Net Neutrality Debate à la Française

16 Jan

Over the Seine

Since the recent (and thankfully short lived) decision by Free to block Google’s advertising content for users of their set-top box, the French net (from government to activists) has been abuzz. Even the international tech press has commented on what looks from the outside like an emblematic struggle between an ISP and an OSP (See FastCompany’s French ISP Free Blocks All Web Advertising and the thoroughly researched pre-kerfuffle article on GigaOm YouTube sucks on French ISP Free, and French regulators want to know why).

Government condemnation of Free’s patent net neutrality violation has been mild, to say the least. Fleur Pellerin (French delegate minister in charge of small and medium businesses, innovation and digital economy) did state that Free’s “approach was not acceptable” (Free: Fleur Pellerin demande de mettre fin au blocage de la pub) but that “it is not illegal under French law” (Pellerin : «Free et les éditeurs vont trouver un compromis»). Over the last week-end she even stated that Xavier Niel (Free’s CEO) “asked the right question, a question that needed to be asked” (Blocage de la publicité: Niel a “posé la bonne question”, selon Pellerin).

So it was with some trepidation that I attended a round table at the ministry on Tuesday morning entitled ‘Neutralité de l’Internet’ (Internet Neutrality). A lot of people were in attendance, an interesting mix of greybeards (and future hairy greybeards) and suits. The round table was organised in two sessions with different speakers although to be fair there wasn’t really a clear underlying theme to each. I tweeted extensively, and you can find my tweets here and here. I’m going to try to pull the many threads of the discussions into a coherent whole, using the things I quoted in tweets as anchor points. Forgive me if I don’t fully succeed. One last thing: moderation was excellently handled by tech and economy journalists Solveig Godeluck and Guillaume de Calignon from Les Echos who managed to keep things moving despite too many speakers with too much to say!

The first session started with a somewhat technical explanation by Kave Salamatian of why Net Neutrality was a new issue, the thrust of the argument being essentially that it stems from the Internet’s nature as the first separated delivery network ie. one that isn’t medium specific. Questioned on the academic’s views on what was really happening in the networks, he made an elegant analogy to Plato’s Cave:

Agustin Diaz-Pines from OECD and Vesa Terava from the Electronic Communications Policy Directorate at the European Commission both presented some slides. Diaz-Pines insisted on the inherent efficiency of the current financial (or, as the case may be non-financial) mechanisms underlying internet connectivity while Terava showed the results of a recent Berec study highlighting the extend of throttling on ISP networks in Europe. Neither really offered solutions though (more was expected there from the EC, and the general feeling in the room was that they were yet again stating the obvious: that there are net neutrality violations in Europe…)

Things started heating up a little when French MPs started talking. Laure de la Raudière and Corinne Erhel spoke about the main results of a parliamentary investigation they published on the topic nearly two years ago. It was quite clear from Laure de la Raudière’s arguments that at a political level there’s a mix of very different threads that should (in my opinion) be unraveled for the debate to move forward. This is what I said in the heat of the moment:

I thought MP Christian Paul‘s statements were much sharper in that respect. He started by stating that the dichotomy between managed services and “the rest” was dangerous:

He then addressed the often heard argument of ISPs needing a contribution from OSPs (in France, the polite way of saying it is “a better share of the value accross the value chain”) by asking if we really believed that more revenues in today’s networks would mean more investment in tomorrow’s network:

He didn’t lay it thick on that argument, but considering the French operators’ track record in FTTH so far, it’s certainly a potent argument. Finally he ended his short adlib intervention by stating that the emergency was to legislate on non-discrimination now:

And indeed, this ties back to the minister using the argument that it’s not illegal to absolve Free in one of the above interviews. On that note the first panel came to a close with Corinne Erhel stating the important notion that relationships between players on the internet should not be reduced to the (often contentious) relations between the big guys:

Consensus from the first panel was that non-discrimination was an issue everyone was in agreement on and the sense from the MPs was that the government should legislate on that. The twitter feed (mostly in French), especially during the EC presentation was very much all “enough commissions and studies and reports and hearings, we all agree on this, let’s act”. The second panel was a little more fact oriented, if only for the participation of Benjamin Bayart, the head of FDN a small not for profit French ISP. Bayart is vocal, articulate and seems afraid of nothing. On the same panel was Octava Klaba, the CEO of OVH, the largest French hosting company (and one of the largest in the world). In a sense, while their participation was very welcome, it also highlighted the complete absence of representatives from large ISPs or the large OSPs on either panel. The first real numbers mentioned all morning came from Klaba (whose name I originally misspelt):

One of the things he stated also that I was waiting for someone to express what the piddly little amounts that this whole debate revolves around:

When Yves Le Mouël started talking, we were hoping for some action at last: as a representative of ISPs in France, he’s known for being pretty adamant in defending their positions. I don’t know if he felt cornered (which, to be fair, he probably was, both on the panel and in the audience) but he wasn’t very combative. He tried to explain that the whole discussion was not really about the money

That in itself is interesting since that argument is repeatedly put forward by his members’ representatives. In fact he himself used that same argument a few minutes later stating that ISPs (more specifically network operators) represented 90% of the investment in the sector (and conveniently ommiting to mention how much of the revenue they represented) and as such deserved some solidarity. I wasn’t very convinced by that argument, to say the least:

The way he framed his argument though, probably paves the way for the way the government is framing theirs since a lot of his rhetoric was covered in the Minister’s speech a little later (sorry if I’m getting ahead of myself here). The core concept is that of an ‘economic signal’. When asked to explain exactly what that meant, how that signal was to be sent, to whom and what the results would be, Le Mouël was less than clear. What I could gather is essentially that because most of the peering does not lead to an exchange of actual money, it doesn’t send an inherent economic signal to the parties involved. And that’s wrong. As nebulous as that sounds, it seems to be the latest track that the steam train of legislative reform is on. Or rather regulatory oversight. Indeed, Le Mouël insisted that his members (ISPs) did not want a law, they just wanted to have the ability to appeal to the regulator (which, as I understand it they already can). Of course, he could not end by not stressing (quite subtly) that there’s an “us” vs “them” thing going on here. For full transparency, in the following tweetquote, the stuff in brackets is mine, not his:

In fact, Laure de la Raudière mentioned something about that recourse to the regulator a little earlier, she said:

ARCEP was on the second panel and seemed to take a relatively hands free approach, stating that they believed peering should be the result of commercial negociations and not regulation of legislative action. In a sense, that comment which came towards the end of the panel was a good summary of the panelists position. I’ll come back to what I think that means later, but the contrast with the minister’s speech which followed was striking. In that speech, she outlined again most of the arguments that had already been mentioned, strongly reaffirmed attachment to non-discrimination but argued for a more balanced share of revenues accross the value chain and expressed a (non-specific) need for an “economic signal”. In other words, she built the case for intervention… only to conclude that she would ask a commission to examine the issue. After that, there was a bit of a Q&A which I won’t bore you with, I’ll just quote a couple of statements from the panelists which I thought were both spot on and provocatively framed:

 

 

At the Q&A I raised two questions, one about asymetry and one about paid transit. The first one was aimed at Yves Le Mouël. I asked him if his members would be willing to pay the OSPs if the traffic flows reversed in a few years time when symmetrical access became the norm, as seen already in some Nordic countries. He hesitated and answered that his members would address that issue when the time came if it ever came.

My second question was to the minister who has been using the example in several interviews that Dailymotion paid for peering when Youtube didn’t and that wasn’t fair. I asked her if the fact that Dailymotion was the property of Orange might not make their example a little biased. She answered that the fact they were owned by Orange didn’t mean they didn’t peer with Free, SFR and other French players and therefore was neither here nor there. But then Octave Klaba took the microphone and made a statement that really stunned me:

That tells me I need to investigate this, which I’ll do in the next few days. I don’t know which payment the minister is referring to (since none of this is public), or who is right, but I’d sure like to know.

My feeling at the end of the conference was as follows:

I don’t think the ISPs want to push for a law, or even any more interference from the government or the regulator in this matter. I think they’ve been painstakingly building the arguments for government to tolerate known breaches of net neutrality as long as they’re not too visible. Since the OSPs don’t want government intervention (but would support a non-discrimination law) it’s a deadlock. What’s completely polluting the debate is the tax issue. The French government, like other governments in Europe, is mightily pissed off at Facebook, Google, Amazon and others for not paying proper taxes in France through tax evasion. I think they’re right to be pissed off about this. But the ISPs are using that as an argument to justify their misbehaviour: it’s the nice French guys who dutifully pay their taxes vs. the evil American guys who don’t.

That political ire is tainting the debate, and that’s why the government wants to be seen to take it seriously while not acting really (at least that’s my interpretation). The consensus on non-discrimination is there, from all political sides and both greybeards and suits. But there won’t be a law anytime soon. Because in the eyes of the government, the quid pro quo has become: be dutiful tax-paying companies, OSPs, and then we’ll look into it. Of course they’d never admit that that’s how it’s now framed, but I strongly believe it is.

All the rest, “economic signals”, “traffic asymetry”, “network investment”, it’s all window-dressing, aimed at suggesting that there is a legitimate reason to examine all of these issues when in fact it weighs so little in the cost structure of the ISPs that it shouldn’t even be a point of interest for government.

That leaves me a little concerned. On the one hand, I think (I hope) it’s unlikely that the economy of traffic exchange will be affected by any government decision anytime soon. On the other hand, the evident sympathy that Free has garnered with the government by dropping their little bomb a fortnight ago is worrying. That my government – or in fact any government – would think that such an action need not be strongly condemned is a big concern. That they might further think that it’s a good way of framing the argument is even more preoccupying.

More than ever I believe that network neutrality needs to be protected. If it won’t be protected by law, it must be protected by citizens who understand what there is to lose if breaches are tolerated any further.

 

Photo Credit: Sylvain Courant photographies

5 Responses to “Net Neutrality Debate à la Française”

  1. Martin Geddes January 16, 2013 at 5:07 pm #

    Nice write-up.

    If a user signed up to a Free account knowing Google ads were blocked, having had a wide choice of competing ISPs, would that be a problem? I’d say not.My take is that the issue is the incompleteness of the contract between the user and ISP. The ISP can both create new classes of traffic treatment, change treatment, and overbook each class without any limit. That is open to abuse, and will thus be abused.”What are you going to do with my packets between my premises and the backbone?” — that’s the essence of what you want to know. The language to describe that contract is a Quality Transport Agreement. Make them say what they do, and then do what they say!The payments between ISP and OSPs are an orthogonal issue. That it’s an unregulated free-for-all seems OK as long as nobody gets significant market power over the interconnection market. The whole point of IP is to allow a variety of ideas to co-exist, without the coupling of transport and business model that telcos know and love. Maybe some OSPs should pay ISPs. I doubt it, but I wouldn’t force it or stop it.

  2. Donald Clark January 16, 2013 at 7:06 pm #

    “it’s the nice French guys who dutifully pay their taxes vs. the evil American guys who don’t”

    Spot on.  If I read your summary and other material correctly, the only reason this is being taken as seriously – getting so much air time – is this very point.

    It’s smart negotiating on behalf of the ISPs to conflate these issues.  And unless the OSPs do something to address the tax issues [a la Starbucks in the UK] then I believe they will be increasingly find it being used as “public weapon #1″ by everyone and anyone with an issue agains them.

  3. Diffraction Analysis January 17, 2013 at 4:13 pm #

    Donald, I fully agree. I wrote about this recently and stressed that it’s suicidal for the large OSPs to keep avoiding taxes in countries where they are doing business. 

    Ultimately, the laws will change to accomodate that. Luxembourg and Ireland can only last so long in the EU if they keep fiscal (and generally legal) dumping (and if it wasn’t for the EU that problem simply would not exist).

    Meanwhile, the OSPs will have accumulated a very big amount of badwill towards them. By showing now that they comply with the spirit of the law instead of the letter of the law, will lead to the same result without them accumumating that goodwill. 

  4. Shimizee January 21, 2013 at 9:29 am #

    Excellent summary Benoît, merci beaucoup

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