Friday, February 26, 2010

Engineers, Commissars and Regulators: Layered self-regulation of network neutrality

My post Ostrom and Network Neutrality suggested that a nested set of self- or co- regulatory enterprises (Ostrom 1990:90) could be useful when designing regulatory approaches to network neutrality, but I didn’t give any concrete suggestions. Here’s a first step: create separate arenas for discussing engineering vs. business.

One’s immediate instinct when devising a shared regulatory regime (see the list of examples at the end) might be to involve all the key players; at least, that’s what I pointed to in When Gorillas Make Nice. However, I suspect that successful self-regulatory initiatives have to start with a relatively narrow membership and scope: typically, a single industry, rather than a whole value chain. That’s the only way to have a decent shot at creating and enforcing basic norms. Legitimacy will require broadening the list of stakeholder, but too many cooks at the beginning will lead to kitchen gridlock.

Let’s stipulate for now that the key problem is defining what “acceptable network management practices” amount to. Most participants in the network neutrality debate agree that ISPs should be able to manage their networks for security and efficiency, even if there is disagreement about whether specific practices are just good housekeeping or evil rent-seeking.

The engineering culture and operating constraints of different networks are quite distinct: phone companies vs. cable guys; more or less symmetrical last mile pipes; terminating fiber in the home vs. at cabinet; and not least, available capacity in wireline vs. wireless networks. Reconciling these differences and creating common best practices within the network access industry will be hard; that’s the lowest layer of self-regulation. The “Engineers” should be tasked with determining the basic mechanisms of service provision, monitoring compliance with norms, and enforcing penalties against members who break the rules.

The core participants are the telcos (e.g. Verizon, AT&T) and cable companies (e.g. Comcast, Time Warner Cable), in both their wireline and wireless incarnations. Only within a circumscribed group like this is there is any hope of detailed agreement about best practices, let alone the monitoring and enforcement that is essential for a well-functioning self-regulatory organization. Many important network parameters are considered secret sauce; while engineers inside the industry circle can probably devise ways monitor each other’s compliance without giving the MBAs fits, there’s no chance that they’ll be allowed to let Google or Disney look inside their network operating centers.

The next layer of the onion adds the companies who use these networks to deliver their products: web service providers like Google, and content creators like Disney. Let’s call this group the “Commissars”. This is where questions of political economy are addressed. The Commissars shape the framework within which the network engineers decide technical best practices. It’s the business negotiation group, the place where everybody fights over dividing up the rents; it needs to find political solutions that reconcile the very different interests at stake:

  1. The ISPs want to prevent regulation, and be able to monetize their infrastructure by putting their hand in Google’s wallet, and squeezing content creators.
  2. Google wants to keep their wallet firmly shut, and funnel small content creators’ surplus to Mountain View, not the ISPs.
  3. Large content creators want to get everybody else to protect their IPR for them.
  4. New content aggregators (e.g. Miro) want a shot at competing in the video business with the network facility owners.
This is not an engineering argument, and a Technical Advisory Group (TAG) along the lines described by Verizon and Google (FCC filing) would not be a suitable vehicle for addressing such questions. The Commissars are responsible for answering questions of collective choice regarding the trade-offs in network management rules, and adjudicating disputes that cannot be resolved by the Engineers among themselves.

The Engineers can work in parallel to the Commissars, and don’t need to wait for the political economists to fight out questions about rents; in any case, it will be helpful for the Commissars to have concrete network management proposals to argue about. There will be a loop, with the conclusions of one group influencing the other. The Commissars inform the Engineers about the constraints on what would constitute acceptable network management, and the Engineers inform the Commissars about what is practical.

Finally, government actors – call them the “Regulators” – set the rules of the game and provide a backstop if the Engineers and Commissars fail to come up with a socially acceptable solution, or fail to discipline bad behavior. Since the internet and the web are critical infrastructure, governments speaking for citizens are entitled to frame the overall goals that these industries should serve, even though they are not well qualified to define the means for achieving them. Final adjudication of unresolved disputes rests with the Regulators.


Ofcom, Initial assessments of when to adopt self- or co-regulation, December 10, 2008,

Elinor Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge University Press, 1990

Philip J. Weiser, Exploring Self Regulatory Strategies for Network Management: A Flatirons Summit on Information Policy, August 25, 2008,

Examples of self- and co-regulatory bodies

The Internet Watch Foundation (IWF) in the UK works to standardize procedures for the reporting and taking-down of abusive images of children. It was established in 1996 by the internet industry to allow the public and IT professionals to report criminal online content in a secure and confidential way. (Ofcom 2008:9, and IWF)

The UK “Classification Framework” for content on mobile phones is provided by the Independent Mobile Classification Body (IMCB) with the aim of restricting young people’s access to inappropriate content. It is the responsibility of content providers to self-classify their own content as “18” where appropriate; access to such content will be restricted by the mobile operators until customers have verified their age as 18 or over with their operator. (Ofcom 2008:9, and IMCB)

The Dutch organization NICAM (Nederlands Instituut voor de Classificatie van Audiovisuele Media) administers a scheme for audiovisual media classification. It includes representatives of representatives of public and commercial broadcasters, film distributors and cinema operators, distributors, videotheques and retailers. (Ofcom 2008:9, and NICAM)

Amateur radio service and frequency coordinators provide examples of self-regulation in spectrum policy. The American Radio Relay League (ARRL) has an understanding with the FCC that it manages the relevant enforcement activities related to the use of ham radio. Only in the most egregious cases will ARRL report misbehavior to the FCC Enforcement Bureau. (Weiser 2008:23)

The Better Business Bureau’s National Advertising Division (NAD) enforces US rules governing false advertising, using threats of referrals to the FTC to encourage compliance with its rules. (Weiser 2008:24, and NAD)

US movie ratings are provided by a voluntary system operated by the MPAA and the National Association of Theater Owners.

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