Paid Prioritization: We Have Solved This Problem Before
Written by Stan Adams
Net neutrality does not end today. Although today does mark 60 days since the publication of the FCC’s order repealing its own rules, that repeal (due to some obscure and protracted administrative procedure) has not yet taken effect. Keep this in mind if you read or hear any arguments pointing out that ISPs haven’t ruined the internet, even without the net neutrality rules. For now, they still exist. And if the current effort to shut down the repeal through the Congressional Review Act (CRA) succeeds, the net neutrality protections will survive even longer.* But that doesn’t mean the debate is standing still. Instead, opponents of the rules are using the recent and repeated regulatory swings (that they caused) as justification for a legislative compromise. Specifically, some in the telecom industry have argued for watered-down consumer protections, most recently on the subject of paid prioritization.
Although it has been a key tenet of the net neutrality discussion for years, paid prioritization has recently become a more prominent focal point. Commonly spoken of in terms of “fast lanes,” paid prioritization is when online companies pay ISPs to give their data traffic preferential treatment. It allows ISPs to double charge by charging both the customer for service and edge providers to reach customers, and lets well-funded companies buy an advantage over their competitors. Because the value (and therefore the price) of paid prioritization increases as networks become more congested, it also rewards ISPs for letting their networks become clogged rather than upgrading their capacity.
Last week, the House Energy and Commerce Subcommittee on Communications and Technology held a hearing on the subject, ostensibly to “have a realistic discussion” about it and to develop a “nuanced approach.” This language fits nicely with the industry’s calls for compromise legislation, but conveniently discounts the decades-long discussion that led up to the 2015 Open Internet Order (OIO).
In some ways, the focus on paid prioritization represents progress. (It even sells hamburgers!) Practices like blocking websites or applications or throttling certain net traffic have become so universally disapproved that they have faded from the debate. Most ISPs either have no interest in blocking or throttling or they have given up fighting for the ability to do so, and even the current ISP-friendly legislative proposals would prohibit these practices. Paid prioritization, however, remains a core source of disagreement.
Unfortunately, ISPs and their advocates have tried to confuse the issue to hide the negative effects and incentives paid prioritization creates. They have claimed that banning paid prioritization jeopardizes telemedicine applications and autonomous vehicle safety and would inhibit emergency first responders and 911 systems. They have claimed that content delivery networks (CDNs) do the same thing as paid prioritization. They have talked about beneficial network traffic management techniques and paid prioritization as though they are one and the same. They have argued that small businesses would benefit from paid prioritization. They have claimed that paid prioritization would somehow lower the cost of internet access and have even used TSA PreCheck as a positive example of paid prioritization. But these claims are either misleading, ridiculous, or just plain wrong.
The net neutrality rules created by the OIO banned paid prioritization because of its potential for harm to innovation and competition at the edges of the internet was “overwhelming.” The rules, (which the current FCC has voted to repeal) applied only to broadband internet access service (BIAS) and did not apply to “specialized” or non-BIAS services, such as telemedicine applications or autonomous vehicle support. The rules also created exceptions for emergency services. So, under the OIO, ISPs would still be able to offer paid prioritization for the use cases they list because they do not constitute broadband internet access.
The arguments about CDNs and network management amount to semantic sleight-of-hand. CDNs allow companies to store information, like the files that make up websites or the music and movie files for streaming, closer to end users. This decentralized distribution makes for a better, faster experience by minimizing the distance and number of network segments between the user and the information. Prioritization, on the other hand, involves giving favorable treatment to some traffic as it crosses a network. For instance, an ISP can prioritize the traffic from an affiliate’s video streaming service by letting those packets jump the queue at the ISP’s routers, or by creating a separate queue just for the affiliate’s traffic.
Beyond the structural differences between paid prioritization and CDNs, they also have different effects on both network function and competition. Not only do CDNs offer more efficient delivery for their customers, they also reduce traffic loads between distant parts of the internet, improving speeds for everyone else. There is no limit to how many companies can benefit from CDNs, nor do CDNs create a disadvantage for non-customers; no traffic is made slower by CDN usage. Paid prioritization, however, cannot benefit everyone; by definition, it is impossible to prioritize everyone. By the same token, paid prioritization necessarily disadvantages all those who do not, or cannot pay for preferential treatment.
Supporters also try to blur the line between paid prioritization and reasonable network traffic management. Traffic management consists of several techniques by which network operators like ISPs can improve the overall functionality of their network. For instance, operators may be able to provide a better quality of experience for subscribers using real-time video applications by prioritizing that traffic over less time-sensitive traffic like email or software updates. Done properly, no one’s quality of experience is degraded and all similar kinds of traffic enjoy the same treatment. The network works better and no one loses.
The protections against blocking, throttling, and unreasonable discrimination in the OIO each had exceptions for reasonable network management. The rule against paid prioritization, however, did not. According to the Order, paid prioritization, by definition, is not a network management practice because it “does not primarily have a technical network management purpose.” Although (unpaid) prioritization can be a network traffic management technique, it takes on a completely different character when compensation is part of the deal, creating perverse incentives for ISPs and distorting competition online. This is why it’s so important to distinguish paid prioritization from everything else and not fall for the trickery of using paid prioritization and other, harmless terms interchangeably.
The claims that paid prioritization could somehow give small businesses an advantage are almost laughable. Paid prioritization is all about buying an advantage; how can small businesses hope to out-spend their deep-pocketed competitors? Equally ludicrous are the claims that ISPs would somehow drop broadband subscription prices if they could charge for prioritized treatment. As we’ve already said, paid prioritization monetizes network congestion, giving ISPs a way to charge more for getting around traffic jams that they create. In this light, Congresswoman Blackburn’s comparison of paid prioritization to the TSA PreCheck program is somewhat accurate, but it’s also illustrative of the perverse incentives it creates for ISPs.
The conversation about paid prioritization is far from over, and you can be sure that efforts to confuse the issue will continue. Just remember this: the problems with paid prioritization all stem from the “paid” aspect. Whatever other aspects of prioritization ISPs may talk about, getting paid is what they want. But net neutrality cannot coexist with paid prioritization of web traffic; real net neutrality protections must prohibit paid prioritization. The 2015 Open Internet Order did this, while also allowing flexibility to perform reasonable network management and to support limited-purpose “specialized” services like telemedicine. That sounds like a compromise to me.
* There are also two court cases pending: one to strike down the 2015 rules is stalled in front of the Supreme Court, and one to strike down the 2018 repeal of the rules is gearing up for briefing. The outcome of either of these could alter the existing rule set. To add to the complexity, litigation against the various state initiatives to put net neutrality protections in place will emerge as soon as the repeal takes effect.