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May 21, 2014

Net Neutrality and the AT&T, DIRECTV Merger

The battle over Net Neutrality seems charged with skirmishes over content and not technology.  Many of the discussions miss the issue of end-to-end communication and the goal of the Internet (a prime example being tech writer Stacey Higginbotham’s concern that Comcast would prioritize their own content over GigaOm’s content). The Internet is designed to deal with congestion, with the point of best-effort transmission requirement being to be tolerant of constraints. To be better than best-effort, companies such as Amazon, Apple and Google have deployed data centers that ensure their traffic enjoys better-than-best-effort experiences, which is, in effect, the purpose of a content delivery network.

(By the way, on Thursday, May 22, at 11 a.m. [EDT], I will be participating in a discussion on the Net Neutrality order, and you are invited you to join in. Click HERE to reserve your spot; it’s free.)

What is the issue, if the last mile provides the ability to deliver services that resemble the CDN networks’ capability? To date the discussion has been primarily about video, and specifically content programming. Stacey’s concern about the GigaOm website is hypothetical, however, considering that GigaOm is not a video-intensive experience.

The merger of DIRECTV with AT&T brings the point further home. DIRECTV is a satellite service that has negotiated for content to be delivered to its subscribers via a bundled package with some on-demand additions. The system was designed to support a subscriber base without degradation of services. I doubt, however, that anyone would suggest that DIRECTV has an obligation to make YouTube available on its service.

The direct relationship of content and transmission is well understood. Now, though, let’s go back to the wireline side of the business. Before they switched to digital systems, cable operators had a head-end that would look very much like the satellite service. Today, although they have a digital system that includes the Internet, their business models have changed little with regard to content. In fact, we can say they’re somewhat behind, as many of the on-demand services already offer the equivalent on the Internet. Is the battle then over stored services, or over broadcast services? If it is about broadcast services, then a network sizing to capacity makes sense, and the carrier has the right to look for the capacity at the head-end to match the demand. If the battle is over stored services, though, then the content delivery has an obligation to figure out what is needed to get through the packet network, be it compression techniques and/or local data caching.   

Simply put, there is a difference between broadcasting and stored services. If you want to say the Internet is evolving to be a broadcast media, then the question should not be about carriers but about engineering packet networks supporting delivery of broadcast video. The suggestion that all packets are the same has been the contention, but in reality that is not the case. The Internet routes on a best-effort basis, and though you can create services that improve best effort, the delivery is balanced.  

So what is the concern that Net Neutrality advocates should be looking for? The primary cause for concern would be data suppression. Prioritizing packets, however, does not indicate that best-effort is deliberately thwarted. No, what should be of concern is a just and reasonable delivery method for packets. Whatever packet prioritization Comcast receives, it should be able to offer to anyone else. Thus, at the end of the day I believe that connectivity to “head-end” is the issue and not the last mile.

The AT&T / DIRECTV merger will undoubtedly be scrutinized and again monopoly claims will be made. This is a merger, however that should be allowed to occur, one that will certainly demonstrate that many in the Net Neutrality camp do not make the distinctions necessary to come up with a policy that is logical and enforceable.


Edited by Rory J. Thompson


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