My weekly Law Bytes column (Toronto Star version, freely available version) examines the growing trend toward a two-tiered Internet, which upends the longstanding principle of network neutrality under which ISPs treat all data equally.
I argue that the network neutrality principle has served ISPs, Internet companies, and Internet users well. It has enabled ISPs to plausibly argue that they function much like common carriers and that they should therefore be exempt from liability for the content that passes through their systems.
Websites, e-commerce companies, and other innovators have also relied on network neutrality, secure in the knowledge that the network treats all companies, whether big or small, equally. That approach enables those with the best products and services, not the deepest pockets, to emerge as the market winners.
Internet users have similarly benefited from the network neutrality principle. They enjoy access to greater choice in goods, services, and content regardless of which ISP they use. While ISPs may compete based on price, service, or speed, they have not significantly differentiated their services based on availability of Internet content or applications, which remains the same for all.
Notwithstanding its benefits, in recent months ISPs have begun to chip away at the principle.
Internet telephony provides a classic illustration of this trend. As each major ISP races to offer their own Internet telephony services, some have begun to use their network position to unfairly disadvantage the competition. For example, Canadian cable provider Shaw now offers a premium VoIP service that promises to prioritize Internet telephony traffic for a monthly fee. The potential implications of such a service are obvious – the use of competing services will require a supplemental fee, while Shaw will be free to waive the charge for its own service.
While ISPs once avoided content intervention, earlier this summer, Telus blocked access to Voices For Change, a pro-union website. The company has since indicated that it was a one-time event, though in the process it also blocked more than 600 additional websites hosted at the same IP address and cut off entire communities from the controversial content.
Most recently, customers of Rogers, Canada’s largest cable ISP, have speculated that the company has begun to block access to peer-to-peer services such as BitTorrent as well as the downloading of podcasts from services such as iTunes. While Rogers initially denied the charges, it now acknowledges that it uses "traffic shaping" to prioritize certain online activity. As a result, applications that Rogers deems to be a lower priority rity may cease to function effectively.
Moreover, blocking services, websites, and certain applications may not be the end game. Some ISPs see the potential for greater revenue by charging websites or services for priority access to their customers. In the U.S., BellSouth Chief Technology Officer executive William L. Smith, recently mused about the potential to charge a premium to websites for prioritization downloading, noting that Yahoo could pay to load faster than Google. In fact, reports last week indicated that BellSouth and AT&T are now lobbying the U.S. Congress for the right to create a two-tiered Internet, where their own Internet services would be transmitted faster and more efficiently than those of their competitors.
These developments should send alarm bells to Internet companies, users, and regulators. While prioritizing websites or applications may hold some economic promise, the lack of broadband competition and insufficient transparency surrounding these actions will rightly lead to growing calls for regulatory reform that grants legal protection for the principle of network neutrality.