Net Neutrality, Part I: What’s Old Is New Again (2007 – 2010)

February 18, 2018 by

Net Neutrality from 2007 to 2010

It’s easy to forget that the recent debate around Net Neutrality mirrors arguments made more than a decade ago. So, is this the final round in a blow-by-blow Net Neutrality showdown—and the last hope for an open internet? Or is it just a return to the old way of doing business online?

I’ll explore this subject in a three-part series of guest posts for Wowza. First, we’ll look at the origins of the Net Neutrality debate: “Round 1” of the matchup, from 2007 to 2010. Our second post will focus on the re-emergence of open-internet discussions, from 2013 until today—also known as “Round 2.” We’ll finish with a discussion of what has changed between 2007 and 2018, and what the impacts are for two key use cases.

 

The Rise of Online Streaming Sets the Stage for the Debate

It may sound strange looking back, but there wasn’t a whole lot of video streaming on the web in early 2007. Netflix had just begun to toy with the idea of replacing its DVD-by-mail, consumer-video consumption model with an on-demand video streaming service—that is, after unsuccessfully offering itself for sale to Blockbuster for $50 million in the early 2000s, then laying off almost one-third of its staff in the aftermath.

Blockbuster itself had failed in its creation of the Blockbuster Online service, perhaps due to the “help” provided by infrastructure partner Enron. Amazon had announced its video-on-demand service, Amazon Video, in mid-2006, but had not gained much traction.

Netflix was used to tying up deals with content providers, but its distribution deals were primarily with the United States Postal Service—not with the large broadband providers or internet service providers (ISPs). And the company was probably more concerned with fending off rival Redbox, with its close-at-hand DVD kiosks, rather than dominating potential streaming-video competitors.

On Jan. 15, 2007, a New York Times article described Netflix’s pivot to streaming video as a potential rise from the dead, breathlessly declaring, “Netflix to Deliver Movies to the PC.” Hulu emerged a little over a year later, in March 2008. It didn’t take a seer to understand the much bigger role video entertainment might begin to play on the World Wide Web.

“Ponder this: By 2013, online video will account for 90 percent of all internet traffic,” declared the opening line of the first Open Video Conference (OVC) agenda. OVC, held at the New York University School of Law from 2009 to 2011, was a precursor to initial Net Neutrality discussions. However, it couched discussions in terms such as the “open internet” or a “digital haves and have-nots” rallying cry.

Another wave of headlines focused on the technologies that might allow ISPs to slow down delivery of media content. “Throttle me this: Deep packet inspection meets ‘net neutrality,” stated an ArsTechnica headline from the same era.

 

Re-Understanding Key Net Neutrality Issues From the 2000s

By 2010, Comcast had appealed—and won, at the DC Circuit Court level—the Federal Communications Commission’s injunction against Comcast’s practice of throttling Bittorrent traffic. The FCC’s newly appointed Chairman, Julius Genachowski, suggested a reclassification of ISP traffic as a utility; for several decades, it had merely been a non-regulated service of regulated telecommunications companies.

Genachowski’s manifesto, titled “The Third Way: A Narrowly Tailored Broadband Framework,” defined mid-2010 broadband.

“A challenge for the FCC in recent years,” Genachowski wrote, “has been how to apply the time-honored purposes of the Communications Act to our 21st-century communications platform—broadband internet—access to which is generally provided by the same companies that provide telephone and cable television services.”

This would limit some of the operational and strategy headaches that traditional telecommunications companies, such as the Regional Bell Operating Carriers (RBOCs), faced when dealing with regulated and non-regulated services (an experience I had witnessed firsthand as a consultant in Chicago in the late 1990s, when DSL was first being rolled out for an RBOC called Ameritech). But it also meant the FCC might run the risk of stifling innovation if internet service were inadvertently placed in a monopolistic framework.

“The FCC should adopt a restrained approach to broadband communications,” Genachowski wrote, “one carefully balanced to unleash investment and innovation, while also protecting and empowering consumers.” Striking this balance was what he saw as the “third way” forward in the Net Neutrality debates.

Genachowski seemed to understand that 2010 would set the stage for future growth, adding that “heavy-handed prescriptive regulation can chill investment and innovation, and a do-nothing approach can leave consumers unprotected and competition unpromoted, which itself would ultimately lead to reduced investment and innovation.”

In my next blog post, we’ll explore the disparity of views on the initial regulatory approach—and why it has led us to another round in the Net Neutrality debate.