Andrea RendaETNO/Mlex summit, 25 June 2014

Neutrality in the “flat internet”

Peter Steiner. The New Yorker, July 5, 1993

WHY DID WE WANT NEUTRALITY IN THE FIRST PLACE?

Too many explanations? Non-discrimination

Non-discrimination by ISPs

No charging for access (low entry barriers)

Competition across/within layers

Innovation at higher layers

User choice

User anonymity

Freedom of expression/Pluralism

Content and

application providers

End users

THE NET NEUTRALITY SPECTRUM

Over the past 5 years, several countries have taken action on net neutrality

All of them imposed transparency, but there is wide divergence on “reasonable” traffic management

Is this divergence plausible given the global nature of Cyberspace?

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Mandatory NN Net diversity(just transparency)

NL FR Europarl

US Canada

EC/BEREC UK???

FIVE MYTHS...

1. The net is neutral

2. Users always want a neutral Internet

3. Neutrality always helps start-ups

4. With diversity, QoS fees would be positive and supra-competitive

5. With diversity, market power would necessarily accumulate in the hands of ISPs

THE INTERNET IS BECOMING FLATTER (1)

THE INTERNET IS BECOMING FLATTER (2)

“Platformization” (Clarke and Claffy 2013)Rather low entry barriers

Prevalence of open models

Revenue sharing models (possible competition issues)

“Flat Internet”: an emerging market for QoSA juxtaposition of infrastructures

Various types of CDN business models

Do they compete with potential QoS offers by ISPs?

THE INTERNET IS BECOMING FLATTER (3)

Source: Palacin et al. (2013)

THE INTERNET IS BECOMING FLATTER (4)

Source: Palacin et al. (2013)

THE INTERNET IS BECOMING FLATTER (5) Emerging CDN strategies

Example: Level3 Example: Akamai

Source: Palacin et al. (2013)

THE INTERNET IS BECOMING FLATTER (6)

“Platformization” of traffic delivery: impact on entry barriers?No level playing field? Large content providers

commonly use CDNs in the distribution of their content while long tail content providers tend to use traditional hosting solutions

Hyper-giants tend to follow a two-sided market strategy: bloggers and newly born content providers can use existing free services such as Google Sites, App engine or Amazon Web Services

Centripetal force, again?

Should we protect neutrality, competition, or rather the end-to-

end nature of the (public) Internet?

CONNECTED CONTINENT: FIVE SYNDROMES

“First legislate, then think”

“Galileo syndrome”

“Trabant syndrome”

“Keys and lamp post” syndrome

“Stockholm syndrome”13

Peter Steiner. The New Yorker, July 5, 1993

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Copyright – 1997 The School of Journalism and mass Communications, University of North Carolina

WHY DO WE WANT NEUTRALITY TODAY?

What would the current approach achieve? Non-discrimination

Non-discrimination by ISPs

No charging for access (low entry barriers)

Competition across/within layers

Innovation ay higher layers

User choice

User anonymity

Freedom of expression/Pluralism

DIFFICULT QUESTIONS

Advantages of pro-neutrality regulation Easier to enforce? Suitable if the EU aims at regulating only the more stable

layers of the ever-changing internet architecture

Disadvantages What (or whose) problem does it solve? Need to do something on infrastructure deployment Are we eliminating players from a broader market? Uncertainties on neutrality at higher layers (e.g. Google) Way beyond “antitrust-oriented regulation” Harming existing platforms?

Tough competition stories...

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CONCLUDING THOUGHTS

Need for a thorough reflection on the meaning of neutrality and a future-proof, non-rhetorical approach to this concept

Debate should perhaps shift towards protecting the original E2E design of the Internet

Strong need for an incentive-oriented, architecturally savvy approach to e-communications policy

Strong need for clarity in e-antitrust (the practice of market tests and settlements not suitable)

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Andrea RendaETNO/Mlex summit, 25 June 2014

Neutrality in the “flat internet”

THANK YOU!!