality of service for other consumers cannot decline, no matter how intensively this special service is used.

5. Throttling is transparent and kept to a minimum: An ISP may limit (throttle) the maximum bandwidth of a consumer's connection only if the following conditions are met:
a) The consumer's connection to the ISP is shared (wireless or shared cable for example);
b) The capacity of the connection is near its maximum;
c) The consumers subject to throttling are using substantially more capacity than many other users and it is occurring over an extended period of time;
d) The throttling will only be to the degree necessary and continue only as long as necessary to ensure users with lesser demands on the network can obtain good quality of service;
e) The throttling will applied gradually, not in a drastic manner (i.e. reducing maximum bandwidth by 10%, then 20%, then 30%, etc. as necessary);
f) The consumer is notified about the exact policy for throttling, and can opt to be notified whenever throttling is initiated, by methods such as email or text messaging;
g) Limitations on bandwidth are fairly applied to all of the user's connections, and protocols;
h) The consumer can at all times query the ISP to find out the exact amount of throttling currently in effect, and the amount applied at any given time over at least the last two billing cycles.
Rationale: Some people object outright to throttling, however all network connections to some extent involve sharing of a limited resource. The sum total of every customer's potential maximum throughput will always exceed the network's capacity. Therefore the ability to slow down the heaviest users in a fair way on an occasional basis is a necessary evil. Other utilities are also subject to throttling: In a drought, watering of lawns and filling of pools is limited. If a transmission line goes down, people will be asked to limit consumption or else suffer rolling blackouts. The criteria listed make throttling transparent, which it currently is not. This transparency will force ISPs to build capacity such that throttling becomes unnecessary.

6. Strictly limited packet inspection: An ISP must not perform  packet inspection other than, a) to determine the protocol and routing of the user's communication for the purposes described in this document; b) to detect malware or hacking; c) under court order. Rationale: Deep packet inspection is intrusive and is akin to reading postal mail or wiretapping of traditional phone lines. Even the postal service would open a package to help determine where to deliver it to if the mailing label fell off, and would set aside packages that seemed dangerous.

7. No data modification without opt-in: An ISP must not modify packets or protocols, such as to place advertisements on web pages or to providing search pages when a DNS lookup fails, unless prior arrangements have been made with the consumer to allow this to happen. Such modification must only take place when the consumer explicitly opts in, and the consumer must be able to easily opt out at no cost at any time. Rationale: More and more ISPs deliver search pages and ads when a DNS lookup fails. Others place ads on web pages by hijacking parts of the html. This is unacceptable without explicit consent.

8. Free choice of anti-virus or security software: If an ISP provides at no charge its own custom or branded software for virus protection and other aspects of security, it must also provide deep discounts on other brands of similar software: Rationale: This type of software doesn't just benefit the consumer, it benefits the ISP too. However, consumers get locked into the ISP's brand, which may not work on all operating systems, and may double as a tool for selling bundled value-added services. Consumers need to be free to say no to the ISP's software, without feeling that they then must pay full price for something they could have got free.

9. No bloatware: An ISP must not require or even strongly suggest to users to install software provided by the ISP, nor must it partner with hardware providers to have such 'bloatware' pre-installed.

10. Free choice of hardware: An ISP must allow and facilitate consumers to use of their own modem and wireless network hardware, and must not price their own hardware at rates that unduly coerce consumers to choose their own brand. The only exception would be hardware that damages the network.

11. Stable IP Address: An ISP should refrain, where possible, from changing a user's IP address. Where this is not possible, the consumer must be able to determine the policies for when IP addresses will be changed. Rationale: Many ISPs rotate IP addresses, to make it harder for consumers to run servers and to make it harder for attackers to attack a particular consumer. However, there are unfortunate unintended consequences: Often websites that have been attacked will blacklist a particular IP address. When this is rotated to some other unsuspecting consumer, that new consumer will be denied services. Also long-lived client connections can crash as can home routers. Finally, as the next item points out, consumers should be able to run servers.

12. Servers allowed on a limited basis: Consumers should be able to run small-scale web and other servers as long as the total bandwidth of connections to servers does not exceed 10% of the consumer's allowed bandwidth on landlines, and 5% on wireless and connections. Excess usage would be subject to throttling in the manner described above. Rationale: The days when upload capacity was minuscule are long past except in satellite connections. Allowing people to run small-scale servers will make the Internet more open, as it was intended to be, and will foster innovation.

13. Usage limits with reasonable charges for overages: Internet access may be sold with soft limits on total usage per billing cycle, only if the following is respected: a) The consumer should be able to see their history of usage, and their usage limit; c) A mechanism must be in place for informing consumers by a variety of means, including email and text messaging, when they are approaching their limit, have reached it, or are likely to reach it before the end of the billing period; c) the incremental cost of additional usage, beyond the basic amount, should be no more than 20% more costly on a per-gigabytes basis than the marginal cost of ISPs to provide service. (See my previous post for a suggested rate for landline connections as of early 2011). Rationale: Flat charges for significant amounts of usage per month allow consumers to use the service in innovative ways without constantly worrying about how much capacity they are using, but it must be possible for ISPs to recoup at a fair rate the cost of extra service for their heaviest users.

14. Short-term access at fair prices: Access to the Internet sold on a per-minute or per-hour basis, such as at WiFi hotspots or hotels, should be no more than three times more expensive, per unit time, than an equivalent service sold on a monthly basis, although a fixed account setup fee or per-computer setup charge may be levied. Rationale: Hotel or hotspot access varies from free to egregiously expensive. It varies a lot from country to country too. For example, if an ISP would provide 100 GB for  30 days service to a resident for $30, then it would seem reasonable that if the ISP sets up a hotspot, a traveller should be able to access 3GB of data over the course of a day for $3.

15. Reasonable roaming charges: Access to the Internet using 'roaming' where billing is to be to a home ISP or wireless provider should cost no more than twice what either the home ISP or the remote ISP would charge for local users. This applies to wireless data roaming, and also roaming to WiFi hotspots. Rationale: Roaming charges are obscenely expensive. They can be hundreds of times what non-roaming charges would be, even though the marginal cost of providing roaming is minimal. For a connected, intelligent society, this kind of pricing abuse has to stop.

16. Commitment to build capacity to meet excellence in service levels: It is common for ISPs, especially wireless ones, to be overwhelmed by traffic volumes, such that service becomes poor. An ISP should commit to detecting all sections of their network that regularly suffer from congestion and building capacity such that congestion in those sections is lowered within 8 months. Rationale: If customers are paying for service and experience network slowdowns, they are not getting the service they have paid for.

17. Wholesale service at reasonable prices: Landline-owning ISPs (with copper wires, fibers or cables) must sell their services on a wholesale basis so other ISPs can offer competing services. The wholesale arrangement should be such that consumers can choose the ISP they deal with to obtain service. Furthermore, the landline owner must guarantee sufficient bandwidth on segments of the network they control such that the ISPs can independently follow all the policies in the above document.  Rationale: It is required in Canada, for example, that phone companies provide the lines on a wholesale basis to other ISPs, but cable TV companies are not under any obligation. The arguments against this are that it is a disincentive for landline owners to build their landline service. However, wholesale phone, electricity and natural gas distribution is widespread, and infrastructure investments continue to be made. Wholesale phone and long distance pricing caused precipitous price reductions when introduced many years ago.

18: Transparency in all aspects of service: The methods and extent to which all of the above items are being adhered to should be prominently published on each ISP's website.

Due to the monopoly/duopoly situation, it is my expectation that some form of government regulation will always be required. Note that in the EU there are several directives providing for a form of Internet User Bill of Rights. The Ofcom regulator in the UK regulates the open Internet market much more than it is regulated in the US or Canada. The FCC in the US is trying to establish a compromise on net neutrality, but the charter I have presented above covers considerably wider ground. For more on the FCC rules, go to this website, and look at the items under the heading 12-23-10.

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