The Two-Tier Internet: Fighting for Control of the Web's Future

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Alongside traditional data traffic, it would allow the establishment of paid services which the customer could decide to activate by clicking, for example, on a "high-speed" button. Medical and video applications, for example, could receive a special right of way, while certain search queries could be carried out more quickly and extensively -- provided, of course, that customers are willing to pay for this service, as they are already accustomed to paying for ringtones or apps.

Since Apple's iPhone conquered the market, telecommunications companies and service providers have been experiencing firsthand what happens when network capacity is insufficient. American telephone giant AT&T has been struggling for months with quality issues in its cellular network that have led to dropped calls and sometimes even complete service blackouts, especially in population centers.

Service flat rates provided along with smartphones such as the iPhone are one cause of these problems, as is content, especially radio programs and videos, that pushes networks to their limits. Both customers and providers are getting fed up.

"No one benefits from conditions like these," says Harald Stöber, vice president of the Association of Telecommunications and Value-Added Service Providers (VATM), an interest group representing the other German telecommunications companies that compete against former monopolist Deutsche Telekom. All these competitors find themselves in agreement, for once, on the question of redesigning the Internet. It could allow the creation of new business models in the Internet, Stöber suggests, and companies shouldn't be denied the opportunity.

Stuck in the Slow Lane

Torsten Gerpott, a professor of telecommunications studies in the German city of Duisburg, doesn't see Deutsche Telekom's plans causing massive changes to the system. Consumers already pay different prices for different types of access, he says, and in principle he has few objections to differentiation if the Web is truly experiencing capacity problems.

Nevertheless, critics see this as precisely where freedom for businesses collides with diversity of opinion. They envision, for example, large companies renting out a virtual fast lane for their services and content, with innovative start-ups and critical bloggers relegated to the channels for regular data, the online equivalent of a rough dirt road.

"Companies such as Verizon want to determine which data are transmitted faster, which slower and which not at all -- and who pays how much for it," says Gundolf S. Freyermuth, a professor of applied media studies at the International Film School in Cologne. "That amounts to attempts to colonize the new public sphere of the Internet."

Organizations for data protection and consumer rights have collected examples of situations in which Internet and telecommunications companies may have abused their power over data. In one 2004 case, according to German consumer rights centers, German Internet provider Freenet blocked its clients' access to certain websites that had expressed criticism toward the company's business practices. The proposed two-class Internet, these organizations say, would open the floodgates for this type of abuse.

Already a Reality

Instead, critics want to legally codify the principle of "Net neutrality." Computer experts such as Kristian Köhntopp, though, warn that this buzzword is too imprecise. "Already, the Internet is often not neutral," Köhntopp explains. Many flat rate packages are shams, he adds, and "providers reduce speeds selectively without informing customers."

"Activists and companies tend to talk as if the two-class Internet were a vision of the future, but it already became reality long ago," says Bernd Holznagel, director of the Institute for Information, Telecommunications and Media Law at the University of Münster.

It especially bothers him that some companies selectively choose what to block. T-Mobile, for one, long kept its competitor Skype from being used on the iPhone. Now, Holznagel says, the competitor is penalized with a separate €10 ($12.60) fee.

"We need an antidiscrimination clause to make competition and innovation possible," Holznagel says. He also suggests that basic services should be openly available, as is currently the case with postal services or radio. That could create a compromise, something like a "one-and-a-half tier" Internet.

Distracted by Smaller Issues

"Rather than symbolic politics, we need definitions of what Net neutrality really should be -- and this is where the Google/Verizon proposal is very helpful," Holznagel says. Now, he adds, politicians need to take the next step.

Holznagel has long been waiting for a draft version of an amendment to Germany's Telecommunication Law (TKG) that the federal government is required to submit by the middle of 2011, according to EU guidelines. "The amendment to the Telecommunication Law is extremely important and there are billions of euros involved," he says.

He feels, however, that attention is being distracted by other, less important debates, such as the ongoing controversy over Google's Street View service, which will be launched in Germany later this year and which has been criticized because of privacy concerns. "Politicians would rather jump on smaller issues like Google Street View," Holznagel says. "After all, photographing buildings is easier to understand."

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• Part 1: Fighting for Control of the Web's Future
• Part 2: Are Customers Willing to Pay?