Warnings Sounded Over Net Neutrality in Asia

Asian regulators should think twice about following the U.S. lead on net neutrality, or risk undermining the economic incentive for Asian carriers to build and maintain faster networks, according to speakers at the CommunicAsia Summit in Singapore.

Regulators in Hong Kong and Singapore show signs of enshrining a policy of net neutrality for future networks, and that's not necessarily a positive development, said Peter Waters, a partner at law firm Gilbert+Tobin. Net neutrality is a term for policies that prevent carriers from giving preference on their networks to traffic from their own sites, or charging Web sites extra for preferential treatment.

"We need to back off a bit," Waters said. Regulators should wait until a problem arises before stepping in to set new policies, he said.

Waters and others speaking at CommunicAsia argued that carriers must be able to collect revenue for the different types of content that crosses their networks.

Asia Netcom, which operates a backhaul network in Asia, claimed the right to charge content providers for the data carried on its network, particularly when that data is valuable. For example, Google Inc. and others use Asia Netcom's network to transmit advertisements and other content that have significant value. "Why do I keep providing that [service] for free?" said Mark Simpson, the company's chief operating officer.

Waters proposed a revenue-sharing model, where backhaul carriers receive a portion of the revenue from content providers for the data carried on their networks.

Net neutrality is a contentious issue and is generally opposed by carriers, who argue it reduces the incentive to build new networks.

However, in March, researchers at the University of Florida conducted a study using game theory analysis that found the opposite to be true. Allowing carriers to charge content providers for the data they carry provides less incentive for the carriers to expand and improve their networks, they found.

"The incentive for the broadband service provider to expand under net neutrality is unambiguously higher than when the principle of net neutrality is abandoned," the researchers wrote in the conclusion of their report.