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UPDATE: See comment from Tim Wu!

Tim Wu — the coiner of the term Network Neutrality and the Chairman of Free Press — gave Engadget a must-see interview — I’m serious, if you have not seen it, go see it!!! — but he missed a huge opportunity. The interviewer asked Tim what the ideal case could be, and he painted a picture of a world where Net Neutrality is the law, where halos of good behavior hover over winged telcos and cablecos. This is fantasyland. Or full-employment-for-network-neutrality-lawyers-land.

In reality, Wu’s world is a land where the telcos and cablecos, deprived by law of their power to discriminate on the Internet, use their power to restore their power to discriminate. The only way we’ll have Sustainable Network Neutrality is by restructuring the industry into infrastructure providers (who are prohibited from having a financial interest in the contents of the traffic on their infrastructure) and providers of services, apps, devices and content. This is the only route to sustainable law and long-term enforcement.

We’ve been there before. Remember all the great pro-competition provisions of the Telecom Act of 1996? Remember Unbundled Network Elements? No? You don’t? Exactly. They were systematically smothered, slaughtered, infected, subverted, isolated and strangled over the decade 1996-2006. If that’s not a warning about what will happen to network neutrality, I don’t know what is.

Such separation would be good for shareholders too. An infrastructure business is a very different business than the service/app/device/content business. It is slow. It is predictable. It requires massive amounts of capital. It demands a deliberative management style. It requires a steady work force. It attracts patient investors. It would benefit from carrying traffic, any traffic, from any source to any destination. It would be INHERENTLY neutral.

In contrast, businesses based on services, apps, devices or content are faster, more entrepreneurial, more competitive. Product cycles are measured in weeks, not decades. These business demand entrepreneurial management that can parry competition, turn on a dime when market opportunities change, learn from mistakes and make decisions on the fly. Their work force is on-demand as virtual teams come and go. They attract risk-taking investors. They thrive not only by making better products, but also by creating competitive advantages and playing strategic games.

Housing these two different businesses inside one company is asking for trouble. Remember AOL/Time Warner? How about PCCW/HKT? Waiting for Comcast/NBCU? In fact, even Verizon and AT&T are two-in-one businesses. Their network is all about carrying all the traffic that comes, regardless of source or destination. Their opposition to Network Neutrality comes from their service/app/device/content side. They should be broken up.

With separation, enforcement would be easy. The infrastructure company would have no motive to discriminate, so it could be as creative with its network management as it wanted to be. If there were a question, an auditor would go to the infrastructure company’s books to determine whether it had illegally taken a financial interest in what it is carrying. On the other side, a services, apps, devices, content company would have no power to use the infrastructure to preserve its competitive advantage.

Tim Wu I have been discussing this since 1997. At that time I was writing, Making Network Neutrality Sustainable, and Tim Wu, having read a draft, emailed me (May 23, 2007, quoted with his permission):

David,

This is great and very deep writing that once again shows how well you
understood all of this way before any of the rest of us ; you are the true
father of the net neutrality movement

My main criticism is that the piece can be and may be misunderstood. People
who read it superficially will think you are thinking that NN “won’t work.”
What you really mean is that we need something more like “super-NN,” because
any NN rules will be eroded by the long term hydraulic pressure of the Bell
& Cable’s desire to stay alive

Its like we are building a dam, and today’s NN proponents are simply
building based on today’s water levels, and you’re saying, no, the water
levels are going to increase and no one is realizing that.

But for that reason I think you should phrase this less as the current NN
regime isn’t any good, and more toward, we need more. I know this is what
you are saying but it isn’t clear enough.

<snip>

In fact you are playing more the role of the academic here — saying what
the right, long term answer is. It is vitally important that your message
get out

So Tim Wu does understand, “the right long term answer.” So why, when he’s asked about the long-term answer, doesn’t he explain it to others? The next time Tim Wu gets an opportunity to describe the ideal neutral network, my hope is that he will describe a realistic, sustainable ideal.

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