It's interesting that an FCC ban on paid peering (or "on-net transit" if you prefer that expression) is now seen as a plausible and even likely outcome of the FCC's net neutrality expedition. It wasn't that long ago that a number of NANOGers insisted that such action by the FCC was totally out of the question and could only be suggested by clueless industry shills. I'm talking about a blog post I wrote for GigaOM in 2009 about how video streaming was changing the Internet and the FCC's curiosity about paid peering raised in Question 106 of the 2010 Open Internet NPRM, in which I wrote:
"But paid peering may be forbidden by Question 106 <http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-09-93A1.pdf> of the FCC’s proposed Open Internet rules because it’s essentially two-tiered network access, [Bill] Norton points out.
" Paid peering illustrates how hard it is to write an anti-discrimination rule for the Internet that doesn’t have harmful side effects for all but the largest content networks. Paid peering is a better level of access to an ISP’s customers for a fee, but the fee is less than the price of generic access to the ISP via a transit network. The practice of paid peering also reduces the load on the Internet core, so what’s not to like? Paid peering agreements should be offered for sale on a non-discriminatory basis, but they certainly shouldn’t be banned."
http://gigaom.com/2009/11/22/how-video-is-changing-the-internet/
In the comments, Daniel Golding and a number of others who hung out on a particular IRC channel insisted an FCC ban on paid peering was totally out of the question: " Paid peering is not and will not be banned. Bill, unfortunately, made this up. There is no way to read the proposed rulemaking this way – its simply not in the document, at all."
One of the more interesting wrinkles was Patrick Gillmore walking back from things he and his co-authors had said about paid peering in an academic paper a few years earlier, such as:
“We also have a cautionary conclusion: if one should be motivated (for whatever reason) to contemplate some regulatory rule to manage interconnection (which the debate over Net Neutrality is, in part, about), the design of such a rule will be both complex and informationally demanding. Any simplistic rules that try to define network neutrality as the elimination of discrimination will fail even to match today’s reality by a wide margin. There is a substantial level of economic discrimination today just in the variation in willingness to peer, and the emergence of paid peering and partial transit only increase this space. Partial transit and paid peering may be seen as efficiency-enhancing responses to changing market conditions. While there may be opportunities for abuse by providers with excessive bargaining power, the complexity of what is in place today, and what seems to be working today, would argue that the best way to address any potential concern would be to focus on the sources of bargaining power and identify anti-competitive opportunism, rather than to impose ex ante restrictions on the range of bilateral contracts.” – Complexity of Internet Interconnections: Technology, Incentives and Implications for Policy, P. Faratin, D. Clark, P. Gilmore, S. Bauer, A. Berger and W. Lehr. http://people.csail.mit.edu/wlehr/Lehr-Papers_files/Clark Lehr Faratin Complexity Interconnection TPRC 2007.pdf
It seems that those of us who predicted FCC involvement in peering in the name of net neutrality were right, regardless of the terms we used, the sources we cited, or where our paychecks came from at the time.
If you read the initial net neutrality arguments from Tim Wu, Larry Lessig, and Mark Lemley, it's pretty clear that net neutrality was always about interconnection. In "Network Neutrality, Broadband Discrimination" Wu discussed it in terms of a "gateway" between a broadband network and "the Internet"; see: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=388863 .
That was obviously a simplification, but it's clear that his "gateway" represented the entire interconnection apparatus connecting a given eyeball network to the rest of the Internet. And perhaps it's also clear that this "gateway" can never be neutral because it comes down to ports at specific locations and a distribution and aggregation fabric between residential connections and ports that can never provide exactly the same service on every possible path.
From one point of view, questions about fair and equitable interconnection have to do simply with fees and capacity, but from another they have to do with steps the traffic source should take to ensure that it releases traffic into the eyeball network at locations that permit the most efficient internal routing.
And other questions are beginning to emerge about the poor interaction of video rate control algorithms and TCP congestion control that indicate that services such as YouTube and Netflix are actually their own worst enemies, see: http://apps.fcc.gov/ecfs/document/view?id=7521706465 , page 13, and http://apps.fcc.gov/ecfs/document/view?id=7521389953 , page 8.
So yeah, the demand for "free and open" interconnection is front and center, and it tends to submerge questions about the obligations of traffic sources to deliver to the best locations in an efficient way. There certainly are opportunities for abuse on both sides of the "gateway".
RB
