With the text of the just passed Net Neutrality rules under lock and key, the FCC is trickling out some of the details regarding the ruling.  ArsTechnica’s Matthew Lasar noted that the FCC was promising to outlaw paid prioritization.  The FCC majority that passed the rules justifies this by claiming:

“Since the beginning of the Internet, Internet access providers have typically not charged particular content or application providers fees to reach the providers’ consumer retail service subscribers or struck pay-for-priority deals, and the record does not contain evidence that U.S. broadband providers currently engage in such arrangements.”

But this is false.  “Internet access providers” i.e., broadband providers have either directly or indirectly charged (via Content Distribution Networks or CDNs) content providers for a direct connection with broadband networks.  This is typically done through CDNs because they offer a one-stop shop that connects content providers with multiple broadband networks as well as a distributed server and storage infrastructure situated in strategic locations (which are very expensive to rent) around the Internet.  A typical content provider is going to be busy creating or licensing the content and attracting customers so they typically outsourced their distribution to CDNs.  The content provider essentially pay the broadband provider for delivery via CDN and the broadband provider sells hundreds of gigabits per second (Gbps) of private peering capacity to CDNs.

The significance of these CDNs was that they offered a high performance and low cost alternative to Internet backbone providers who offered only Internet transit service to connect content providers with broadband providers and their subscribers.  CDNs essentially compete with Internet backbone providers but one way or another, content providers have always had to pay someone to deliver their packets to broadband subscribers and the more they paid the more priority given to their data which resulted in better performance and reliability.

The FCC majority goes on to argue:

“A commercial arrangement between a broadband provider and a third party to directly or indirectly favor some traffic over other traffic in the connection to a subscriber of the broadband provider (i.e., “pay for priority”) would raise significant cause for concern.”

Given the fact that CDNs have existed since the beginning of the broadband era and the Internet that most of the public was first exposed to, this rule against Paid Prioritization flies in the face of how the Internet actually works.  Favoring traffic for content providers who pay is exactly what a CDN  does yet we’re hearing (not certain since the actual rules are still secret) that “managed services” and CDNs are permissible.  This statement is confusing on multiple levels.

First of all, what is a “third party”.  Doesn’t anyone dealing in a business transaction automatically become a direct participant and therefore are no longer a “third party” by definition?

Shouldn’t the purpose of a non-discrimination rule be to outlaw improper coercion e.g., “buy my priority access service or something bad (below best effort and below fair capacity/queue allocation) happens to your packets”?

How do CDNs get around this rule?  Are they exempt from “third party” status whatever that means?

Does this mean that it’s now illegal to buy priority delivery from anyone who lacks this special “third party” exemption?  In other words, they can’t buy direct wholesale peering bandwidth unless they can retain expensive lawyers to convince the FCC that they’re not a “third party”?

From what little we know about the rules passed by the FCC, we hear that it might be a workable compromise but that doesn’t make it any less confusing and contradictory.  But that’s what happens when we listen to Internet revisionists who are in absolute denial about the fact that CDNs have always existed and operate as fee based priority delivery services.

[Cross-posted at Digital Society]