SECTIONS - Network
November 23, 2016

Net Neutrality, IoT, and IPX

The broadband industry recently lost a 2-1 decision, which rejected challenges to the imposition of net neutrality rules and its listing as a protected public utility under Title II.

Title II prevents broadband providers from elevating one type of content over another. This means current practice is to deliver best-effort internet to everyone, regardless of the intended use. From a user’s perspective, this has been a good thing – at least so far. Everyone can enjoy his or her over-the-top apps and videos with the knowledge that his or her service isn’t being purposely throttled. Customers get best effort internet – all fair and equal. And if a customer’s Game of Thrones’ video starts buffering because all his or her neighbors logged on, while probably somewhat frustrating, it’s no big deal because, well, it’s just a movie. It’s not exactly life and death. Or is it?

Changes to the communications ecosystem are rapidly evolving on three fronts: business, technology, and regulatory.

The communications industry, and the world in general, are going through a tremendous shift at the moment. We are becoming increasingly dependent upon our connected devices to perform all types of tasks. It’s no longer just about sending emails and streaming videos. People, businesses, transportation, governments, hospitals, utilities, and even cities are relying upon cloud-based, internet-connected software, services, and apps to perform all types of critical functions. As the use of sensors grows and the Internet of Things evolves over the coming years, internet connectivity, both fixed and wireless, will increasingly becoming the lifeline for our personal lives, our economy, and even our world.

In this climate, there is a tremendous opportunity for the wholesale community – carriers and OTTs alike. But uncertainty exists as well. Net neutrality laws are often unclear and vary from nation to nation, which may have the opposite impact of creating a fair playground for all. I believe that the regulatory forces of net neutrality, plus technology advancements within the IoT and the carrier-to-carrier IPX ecosystem, are forces that will interact with each other and influence business outcomes for all the players involved.

IoT – The Future is Here

The first wave of the Internet of Things is already upon us and has been for some time, although we didn’t call it that. One year before the first webpage was even written, John Romkey created the first internet device, a toaster that could be turned on and off over the internet.

At the 1990 INTEROP conference, the toaster took center stage. It was connected to a computer with TCP/IP networking and used an information base (SNMP MIB) to turn the power on, as noted in Postcapes’ “A Brief History of the Internet of Things”.

Since then, app-driven home security services and thermostats have entered the market, along with wearable devices like Fitbits. In the enterprise world, automated fleet and asset tracking devices have greatly improved shipping and logistics. This first wave of IoT devices and services is leading us into the second wave. With this, we can see that indeed some sci-fi ideas will become reality: Self-driving cars, life-saving medical devices, virtual reality tools, smart cities, and more are all within reach.

But there will be a third wave of IoT applications. This is what lies beyond what is imaginable now, and this is where current regulation may fall short. Just like the introduction of the internet, where we couldn’t have foreseen the impact it would have on today’s world, the same is true for the IoT. We are only at its beginning stages – where what we are experiencing, and even imagining, is just the tip of the iceberg.

There are three questions net neutrality leaves unanswered in an IoT world.

When connectivity really is a matter of life and death, how will net neutrality address QoS-based services that require SLAs and a fast-track channel that ensures no latency or data loss?

Today, the FCC classifies the internet as a “protected public utility”, similar to electricity. There is no doubt that electricity is a critical service, and when we don’t have it, it’s painful –sometimes even life threatening. But hospitals, schools, businesses, and even homes can buy back-up generators to ensure they get continuous power, even when everyone else has to go without.

Most of us realize this is a fair tradeoff. Those who can’t (or won’t) do without power have the option to purchase a generator. But currently there is no back-up generator, or fast track, for the internet. 

With net neutrality, when service quality is degraded because of unexpected usage spikes, that’s just tough luck. Everyone is in the same boat, regardless of whether you’re a teenager Snapchatting with your friends or you’re a doctor performing life-saving tele-surgery on a patient on the other side of the world; under U.S. net neutrality rules, no one is allowed to get preferential, guaranteed connectivity – at any price.

Will net neutrality slow much-needed investment in fixed and wireless communications infrastructure, even as increasing demands from IoT devices and content delivery cause bandwidth consumption to increase to new highs?

The latest innovations in wireless and fixed technologies promise amazing new services and capabilities that we can’t even fathom today. New businesses are being built around connected devices. Things like wearables, virtual reality, and high value content need specific levels of service and bandwidth to perform properly. This means operators need to guarantee agreed upon levels of service quality and other key performance indicators to ensure these new products and services are reliably delivered.

To address this, operators around the world are working to develop enabling technologies like 5G on the wireless side, with its personalized network slicing capabilities, broadband IP with fiber optics and satellite technologies, SDN and NFV. Most recently, so that high-quality KPI-driven connectivity can be ensured across multiple underlying networks and service providers on a global scale, service providers have been working on a new standard – IPX – for interconnections among each other. This will, in effect, allow operators to provide a superior and guaranteed class of service – different from one that is best effort – and that can support specialized services with KPI-driven performance.

Unfortunately this runs against the very grain of how net neutrality is defined today. This means many of the next-generation services enabled by these technologies may not be available to those of us in the U.S. – unless the current FCC laws are clearly adjusted to make provision for the legitimacy of this premium service.   

Will strict U.S. net neutrality laws give other nations a competitive advantage, and how will this impact global wholesale communication trends?

Net neutrality at the international level is currently a global patchwork of murky rules and regulations – some more widely enforced than others. This creates an uneven competitive playing field for businesses and operators alike.

Some countries, like India and the EU, allow zero-rated services, where companies strike agreements with operators to provide content, like video or music, to their subscribers, without incurring data charges. Internet services like Facebook, Wikipedia, and Google have built special programs to use zero-rating as means to provide their service more broadly into developing markets, but this would position these content providers in an unfairly advantageous position.

The U.K. has provided a net neutrality exception for what the country deems as specialized services that require guaranteed bandwidth to work properly. This includes high-quality voice calling on mobile networks; live television delivered over the internet; and remote surgery. It recognizes that relinquishing these services to the open internet will impact their performance and make these valuable services potentially unusable.

For international communications that cross geographical boundaries with different regulatory controls, there is new complexity that is added to the wholesale processes of contract management, rating, billing, and reconciliation/dispute management.

Planning for the Known: Where Opportunities Abound

While the technology landscape is changing, and while the nature and speed with which communications services are being used is setting a new precedent, what we can predict with certainty is that we will continue to see huge increases in data, messaging, and video traffic exchanged over networks. On the wholesale side, this implies more emphasis on quality of service-based, and volume-based tiered interconnection contracts, and more critical business traffic routed among trusted partners.

Indeed, the growing richness of internet services spurred on by the Internet of Things will drive more IPX partnerships and more carrier-OTT and enterprise partnerships, in turn resulting in QoS-based SLAs, complex agreements, sophisticated multi-objective route optimization, and wholesale payments to manage.

Net neutrality and the idea of a free and open internet may have its rightful place, but the demands we put on the internet today are very different from what they once were, and will surely be different a decade from now. Regulations on the internet and the shared network that were intended to simplify and create a level playing environment may in fact have added to the burden by creating a non-neutral playing field. Service providers are now tasked with managing regulatory compliance across globally inconsistent laws, in addition to keeping up with technology advances, demand for increased capacity on their networks, and a wave of new services introduced via IoT, all of which create new and complex operational demands. But there is also – in this environment – new revenue- generating opportunity that is created, and many consumer services that will change the internet as we know it. Strategic partnerships across providers via IPX, or business-business partnerships between service providers and OTT, content providers or enterprise-side consumers/providers of IoT services, would allow each to take advantage of the imminent boom in volume and usage.

Shoma Chakravarty is CTO of Telarix (

Edited by Ken Briodagh

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