Network Neutrality : Who Benefits?

Network neutrality is the principle that Internet users should be able to
access any web content they choose and use any applications they choose, without
restrictions or limitations imposed by Internet service provider. The Internet
has become the face of new media and an Internet service provider is reduced to
a newspaper delivery boy, The telecom infrastructure builders having made
billions of dollars worth of investment in building the network have reasons to
be concerned over this sudden change of status.

At the outset it must be clarified that the Internet is not just a gigantic
publishing house; it is a conglomeration of multiple services possible due to
real-time, two-way communications over intelligent networks. Some of the popular
services on the Internet in the context of network neutrality are:

Transaction Services & Payment Gateways: Online trading, banking, ticket
booking, cash remittance, flower delivery, greeting cards, online shopping,
auctions and other similar services fall under transactional services. The cost
of performing an online transaction is very low in comparison to performing the
action by physical means. In the early days of Internet the transactional
services had no secure means of collecting cash. It was a challenge to perform
the physical act of card swipe or phone call to complete the transaction. The
online payment gateway service was thus born out of necessity.

Payment gateways validate, encrypt transaction details, sending it to correct
destination and then decrypt the responses which are sent back. The payment
gateways charge a percent of transaction value. This according to me is a
fundamental flaw in the payment gateway business model. Payment gateway provides
nothing more than a secure session, which is simple networking function. Its
ability to read and store transaction value adds not only to the risk but also
introduces a third party to complete a transaction. ISPs do not charge banks
for secure VPN services as a function of transaction value but only for the
bandwidth and in that sense ISP are network neutral towards transactional
services.

Information Services: Websites of companies, government and standard bodies,
news and media and Wikis provide information services. Unlike in the brick and
mortar world there is no license or permission needed to get a website up and
broadcasting. Internet service providers have virtually no role to play in
content ranking, popularity, classification and selectively blocking or
promoting. When a website becomes popular it would like to take advantage of its
celebrity status by reaching out to larger audience.

IP network, the backbone of Internet, is by design best-effort and this is a
serious problem for popular websites. Network neutrality comes in the way to get
preferential treatment on the clogged Internet Highways. Content Distribution
Networks (CDN) help their clients with private jet service over the Internet.
CDNs are overlay networks that diverts Internet traffic from its source to a
private network and delivers it at the edge of the network, bypassing the public
networks, and giving better user experience. Many of the Internet publishers use
CDNs, however vast majority of websites have to deal with best-effort Internet
delivery.

At 5 AM in the morning on the way to airport, as you go past Shankar Chowk (Gurgaon),
it is interesting to note that newspaper delivery boys are inserting pamphlets
in the newspapers. Delivering location based advertisement is perhaps an
additional source of revenue for the bearer service provider. This is loss of
revenue for the publisher. The point I am trying to make is that it is possible
for the bearer to outsmart the publisher, if they do not remain invested in the
wellbeing of bearer service provider.

Search Engines: SE provides a seemingly intelligent response to a search
query by listing multiple choices response in an order governed by complex rules
of context and commerce. The business model of SE is to sell keywords or tags
to advertisers who bid for it. Their USP is to keep their catalogs up-to-date to
help find a needle in the haystack. The page ranking of the websites listing the
keywords is based more on the network popularity than on network neutrality.
Search engines are the Holy Grail of Internet, so let me not cast doubts in the
minds of readers on its network neutrality.

There is however one problem with the SE business model, why do they share
revenue with advertisement consumers? This has perhaps helped in sustaining
keyword pricing from dropping sharply. In the long run the SE will not be able
to sustain the ever growing cost of search. In the last one year there is a
trend emerging where service providers and search engines are collaborating.
Telecom operators are better positioned with user demographic information to
improve utility of search for Advertisement RoI.

Publishing Services: To get on board free online publishing service a user
account is all that you need. The website collects some personal user
information but makes little or no effort to validate it. In fact the validation
is as simple as having an active email account. The user is then asked to accept
terms of usage and privacy policy of the website. Voila, you are now a
publisher. You have access to free email, disk-space, photo-storage, blogging,
social networking, etc. The focus of the online publishing services is user
generated content. The table of top 20 popular websites establishes the
popularity of user generated content over traditional publishing.

The end purpose of these services is to create a stadium or mall like
experience where hoards of visitors would like to hop-in daily. Having free
online service is no guarantee for advertisement revenue. The success is
measured by number of active users and daily visitors. Internet provides
easy solutions for making web services popular. There are references, cross
references, RSS feeds, Blog rolls, Bookmarks, Diggs & del.icio.us like endless
tools to manage multiple personalities of an Internet visitor. Thanks to
advanced browser features every known online service is only a few clicks away
and runs on autopilot.

The flow of user-generated-content in the Internet is that of a classical
pyramid scheme and you can test it for yourself. Ask your grandmother the home
cure for hiccups and send it to just one of your friends in an email. Within two
weeks it will be translated in all the languages, circulated to discussion
forums and social networking sites with endorsement, video demo on YouTube by a
doctor, a Twitter micro-blog for mobile users, last but not the least a
PowerPoint printout for your ex-boss who hasnt accepted your Facebook
invitation! The demand for content on the Internet is mind-boggling; we have got
to feed 600 Gbps (ingress) to this ever-growing black-hole, estimated to reach 1
mn Gbps in the next five years.

In conclusion what must happen for the growth of Internet is an effort from
ISP and network operators to improve its web services strategy. Have better
representation in W3C and Telco2.0. Push all session based web transactions on
open standard based platforms. Drive standards for CDN for publishers. Initiate
concepts of overlay specialized networks for specialized needs. Develop tools to
measure ratings and network based advertisement insertions. Protect and promote
investment on intelligent network.

Lalit S Chowdhary

The author is director, carrier sales, Alcatel-Lucent

maildqindia@cybermedia.co.in