Opinion The usually perspicacious Neelie Kroes, the European Digital Agenda Commissioner, has finally hit a wall in Net Neutrality legislation, perhaps seeing the conflicting sides to the net neutrality argument. These are the same arguments that the US Government and the Federal Communications Commission (FCC) have been unable to sort out for the past five years.

Across the globe there are those who, plainly and simply, hate markets to be too highly regulated and will resist any attempt to force the internet down the same road as telecoms. But Kroes had not previously been one of these.

This position is probably equally balanced by people who fear that without regulation, major companies, especially ISPs, will block or slow traffic streams from rivals. In the past Kroes might have put herself in this camp.

But suddenly, in a speech given at a Net Neutrality Summit in Brussels, Kroes said that she thought that in general ISPs have upheld the principle of open access and said that now was not the time to create new legislation to guard the internet. She also said that the recent European Union 2009 Telecoms Framework gives regulators sufficient tools to protect the openness of the Internet. Well you might hope so, but this failure to act will immediately cause an avalanche of change on the internet and one day later it is already happening.

UK gov backs ISPs, rather than the British public

Within a day of the confession by Kroes that she will not be pursuing the creation of a Europe-wide piece of network neutrality legislation, the UK Culture, Communications and Creative Industries minister Ed Vaizey came out and said that ISPs should be free to favor traffic from one content provider over another as long as they inform customers. What was he thinking?

He issued this opinion at an FT Conference, saying that the market will decide how far ISPs can go in charging for preferential or guaranteed content delivery and QoS. Suddenly the UK government appears to have broken the deadlock on net neutrality and put itself on the side of major ISPs, instead of the public.

Part of the reasons for all this is that for five years there has been a legislation stand-off between the two sides. Back in 2005 the FCC in the US caught Comcast blocking Vonage VoIP traffic, so that its customers could not subscribe to Vonage. This week Kroes admitted that the cellular equivalent of this – cellular networks blocking Skype calls – was almost inevitable with no legislation. So who or what is going to protect Skype? Consumers' freedom to change operators, says Kroes.

Back in 2005 the FCC said that it was committed to creating an internet adhering to four principles: (1) consumers are entitled to access Internet content of their choice; (2) consumers are entitled to run applications and services of their choice; (3) consumers are entitled to connect their choice of devices to the internet; and (4) consumers are entitled to competition among internet providers.

But item 3 is already being widely broken, where US broadcasters have blocked the delivery of their video web sites to Google TV devices... and there appears to be no legal remedy in sight.

There are several key arguments here which balance each other out. The first is that if network operators cannot choose which traffic travels fastest over its internet channels, then this will reduce investment in broadband networks. They can prove this is true simply by refusing to grow their networks until the government gives way – and in the US, Verizon and AT&T have used this tactic in the past. However, they are both living with the legacy of this tactic and they lost ground considerably against cable operators in broadband.

Another argument is that 5 per cent of the users use 95 per cent of the traffic on the internet, so traffic shaping is needed to block in particular video piracy, to slow down the packets which are delivered from illegal P2P downloading sites. Except that of course they are not downloaded from those sites, but come from uplinks all over the internet.

All ISPs can do is establish that they are video packets, by using packet sniffing appliances in the network, and then marry this to where they come from and block accordingly. That would mean that an upload of Granny‘s holiday videos would be indistinguishable from a pirated movie, especially if it is encrypted, which can be achieved by using a boring old VPN.