The real cost of violating net neutrality

A recent move by two major Caribbean mobile providers to block access to Internet-based telephony services—including several popular Voice over Internet Protocol (VoIP) applications—has brought the issue of net neutrality to the attention of Caribbean mobile phone users. 

The core principle of net neutrality is that Internet service providers should treat all data passing across their networks equally, not discriminating by user, generator, content, site, platform, application or equipment.

A joint statement from the T&T chapters of the Internet Society (ISOC-TT) and the Institute of Electrical and Electronics Engineers (IEEE-TT), along with the T&T Computer Society, described the move to block certain services as “a violation of the concept of network neutrality”.

“The action of these ISPs sets a dangerous precedent and could have a deleterious impact on efforts to leverage ICTs for both economic and social development across the region,” said Bevil Wooding, an Internet Strategist and Caribbean Outreach Manager at the research non-profit Packet Clearing House.

“Historically, ISPs have acted as gateways to the Internet and the many applications, services and content that live on the computer servers connected to it. But their role was never intended to be as gatekeepers, determining which data bits and Web services should load better or worse,” Wooding stated in a strongly worded piece on the subject.

His view was shared by a number of other regional and international observers, including the Latin America and Caribbean Network Information Centre (Lacnic), one of five Regional Internet Registries in the world which provide number resource allocation and registration services for the administration of the global Internet.

Digicel’s violation of this central principle “sets a dangerous precedent”, said Carlos Martinez, Chief Technical Officer at Lacnic, speaking to the T&T Guardian in a telephone interview.

Martinez said, “The Internet as we know it is a platform to deliver packets from one end to another end. It’s definitely not the role of the ISP to decide where packets can go and where they cannot go. It would be the equivalent of the mail deciding which letters it wants to deliver or not...Why should an ISP decide which applications they want to support or not?

If there are applications that the user finds useful, they should be able to use them. They are paying for the service.”

That notion is a pillar of net neutrality, Martinez explained.

“The end-to-end principle says that every device on the Internet should be able to send a packet to any other device on the Internet without asking permission from intermediate networks and without being translated in transit. This basic principle is respected across the Internet.”

Evolving business models

The scenario now playing out with Digicel and Lime in the Caribbean is nothing new. Proponents of net neutrality have long warned against telcos seeking to discriminate against certain kinds of data in order to remove competition, create artificial scarcity, and oblige subscribers to subscribe to their otherwise uncompetitive services.

As Wooding put it, “They are in fact discriminating against a certain type of data traffic that challenges their business model. And instead of innovating and evolving, their response is to stifle competition, and frighten the region’s governments with threats of diminished revenues.”

According to Martinez, although VoIP services do not consume as much bandwidth as services like online video streaming, they hurt the very profitable traditional voice traffic and messaging services that operators provide. This is why in more developed markets, service providers are restructuring their business models to treat with the rise of data services, and the decline of voice services.

Martinez said, “The issue is that their business model is threatened. The business model that is being directly threatened by these new applications is the traditional way that we provide the voice service. If other mechanisms prove more efficient and cheaper for the user, who are you protecting if you filter those services out? Are you protecting the user? You’re protecting the profit margins of another service! And that’s definitely not in the best interest of the user.”

Competition pushes providers to optimise their networks. By stifling competition, providers are essentially revealing an underlying unwillingness to upgrade their services and evolve their old business models, Martinez said.

Michele Marius editor of the popular Caribbean technology blog, ICT Pulse points out: “Telcos’ battle against VoIP is not new—it is at least 10 years old. During that time, technology evolved, making VoIP easier and even more accessible, and it is likely that newer and easier alternatives will continue to emerge. However, what has not been as evident is the willingness of the telcos to be more proactive in exploring newer business models, based on changes that have been occurring in the industry.”

Enabling innovation

In a statement issued shortly after news of Digicel blocking VoIP broke in T&T, Columbus Communications, the largest provider of wholesale broadband in the region, said, “…From what we understand, no other major international provider engages in the practice of blocking legitimate VOIP and similar apps...This practice can be considered punitive to customers, restricting their choices and certainly putting them at a disadvantage compared to international counterparts. Customers’ expectation today is that they can access data and voice ‘on the go’, at their convenience, on their device of choice.

Columbus maintains its position that broadband enables all current and future innovations.”

“If you think of Facebook and Twitter and all the social media that we have now, they have been permitted to grow without requiring permission from a provider...And this is something that we need to preserve; this is what has allowed the Internet to become such a rapidly growing example of technology adoption...If we give the intermediate networks the right to decide what kinds of traffic they can deliver, we are creating an environment that is adverse to innovation.”

“Right now the only country that I know that filters Voice over IP is Cuba. Not even Venezuela during the rioting earlier this year messed with Voice over IP,” Martinez said. “In countries where the regulator is strong enough, we’re going to see things play out differently. What worries me is what happens in countries where the regulator is not strong enough.”

Experts agree that by failing to create and enforce rules that actually require Internet service providers to offer equal quality of service to all data, Caribbean regulators are ultimately hurting consumers, harming economic diversification and hindering innovation.