FCC Title II Ruling

I got an email from the Heartland Institute today, purporting to give an expert opinion about today’s Net Neutrality ruling. The money quote reads: “The Internet is not broken, it is a vibrant, continually growing market that has thrived due to the lack of regulations that Title II will now infest upon it.”

This is wrong both on Internet history, and on the current state of broadband in the US.

It was the common carriage regulatory requirement on voice lines that first enabled the Internet to explode into the consumer world, by obliging the phone companies to allow consumers to hook up modems to their voice lines. It is the current unregulated environment in the US that has caused our Internet to become, if not broken, at least considerably worse than it is in many other countries:

America currently ranks thirty-first in the world in terms of average download speeds and forty-second in average uploads speeds, according to a recent study by Ookla Speedtest. Consumers pay much more for Internet access in the U.S. than in many other countries.

Net Neutrality, Congestion, DRM

Videos burn up a lot more bandwidth than written words, per hour of entertainment. The Encyclopedia Britannica is 0.3 GB in size, uncompressed. The movie Despicable Me is 1.2 GB, compressed. Consequently we should not be surprised that most Internet traffic is video traffic:

The main source of the video traffic is Netflix, followed by YouTube:

Internet Service Providers would like to double-dip, charging you for your Internet connection, and also charging Netflix (which already pays a different ISP for its connection) for delivering its content to you. And they do.

To motivate content providers like Netflix to pay extra, ISPs that don’t care about their subscribers could hold them to ransom, using network congestion to make Neflix movies look choppy, blocky and freezy until Neflix coughs up. And they do:

This example illustrates the motivation structure of the industry. Bandwidth demand is continuously growing. The two basic strategies an ISP can use to cope with the growth are either to increase capacity or to ration the existing bandwidth. The Internet core is sufficiently competitive that its capacity grows by leaps and bounds. The last mile to the consumer is far less competitive, so the ISP has little motivation to upgrade its equipment. It can simply prioritize packets from Netflix and whoever else is prepared to pay the toll, and let the rest drop undelivered.

One might expect customers to complain if this was happening in a widespread way. And they do:

Free market competition might be a better answer to this particular issue than regulation, except that this problem isn’t really amenable to competition; you need a physical connection (fiber ideally) for the next generation of awesome immersive Internet. Running a network pipe to the home is expensive, like running a gas pipe, or a water pipe, or a sewer, or an electricity supply cable, or a road; so like all of those instances, it is a natural monopoly. Natural monopolies work best when strongly regulated, and the proposed FCC Title II action on Net Neutrality is a good start.

Digital Rights Management

Unrelated but easily confused with Net Neutrality is the issue of copyright protection. The Stop Online Piracy Act, or SOPA, was defeated by popular outcry for being too expansive. The remedies proposed by SOPA were to take down websites hosting illegal content, and to oblige ISPs to block illegal content from their networks.

You might have noticed in the first graphic above, about 3% of what consumers consume (“Downstream”) online is “filesharing,” a.k.a music and video piracy. It is pretty much incontrovertible that the Internet has devastated the music business. One might debate whether it was piracy or iTunes that did it in, but either way the fact of Internet piracy gave Steve Jobs a lot of leverage in his negotiations with the music industry. What’s to prevent a similar disembowelment of the movie industry, when a consumer in Dallas can watch a movie like “Annie” for free in his home theater before it has even been released?

The studio that distributes the movie would like to make sure you pay for seeing it, and don’t get a pirated copy. I think so too. This is a perfectly reasonable position to take, and if the studio was also your ISP, it might feel justified in blocking suspicious content. In the US it is not unusual for the studio to be your ISP (for example if your ISP is Comcast and the movie is Despicable Me). In a non-net-neutral world an ISP could block content unilaterally. But Net Neutrality says that an ISP can’t discriminate between packets based on content or origin. So in a net-neutral world, an ISP would be obliged to deliver pirated content, even when one of its own corporate divisions was getting ripped off.

This dilemma is analogous to free speech. The civilized world recognizes that in order to be free ourselves, we have to put up with some repulsive speech from other people. The alternative is censorship: empowering some bureaucrat to silence people who say unacceptable things. Enlightened states don’t like to go there, because they don’t trust anybody to define what’s acceptable. Similarly, it would be tough to empower ISPs to suppress content in a non-arbitrary but still timely way, especially when the content is encrypted and the source is obfuscated. Opposing Net Neutrality on the grounds of copyright protection is using the wrong tool for the job. It would be much better to find an alternative solution to piracy.

Actually, maybe we have. The retail world has “shrinkage” of about 1.5%. The credit card industry remains massively profitable even while factoring in a provision for fraud at about 3% of customers compromised.

Total Existing Card Fraud Losses and Incidence Rate by Year. Source: Lexis/Nexis.

“Filesharing” at 3% of download volume seems manageable in that context, especially since it has trended down from 10% in 2011.

ALA Troubled by Court’s Net Neutrality Decision

My thoughts on network neutrality can be found here and some predictions contingent on its loss here, so obviously I am disheartened by this latest ruling. The top Google hit on this news is currently a good story at GigaOm, and further down Google’s hit list is a thoughtful article in Forbes, predicting this result, but coming to the wrong conclusion.

I am habitually skeptical of “slippery slope” arguments, where we are supposed to fear something that might happen, but hasn’t yet. So I sympathize with pro-ISP sentiments like that Forbes article in this regard. On the other hand, I view businesses as tending to be rational actors, maximizing their profits under the rules of the game. If the rules of the game incent the ISPs to move in a particular direction, they will tend to move in that direction. Because competition is so limited among broadband ISPs (for any home in America there are rarely more than two options, regardless of the actual number of ISPs in the nation), they are currently incented to ration their bandwidth rather than to invest in increasing it. This decision is a push in that same direction.

Arguably the Internet was born of Federal action that forced a corporation to do something it didn’t want to do: without the Carterfone decision, there would have been no modems in the US. Without modems, the Internet would never have gotten off the ground.

Arguments that government regulation could stifle the Internet miss the point that all business activity in the US is done under government rules of various kinds: without those rules competitive market capitalism could not work. So the debate is not over whether the government should ‘interfere,’ but over what kinds of interference the government should do, and with what motivations. I take the liberal view that a primary role of government is to protect citizens from exploitation by predators. I am an enthusiastic advocate of competitive-market capitalism too, where it can exist. The structure of capitalism pushes corporations to charge as much as possible and provide as little as possible for the money (‘maximize profit’). In a competitive market, the counter-force to this is competition: customers can get better, cheaper service elsewhere, or forgo service without harm. But because of the local lack of competition, broadband in the US is not a competitive market, so there is no counter-force. And since few would argue that you can live effectively in today’s US without access to the Internet, you can’t forgo service without harm.

The current rules of the broadband game in the US have moved us to a pathetically lagging position internationally so it seems reasonable to change them. Unfortunately this latest court decision changes them in the wrong direction, freeing ISPs to ration and charge more for connectivity rather than encouraging them to invest in bandwidth. If you agree that this is a bad thing, you can do some token venting here: http://act.freepress.net/sign/internet_FCC_court_decision2/

Here is a press release from an organization that few people could find fault with.

Clearing the Cloud for Reliable, Crystal-Clear VoIP Services

The compelling advantage of VoIP is that it is far cheaper than circuit switched technology. But VoIP calls often sound horrible. It doesn’t have to be this way. Although VoIP is intrinsically prone to jitter, delay and packet loss, good system design can mitigate all these impairments. The simplest solution is over-provisioning bandwidth.

The lowest bandwidth leg of a VoIP call, where the danger of delayed or lost packets is the greatest, is usually the ‘last mile’ WAN connection from the ISP to the customer premises. This is also where bandwidth is most expensive.

On this last leg, you tend to get what you pay for. Cheap connections are unreliable. Since businesses live or die with their phone service, they are motivated to pay top dollar for a Service Level Agreement specifying “five nines” reliability. But there’s more than one way to skin a cat. Modern network architectures achieve high levels of reliability through redundant low-cost, less reliable systems. For example, to achieve 99.999% aggregate reliability, you could combine two independent systems (two ISPs) each with 99.7% reliability, three each with 97.8% reliability, or four each with 94% reliability. In other words, if your goal is 5 minutes or less of system down-time per year, with two ISPs you could tolerate 4 minutes of down-time per ISP per day. With 3 ISPs, you could tolerate 30 minutes of down-time per ISP per day.

Here’s a guest post from Dr. Cahit Jay Akin of Mushroom Networks, describing how to do this:

Clearing the Cloud for Reliable, Crystal-Clear VoIP Services

More companies are interested in cloud-based VoIP services, but concerns about performance hold them back. Now there are technologies that can help.

There’s no question that hosted, cloud-based Voice over IP (VoIP) and IP-PBX technologies are gaining traction, largely because they reduce costs for equipment, lines, manpower, and maintenance. But there are stumbling blocks – namely around reliability, quality and weak or non-existent failover capabilities – that are keeping businesses from fully committing.

Fortunately, there are new and emerging technologies that can optimize performance without the need for costly upgrades to premium Internet services. These technologies also protect VoIP services from jitter, latency caused by slow network links, and other common unpredictable behaviors of IP networks that impact VoIP performance. For example, Broadband Bonding, a technique that bonds various Internet lines into a single connection, boosts connectivity speeds and improves management of the latency within an IP tunnel. Using such multiple links, advanced algorithms can closely monitor WAN links and make intelligent decisions about each packet of traffic to ensure nothing is ever late or lost during communication.

VoIP Gains Market Share

The global VoIP services market, including residential and business VoIP services, totaled $63 billion in 2012, up 9% from 2011, according to market research firm Infonetics. Infonetics predicts that the combined business and residential VoIP services market will grow to $82.7 billion in 2017. While the residential segment makes up the majority of VoIP services revenue, the fastest-growing segment is hosted VoIP and Unified Communications (UC) services for businesses. Managed IP-PBX services, which focus on dedicated enterprise systems, remain the largest business VoIP services segment.

According to Harbor Ridge Capital LLC, which did an overview of trends and mergers & acquisitions activity of the VoIP market in early 2012, there are a number of reasons for VoIP’s growth. Among them: the reduction in capital investments and the flexibility hosted VoIP provides, enabling businesses to scale up or down their VoIP services as needed. Harbor Ridge also points out a number of challenges, among them the need to improve the quality of service and meet customer expectations for reliability and ease of use.

But VolP Isn’t Always Reliable

No business can really afford a dropped call or a garbled message left in voicemail. But these mishaps do occur when using pure hosted VoIP services, largely because they are reliant on the performance of the IP tunnel through which the communications must travel. IP tunnels are inevitably congested and routing is unpredictable, two factors that contribute to jitter, delay and lost packets, which degrade the quality of the call. Of course, if an IP link goes down, the call is dropped.

Hosted, cloud-based VoIP services offer little in the way of traffic prioritization, so data and voice fight it out for Internet bandwidth. And there’s little monitoring available. IP-PBX servers placed in data centers or at the company’s headquarters can help by providing some protection over pure hosted VoIP services. They offer multiple WAN interfaces that let businesses add additional, albeit costly, links to serve as backups if one fails. Businesses can also take advantage of the various functions that an IP-PBX system offers, such as unlimited extensions and voice mail boxes, caller ID customizing, conferencing, interactive voice response and more. But IP-PBXes are still reliant on the WAN performance and offer limited monitoring features. Thus, users and system administrators might not even know about an outage until they can’t make or receive calls. Some hosted VoIP services include a hosted IP-PBX, which typically include back-up and storage and failover functions, as well as limited monitoring.

Boosting Performance through Bonding and Armor

Mushroom Networks has developed several technologies designed to improve the performance, reliability and intelligence of a range of Internet connection applications, including VoIP services. The San Diego, Calif., company’s WAN virtualization solution leverages virtual leased lines (VLLs) and its patented Broadband Bonding, a technique that melds various numbers of Internet lines into a single connection. WAN virtualization is a software-based technology that uncouples operating systems and applications from the physical hardware, so infrastructure can be consolidated and application and communications resources can be pooled within virtualized environments. WAN virtualization adds intelligence and management so network managers can dynamically build a simpler, higher-performing IP pipe out of real WAN resources, including existing private WANs and various Internet WAN links like DSL, cable, fiber, wireless and others. The solution is delivered via the Truffle appliance, a packet level load balancing router with WAN aggregation and Internet failover technology.

Using patented Broadband Bonding techniques, Truffle bonds various numbers of Internet lines into a single connection to ensure voice applications are clear, consistent and redundant. This provides faster connectivity via the sum of all the line speeds as well as intelligent management of the latency within the tunnel. Broadband Bonding is a cost effective solution for even global firms that have hundreds of branch offices scattered around the world because it can be used with existing infrastructures, enabling disparate offices to have the same level of connectivity as the headquarters without the outlay of too much capital. The end result is a faster connection with multiple built-in redundancies that can automatically shield negative network events and outages from the applications such as VoIP. Broadband Bonding also combines the best attributes of the various connections, boosting speeds and reliability.

Mushroom Networks’ newest technology, Application Armor, shields VoIP services from the negative effects of IP jitter, latency, packet drops, link disconnects and other issues. This technology relies on a research field known as Network Calculus, that models and optimizes communication resources. Through decision algorithms, Application Armor monitors traffic and refines routing in the aggregated, bonded pipe by enforcing application-specific goals, whether it’s throughput or reduced latency.

VoIP at Broker Houlihan Lawrence – Big Savings and Performance

New York area broker Houlihan Lawrence – the nation’s 15th largest independent realtor – has cut its telecommunications bill by nearly 75 percent by deploying Mushroom Networks’ Truffle appliances in its branch offices. The agency began using Truffle shortly after Superstorm Sandy took out the company’s slow and costly MPLS communications network when it landed ashore near Atlantic City, New Jersey last year. After the initial deployment to support mission-critical data applications including customer relationship management and email, Houlihan Lawrence deployed a state-of-the-art VOIP system and runs voice communications through Mushroom Networks’ solution. The ability to diversify connections across multiple providers and multiple paths assures automated failover in the event a connection goes down, and the Application Armor protects each packet, whether it’s carrying voice or data, to ensure quality and performance are unfailing and crystal clear.

Hosted, cloud-based Voice over IP (VoIP) and IP-PBX technologies help companies like Houlihan Lawrence dramatically reduce costs for equipment, lines, manpower, and maintenance. But those savings are far from ideal if they come without reliability, quality and failover capabilities. New technologies, including Mushroom Networks’ Broadband Bonding and Application Armor, can optimize IP performance, boost connectivity speeds, improve monitoring and shield VoIP services from jitter, latency, packet loss, link loss and other unwanted behaviors that degrade performance.

Dr. Cahit Jay Akin is the co-founder and chief executive officer of Mushroom Networks, a privately held company based in San Diego, CA, providing broadband products and solutions for a range of Internet applications.

Net neutrality – Holland leads the way

Service providers can offer any product they wish. But consumers have certain expectations when a product is described as ‘Internet Service.’ So net neutrality regulations are similar to truth in advertising rules. The primary expectation that users have of an Internet Service Provider (ISP) is that it will deliver IP datagrams (packets) without snooping inside them and slowing them down, dropping them, or charging more for them based on what they contain.

The analogy with the postal service is obvious, and the expectation is similar. When Holland passed a net neutrality law last week, one of the bill’s co-authors, Labor MP Martijn van Dam, compared Dutch ISP KPN to “a postal worker who delivers a letter, looks to see what’s in it, and then claims he hasn’t read it.” This snooping was apparently what set off the furor that led to the legislation:

“At a presentation to investors in London on May 10, analysts questioned where KPN had obtained the rapid adoption figures for WhatsApp. A midlevel KPN executive explained that the operator had deployed analytical software which uses a technology called deep packet inspection to scrutinize the communication habits of individual users. The disclosure, widely reported in the Dutch news media, set off an uproar that fueled the legislative drive, which in less than two months culminated in lawmakers adopting the Continent’s first net neutrality measures with real teeth. New York Times

Taking the analogy with the postal service a little further: the postal service charges by volume. The ISP industry behaves similarly, with tiered rates depending on bandwidth. Net neutrality advocates don’t object to this.

The postal service also charges by quality of service, like delivery within a certain time, and guaranteed delivery. ISPs don’t offer this service to consumers, though it is one that subscribers would probably pay for if applied voluntarily and transparently. For example, suppose I wish to subscribe to 10 megabits per second of Internet connectivity, I might be willing to pay a premium for a guaranteed minimum delay on UDP packets. The ISP could then add value for me by prioritizing UDP packets over TCP when my bandwidth demand exceeded 10 megabits per second. Is looking at the protocol header snooping inside the packets? Kind of, because the TCP or UDP header is inside the IP packet, but on the other hand, it might be like looking at a piece of mail to see if it is marked Priority or bulk rate.

A subscriber may even be interested in paying an ISP for services based on deep packet inspection. In a recent conversation, an executive at a major wireless carrier likened net neutrality to pollution. I am not sure what he meant by this, but he may have been thinking of spam-like traffic that nobody wants, but that neutrality regulations might force a service provider to carry. I use Gmail as my email service, and I am grateful for the Gmail spam filter, which works quite well. If a service provider were to use deep packet inspection to implement malicious-site blocking (like phishing site blocking or unintentional download blocking) or parental controls, I would consider this a service worth paying for, since the PC-based capabilities in this category are too easily circumvented by inexperienced users.

Notice that all these suggestions are for voluntary services. When a company opts to impose a product on a customer when the customer prefers an alternative one, the customer is justifiably irked.

What provoked KPN to start blocking WhatsApp, was that KPN subscribers were abandoning KPN’s SMS service in favor of WhatsApp. This caused a revenue drop. Similarly, as VoIP services like Skype grow, voice revenues for service providers will drop, and service providers will be motivated to block or impair the performance of those competing services.

The dumb-pipe nature of IP has enabled the explosion of innovation in services and products that we see on the Internet. Unfortunately for the big telcos and cable companies, many of these innovations disrupt their other service offerings. Internet technology enables third parties to compete with legacy cash cows like voice, SMS and TV. The ISP’s rational response is to do whatever is in its power to protect those cash cows. Without network neutrality regulations, the ISPs are duty-bound to their investors to protect the profitability of their other product lines by blocking the competitors on their Internet service, just as KPN did. Net neutrality regulation is designed to prevent such anti-competitive behavior. A neutral net obliges ISPs to allow competition on their access links.

So which is the free-market approach? Allowing network owners to do whatever they want on their networks and block any traffic they don’t like, or ensuring that the Internet is a level playing field where entities with the power to block third parties are prevented from doing so? The former is the free market of commerce, the latter is the free market of ideas. In this case they are in opposition to each other.

ITExpo East 2011: C-01 “Connecting the Distributed Enterprise via Video”

I will be moderating this panel at IT Expo in Miami on February 3rd at 9:00 am:

Mobility is taking the enterprise space by storm – everyone is toting a smartphone, tablet, laptop, or one of each. It’s all about what device happens to be tIn today’s distributed workforce environment, it’s essential to be able to communicate to employees and customers across the globe both efficiently and effectively. Prior to today, doing so was far more easily said than done because, not only was the technology not in place, but video wasn’t accepted as a form of business communication. Now that video has burst onto the scene by way of Apple’s Facetime, Skype and Gmail video chat, consumers are far more likely to pick video over voice – both in their home and at their workplaces. But, though demand has never been higher, enterprise networks still experience a slow-down when employees attempt to access video streams from the public Internet because the implementation of IP video is not provisioned properly. This session will provide an overview of the main deployment considerations so that IP video can be successfully deployed inside or outside the corporate firewall, without impacting the performance of the network, as well as how networks need to adapt to accommodate widespread desktop video deployments. It will also expose the latest in video compression technology in order to elucidate the relationship between video quality, bandwidth, and storage. With the technology in place, an enterprise can efficiently leverage video communication to lower costs and increase collaboration.

The panelists are:

  • Mike Benson, Regional Vice President, VBrick Systems
  • Anatoli Levine, Sr. Director, Product Management, RADVISION Inc.
  • Matt Collier, Senior Vice President of Corporate Development, LifeSize

VBrick claims to be the leader in video streaming for enterprises. Radvision and LifeSize (a subsidiary of Logitech) are oriented towards video conferencing rather than streaming. It will be interesting to get their respective takes on bandwidth constraints on the WLAN and the access link, and what other impairments are important.

IT Expo East 2011: NGC-04 “Meeting the Demand for In-building Wireless Networks”

I will be moderating this panel at IT Expo in Miami on February 2nd at 12:00 pm:

Mobility is taking the enterprise space by storm – everyone is toting a smartphone, tablet, laptop, or one of each. It’s all about what device happens to be the most convenient at the time and the theory behind unified communications – anytime, anywhere, any device. The adoption of mobile devices in the home and their relevance in the business space has helped drive a new standard for enterprise networking, which is rapidly becoming a wireless opportunity, offering not only the convenience and flexibility of in-building mobility, but WiFi networks are much easier and cost effective to deploy than Ethernet. Furthermore, the latest wireless standards largely eliminate the traditional performance gap between wired and wireless and, when properly deployed, WiFi networks are at least as secure as wired. This session will discuss the latest trends in enterprise wireless, the secrets to successful deployments, as well as how to make to most of your existing infrastructure while moving forward with your WiFi installation.

The panelists are:

  • Shawn Tsetsilas, Director, WLAN, Cellular Specialties, Inc.
  • Perry Correll, Principal Technologists, Xirrus Inc.
  • Adam Conway, Vice President of Product Management, Aerohive

Cellular Specialties in this context is a system integrator, and one of their partners is Aerohive. Aerohive’s special claim to fame is that they eliminate the WLAN controller, so each access point controls itself in cooperation with its neighbors. The only remaining centralized function is the management. Aerohive claims that this architecture gives them superior scalability, and a lower system cost (since you only pay for the access points, not the controllers).

Xirrus’s product is unusual in a different way, packing a dozen access points into a single sectorized box, to massively increase the bandwidth available in the coverage areas.

So is it true that Wi-Fi has evolved to the point that you no longer need wired ethernet?

Net Neutrality Fallout

Stacey Higginbotham posted an analysis of the FCC Net Neutrality report and order on GigaOM. She concludes:

As a consumer, it’s depressing, …it leaves the mobile field open for the creation of walled gardens and incentivizes the creation of application-specific devices.

Sure enough, just two weeks after the publication of the R&O, Ryan Kim reports on GigaOM that MetroPCS announced on January 3rd plans to charge extra based on what you access, rather than on the quantity or quality of the bandwidth you consume.