At Apricot 2017 last week, APNIC chief scientist Geoff Huston delivered a scathing, dystopian snapshot on how the telecoms industry has evolved from a public peer-to-peer service – where people had the right to access telecommunications – to a pack of content delivery networks where the rules are written by a handful of content owners, ignoring any concept of national sovereignty.
Presentation title: “The Death of Transit”.
Huston’s argument runs like this [Strap yourselves in. – Ed.]:
At the telecoms industry’s peak in the 20th century, sad Huston, telcos were the biggest employers in any country. Governments created Universal Service Obligation rules and put in massive cross-structural subsidization to ensure everyone had telephony at an affordable price.
The networks were dumb handset-to-dumb handset. This was the heritage of the telecoms industry. Every handset was the same and the circuit-switched network saw every user uniformly.
When it came to building computer networks, the same approach was taken. Everything was done at the edges, and the network was still transparent. Computers did not trust the network, and protocols were designed so that hopefully all the data came through, but it wouldn’t matter if they didn’t.
As for the computer network itself, there is no circuit to follow. All each switching element needs to know is the relative address of the packet. The network is stateless and no matter where a packet is injected, that data should reach its destination.
TCP as a piece of software engineering has been phenomenal. This is how the Internet was made. From a technical standpoint it was unbelievably efficient – but when the concept of money was introduced it changed everything.
The industry soon discovered that it was very hard to make money flow evenly. Telephone companies spend decades making financial settlements between providers so that when someone rang a number, the call happened and the call’s money was divided between the two in a way that was agreeable to both.
But when it came to the Internet, the system was very crude. They worked out who was the dominant partner (the provider) and the customer. In this scenario, the customer pays. In a few cases where there was no dominance, zero-dollar peering was agreed. This resulted in a world where a small club at the top – the AT&Ts and Verizons – got all the money. In some countries, there were national aggregators like Telstra who ran their own fiefdoms and everyone in the country paid them. Money flowed upwards.
Then things changed. It is no longer telephony where clients talk to clients. Clients only talk to servers, not other clients. Packets do not flow edge to edge. People do not communicate with each other – they both communicate with Google.
Then the rebellion came. The carriage folks had a massive fight with the content folks. The access folks were told by their clients that the only reason they have customers is because the content folks deliver content. Carriers said, no, that’s wrong: traffic is traffic.
It was a critical battle over who was dominant – and ultimately, carriage lost and content won. Today Facebook serves its content locally out of data centers scattered around the world. The content networks replicate the data and spit it in your face without the latency of the long links anymore.
Privatization of public space
Over the last six years, Huston said, a significant shift has occurred in which companies like Google, Facebook, Amazon, Microsoft and Apple have been investing in subsea cables. No public carriage provider is the dominant partner anymore. Public carriage has effectively stopped, Huston insisted, and private carriage is taking over. Content distribution now rules the long-distance market.
But the changes are more profound than that, Huston said. New investments are creating private networks, not public networks. In this context, transit is not a public concern – it is a private concern that serves Google or Facebook’s business plans.
Today the network is split into clients and servers. Servers sit in fortified castles in data centers. If someone has valuable data, are they going to store it at home or in a CDN like Akamai? CDNs now rule. Users no longer connect to users.
In this new world, said Huston, there is no network neutrality, there are no transit providers, there is no universal service.
This is not just the death of transit, but the privatization of a public space, of a public domain that has lasted over a century. Edge computers are now just televisions looking into the cloud data center. It is the Google cloud, not the user’s local hard drive, that matters. When everything is content, Huston said, there is no telecommunications. Now that it is all about commerce, not carriage, regulators have nothing to do.
This is a fundamental change, he said. There is no network neutrality because it is a private network. There is no right of access as you have no rights as a consumer. Even concepts like market dominance are irrelevant in face of the excessive market power of Google and Facebook.
Today, Huston said, the Internet is bringing in not a golden age but a gilded age. The chrome sheen is only a few atoms thick. Underneath is a savage world that is rapidly privatizing what was once public property, turning it into a private space to be exploited at will without any regulatory oversight. What is data privacy? It is whatever Google’s and Facebook’s rules say it is, not what any country’s regulator says. The content folks in the game are setting the rules of the game, Huston maintained – and this is the worst possible corruption that you can have.