Center for REALTOR® Technology Web Log

    The House of Representatives just voted down the net neutrality amendment to the Communications Opportunity, Promotion and Enhancement(Cope) Act- they voted in the Cope Act (more on that later). What is this net neutrality and why was there a vote about it? 

    Basically net neutrality is the idea that all data should be treated neutrally on the internet. Data from my server shouldn’t have priority over data from your server.

    Sounds straight forward right? Well there are some issues turning the ideal into reality, namely QoS (Quality of Service). QoS is regulated by the routers that control the "net" in internet. Currently these routers determine which packets get higher priority based on what the information being transmitted requires- webpage content is happy with a best effort priority(read low priority), it will wait patiently for it’s turn even if other data cuts in line, high bandwidth video or voice communication information can’t allow others to cut, watching a video that cuts out for a second or two randomly is not a lot of fun, it requires a high priority. So if your server is hosting video content it’s data transmissions will have a higher priority then my server hosting basic web pages. This works great right now but as more servers start transmitting data requiring high priority, bandwidth becomes an issue.

     Now why would anyone be against this? The ISPs don’t like it, they would like to charge users that transmit high priority data more. They say the bandwidth and QoS requirements are a heavy burden on their networks. Case in point; video streaming now comprises approximately 20% of internet traffic in the US and is growing. They say that net neutrality will cause problems for their engineers who design QoS architechtures and involve expensive upgrades to their networks. Because of this they would like to implement a tiered internet- fast transmission speeds for those who pay extra and slower speeds for those who don’t- this certainly isn’t neutral but it’s a valid argument

    Advocates of the net neutrality ammendment say that enabling the ISPs to create a tiered internet would allow them to charge for a service that’s already been paid for. Example; you paid for your internet connection, Google pays for theirs. Once both parties are connected they should be able to communicate but under a tiered plan there would be more fees for transmitting specific types of data. The ISPs could disallow transmission of certain types of data that competed with services of their own unless a fee was paid; this is where the Cope Act comes in.

    The Cope Act gets rid of the hassle cable companies had to go through implementing their networks. Before the Cope Act cable companies had to negotiate with thousands of local governments for franchise agreements to offer video services now they only need to get approval from the FCC.

    There are many issues with this but the reason I mention it is that the ISPs and Telcos pushed for this . Why? Because they want to get into the video business and they say it would take decades for them to go through the negotiations to catch up to the cable companies. Once the ISP’s are in the video business they’ll be able to control access to their competitors services, not very neutral.

    Much of the ISPs networks were built with public money in tax breaks, direct subsidies in money and land(for cable or fiber runs) with the understanding that they would upgrade their networks to give the public high speed connections, exactly what they are now complaining the high priority transmissions require.

    Since this is the Center for REALTOR® Technology Blog, the obvious question is: "How will this affect our members and the real estate industry as a whole?" The simple answer is that it will effect our industry as much as others that use the internet to provide services. If the internet is no longer neutral there will be a higher cost to do business over the internet. How high will the cost be? That remains to be seen but it will certainly cost more to provide video content. With the passage of the COPE Act the ISPs can set any price they think the market will support. Unfortunately the price could be high because the internet is an integral component of most business interactions today. In other words high demand, high prices. Many network neutrality advocates say this will stifle innovation and keep the smaller players out of the game.  For REALTORS® this might mean only the large brokerages will be able to provide newly expensive services to their clients.

[update 6/16/06  CRT doesn't make policy decisions concerning NAR's stance on technology issues so our blog posts are purposefully educational. That being said, NAR is currently looking into this issue.]