NETWORK NEUTRALITY: A PIPE NIGHTMARE

Shane Lunceford*

I. INTRODUCTION

In order to create legislation to solve a problem, the nature of the

problem must be understood. The problem may not have to exist, as some
would argue,1 but may only need to be foreseeable. However, creating law to
solve an undefined problem may generate new dangers. Network neutrality
is a concept with widely varying definitions,2 but perhaps it is best defined by
describing its effects. In a network neutral world, all traffic and content on
the Internet are created equal.3 As romantic as this idea sounds, it is an
oversimplification. This simplified approach has found its way into proposed
legislation,4 promising to needlessly regulate technology, rather than public
policy, if passed. This paper examines the public policy behind the net
neutrality movement, discusses scenarios in technical detail, and surveys the
landscape of proposed legislation and the current regulatory framework.
This paper demonstrates, through the use of detailed examples, the danger of
outlawing technology rather than behavior.
How does one draw a line allowing acceptable network management
practices without outlawing legitimate uses of technology? Currently,
Internet Service Providers (hereinafter “ISPs”) block unsolicited commercial
email5 meant for users of their network. This is commonly considered a
service, and very few complaints arise from the practice. In fact,
organizations, task forces, and legislation have been created to stop the

*
Shane Lunceford is a former technical instructor for Excite@Home and Liberate
Technologies, where he taught courses on cable modem, DSL, leased circuit, Video on
Demand, and interactive television technologies. Mr. Lunceford holds a J.D. from Santa
Clara University and a B.S. in Computer Science from California State University, East
Bay.
1
See Donna N. Lampert, No Sight Like Hindsight: The 1996 Act and the View Ten Years
Later 58 FED. COMM. L.J. 519, 528 (2006) (“[H]istory is rife with examples of industry
pleading that regulation is premature and later claiming reliance on no regulation when
regulators seek to step in and address abuses.”).
2
Neutrality: Background and Issues, Cong. Research Serv. (Library of Congress) Order
Code RS22444, at CRS-1 (May 16, 2006).
3
Joshua Gans, No Longer Self Evident: Is All Internet Content Created Equal?, CENTRE
FOR POLICY DEVELOPMENT, Aug. 25, 2006, http://cpd.org.au/article/no-longer-self-
evident:-all-internet-content-created-equal%3F.
4
See Internet Freedom and Nondiscrimination Act, H.R. 5417, 109th Cong. (2006);
Internet Nondiscrimination Act, S. 2360 109th Cong. (2006); Internet Freedom and
Preservation Act, S. 2917, 109th Cong. (2006).
5
Unsolicited commercial email is commonly referred to as “spam.” Hormel Foods, LLC
has taken a position on the use of the word “spam” to describe unsolicited commercial
email. SPAM.com, Privacy Policy, http://www.spam.com/legal/spam (last visited Feb. 9,
2009).
26 Baltimore Intellectual Property Law Journal [Vol. 17

proliferation of unsolicited commercial email.6 Another example of a

legitimate use of discriminatory technology is wire speed virus detection and
removal.7 Networking hardware is now capable of removing viruses and
other malicious software from email attachments and other network traffic
without slowing down the delivery of non-malicious data.8
There are several reasons for these practices. First, service providers
wish to differentiate themselves from other providers by offering a safer
network for their customers by shielding them from presumably unwanted
and malicious data.9 Second, service providers wish to increase available
bandwidth on their network by removing “useless” data from the network.10
Finally, network administrators recognize that an entire network of
computers can be affected by the actions of one computer on the network.11
Malicious code on a networked computer, such as a virus or a worm, may
slow or halt network traffic and may impose serious costs on the industry.12
The costs associated with customer service calls are enough to encourage a
network provider to implement active network management tools.13
Although network neutrality proponents claim that they are not
suggesting that spam or viruses are worthy of protecting with network
neutrality principles,14 most proposed “network neutrality” legislation would
allow users to decide what is able to pass through their network while

6
Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, 15
U.S.C. § 7701 (2004); see generally Federal Trade Commission, Spam,
http://www.ftc.gov/spam (last visited Feb. 9, 2009) (providing more information on
unsolicited commercial email and the law).
7
Juniper Networks and other providers offer switches with stateful packet inspection
technology, allowing them to protect network resources and users from spyware, viruses,
and other malware. See Juniper Networks, Intrustion Detection and Prevention (IDP),
http://www.juniper.net/products_and_services (follow “Intrusion Prevention Portfolio”
hyperlink; then follow “Intrusion Detection and Prevention (IDP)” hyperlink) (last visited
Feb. 9, 2009).
8
E.g., Soft32.com, Microsoft Malicious Software Removal Tool,
http://www.soft32.com/download_121631.html (last visited Feb. 9, 2009).
9
Comcast, for example, has offered free virus scanning, privacy, and firewall software for
its customers. Comcast, Security, http://www.comcast.net/Security/SecSuiteSSO/ (last
visited Feb. 9, 2009).
10
Comcast, Ethernet Private Line,
http://www.comcast.com/corporate/business/large/privateline.html?fss=bandwidth (last
visited Feb. 16, 2009) (showing available bandwidth and removal).
11
Comcast, Ethernet Private Line, http://business.comcast.com/ethernet/private-line.aspx
(last visited Feb. 16, 2009) (showing Comcast‟s network security features).
12
Hal Berghel, The Code Red Worm - Malicious Software Knows No Bounds, 44 COMM.
OF THE ACM 15, 19 (2001) (illustrating how the Love Bug, Code Red, and Melissa
worms cost society an estimated $12.5 billion).
13
See e.g., ASSOCIATION OF SUPPORT PROFESSIONALS, TECHNICAL SUPPORT COST RATIOS
(2004).
14
See Lisa Phifer, 2006 MSSP Survey, Part 6: Managed Anti-Spam and Content Filtering,
ISP PLANET, Dec. 22, 2006, http://www.isp-planet.com/technology/mssp/2006/
mssp6a.html.
Fall 2008] Network Neutrality 27

making legitimate uses of technology illegal.15 For example, some proposed

legislation requires that customers of ISPs be allowed to turn off virus
detection, spam removal, and other safeguards while denying network
providers the ability to prioritize traffic in order to ensure a minimum level of
service.16 This ignores the ISP‟s property interest in the network, as well as
the interest that the network provider and other users have in keeping
unwanted, and possibly dangerous, traffic to a minimum.17
Some ISPs create doubt in the minds of content providers, causing
network neutrality proponents to scramble for legislation before ISPs are
given a chance to discriminate.18 One Canadian ISP deemed Skype and other
voice over IP providers (hereinafter “VoIP”) “parasitic,” showing the
ideological split between network providers and providers of content and
services that rely on networks.19 Former SBC CEO Ed Whitacre, further
inflamed network neutrality proponents:

How do you think [Vonage, MSN, and others] are going to

get customers? Through a broadband pipe. Cable
companies have them. We have them. Now what they
would like to do is use my pipes free [sic], but I ain‟t [sic]
going to let them do that because we have spent this capital
and we have to have a return on it.20
15
See Internet Freedom and Nondiscrimination Act, H.R. 5417, 109th Cong. (2006);
Internet Nondiscrimination Act, S. 2360, 109th Cong. (2006); Internet Freedom and
Preservation Act, S. 2917, 109th Cong. (2006).
16
The Internet Nondiscrimination Act and the Internet Freedom and Preservation Act both
require service providers to provide a mechanism allowing customers the ability to
disable protective measures. See S. 2360; S. 2917. These requirements assume that the
user of a network should have more control over the allowance of malicious software,
viruses, spam, worms, and other malware then the owner of the network. See S. 2360; S.
2917.
17
See Adam D. Thierer, "Net Neutrality” Digital Discrimination of Regulatory
Gamesmanship in Cyberspace?, POLICY ANALYSIS, Jan. 12, 2004, at 17, available at
http://www.cato.org/pubs/ pas/pa507.pdf. Thierer argues that net neutrality is like telling
network owners “your networks are yours in name only, and the larger community of
Internet users – through the FCC or other regulatory bodies – will be free to set the
parameters of how your infrastructure will be used in the future.” Id.
18
Michael Geist, The Search for Net Neutrality, Dec. 18, 2005,
http://www.michaelgeist.ca/index.php?option=com_content&task=view&id=1040.
19
Id.
20
Patricia O‟Connell, At SBC, It’s All About “Scale and Scope,” BUSINESS WEEK, Nov. 7,
2005, available at
http://www.businessweek.com/print/magazine/content/05_45/b3958092.htm?chan=gl.
Although Whitacre‟s comments were easily combated by the obvious argument that
customers pay the ISP for bandwidth, while the ISP pays the network provider and the
content provider pays their own network provider (ensuring compensation for network
providers), there is a deeper issue here. If network operators are required by law to
ensure that the speed of a packet to every destination on the Internet is equal, as some
proposed legislation would have it, then does the content provider have a duty to ensure
that their bandwidth is sufficient, or can they rely on the service provider to make up the
difference? See generally H.R. 5417; S. 2360; S. 2917. While this is an extreme
28 Baltimore Intellectual Property Law Journal [Vol. 17

Whitacre‟s comment caused uproar among network neutrality proponents

and content providers, and likely caused service providers to groan.21
Meanwhile, savetheinternet.com, a strong supporter of network neutrality
legislation, would have consumers believe that the Internet as we know it
will come to a grinding halt if some sort of legislation is not passed.22

II. PUBLIC POLICY INTERESTS

To create appropriate law to govern the Internet one must first

identify the parties and their respective interests. A few key interests to
consider include:

Internet Service Providers

 Want to be paid for the use of their networks.
 Want to manage their networks according to their business plan.
 Want to provide a user experience that promotes customer retention.

Content / Application Providers

 Want their content to be available to consumers.
 Do not want to pay “extra” tolls to ISPs to ensure content delivery.
 Want to provide new technologies that make use of the growing
amount of bandwidth available to consumers.
 Want to avoid being “cut off” from consumers of their services
because the network provider has entered the market as a competitor.
 Want to keep other competing content providers from buying an
upper hand.

Consumers
 Want access to all legal websites and other services available via the
Internet.
 Want to use cutting edge network based applications, regardless of
source.
 Want to be able to connect devices to the Internet to enhance their
Internet experience.

argument, it shows that the proposed legislation is drafted with the interest of only one
party in mind. Id. Also consider the fact that all current proposed legislation requires
that all content providers are given the same treatment as affiliates. Id. This may mean
that ISPs which have content stored on their network have to provide space for other
content providers to store content. If this is the case, what is the point of being an
affiliate?
21
Arshad Mohammad, SBC Head Ignites Debate, WASH. POST, Nov. 4, 2005, at D01.
22
Save the Internet.com, Frequently Asked Questions, http://www.savetheinternet.com/=
faq (last visited Feb. 12, 2009).
Fall 2008] Network Neutrality 29

Because consumers have failed to voice a strong opinion, leaving well

enough alone, others have been able to speak, supposedly, on their behalf.
Both sides, after all, have claimed to be the one giving the consumers what
they want. But, the true interests of the consumer are secondary to those
funding the fight, since most of the factors for content and service providers
are driven by money. Phrases like “net neutrality” tend to suggest to
consumers that the debate is about their ability to have “unfettered access” to
the websites they love.23 Liberal use of the words “discrimination” and
“freedom” are also used to set the semantic stage.24 As Adam Thierer stated,
“sometimes the word „discrimination‟ gets thrown around in a very cavalier
manner by parties seeking to enlist the support of the government in a dispute
in which it doesn‟t belong.”25

III. INTERNET TRAFFIC

To determine what is in the best interest of public policy, those

considering legislation in the Internet space need to understand the effects of
the legislation. This requires a firm understanding of basic Internet
architecture.
The Internet is a global network of networks.26 Many people view
the Internet as a destination which is accessed through a pathway provided
by an ISP.27 However, the Internet is more like a series of roads and
highways, both public and private, which are connected to become part of the
same system. If a person owns a piece of land, he may create a private road
system; however his private land is not part of the greater system until his
private road system is connected to the public road system. Once the two are
connected, they are part of the same larger transportation system. Any point
on the system may be both a source and a destination for traffic. Although
this analogy is not perfect, it illustrates that the Internet itself is not a
destination, but rather, an infrastructure that facilitates interconnection
between destinations.
Private home networks, networks connecting machines at businesses,
and content provider networks, such as Yahoo!‟s network, are examples of
networks that benefit from interconnection.28 Until they are interconnected,
these networks are only capable of sending requests for information within

23
See Posting of amacd to http://news.zdnet.com/2100-9588_22-
6081882.htmlhttp://news.zdnet.com/5208-9588-
0.html?forumID=1&threadID=21892&messageID=416797&start=-1 (June 6, 2006)
(discussing the “propagandist framing of terms such as „net neutrality‟ and „death tax‟.”).
24
See Thierer, supra note 17, at 2.
25
Id.
26
See Jeff Tyson, How Stuff Works, How the Internet Infrastructure Works,
http://www.howstuffworks.com/internet-infrastructure.htm/printable (last visited Feb. 12,
2009).
27
Id.
28
Id.
30 Baltimore Intellectual Property Law Journal [Vol. 17

their own respective local networks.29 Likewise, they are only capable of
receiving and honoring requests that originate from their own respective
local networks.30 If these networks decide to interconnect with one another,
information may be shared between them, subject to the will of each private
network operator.31
The Internet consists of many such networks that are interconnected,
but the means of interconnection is less direct than, for example, a few
neighbors deciding to run cables out of their windows to the business or
residence next door. Broadband ISPs build networks capable of handling
extremely large amounts of data, and provide access to their networks for a
price. These service providers may in turn buy access to other larger
networks, known as Tier 1 ISPs.32 Tier 1 ISPs, such as AT&T, Verizon
Business, and Level 3, interconnect with one another via private peering or
Network Access Points (NAPs), also known as Internet Exchanges (IXs).33
Private peering and IXs are spread throughout the world, but the nature of
these points, exchanging traffic between competing Tier 1 providers, makes
them the logical core of the Internet, if there is one.34
Everyone who accesses the Internet, which essentially makes them a
part of the Internet, is connected at least indirectly to a Tier 1 ISP. 35 For
example, a customer using Comcast High Speed Internet via a cable modem
may connect to the Comcast network, which, in turn, may connect to the
AT&T network as a Tier 1 provider. Yahoo!, on the other hand, may
connect directly to Level 3, a Tier 1 ISP. Therefore, a cable modem user that
wishes to access content residing on Yahoo!‟s network, such as world news
or web-based email, may connect to the Comcast network. The Comcast
network would connect to AT&T‟s network; AT&T‟s network would
connect to the Level 3 network via private peering or IXs; and the Level 3

29
Id.
30
Id.
31
Id.
32
See Rob Frieden, Revenge of the Bellheads: How the Netheads Lost Control of the
Internet (Oct. 2001) (working paper, Pa State Univ. Coll of Communications and
Dickinson Sch. of Law), available at http://ssrn.com/abstract=290121. Currently, most
Internet traffic in the U.S. travels through private peering arrangements, since the fall of
public Network Access Points (NAPs), such as Metropolitan Area Ethernet (MAE-East),
and the Sprint NAP. Id. This market driven traffic exchanging has allowed broadband
ISPs to keep up with the bandwidth demands of packet-hungry applications such as
video, VoIP, and file sharing technology. Id. Several years ago, high speeds were
impossible outside of a given network due to the congestion that existed at the NAPs. Id.
The workarounds at the time were to pipe in affiliated content through a private
connection and distribute it over the ISP‟s network. Id.
33
See O. Heckmann, et al., Optimizing Interconnection Policies, 46.1 COMPUT. NETW. 19
Mar. 31, 2004, http://www.sciencedirect.com (under “subject” select “Computer
Networks” then select Volume 46, Issue 1) (discussing peering).
34
See Tyson, supra note 26.
35
See Frieden, supra note 32.
Fall 2008] Network Neutrality 31

network would connect to Yahoo!‟s network.36 (See Fig. 1). Although

each network is likely connected to many more networks, this diagram is
simplified in order to illustrate a possible network path from a user to a
content provider.

IV. IS LEGISLATION REQUIRED?

Proponents of network neutrality say that legislation is required to

keep the Internet open and free from discrimination.37 Those proponents
suggest that neutrality is the “guiding principle that preserves the free and
open Internet.”38 There are many different opinions regarding network
neutrality, and even people on the same side of the debate often interpret the
issue quite differently from one another.39 Some proponents of network
neutrality say that, without legislation, network giants will disable or cripple
access to certain websites unless they pay a “tax.”40 These proponents also
contend that prioritizing traffic for those willing to pay for faster service will

36
Although this scenario may be accurate, it is meant to be hypothetical and is presented
with company names in order to facilitate understanding of the players involved in such a
network transaction.
37
Save The Internet.com, Frequently Asked Questions, http://www.savetheinternet.com/=
faq (last visited Feb. 12, 2009).
38
Id.
39
For example, some proponents of legislation for network neutrality principles are
convinced that packet prioritization is evil, while others feel that prioritization is fine if it
is not based on the source of the traffic. Anush Yegyazarian and Tom Spring, Should the
Internet Play Favorites?, WASH. POST, Mar. 25, 2006.
40
Save The Internet.com, supra note 37.
32 Baltimore Intellectual Property Law Journal [Vol. 17

create a “fast lane” for those with money, leaving all others to travel the
Internet on a “winding dirt road.”41 They claim that “[ISPs] want to be
Internet gatekeepers, deciding which web sites go fast or slow and which
won't load at all.”42 On the other extreme are those who claim that content
providers simply want to use broadband provider pipes without paying for
them.43 These extremes do not really represent what the network neutrality
debate is about, and simply create polarizing straw man arguments.
However, the legislation that has been proposed by some members of
Congress would indeed have the effect of making network providers
responsible for ensuring that their customers have a certain level of service
and speed to destinations on networks which they have no control over.44
The Internet Freedom Preservation Act would have required that a broadband
provider:

[E]nable any content, application, or service available via the

Internet to be offered, provided, or posted on a basis that …
is at least equivalent to the access, speed, quality of service,
and bandwidth that such broadband service provider
provides to affiliated content, applications, or services made
available via the public Internet into the network of such
broadband service provider.45

This would force ISPs to ensure that all content on the Internet is available to
users at the same speed as content provided by affiliates of the ISP. There is
no mention of a requirement for content providers to ensure that adequate
bandwidth is purchased to deliver content to the edge of the broadband
provider‟s network.
For example, if Website A, a popular high-bandwidth streaming
video site, purchased only ten percent of the bandwidth required to deliver
the content requested by its users at the speed necessary to compete with
Website B, another streaming video content provider affiliated with a
particular broadband service provider, by the language of the Internet
Freedom Preservation Act, the broadband service provider would have to
either (1) provide bandwidth to make up the difference in speed, or (2) lower
the delivery speed of affiliated content to match that of the non-affiliated
site.46 But, there is also the possibility that Website C, a different non-
affiliated site that offers streaming video, has provided more than enough

41
Id.
42
Id.
43
See O'Connell, supra note 20.
44
See Internet Freedom Preservation Act, S. 2917, 109th Cong. (2006).
45
Id. at § 12(a)(4)(B).
46
Id. at § 12(a)(4). This section is written in a way that requires broadband ISPs to actually
enable higher network transmission speeds for content providers. This goes beyond mere
neutrality, which would only require that ISPs not interfere with the priority of packets
based on source.
Fall 2008] Network Neutrality 33

bandwidth to handle the requests. If Website B was throttled back to the

same speed as Website A to comply with § (a)(4)(B), Website C would
deliver content at a higher rate of speed than the affiliated content, since §
(a)(1)47 would keep the ISP from lowering the speed of Website C to match
Websites A‟s and B‟s speed.48
However, a middle ground exists. Many in the debate, including
ISPs, seem to support the idea that ISPs should not block or slow access to
content in the name of competition. In other words, if a broadband ISP
offers its own telephone service, it should not block third party VoIP
providers. But, some network providers have done just that and have
blocked VoIP across their networks.49 This was met with swift attention
from the FCC, resulting in a consent decree and the reopening of those
ports.50
The dividing line among the middle ground seems to be
prioritization of packets,51 or traffic shaping technology. Although network
operators feel that it is within their right to manage their network in a way
that makes business sense and provides the best overall experience possible,
content providers might contend that prioritization of packets based on a
business model violates the fundamental values of the Internet.52 Others may
recognize a tighter middle ground, agreeing that prioritization schemes are
capable of enabling technologies, such as VoIP, without hurting other traffic
that is less vulnerable to packet loss, such as email and web browsing.53 In
this group, some may still believe legislation is necessary to ensure that

47
“Duty of Broadband Service Providers – With respect to any broadband service offered
to the public, each broadband service providers shall not block, interfere with,
discriminate against, impair, or degrade the ability of any person to use a broadband
service to access, use, send, post, receive, or offer any lawful content, application, or
service made available via the Internet.” Id. at § 12(a)(1).
48
Id.
49
See Michael Geist, supra note 18 (discussing the comments of Canadian ISP Videotron
and the likelihood of port blocking and discussing Canadian cable provider and
broadband ISP Shaw‟s plans to offer prioritization of VoIP traffic for a fee, possibly
leading to the waiver of that fee for Shaw voice subscribers, effectively charging users
who use a third party system).
50
See Madison River Communications, LLC, 20 F.C.C.R. 4295, 4297 (Mar. 3, 2005)
(consent decree). In Madison River, VoIP ports were disabled by an ISP, but the FCC
took swift action and started an investigation. Id. The investigation lasted less than a
month before the FCC entered into a consent decree, accepting $15,000 for its troubles
while Madison River re-opened VoIP ports. Id.
51
Info. Sciences Inst., Univ. S. Cal., Internet Protocol, DARPA Internet Program Protocol
Specification, RFC 791, Sept. 1981, available at
http://www.javvin.com/protocol/rfc791.pdf (discussing how packets are essentially
containers for data).
52
See David L. Cohen, Statement at the Federal Communications Commission Public en
banc Hearing on “Broadband Network Management Practices,” WC Doc. No. 07-52,
(Feb. 25, 2008), available at
http://www.fcc.gov/broadband_network_management/022508/cohen.pdf.
53
See Ryan Kim, FCC Hears Net Neutrality Arguments at Stanford, S.F. CHRONICLE, Apr.
18, 2008.
34 Baltimore Intellectual Property Law Journal [Vol. 17

content is only prioritized based on application and not based on the source
or destination of the traffic, i.e., content provider.

V. PEERING, PRIORITIZATION AND TRAFFIC SHAPING

Now that I have laid down the basics of Internet traffic and explored
some preliminary definitions of the problem at hand, this section will
introduce some new players and situations into the illustrations. This will
help define the core problems that network neutrality proponents seek to
address and define the actual public policy at stake.

A. Hypothetical A – Is Traffic Shaping Square?

Suppose Tier 1 Provider A54 offers a 50% discount to ISP, a

broadband ISP, on high bandwidth OC-x circuits,55 if ISP submits to Tier 1
Provider A‟s packet prioritization scheme. ISP accepts the offer and Tier 1
Provider A makes up for the price difference by creating traffic shaping
agreements with popular websites,56 which places them at the highest priority
possible. (See Fig.2)

If this occurs, competitors of the companies that are paying for

priority treatment will be concerned about losing a share of their respective

54
Common Tier 1 providers include AT&T, Verizon, and Level 3.
55
“OC” stands for Optical Carrier, and refers to the speed of a fiber-optic network
connection. Webopedia, What is OC?, http://www.webopedia.com/TERM/O/OC.html
(last visited Feb. 12, 2009).
56
Websites for companies Amazon, CNN, and YouTube are a good example.
Fall 2008] Network Neutrality 35

market for eyeballs57 that they can advertise or sell to. However, the
broadband ISP is not necessarily required to upgrade the amount of
bandwidth available to its users. The argument that any additional
bandwidth provided to users needs to be allocated evenly, or “neutrally”
among content providers lacks merit when the alternative is considered. A
broadband ISP may simply refuse to add bandwidth, keeping the pie smaller,
but still net neutral.58 An argument that customers would not stand for this
would show that there is sufficient competition in the marketplace to cause
customers to choose a different ISP.59
If traffic shaping technology is applied only to current bandwidth, as
opposed to additional bandwidth, an inequity may be seen when compared
with the current state of things. If there is so much priority traffic that only
priority traffic gets through, then the effect would be to block sites that do
not pay for priority. This is an unlikely scenario for several reasons. First,
network operators are slow to make comprehensive, sweeping changes to
their networks without purchasing the additional bandwidth to make the
change unnoticeable to customers for fear of losing customers who notice a
degradation in service.60 This makes financial sense, because the acquisition
cost of a broadband customer eats up the profit gained from that customer for
some time after acquisition.61 The cost and frustration of fielding customer
service calls related to a noticeable change in the service is also a deterrent.62
Second, speed of service has become a way to differentiate providers from
one another in today‟s broadband market.63 To keep up with the demands of
Internet users, broadband ISPs are more likely to continue upgrading and

57
“Eyeballs” is a slang term used in marketing, which represents the number of people
viewing content or advertising. Netlingo, Eyeballs, http://www.netlingo.com/dictionary.
php (follow “e” hyperlink; then follow “eyeballs” hyperlink under “start here”) (last
visited Oct. 17, 2008).
58
This argument was made when the regulation of DSL was first discussed and the
argument failed. The net neutrality argument is different, however, because the benefit of
prioritization of traffic is substantially lower for the network owner than it is for a content
provider. With DSL, there was an obvious new revenue stream (from Internet access
subscription fees) that would drive the Incumbent Local Exchange Carriers (ILECs) such
as Verizon to market anyway. Here, if there is no more money to be made, then complete
neutrality would be better for business than selective prioritization. See Kevin Fayle,
Appeals Court Rubber Stamps FCC's DSL (De)regulation, THE REGISTER, Oct. 24, 2007,
http://www.theregister.co.uk/2007/10/24/fcc_dsl_regulation_appeal_ruling/.
59
See Angele A. Gilroy, Net Neutrality: Background and Issues, CRS Report for Congress,
at 4 (May 16, 2006), available at http://www.fas.org/index.html (under “search” type
Angele A. Gilroy; follow “Net Neutrality: Background and Issues” hyperlink)
60
This observation is based on the author‟s personal experience.
61
See Mark Mahaney, Netflix - Subscriber Acquisition Costs and Churn, SEEKING ALPHA,
Dec. 22, 2005, http://seekingalpha.com/article/5258-netflix-subscriber-acquisition -costs-
and-churn-nflx.
62
See ASSOCIATION OF SUPPORT PROFESSIONALS, TECHNICAL SUPPORT COST RATIOS (2004).
63
Comcast is currently offering speeds of 6 to 12 Mbps to its customers. See Comcast,
High-Speed Internet, http://www.comcast.com/Corporate/Learn/HighSpeedInternet/high
speedinternet.html?lid=2LearnHSI&pos=Nav (last visited Feb. 25, 2009).
36 Baltimore Intellectual Property Law Journal [Vol. 17

adding new bandwidth.64 If cable modem users feel that they are not
receiving the premium service that they are paying for, they are likely to
switch to the less expensive and usually slower DSL service.65 Although not
everyone has a choice, the new numbers of deployment are nearing 100% of
homes passed for both cable and telephone companies in the United States.66
Another issue is that there are multiple network operators involved.
Tier 1 Provider A is a network service provider for an ISP. The ISP has an
interest in managing its network, and prioritization at this level is often
ignored.67 Although they are not directly providing broadband services to the
public in this particular scenario, the effect of traffic prioritization across the
Tier 1 Provider A network is similar to the effect of prioritizing traffic across
any given broadband network. Because end-to-end prioritization is difficult
to achieve,68 prioritization schemes will most likely end at the edge of the
network on which they are implemented. However, if a particular content or
application provider is a customer of the same Tier 1 provider as the
broadband service provider, Internet traffic traveling between the customer
and content provider may possibly never pass through more than one Tier 1
provider, and there may be a greater advantage to prioritizing traffic through
that Tier 1 provider. Therefore, any public policy regarding traffic shaping
technology must consider the role of all network providers involved, not just
broadband ISPs.

B. Hypothetical B – Losing Your Voice

Suppose the ISP in Fig. 3, a broadband ISP, offers Internet service

over coaxial cable lines. The ISP is the only player in the cable modem
market, and offers higher speeds than DSL, WiFi, or dial-up access in the

64
See Keith Reed, Comcast Upgrade Speeds up Downloads, BOSTON GLOBE, June 2, 2006,
available at
http://www.boston.com/business/technologyarticles/2006/06/02/Comcast_upgrade_speed
s_up_downloads.
65
High Speed Internet, DSL vs. Cable, http://high-speed-internet-access-guide.com/dsl-vs-
cable.html (last visited Feb. 15, 2009).
66
See Competitive Analysis of DSL and Cable Modems, COMMC‟N MEDIA ANALYSIS GROUP
QUARTERLY ANALSYS (Pike & Fischer, Silver Spring, MD.), 4th Quarter 2004, available
at http://www.broadband-daily.com/crossIA.asp. These are 2004 deployment numbers
and the numbers have increased since.
67
This observation is based on the author‟s personal experience.
68
End-to-end prioritization is difficult to achieve because all networks from one end to
another must agree to carry the prioritization scheme in order for the scheme to work, and
these networks are often owned by different entities with competing interests. Although
end-to-end prioritization is difficult to achieve, there are instances in which it may occur.
If a content provider can ensure prioritization by buying bandwidth from a provider that
the ISP buys from, they may be able to make a deal with the provider to carry the
prioritization scheme.
Fall 2008] Network Neutrality 37

area.69 The ISP exchanges traffic with the general Internet through the use of
leased lines from network providers like hypothetical Provider E, a Tier 1
provider,70 but manages the connections up to the Provider E backbone,
where prioritization schemes are lost. VoIP Provider offers VoIP service and
wishes to maintain a higher quality of service for its own VoIP traffic than
other types of traffic, such as email and web browsing. The VoIP service
requires that the user have access to the Internet via an IP network such as
the one provided by ISP. (See Fig.3)

Many feel that prioritization schemes are not inherently against

public policy, but some try to solve what they consider to be a fairness
problem by setting boundaries for the use of prioritization technology, and
call for legislation requiring that prioritization be based only on traffic type.
The issue in the hypothetical situation above is whether or not source based
traffic shaping technology is inherently against public policy.
The danger of restricting a particular use of technology is that
legitimate reasons may exist to use technology in the prohibited manner.71
This dilemma often comes into play during the development of new
technology. For example, a company may be working on the next “killer
application” for the Internet, but it may require prioritized bandwidth because
it is susceptible to packet loss. However, broadband ISPs may not agree with
the market value of the application, and may therefore be unwilling to
69
See Comcast, Prices and Choose Packages,
https://www.comcast.com/Localization/Localize.ashx?Referer=%2fShop%2fBuyflow%2
fDefault.ashx%3farea%3d6%26SourcePage%3dInternet (last visited Feb. 25, 2009).
70
Common Tier 1 providers include AT&T, Verizon, and Level 3.
71
See Gilroy, supra note 59.
38 Baltimore Intellectual Property Law Journal [Vol. 17

implement changes to its network to accommodate the necessary

prioritization scheme, because it is a privately owned network. If the ISP is
able to charge for its efforts, and the developers are willing to risk a cash
investment in the prioritization scheme for implementation and increased
network capacity costs, then those who are willing to “put their money where
their mouth is” will drive innovation while respecting the rights and
boundaries of network operators and users. But, if the broadband provider is
required to offer the same scheme to all other developers on the same type of
application, then the ISP may refrain based on a possible administrative
nightmare. Restraint may lead to less innovation, or applications that are
slow to market, since some applications will have to wait until neutral
network bandwidth meets the minimum requirements for the application.
The better solution is to let the market sort out those who have applications
worth prioritizing without imposing an undue burden on the network owner.
Still, some may continue to argue that if traffic shaping is used to
prioritize packets of a particular type, such as VoIP, then all packets of that
type should be prioritized. Such a policy would hurt the network operator
that may wish to prioritize its own traffic. This is the equivalent of saying,
“If you want your own VoIP packets to travel in a fast lane, you need to let
our VoIP packets use the fast lane as well, at no cost to us.” Under this
policy, it would not be in the interests of any VoIP provider to be the first to
contract for priority service, because this would effectively open the same
rights to their competitors for free. Additionally, broadband service
providers are much closer to the home, so their packets do not need to
traverse the Internet to reach the point at which the packets are converted to
work on the general telephone network. This leaves the broadband provider
with little incentive to allow prioritization of VoIP traffic, because the
broadband provider benefits much less from the prioritization than other
providers by virtue of their ownership of the network. The best way to cure
this stalemate is to allow other providers or users to purchase prioritization as
they see the value. Furthermore, this approach sparks additional innovation,
since there will be motivation to create new technology that is less affected
by packet loss.72
The result of this policy becomes clear when the broadband service
provider is also the Incumbent Local Exchange Carrier (“ILEC”), or
telephone company. Because they would be slow to invest in VoIP
technology, offering any prioritization of VoIP traffic may seem ridiculous
when considering the plans of their telephone service business unit.

72
As a veteran web developer, I used to negotiate bandwidth requirements and loading time
with clients when creating websites. I continued to optimize web pages for fast loading
and efficient bandwidth use, but clients simply assumed that websites would load quickly
because of the increasing number of Internet users with broadband Internet access.
Increasing network speeds took optimization off the table. Many web developers have
become lazy and less experienced web developers often skip optimization altogether.
When bandwidth has no cost to the application provider, there is little incentive to
innovate in a way that saves bandwidth.
Fall 2008] Network Neutrality 39

Ironically, prioritization of VoIP traffic may be more important on DSL-

based broadband connections due to the lower available bandwidth. If the
market allowed a small surcharge to the user for VoIP prioritization,
however, a customer who is satisfied with browsing the web at the slower
speeds of a DSL connection may be able to ensure a quality VoIP connection
without paying for more expensive cable modem service. This may help to
level the playing field between cable and DSL, as well as between VoIP
providers and the ILECs.
There are other anticipated scenarios that seem fundamentally
wrong. For example, what if a broadband provider affirmatively slowed
down or halted traffic to other VoIP services in order to sell their
prioritization services? This scenario became a reality when Madison River,
an ISP, blocked ports used for VoIP traffic.73

C. Hypothetical C – Over the Pond in the Fast Lane

ISP offers high-speed Internet access over coaxial cable lines.

European Content Provider offers video services over IP with a strong
market in Europe, but the connection is insufficient to serve the U.S. market.
Content Provider can buy more bandwidth from its current provider, but
wants to target customers with a high speed connection since the video files
are large. Content Provider strikes a private peering agreement with ISP to
connect an OC-3, a fiber-optic leased line, directly to ISP‟s backbone from
the small Content Provider network, providing a 155 Mbps private pipeline.74
This allows a “fast lane” for ISP users seeking Content Provider‟s traffic.75
(See Fig. 4)

73
See Madison River Communications, LLC, 20 F.C.C.R. 4295, 4297 (Mar. 3, 2005)
(consent decree).
74
See generally Christopher S. Yoo, Network Neutrality and the Economics of Congestion,
94 GEO. L.J. 1847, 1862-63 (2006) (outlining the historical progression of Internet usage
from simple email programs to high volume file-sharing and other high bandwidth usage
programs).
75
See generally Douglas A. Haas, Comment, The Never-Was-Neutral Net and Why
Informed End Users Can End the Net Neutrality Debates, 22 BERKELY TECH L.J. 1565,
1579-82 (2007) (describing how Sprint, UUNET, Advanced Network Services, BBN
Planet, MCI, and AT&T entered reciprocal peering agreements to form the backbone of
the Internet as high bandwidth content overloaded individual private networks).
40 Baltimore Intellectual Property Law Journal [Vol. 17

This sort of private peering arrangement is motivated by different

purposes than mutual peering by Tier 1 network operators.76 Tier 1 network
operators privately peer with one another to overcome traffic congestion at
IXs and public peering facilities.77 Here, we have a content provider that
wants to pay for a network connection that directly links the Content
Provider network to the network of a broadband service provider. The
advantage of this scenario is twofold. Content Provider is able to deliver
high quality content to a target audience with the bandwidth to take
advantage of the content, and ISP is able to relieve its uplinks and the public
Internet of bandwidth that would have been consumed by requests for
Content Provider‟s content. Moreover, bandwidth to competing sites will not
only be unhurt, but will benefit from the newly freed bandwidth due to the
diversion of traffic to the private network created in accordance with the
private peering arrangement.
In reality, direct links are costly and unconsumed bandwidth may go
to waste.78 A content provider could instead work with a content distribution
network or connect to an IX that already has a relationship with the
broadband service providers they wish to target.79 This strategic positioning

76
See Yoo, supra note 74, at 1871.
77
See AT&T, AT&T Global IP Network Settlement Free Peering Policy, available at
http://www.att.com/peering (last visited Feb. 25, 2009).
78
See Yoo, supra note 74, at 1871.
79
See Equinix, Equinix Peering Portal, http://www.equinix.com/peering (last visited Oct.
29, 2008).
Fall 2008] Network Neutrality 41

of network resources does not seem to bother some of the corporations that
are adamant about net neutrality.80
This hypothetical illustrates that by virtue of strategic network
presence at many of these private peering points and content distribution
networks, those with the resources can buy performance, even if content is
not prioritized.81 As Lawrence Lessig stated at the Gilder-Forbes Telecom
Summit in October, 2006, “There‟s of course an advantage that eBay and
Google have because they have very fast caching servers located all over the
world. So their ability to serve content is better than their competitors.”82
Thus, even on a net neutral Internet, some content providers are more equal
than others.83 This is not to say that neutral content delivery does not solve
the problem, but rather, that the nature of the Internet rewards individuals
and organizations in proportion to their investment and planning.

D. Hypothetical D – Peer to Peer

Electric Company offers high-speed Internet access over electricity

lines at asynchronous speeds of 2.0 Mbps. Electric Company finds a way to
increase the capacity of the network for their customers to 5.0 Mbps, and
plans to implement the change as soon as they complete a traffic analysis.
Electric Company discovers that a large portion of the traffic on their
network is Peer to Peer Application traffic coming from a very small
percentage of their users. Electric Company, fearing that Peer to Peer
Application traffic will affect the experience of other users on the network,
decides to limit the bandwidth available for Peer to Peer Application clients
to 3 Mbps, even though the current maximum bandwidth available is 2Mbps.
Electric Company, months later, implements the new technology, increasing
the network speed to 5 Mbps, while leaving the network management policy
in place for Peer to Peer Application.
Should Electric Company be able to implement an application-based
bandwidth limit of 3 Mbps on a network with a maximum available
bandwidth of 2 Mbps? This hypothetical demonstrates with a somewhat
absurd hypothetical that, as a matter of public policy, we are concerned about

80
See e.g. Comcast, Comcast FAQ, http://www.comcast.com/Customers/FAQ/FaqDetails.
ashx?Id=4390 (last visited Oct. 29, 2008).
81
See Hands Off the Internet, Lessig is More, HANDS OFF THE INTERNET, Oct. 23, 2006,
http://www.handsoff.org/blog/tiered-service/lessig-is-more .
82
Id.
83
Id. But c.f. Letter from Tim Wu, Associate Professor, Univ. of Virginia Sch. of Law, and
Lawrence Lessig, Professor of Law, Stanford Law Sch., to Marlene C. Dortch, Secretary
FCC (Aug. 22, 2003), available at http://freepress.net/files.wu_lessig_fcc.pdf.
(discussing ex parte the current policy of the FCC in regulating the Internet to bolster
competition). The beneficiaries of net neutrality are supposed to be the “little guys” that
do not have the money to compete. Id. But, in a net neutral world, the content providers
with the means to build data centers logically close to the broadband users have an
advantage; unless, that is, we accept the idea that the network operators have to actually
provide the infrastructure to level the playing field for the have-nots. Id.
42 Baltimore Intellectual Property Law Journal [Vol. 17

the effect of network management and traffic shaping, rather than the traffic
shaping technology itself. 84
Electric Company knew that the available bandwidth would soon
increase, so it is obvious that Electric Company meant to implement a policy
that only allowed a particular percentage of bandwidth to be used for Peer to
Peer Application traffic. Electric Company users will likely be happy with
the increased bandwidth, but unhappy if they find out that their favorite
application cannot take full advantage of the network‟s new capabilities.
Furthermore, customers who use Peer to Peer Application infrequently are
being rate-limited simply because of the application they are using.
Tim Wu, a respected professor at Columbia Law School who studies
net neutrality, feels it is helpful to look at other networks implicitly built on a
neutrality theory when thinking about neutrality on the Internet.85 On his
website, Wu states:

The electric grid does not care if you plug in a toaster, an

iron, or a computer. Consequently it has survived and
supported giant waves of innovation in the appliance market.
The electric grid worked for the radios of the 1930s works
for the flat screen TVs of the 2000s. For that reason the
electric grid is a model of a neutral, innovation-driving
network.86

Setting aside the fact that Electric Company is delivering Internet access via
the electric grid, we can see the main problem with this hypothetical is the
associated business model.
The electric grid, as well as the water network and other networks
implicitly built on neutrality are usually metered.87 Although a person may
plug an LED nightlight, toaster, or plasma television into the electric grid and
expect it to function properly, that person does not assume that 24 hours of
plasma television usage will cost the same price as browning two pieces of
toast, or even running the LED nightlight for the same period of time. On the
contrary, consumers expect to pay more when they use more resources such
as electricity. The business model of consumer targeted ISPs, however, is
built on fixed pricing.88
If ISPs charged users based on the number of bytes downloaded,
then the problem raised in this hypothetical would likely never arise. ISPs

84
Id.
85
Tim Wu, Net Neutrality FAQ, http://www.timwu.org/network_neutrality.html (last
visited Feb. 15, 2009).
86
Id.
87
See Brett M. Frischmann, An Economic Theory of Infrastructure and Commons
Management, 89 MINN L. REV. 917, 957-59 (discussing infrastructure from a demand
perspective, and the strength and substance of arguments for maintaining certain
infrastructure as “open access.”).
88
See Yoo, supra note 74, at 1853-54.
Fall 2008] Network Neutrality 43

would encourage users to download as much as possible, through any means,

in order to collect more money from users in return for the usage. In fact in
that scenario, it is hard to see why Electric Company would limit the
bandwidth available to Peer to Peer Application traffic, and it is easy to see
why an electric company would want to take network management measures
to reduce usage if it were to offer an unmetered electricity plan. That is not
to say that forcing ISPs into a metered pricing plan is the solution, rather, this
hypothetical simply illustrates that some network management issues are
related to the fixed-price services consumers have come to expect and
enjoy.89

VI. CURRENT LAW

The decision in Nat’l Cable & Telecomm. Ass’n v. Brand X Internet

Servs.90 resulted in classifying cable modem based Internet service as a data
service, relieving it from the requirements imposed upon common carriers. 91
Shortly thereafter, the FCC deregulated DSL, reclassifying it as an
information service.92 As common carriers, cable and DSL providers would
have been required to “carry for all people indifferently.”93 Brand X and the
subsequent deregulation of DSL left the Internet community with an
expectation that removing cable and DSL providers from common carrier
status would invite abuse.94 Many speculated on how the narrowing of
competition would affect the marketplace, and network neutrality became a
key subject of debate.95 Although the FCC did not adopt rules to ensure
network neutrality, it issued the following policy statement to four principles
“to encourage broadband deployment and preserve and promote the open and
interconnected nature of the public Internet:

1. consumers are entitled to access the lawful Internet

content of their choice;
2. consumers are entitled to run applications and services
of their choice, subject to the needs of law enforcement;
3. consumers are entitled to connect their choice of legal
devices that do not harm the network; and

89
Id. at 1863-66.
90
545 U.S. 967 (2005).
91
See id.
92
See Appropriate Framework for Broadband Access to the Internet over Wireline
Facilities, 20 F.C.C.R. 14853, 14862-98 (2005).
93
Nat‟l Ass‟n of Regulatory Util. Comm‟rs v. F.C.C., 533 F.2d 601, 608 (D.C. Cir. 1976)
(quoting Semon v. Royal Indem. Co., 279 F.2d 737, 739 (5th Cir. 1960)).
94
See Frischmann, supra note 87, at 1013-16.
95
See Jerry Ellig & Alastair Walling, Regulatory Status of VoIP in The Post-Brand X
World, 23 SANTA CLARA COMPUTER & HIGH TECH L.J. 89, 121 (2006).
44 Baltimore Intellectual Property Law Journal [Vol. 17

4. consumers are entitled to competition among network

providers, application and service providers, and content
providers.”96

Some argue that the policy statement has no teeth, but it is a clear signal to
cable and DSL broadband service providers that the FCC is aware of the
ability of broadband providers to abuse their newfound freedom.97 However,
the FCC can change direction with any given administration; therefore, any
outcome resulting from enforcement of this policy may be difficult to
predict.
Madison River, an ISP, blocked ports used by Vonage for VoIP
service, causing the service to fail.98 The FCC initiated an investigation into
Madison River‟s actions on February 11, 2005, but entered into a consent
decree on March 3, 2005.99 Madison River paid $15,000 to the FCC and
reopened the ports for use with Vonage VoIP service.100
Although Madison River makes it clear that the FCC believes it has
the power to regulate this behavior, some felt that an actual ruling would
have been beneficial in defining the limits for network providers and ISPs.101
Additionally, the FCC cited compliance with § 201(b) of the
Communications Act of 1934, as amended,102 as the basis for the initial
investigation, but § 201(b) applies to telecommunications services and not to
data services.103 This, and the fact that the Madison River investigation was
initiated and decided just months before the Supreme Court ruling in Brand
X ,104 leaves commentators with uncertainty on how the FCC might react in a
similar situation today.105 It is possible that the FCC will cite Title 1
ancillary jurisdiction over data services106 and hold service providers
accountable for the policy statements made following DSL deregulation.

96
Press Release, Federal Communications Commission, New Principles Preserve and
Promote the Open and Interconnected Nature of Public Internet (Aug. 5, 2005), available
at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-260435A1.pdf.
97
United Power Line Council, 21 F.C.C.R. 13281, 13294 (Nov. 7, 2006) (concurring
statement of FCC Commissioner Michael J. Copps, “[W]e are nowhere near finished
defining what being an information service actually means.”). Mr. Copps seems to take
the position that this is what he inherited with implied disapproval, but hopes that
broadband over power lines can be a third true competitor in the broadband market. Id.
98
Madison River Communications, LLC, 20 F.C.C.R. 4295, 4297 (Mar. 3, 2005) (consent
decree).
99
Id.
100
Id.
101
See Neal Hannan et al., Note, Net Neutrality and the FCC: What’s Being Done to Preserve
It., COLUM. SCI. & TECH. L. REV., Mar. 29, 2007, http://www.stlr.org/html/engadget/?
entry=005.
102
47 U.S.C. § 151 (1996).
103
Madison River Communications, LLC, 20 F.C.C.R. at 4296.
104
See id. at 4295.
105
Nat‟l Cable & Telecomm. Ass‟n v. Brand X Internet Servs., 545 U.S. 967 (2005).
106
See Am. Library Ass‟n v. F.C.C., 406 F.3d 689 (D.C. Cir. 2005). The FCC has
“authority to promulgate regulation to effectuate the goals and provisions of the Act even
Fall 2008] Network Neutrality 45

At the time this paper was written, Comcast, one of the largest
providers of broadband Internet access in the nation,107 was under fire for
throttling BitTorrent108 traffic.109 BitTorrent allows for distributed file
downloads and is known for its widespread use by consumers for illegally
downloading copyrighted information, 110 although the technology useful for
purposes other than copyright infringement.111 The technology was created
to save bandwidth for file distributors, by allowing users to download from
locations and other users that are logically closer.112 Although bandwidth
may be saved for providers as well, it is unlikely that bandwidth in the more
limited and expensive last mile will be saved.113 Furthermore, such
technology encourages peer to peer transfers, which will likely increase the
use of more expensive last mile links while decreasing the use of less
expensive leased lines connected to the ISP. But, since this increases the use
of the valuable upstream bandwidth, such applications are likely to be met
with network management by network owners. We are likely to see some
definitive answers from the FCC regarding the throttling of BitTorrent and
other applications soon.

VII. COMPETITION

Michael Geist, Canada Research Chair of Internet and E-commerce

Law at the University of Ottawa stated that:

[w]hile prioritizing websites or applications may hold some

economic promise, the lack of broadband competition and
insufficient transparency surrounding these actions will

in the absence of an explicit grant of regulatory authority, if the regulations are

reasonably ancillary to the Commission‟s statutory powers and responsibilities.” Id. at
698.
107
See Brian Stetler, Comcast to Place a Cap on Internet Downloads, N.Y. TIMES, Aug. 29,
2008, available at http://www.nytimes.com/2008/08/30/technology/30comcast.html.
108
See BitTorrent Home Page, http://www.bittorrent.com (last visited Sept. 17, 2008).
109
See Declan McCallagh, FCC Finalizes Comcast Filtering Penalties, CNET NEWS, Aug.
20, 2008, available at http://news.cnet.com/8301-13578_3-10021222-38.html?tag=
mncol.
110
See Tom Spring, BitTorrent’s Battle for Bandwidth Intensifies, PC WORLD, Nov. 21,
2007, available at http://www.pcworld.com/article/139854/bittorrents_battle_for_
bandwidth_intensifies.html.
111
See Anthony Bruno, BitTorrent, Joost Put Download Tech to Legal Use, REUTERS, Feb.
25, 2007, available at http://www.reuters.com/article/musicNews/idUSN251892242007
0228.
112
See BitTorrent FAQ and Guide, http://www.dessent.net/btfaq (last visited Sept. 18,
2008).
113
The “last mile” represents the final link in a broadband network. For cable modem
networks, the last mile is the coaxial cable link from the node that converts the fiber-optic
digital signal into an RF signal. See The TOP Project, Telecommunications Glossary,
available at http://top.bev.net/archive/tamp/8-Telecomm_Glossary/Telecomm_
Glossary.pdf (last visited Feb. 25, 2009).
46 Baltimore Intellectual Property Law Journal [Vol. 17

rightly lead to growing calls for regulatory reform that grants

legal protection for the principle of network neutrality.114

However, this lack of competition argument does not sit well with others.115
In fact, many overstate the opposite, saying that there is plenty of
competition and that there are new broadband technologies on the horizon.
As with many arguments in the network neutrality debate, there is a
middle ground. The broadband market today is largely a duopoly. Most
broadband service subscribers receive service from either their local
telephone or cable company.116 A duopoly, however, is still competitive,
even if it is not perfect competition.117 William G. Laxton, Jr. pointed out
that “[e]conomic research in 2001 found that the cross-price elasticity of
DSL and cable services was positive, indicating that consumers view the two
products as substitutes.”118 Both telephone and cable companies are at nearly
100% availability for broadband services, with availability for cable at over
97% of homes passed and telephone at over 92%.119
In the United States, Verizon,120 Cingular, and AT&T have already
started to deploy wireless technology capable of delivering 2.0 Mbps to
computers, handheld devices, or smart phones, with actual user experiences
ranging from 741 Kbps to 1.2 Mbps in certain markets. The mobile market
shows an interesting blend between the traditional Internet and wireless
services that are typically seen on mobile phones. Even adamant proponents
of network neutrality feel that it is unclear whether net neutrality applies in
this space.121 But, as the devices we attach to mobile networks evolve, so
will our view of the Internet through those devices. Ultimately, the
distinction may disappear altogether.
Then, there are leased lines, such as T-1 circuits, which may seem
odd to bring into the competition argument, but the price for a T-1 circuit has

114
Geist, supra note 18.
115
See William G. Laxton, Jr., The End of Net Neutrality, 2006 DUKE L. & TECH. REV. 15,
§ I (2006).
116
Internet and Non-Discrimination Act of 2006 S. 2360, 109th Cong. § 2(6) (2006).
117
Lampert, supra note 1, at 528.
118
See Laxton, supra note 115 (discussing the economics behind network neutrality).
119
Pike and Fisher, Competitive Analysis of DSL and Cable Modems: Quarterly Analysis
4th Quarter 2004 (2004), http://www.broadband-daily.com/crossIA.asp. However, note
these are 2004 deployment numbers and they have since increased.
120
See Sascha Segan, Verizon Wireless BroadbandAccess EV-DO, PC MAG, Mar. 2, 2005,
available at http://www.pcmag.com/article2/0,1895,1770829,00.asp (containing a
detailed survey of the Verizon service on the East Coast).
121
Marguerite Reardon, Sony Eriksson Teams with Google, ZD NET, Feb. 28, 2006,
available at http://news.zdnet.com/2100-1035_22-6044057.html. Google will apparently
be the search engine of choice for Sony mobile phones. If any of the proposed net
neutrality legislation were to pass, this would be a clear violation unless Sony gave other
search providers equal access to the customer.
Fall 2008] Network Neutrality 47

been steadily declining.122 There is additional perspective gained by

entertaining leased lines as market substitutions for cable modem and DSL
service. A T-1 line traditionally offers speeds of 1.544 Mbps on both the
upstream direction as well as the downstream direction.123 The price of a T-1
line is relevant because it represents the true market cost of unmetered,
neutral bandwidth at speeds somewhat comparable with consumer broadband
networks.124 Wireless “Super-T” service is also available at a similar price
for those in areas where dropping a T-1 line is not convenient.125 The price
of an unmetered asynchronous wireless connection of 1Mbps through a
dumb pipe is nearing the point of market substitution, at least for power
users.
A residential broadband consumer is expected to use only a portion
of the bandwidth. In a residential setting, those who use less bandwidth
typically pay the same for their service as those using a large amount of
bandwidth. Thus, the low bandwidth user subsidizes the high-bandwidth
user. This allows service providers to escape from pricing models that
charge by the amount of data traversing the network on the user‟s behalf, or
even worse, the early AOL model of charging by the minute.126
Consumers that constantly use all or most of the bandwidth allotted
to them on a broadband network raise flags.127 These users may be affecting
the experience of other paying users of the network. Such use is not
necessarily an indication that the user is unethical or doing something illegal,
but may be an indication that the service the user has chosen is inappropriate
for his usage requirement. A user who intends to leave BitTorrent running
constantly to serve files to others should choose a T-1 or Wireless Super-T
service.

122
Quote from Covad Communications on Feb 7, 2008. An unmetered T-1 line to my home
currently costs $329 per month for a 3 year commitment and $359 per month with a one
year commitment. Installation charges will be waived.
123
See J. Martin Network Working Group, Ohio State Univ., There’s Gold in them thar
Networks! or Searching for Treasure in all the Wrong Places, RFC 1402, Jan. 1993,
available at http://www.faqs.org/ftp/rfc/pdf/rfc1402.txt.pdf.
124
While 1.544 Mbps is slower than the 6-8 Mbps download speeds offered by Comcast, the
1.544 Mbps upload speeds are greater than the 384-768 kbps upstream offered by
Comcast. See Comcast, What Speeds are Available with Comcast High Speed Internet,
http://www.comcast.com/customers/faq/FaqDetails.ashx?ID=2580 (last visited Sept. 18,
2008).
125
Quote from Covad Communications on Feb 7, 2008. (Unmetered 1Mbps wireless Super-
T to my home at a cost of $199 per month for a one year commitment. Installation
charges will be waived.)
126
See Posting of Jon Healey to BitPlayer, AOL Parent Revives Usage-Based Billing,
http://opinion.latimes.com/bitplayer/2008/01/aol-parent- revi.html (Jan. 17, 2008).
127
See Comcast, FAQ About Excessive Use, http://www.comcast.com/customers/faq/
FaqDetails.ashx?ID=4566 (last visited Sept. 5, 2008).
48 Baltimore Intellectual Property Law Journal [Vol. 17

VIII. PROPOSED LEGISLATION

Several pieces of legislation have been submitted to Congress in

hopes of addressing perceived problems related to network management
principles.128 The only bill currently before Congress is the Internet Freedom
Preservation Act of 2008.129 However, it is useful to survey legislation
previously proposed in order to avoid possible misunderstandings and pitfalls
in future proposals. The perspective gained by the hypothetical situations
discussed above, as well as our review of network architecture and peering
basics, should make some of these pitfalls clear.

IX. INTERNET FREEDOM AND NONDISCRIMINATION ACT OF

2006

The Internet Freedom and Nondiscrimination Act of 2006130 would

create a problem that is common in almost all proposed net neutrality
legislation. The Act would require that service provided to non-affiliated
content be at least equal to service provided to affiliates, free of any
surcharge.131 What, then, is the point of being an affiliate?
The Act would further require that management of the network to
protect the security of such a network cannot result in discrimination among
content, applications, or services.132 Putting neutrality before network
management has its own negative consequences,133 but putting neutrality
before security is simply foolish.

X. INTERNET NONDISCRIMINATION ACT OF 2006

Internet Nondiscrimination Act of 2006134 does not allow

discrimination in allocating bandwidth.135 This ignores the value in private

128
See Internet Freedom and Nondiscrimination Act, H.R. 5417, 109th Cong. (2006);
Internet Nondiscrimination Act, S. 2360, 109th Cong. (2006); Internet Freedom
Preservation Act, S. 2917, 109th Cong. (2006).
129
H.R. 5353, 110th Cong. (2008).
130
H.R. 5417.
131
Id. at § 3(2)(a)(1).
132
Id. at § 3(2)(c)(1).
133
For example, if a network were near capacity, applications that rely on minimal packet
loss would be seriously impaired, while email and other services would have minimal
problems. Prioritizing the applications that need such treatment would have little effect
on other services, but make a world of difference to the user of the application. See
Kevin Fall & Steve McCanne, You Don’t Know Jack About Network Performance,
QUEUE, May 2005, at 56 (defining “packets” and effect of packet loss on applications);
see also Edward W. Felten, Nuts and Bolts of Network Neutrality, Center for Information
Technology Policy, Princeton University, July 6, 2006, at 4, http://itpolicy.princeton.edu/
pub/neutrality.pdf.
134
S. 2360.
135
Id. at § 4(a)(2)(A).
Fall 2008] Network Neutrality 49

peering for content distribution purposes. Simply put, traversing the Internet
with high-bandwidth content is not good for anyone. It creates an Internet
traffic jam, much like the one that led to the demise of the NAPs.136 Content
that is distributed through a private peering provider by way of a mutual
agreement can help ease this burden.137
Another problem with the Act is that any exceptions, such as spam
blocking, need to be under the control of the customer.138 This assumes that
the network provider has no interest in blocking spyware, malware, spam,
and the like, effectively making the network a dumb pipe at the mercy of its
users.
The Act also attempts to subject all information services, regardless
of technology used, to this regulation.139 On-demand technology is
specifically noted,140 and the Act‟s definition of such technology is listed as
the definition in the Communications Act of 1934,141 but excludes cable
services.142 The definition in the Communications Act is, “a service
providing video programming to subscribers over switched networks on an
on-demand, point-to-point basis, but does not include services providing
video programming prescheduled by the programming provider.”143 This is
disturbing because the network architecture of cable-based on-demand
services fits this description.144 Such technology should be separated from
network neutrality principles due to its non-public nature and logical
separation from the Internet.
Additionally, the Act allows providers to take “reasonable and non-
discriminatory measures to protect the security of the network of such

136
See Geoff Huston, Interconnection, Peering, and Settlements, Internet Society, ISP
Column, at 10 (1999), http://www.isoc.org (search “Huston”; select “Interconnection,
Peering, and Settlements” hyperlink) (providing more information on peering and the
demise of the NAPs).
137
See Equinix, http://www.equinix.com (click on “Investors”; then “Corporate Profile”)
(providing more information on their private peering and content distribution services
and stating Equinix is the leading global provider of network-neutral data centers and
Internet exchange services for enterprise, content companies, and network service
providers).
138
S. 2360 § 4(9)(B)(1)(A).
139
Id. at § 3(1)(A)-(B).
140
Id. at § 3(4)(B).
141
47 U.S.C. § 522 (12) (1996).
142
S. 2360 at § 3(4)(C).
143
47 U.S.C. § 522(12).
144
While addressing schemes that are used to deploy on-demand services over cable
networks, the requirements for providing such services are much different, and more
investment is required. Additional local equipment is needed to ensure that a single
channel does not broadcast the same information for every cable customer for example.
Rather, on-demand technology relies on local control of channel maps, allowing a person
in one city to use the same frequency as a person in another city to view different content
of their choosing. See, mi2n, One in 10 Americans Show a Heavy Preference to Control
Their Media and Entertainment, Music Industry News Network, Mar. 18, 2005,
http://www.mi2n.com/press.php3?press_nb=77926 (providing a description of cable-
based, on-demand services and viewer control).
50 Baltimore Intellectual Property Law Journal [Vol. 17

operator, if such operator faces serious and irreparable harm.”145 Those

drafting legislation seem too willing to put neutrality principles ahead of
security. Even if the harm is serious and irreparable, the operator can only
take action in a way that is non-discriminatory.146

XI. INTERNET FREEDOM PRESERVATION ACT

The Internet Freedom Preservation Act 147 also has problems. The Act states:

Each broadband service provider shall...enable any content,

application, or service made available via the Internet to be
offered, provided, or posted on a basis that…is at least
equivalent to the access, speed, quality of service, and
bandwidth that such broadband service provider provides to
affiliated content, applications, or services made available
via the public Internet into the network of such broadband
service provider.148

The problem with this language is that it puts the burden of an end-
to-end experience on only one player, the ISP.149 The Act also
requires any prioritization be done by application.150 This
requirement ignores the lack of incentive by the network owner to
use prioritization, as discussed in Hypothetical B above.151

XII. INTERNET FREEDOM PRESERVATION ACT OF 2008

The Internet Freedom Preservation Act of 2008152 seemingly has a

different goal than the previous bills proposed to Congress.153 Instead of
establishing rules to enforce network neutrality principles, it focuses on
establishing public policy and directing the FCC to actively study network
neutrality principles.154
Although the language seems fair on its face, and the purpose seems
benign, the passage of this bill would likely set the stage for enacting
legislation based on the policies in this bill.155 While the FCC has its own
policy statement, the Act tries to add to these policies with conclusory
145
S. 2360 at § 4(b)(1)(C) (emphasis added).
146
Id.
147
S. 2917.
148
Id. at § 12(a)(4)(B) (emphasis added).
149
Id. at § 12(a).
150
Id. at § 12(a)(5).
151
See supra pp. 17-20.
152
H.R. 5353.
153
S. 2917, Pmbl.
154
H.R. 5353 Pmbl.
155
Haas, supra note 75, at 1635.
Fall 2008] Network Neutrality 51

language which suggests that legislation is required to ensure the open

marketplace of ideas on the Internet.156 Specifically, the Act states:

It is the policy of the United States...to safeguard the open

marketplace of ideas on the Internet by adopting and
enforcing baseline protections to guard against unreasonable
discriminatory favoritism for, or degradation of, content by
network operators based upon its source, ownership, or
destination on the Internet.157

This statement assumes what the assessment required in the Act sets out to
prove: that net neutrality legislation is required in order to safeguard the open
marketplace of ideas on the Internet.
The Act further requires the FCC to gather facts related to network
neutrality and management principles.158 Although the FCC‟s own policy
statement would be invoked and the FCC would be asked to determine
whether that policy is being followed, the FCC would also be asked to
determine “with respect to content, applications and services, the historic
economic benefits of an open platform.”159 Again, there is an assumption
that an “open platform,” whatever the meaning, somehow provides an
economic benefit.
Although the Act will do little by itself to enact net neutrality
legislation, it creates a policy that assumes legislation is required gets the ball
rolling.160 Unfortunately, net neutrality is still a solution without a well
defined problem,161 and the problems that can be defined are the result of
business planning and market forces, not an evil technology that needs a
leash.

XIII. ALTERNATIVE LEGISLATION

The Internet community is better off with a wait-and-see method,

because it would give the FCC an opportunity to enforce the more flexible
policy statement162 if the need arises. However, proper legislation with a set
of rules that get to the heart of the public policy at issue could be created to
support network neutrality principles. Such legislation would exchange the

156
H.R. 5353 at § 12(4).
157
Id.
158
Id. at § 4(a)(2)(A)-(G).
159
Id. at § 4(a)(2)(A)-(E).
160
Id.
161
See Yoo, supra note 74, and accompanying text (citing Peter J. Howe, News from the
Chicago Cable and Telecom Show, BOSTON GLOBE, June 16, 2003, at C2).
162
See Press Release, Federal Communications Commission, New Principles Preserve and
Promote the Open and Interconnected Nature of Public Internet, Aug. 5, 2005, available
at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-260435A1.pdf.
52 Baltimore Intellectual Property Law Journal [Vol. 17

bright-line rule approach for a balancing test. This test should weigh at least
the following factors:

1. The property rights of the network operator;

2. The architecture of the network involved;
3. The effect on the network;
4. The contracting rights of all parties involved;
5. The content and application provider‟s right of access to
the market;
6. The consumer‟s right to access the lawful Internet
content of their choice;
7. The consumer‟s right to competition among network,
content, and application providers; and
8. Competition in the marketplace, and whether completely
neutral alternatives are available.163

Taking these factors into account will truly level the playing field.164 If a
bright-line rule is drawn to make a particular technology or use of technology
illegal, we risk the loss of innovation and legitimate positive uses for the
technology that has been limited. We also risk stepping away from the
public policy in an effort to create a law that is easier to draft and interpret, at
the expense of justice, and possibly innovation.

XIV. CONCLUSION

The debate about network neutrality can be reduced to a desire for

fairness. Although there is currently no apparent widespread abuse,165
content providers see an opportunity to swing the pendulum in their favor
through the legislative process. This would undoubtedly result in some
inequity, restricting network providers from using technologies deemed to be
against public policy. Network providers ask for a wait-and-see approach,
arguing that Congress should not try to solve a problem that does not exist.166
Currently proposed legislation stifles innovation and needlessly interferes
with the market. While there is an alternative that may create a fair outcome,

163
There are many factors that can be weighed, but these, in the author‟s opinion, get the
heart of the public policy at issue. Although this would not be the easiest rule to enforce,
it would offer more justice.
164
See Connected: An Internet Encyclopedia, OSI Seven-Layer Model,
http://www.freesoft.org/CIE/Topics/15.htm (last visited Sept. 19, 2008); Ring of Saturn
Internetworking, Seven Layer Model, http://networking.ringofsaturn.com/Protocols/
sevenlayer.php (last visited Sept. 18, 2008); Javvin Network Management and Security,
OSI 7 Layers Reference Model for Network Communication, http://www.javvin.com/
osimodel.html (last visited Sept. 19, 2008).
165
See Yoo, supra note 74 and accompanying text.
166
See Felten, supra note 133.
Fall 2008] Network Neutrality 53

the FCC has adopted a flexible policy 167 that supports the basic network
neutrality principles, and they should be given adequate opportunity to
enforce those policies before forcing new requirements on network operators.

167
See Press Release, Federal Communications Commission, New Principles Preserve and
Promote the Open and Interconnected Nature of Public Internet (Aug. 5, 2005), available
at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-260435A1.pdf.