ISOC Panel Addresses Regulation, Innovation, and the Internet

By: Carolyn Duffy Marsan

Date: October 6, 2011

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What will drive the Internet’s evolution in the future: market forces or government regulation? This was the topic debated by a panel of experts at an Internet Society-sponsored luncheon held in Quebec City in conjunction with the IETF 81 meeting.

Panelists, including experts from across the IETF community, predicted a future of increasing regulation given how the Internet has become critical infrastructure for both government and industry.

Leslie Daigle, chief Internet technology officer at ISOC, explained that three key aspects of the Internet need to be retained, regardless of how the network and its underlying protocols evolve: permissionless innovation, open access, and collaboration.

The idea that anyone can innovate on the Internet “is really a fundamental and important aspect of the Internet experience and under the hood that we need to preserve,” said Daigle. “That comes to play in ensuring the technology and protocols that we have are … building blocks. They are not full systems or closed systems that are so tied to one purpose that they can’t be used in any other fashion.’’
Khoudia Gueye Sy

Audience member and IETF Fellow Khoudia Gueye Sy

Daigle added that, unlike broadcast television, it’s important that the Internet remain an open medium that fosters collaboration—both for the common good and for self interest.

“The network is no longer a playground,” she added. “This creates an environment where, perhaps, the notion of the evolution of the Internet is different than it was a decade ago.’’

Mark Handley, professor of networked systems at University College London, talked about some of the technical challenges facing Internet evolution. As an example, he pointed to two protocols that he has worked on—SIP and Multipath TCP—which evolved in ways he never would have predicted when they were being designed.

“We built a lot of flexibility into SIP—perhaps more flexibility than we should have,” said Handley. “But it has survived the process, and it has been distorted into being used in lots of different ways that we never thought of.”

Handley’s research shows that middleboxes run by access networks and content delivery networks are poorly understood from an operational perspective and create significant technical challenges to designing new protocols or adding new functionality.

“The network is evolving whether we like it or not, whether we plan it or not,” said Handley. “This is not the network it was a few years back. It’s changing, and it’s changing in a very unplanned and interesting way. But we’re really losing the ability to reason about what the concatenation of functionality along the path is.”
Lee Howard

Audience member Lee Howard

Handley warned that protocol designers who propose doing more functions over UDP or HTTP to get around middleboxes on TCP will merely cause a situation where middleboxes reappear one layer higher on the network stack.

“We can’t evolve the Internet in any kind of reasonably controlled manner, nor even reason about how it works, unless we understand the motivation behind these middleboxes, why they are there, and whether we can then retroactively try to fit them into some kind of architecture,” he said.

Bernard Aboba, principal architect with the Lync Division at Microsoft, predicted more government regulation of the Internet because the Internet is putting tax-generating industries out of business.

“The Internet has fairly rapidly transitioned from a plucky challenger to the incumbent, and the former incumbent is on the verge of obsolescence or bankruptcy,” said Aboba, pointing to the recent failure of bookstore chains and other publishers. “Plain old telephone service may become a relic by the end of the decade. There are entire industries that are potentially being obsoleted by the Internet. This has effects within our communities and on a global basis, which are quite considerable.’’

For example, state and local governments are seeing their tax revenues decline as more sales occur on e-commerce sites. As telephone revenues dwindle, so do the taxes collected on telephone bills that cover emergency services for the disabled.

“The pace of Internet change is so rapid in many cases that what we have is the need to rethink entire areas of regulation within a very short period of time,” said Aboba.

One issue is the looming obsolescence of plain old telephone service, which the U.S. Federal Communications Commission reports could occur as soon as 2018. According to Aboba, preparing for the telephone system to be turned off in seven years would be a “monumental” engineering and regulatory task.
Geoff Huston

Panel Speaker Geoff Huston

“The argument over how [the Internet] is to be regulated and taxed is just beginning,” said Aboba. “Ultimately we will have to rethink what rules apply and see what rules make sense on the Internet because it is inherently not a local thing, it is a global thing.’’

Geoff Huston, chief scientist at APNIC, heralded the Internet as a poster child of the power of open, unregulated markets. He said it was because of its unfettered nature that the Internet was able to transform technology, business and human life during the last decade. However, he warned that this era of openness is ending.

“The Internet has been an absolute triumph of open markets. But markets fail, markets distort, monopolies form, [and] cartels form. How do you prevent that in something like the Internet? And, indeed, what’s happening in the Internet is that volume economics are creating massive monopolies,” he said. “What’s happening is the market is ossifying. Innovation doesn’t work very well when you are trying to service two billion users.”

Huston points out two issues that will hamper Internet innovation in the future: 1) the sheer size of the Internet and the fact that it is the public telecommunications system of the world, and 2) the idea that network neutrality is going by the wayside in favor of device manufacturers approving content. This creates a scenario where the incumbents can set the terms and conditions of the challengers, something that hasn’t happened in the Internet before.

“All of a sudden we’re recreating what we found so disastrous in the 1960s with the telephone companies. We’re recreating massive amounts of ubiquitous control through carriage,” said Huston, adding that free markets created this problem and that it’s up to regulators to fix it.

Huston predicted that if regulators fail to protect the Internet’s openness, it will result in only a handful of major companies offering products and services to Internet users for many years to come. Then the demand for innovation will build up over a decade or two until there is revolutionary change.

“True salvation … is going to come from the regulatory sector, but we’re asking an awful lot, perhaps too much,” said Huston, “because we’re asking for that very delicate, light touch that keeps the incumbents to the level where innovation is still possible… where your bright idea actually has the ability to redefine tomorrow’s business.”