Information Technology Reference
In-Depth Information
Internet Policy Statement that contains these
principles (FCC, 2005b) was released at the same
time that the FCC eliminated the Computer In-
quiry rules. The Internet Policy Statement (FCC,
2005b) contains the following protections for end
users:
incumbent telecommunications providers of local
telephone service have consistently argued for a
requirement that ISPs pay termination charges
suggesting that ISPs use the local network in the
same manner as do long distance companies. This
traditional pricing arrangement and the exertion
of centralized control of the network work in the
opposite direction to the decentralized culture of
the Internet. In the circuit-switched network the
intelligence of the network lies within the network
allowing the network provider to dictate the range
of permissible applications and to ensure the qual-
ity of each application. It appears that telephone
and cable companies wish to impose a similar
structure on their advanced broadband networks.
Then, a new application provider would need to
adapt the application to the particular specifica-
tions of a network provider in order to reach
successfully the end users of that ISP.
An attempt to shift value from Internet compa-
nies to ISPs is reflected in the desire of ISPs to sell
to Internet companies a premium service (referred
to as better-than-best-efforts where best-efforts is
the standard for the delivery of packets over the
public Internet) for the delivery of data to end
users. ISPs argue that as congestion on the public
Internet increases and the demand for real time,
bandwidth-hungry applications grows (e.g., Inter-
net video), they need to have flexibility to manage
their networks and to have incentives to invest and
innovate within the networks that connect users to
the Internet. ISPs argue that to improve network
performance they should be able to offer different
levels of service at different prices just as firms in
other industries offering other kinds of service are
able to do. Internet companies are concerned about
unconstrained network management practices
given the lack of effective competition among
ISPs in local markets. Specifically, Internet com-
panies worry that the creation of a two-tier public
Internet could provide the mechanism for ISPs to
engage in anticompetitive conduct if broadband
network operators favor particular applications
and content companies. This has led to calls for
(1) Consumers are entitled to access the lawful
Internet content of their choice.
(2) Consumers are entitled to run applications
and use services of their choice subject to
the needs of law enforcement.
(3) Consumers are entitled to connect their
choice of legal devices that do not harm the
network.
(4) Consumers are entitled to competition among
network providers, applications and service
providers, and content providers.
These principles can be viewed as protections
for all consumers of Internet services. Each of
the entitlement principles is subject to reasonable
network management.
Major players in the applications and content
industry, such as Google, Amazon, Vonage, and
Skype were concerned and continue to be con-
cerned with statements made by top management
in telecommunication companies when they char-
acterized these Internet companies as free riders on
Internet infrastructure, a criticism that continues in
the leading business media today (Jenkins, 2009
and Review & Outlook, 2009). Such allegations
overlook the substantial payments that Internet
companies make to IPSs (point D) to access the
entire Internet. In turn, these ISPs have voluntary
commercial relationships with backbone providers
to ensure delivery of data to end users from and
to the Internet companies.
It appears that telecommunications companies
wish to import to the Internet the pricing arrange-
ments of the legacy circuit-switched telephone
network where a local telephone company received
payment for terminating telephone calls from
other telecommunications companies. In fact,
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