VON stirs Net neutrality pot

When it comes to Internet neutrality, no one is neutral. Not surprisingly, sentiment at last week's Spring VON trade show in San Jose, Calif., ran against incumbent cable TV and telephone companies in their determination to offer tiered Internet services and in favor of government intervention, either by Congress or the FCC, to keep the Internet open.

To their credit, VON organizers gave the podium to two prominent incumbents — BellSouth, represented by Chief Architect Henry Kafka, and Qwest Communications, represented by Chairman and CEO Richard Notebaert.

Kafka presented a technical explanation for tiered service requirements, saying the proliferation of IP-based video will swamp existing networks and drive up prices, unless service providers can establish service tiers, charging high-volume content providers more to distribute their content. Notebaert argued that the existing framework for commercial agreements can handle provisioning of premium services without disrupting basic, best-effort Internet services.

But VON founder Jeff Pulver literally laughed off Kafka's numbers, saying third-party sources show the required infrastructure investment to be a fraction of what he claims. “They already have the networks,” Pulver said. “It would be an incremental investment.”

The competitive service providers at VON didn't take much consolation in Notebaert's reassurances, either. One of the major concerns is that Internet peering agreements will shift heavily in the favor of the larger carriers, putting an additional squeeze on smaller companies

“The merger requirements that require Verizon and AT&T to continue peering at the current standard level will expire in three years,” said John Sumpter, vice president-regulatory, for PacWest Telecom, a national wholesale services provider. “At the end of that time, it makes sense that AT&T and Verizon will attempt to peer with each other as equals, and anybody smaller will have terms that are much less advantageous.”

The broader concern is that premium services will absorb bandwidth, reducing what is available for best-effort offerings and effectively relegating competing services to the bandwidth boondocks.

Notebaert insisted this was not the intent, but only indirectly answered a direct question on maintaining quality of service to best-effort services by saying that telephone companies have offered premium services to business customers for years without damaging dial tone.

In the world of commercial service agreements on peering, there are no guarantees that service providers will be able to agree, said Myrle McNeal, senior vice president of Consumer Voice Services for Level 3 Communications, which had its own peering disagreement last fall with Cogent Communications.

“It is entirely possible to get congestion at a peering point because of the inability to agree on what the capacity should be,” he said. “It comes down to the ability of the two companies to negotiate quality of service.”

The push at VON to get signatures on a petition urging government action on Net neutrality is a reflection of how uneasy smaller service providers are over the consolidation of power.

“I'm concerned about the continued consolidation without restriction,” said Bruce Chatterley, CEO of Speakeasy, a national voice-over-IP provider. “The attitude in Washington is that competition is cable versus telco — there's an abandonment of competitive telecom.”

That's why companies such as PacWest continue to push to retain the common carrier model, Sumpter said.

“Metcalfe's Law dictates that the larger the network, the more valuable it is,” he said. “It only makes sense for these guys to try to use the power of their networks to create more value for their shareholders. It doesn't make them evil; it makes them smart.”

But it also puts everyone else at a distinct disadvantage, he added.

“We don't need new laws,” Sumpter said. “We need to keep the common carriage rules we have and enforce them.”