Wednesday, April 23, 2014
It appears that the FCC will permit exceptions to the standard, plain vanilla best efforts routing standard for Internet traffic, such as the paid peering arrangement recently negotiated between Comcast and Netflix. In both academic and applied papers I have supported this option, with several major conditions. See, e.g., Net Bias and the Treatment of 'Mission-Critical' Bitshttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=2422842.
With no opposition that I have seen, companies like Akamai offer better than best efforts routing of “mission critical” traffic from content source to last mile, “retail” Internet Service Providers. This service improves the odds for congestion-free delivery of “mission critical” traffic, e.g., live video streaming. It appears that the FCC intends to permit better than best efforts routing options for retail ISPs.
I have no problem with ISPs throughout the Internet ecosystem providing different tiers of service, provided the most costly differentiation offers a true enhancement. Put more simply better than best efforts should not foreclose the best efforts option, particularly for ventures and individuals whose traffic volumes have no possibility of causing congestion. Comcast and other retail ISPs should have the option of providing companies like Netflix with an insurance policy of sorts so long as all ventures and individuals do not have to follow suit. Without transparency and reporting requirements companies like Comcast can punish anyone refusing to upgrade from the old standard best efforts option by all but guaranteeing congestion and degraded service.
ISPs should have the opportunity to offer an enhanced deliver option with less latency, faster delivery speeds and improved odds for high quality of service. But the enhancement should not become necessary for any and all users.
The Aereo technology and litigation offer several insights on how we will access video entertainment going forward and who has superior bargaining leverage. Once upon a time—back in the age of “appointment television,” broadcasters controlled access to “must see” television. We dutifully selected the network television channel at the appointed time and watched knowing any repeat access option was also subject to great specificity several weeks later.
The onset of the analog video cassette recorder “empowered” viewers by facilitating time shifting and multiple viewing options. With digitization consumers have greater options for shifting content between and among different recording and playback devices. So one trend favors consumers with greater flexibility and the prospect of access to content anytime, anywhere, via any device and in any format. Technology agnostic consumers have little interest in the medium of delivery, but surely expect on demand access to any and all screen: television sets, pc, smartphones and tablets.
So far so good, but no one should be surprised when content creators and distributors responded in ways that lock down access and attempt to reestablish control. While they failed to secure FCC regulations mandating television set processing of broadcast flags limiting content access flexibility, (American Library Assn. v. FCC 347 F.3d 291, 293 (D.C. Cir. 2003)) content creators and distributors achieved success in restricting copying and device shifting when the an HDMI cord handles the carriage, e.g., from a Blueray DVD player to a television set or PC. Score one for the incumbents who now can use Digital Right Management technologies to prevent what might otherwise qualify as fair use, the right of consumers to make copies and switch access between devices for private, non-commercial use.
Broadcasters in particular score additional points when they successfully accrued billions in retransmission consent fees for content they have to offer “free to air” for the 9 percent of the viewers still using the broadcast spectrum option. Copyright fees appear to matter more to broadcasters than advertising revenues which arguably Aereo technologies would increase in light of possibly higher ratings.
So along comes a “disruptive” Aereo technology that mimics old school broadcast television reception. The crux of the copyright litigation lies in whether the reception design of Aereo sufficiently mimics the private reception of public media via each dime sized antennas routing content via the Internet. If the Supreme Court views this reception as a private performance, then Aereo would not incur copyright liability. There is case law that suggests broadcasters have little control over content they “freely broadcast.” Bear I mind that this stakeholder group has benefitted for so many years with such benefits as free spectrum in light of their service in the public interest. Converting free content into content available only subject to a retransmission consent fee dilutes any claim credible claim for such preferred status.
If Aereo loses, perhaps broadcasters should lose the benefits of a status deeming them “trustees” of scarce and valuable spectrum, including the billions that otherwise might accrue by relinquishing control of some spectrum in an incentive auction.