Tag Archives: FCC

Should we celebrate about Google joining net neutrality fight?

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It’s time we be skeptical of high tech companies that support policies that we want. Today, a large number of tech companies came out against the FCC’s plan to allow internet fast lanes. They aren’t as bold as Mozilla in their claims, they don’t push for the most extreme best for the consumer perspective. We, as consumers, have to understand there’s a reason for this. These companies (and there are a lot) wrote the letter without stating what their position actually is, just that they are for a “free and open internet.” This is essentially a dream statement for a lawyer/lobbyist, because “free” and “open” can mean a variety of things based on that company’s perspective.

These companies are willing to push for a free/open internet insofar as it enables them to make money. We have to understand that. Many of these companies are looking to disrupt incumbent market players and are leveraging the internet to enable them to do that.

Normally, I’d be really excited about all these companies coming out in favor of net neutrality. However, because of their tepid support, their lack of recommendations of what to do to address the net neutrality issue, and tardiness to the conversation I’m concerned as to what their actual motives are for this debate. This is a very different discussion than SOPA, where just coming out against the bill was enough. In this case it’s not, we need them to provide clear direction on what the FCC SHOULD do instead. This provides the FCC a path forward and a way to drive the conversation. Without that, essentially there’s no clearly articulated alternative during THIS debate. Yes, they’ve made an argument before, but they aren’t this time.

I also am concerned by this turn of events because of the recent report that Google and the NSA had a very close relationship. In very strict version of net neutrality deep packet inspection wasn’t possible because there was no way to actually do it. The first step to packet discrimination is knowing what’s in the material. Truly end-to-end net neutrality precludes the ability to eavesdrop and snoop on content being passed along the IP backbone. Any sort of relationship between the NSA and arguably the largest internet company in the world necessarily limits the full extent that Net Neutrality can actually be implemented.

Furthermore, we also must remember that a large number of these companies that are now for Net Neutrality were also for CISPA which includes handing over data to the government. Which, based on Google’s relationship with the NSA, they essentially did anyway.

So, it’s a good thing that these companies came out for Net Neutrality because truly only the power of their lobbying can overcome the FCC’s proposal and push Comcast and Verizon into accept the new rules. I don’t think that we citizens could do it on our own.

(if you want to try to fight corruption that’s sort of on display here, check out Mayone.us)

Lack of Net Neutrality will be a competitive liability in the future for the US

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Net Neutrality could be dead in the US and I think that this creates problems for companies that do business in other parts of the world. Or rather, it creates incentives for companies based in the US to focus on non-US markets for conducting business. There are several reasons for this. Let’s take this from a Netflix perspective, assuming they were able to get the same catalog they currently have in the US and took it into Europe (this has been difficult for US companies while it’s been easier for EU companies to come into the US – see Pandora and Spotify as references). Let’s assume that can happen and they have they opportunity to continue to work in one region or the other.

The EU has recently enacted end-to-end Net Neutrality as the law of the land. So, Netflix traffic cannot be slowed down because of the volume. It cannot be slowed down because it is Netflix traffic, all traffic if it needs to be groomed happens at the same time (likely random or everything gets slowed down). Netflix cannot be charged by the ISP to ensure specific speed to guarantee quality of product, if Netflix wants to control this, it’s up to them (they could manage this through increased buffering before the video starts, for example). The average internet speed is significantly higher than in the US, so the quality will be higher and the need for buffering lower, because the speed can account for dropped packets much more effectively. This means if they charge 8 Euros a month, they are able to keep more of that.These conditions would also apply in Argentina.

In the US, Netflix traffic is now subject to the whims of the ISP. the ISP can slow down traffic based on the time of the day, based on the source of the traffic (using deep packet inspection). They can and have charged Netflix for equal access as, for example, Comcast Xfinity’s streaming service. The US has some of the lowest average internet speeds in the industrialized world. Netflix charges $8/month they have to pay Comcast to ensure that their service meets their end users requirements.

As a company that makes money based on the fact that they are able to deliver high quality content (where the price of said content is continually rising), I would prefer to operate in the EU rather than the US. I will have significantly less issues with the ISPs because they can’t discriminate my traffic and I won’t have to pay to make sure that they do not discriminate my traffic. This means that my quality will increase and my cost per user will not increase as it will in the US. I would begin focusing on providing local language content as well as the best content I can provide from the highest quality sources in the world.

As we start moving towards higher speed requirements in our applications, this will become a larger problem. I know of people online that have issue streaming up to Twitch and Mixify as well as streaming the content to their computer. This is a problem now. We will be moving into significantly higher quality video and games (PS4 streaming a game to your console, that will require a lot of bandwidth and low latency $$$$$). Furthermore, if we start having more tele-medicine we’ll need higher quality video feeds to ensure best results.

These are all examples of applications we know of that will suffer from a lack of net neutrality. As we get people that develop applications for gigabit connections, we’ll start to see net neutrality as paramount. These companies will not be able to afford the required costs for the internet speeds required for effective applications.

This means that the EU and other net neutral countries may become the source of innovation for these applications or companies that create them in the US will need to move to markets like the EU for a user base that can fully exploit their application.

We’ll effectively be playing on an Xbox 360, when high quality PCs are out there. We’ll be at a serious disadvantage.

FCC, Net Neutrality, and the Internet as a platform

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The proposed FCC rules for Net Neutrality are pretty terrible. The Verge has a pretty good write up on them, here. Is this a good or bad thing? Personally, I think this is terrible for the future of innovation as I’ve written about before in a few spots, most recently here. I also think it depends on what you think about the role of the ISP. If you think that the role of the ISP is to provide a conduit to the internet and simply pass data to you, then Net Neutrality is for you. If you believe that the ISP should actively play a role in the content you seek, then Net Neutrality is not for you. If you think that the ISP has a role in shaping the way data flows, has the right to extract as much money out of the internet ecosystem, then you probably don’t think that Net Neutrality is the right thing either.

I believe that this comes from a fundamentally different world view on how the economy should function. There are a lot of people out there that truly believe that organizations have the right to maximize profitability. I don’t really think that’s true. I think that organizations have a role to play and those that exploit platforms like the internet are drains on the economy and limit our ability to innovate.

Many of the developers of the initial internet protocols strongly believe in net neutrality. Ranging from the guys that used to run Xerox PARC to Tim Breners-Lee, there’s a lot of different push back against non-neutral positions.

I think from an evolutionary economics standpoint, technology platforms of the past have been wildly successful because they’ve been able to continually lowered in prices which increases accessibility. This drives further adoption of that technology as a platform encouraging more companies to compete to make that technology platform. Some historic platforms are roads (shocking), steel, silicon chips/processors, and now the internet.

Roads have been pretty much government sponsored and open for just about anyone to use. In Portland, the Blue Line MAX line has driven $7 Billion in new development, the largest for a new commuter line anywhere. Computer chips are near and dear to my heart as I’ve worked at a few companies that make them. I think that we can all see in our daily lives how these chips have dramatically changed the world. That the company that makes chips (Intel) is worth a lot less than a company that leverages those chips (Microsoft). The combination of these two companies has essentially driven a great deal of the modernization we’ve experienced in the last 20 years in the US.

In the last 10 years the internet has driven the worlds most valuable companies. It has more quickly shifted how companies engage with their customers and powerful retail based stores have fallen on extremely hard times (Sears/KMart,etc…). My job is only made possible because of the internet I work with people in different states every day.

The fact that it will soon be government policy to enable a company to seek as much money from every user of their platform is only going to hurt the entire ecosystem. If my service stays the same but my price continually increases, that means I can’t afford to buy services that I want online, so I’ll switch to other options or drop the options all together. This will kill competition and negatively impact consumer choice. Furthermore, if I’m paying for Netflix and Comcast and Netflix is forced to pay for access to Comcast customers, then Comcast is charging everyone. I’d expect massive quality upgrades on a continual basis or something in return for all this extra cash flow. Instead it will likely go to investors in the form of higher profits.

What’s the difference between Ma Bell and Comcast?

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If you were born in the 80’s or before you know that Ma Bell was the only phone company in town. Born any later than that you were born into a world without a single monopoly for telecommunication. That’s right, we’ve had a point in our collective history where there was only a single phone company. There are rules in place that prevent something similar from happening with Comcast, but we’ve been there before. However, I believe there are critical differences. AT&T knew they were a monopoly and they were a state sanctioned monopoly. They did everything in their power to keep prices down to prevent being broken up. AT&T actually had a broader monopoly than what Comcast could ever hope to have. They made the phones that worked on the line, they made all the telecom technology that made it work, and they designed the services that made it work. This is something called a natural monopoly, which I’ve written about before. A former founder of Comcast has declared Comcast a natural monopoly.

The biggest difference between Comcast and AT&T, back in the day, was that they did everything they could to keep the government happy. Was it perfect, no clearly not, there were shady business practices, but we as a society benefited greatly from Bell Labs. To this stay is still one of the greatest research facilities that ever existed. If it wasn’t for Bell Labs our current way of life would be very different. I highly suggest checking out the book on it.

Comcast claims to be pushing innovation with their X1 Xfinity platform, but that’s not really true, it’s simply a new operating system pushing content. Voice activation isn’t innovation and if that’s your main selling point then you’re in serious trouble. As I mentioned yesterday, the Netflix deal is a major concern, the Verge is saying the Internet is fucked and that we need to be contacting the FCC daily to un-fuck it.

I’m not entirely sure that the FCC can fix it. Congress has greatly hamstrung the FCC in dealing with internet companies, furthermore, their solution of calling the internet a Utility won’t work. If you aren’t aware we’ve had big pushes to deregulate the utility industry which unfortunately hasn’t really made rates better in many cases or in the long run. I think that it’s fair to say that in the telecom industry this is true as well. The impact of the AT&T break up has been this long term collection of conglomerates that continually increase price as well as “Fees” which similar to baggage fees are hidden from the “price” of the service. So, treating the internet like a utility isn’t going to work. What we need to do is treat it like a road.

Everyone that uses a car on the road is taxed based on use (Gasoline taxes) everyone pays for a portion of the maintenance based on other local taxes too. No, these aren’t perfect and are going to be under pressure based on hybrid and electric cars – and new models are being proposed. Of course one way to do this is through toll roads (which really never work) or through some sort of black box in the car to measure mileage (which no one wants).

Essentially it’s a pay for bandwidth consumed, so if you’re a high consumer of bandwidth you’d pay more, but the rates need to be realistic and the goal would be to cover expenses and continually improve service while making it cheaper. Which brings me back to AT&T – the president of Bell Labs had one mantra anything could be tested but only if it could lead to a “Better, cheaper or both” network. A public internet similar to a road that was paid to continually get cheaper, better, more secure, and faster is the only way to truly un-fuck the internet. It’s not likely to happen because it’s not a capitalist response. However, the internet these days is similar to public transpiration – it’s goal isn’t to make money, it’s goal is to enable economic activity. If think of it that way, then we can see the long term benefit of the whole economy rather than singular actors.

Sponsored data and YOU!

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This could be your lucky day, your cellular provider is going to start offering packages where certain content doesn’t cost you anything in your data cap. This is awesome. You can start streaming more and more video/music/whatever it is that you stream from your favorite services. However, not all of your favorite services will be free of data charge! So make sure that you tell your favorite service that YOU want THEM to sign up and make their content data cap free to you! All those service providers have to do is pay your cellular provider money to stop the data caps! No, seriously, AT&T wants to do this.

Is this a problem? I think it depends on who you are. For a consumer in some cases this is pretty awesome. Let’s say you love to watch video games being streamed on Twitch.tv by your buddies over at KBMOD and Twitch decides to pay money to prevent your data from being charged against your data cap. But you’re also a huge fan of MLG and MLG just decided to start their own Twitch competitor but they can’t afford to pay those same fees. Well, guess you’ll be only watching MLG from your PC or on wifi. Too bad your favorite shows are on while you’re not able to use Wifi though! O well, Twitch is there for you though!

This is a niche market obviously. Not everyone cares about watching someone play streaming video games or even streaming video games to your phone so you can keep playing a game you were playing from home. A lot of people care about TV and movies though. We can look at this as something that’s really analogous to what Comcast was trying to do to Netflix close to two years ago. In April of 2012 Comcast announced that its Xfinity streaming service would not be charged against your Comcast data caps while Netflix streaming service would be. Netflix’s CEO argued that this violated Net Neutrality because it provided preferential treatment to one source of data over another.

What is Net Neutrality? Well, there are two different arguments, which I discuss in a blog here, where one is saying everything must be treated equally, while the other one argues that there are nuances and we can treat data differently because we need to “Groom” our networks. Internet and network purists believe that you shouldn’t even be able to determine what the data is or what the source of that data is if you’re a point along the network, just where it most recently was and where it needs to go next. The only application that can read the data in the package is the application that requested it.

AT&T’s plan, similar to Comcast’s, is in violation of Net Neutrality and the FCC will step in to regulate this type of “service” because it’s, in the end, bad for the consumer. Unfortunately, there are limitations to what the FCC can do and even potentially what AT&T can do.

There has been much more of a push for encryption and it’s likely that these pushes may actually enable more of a return to the true meaning of Net Neutrality. If all of our data is fully encrypted, deep packet inspection tools (which tell if the data you’re getting is video, music, or whatever), won’t work very well as that information will be encrypted. Furthermore, if your application’s data is all encrypted and AT&T won’t be able to tell if your data is your data then there’s no value in paying for “privileged” data status from AT&T.

It’s one of the reasons why I’ll likely support company’s like Wickr, an encrypted Snapchat competitor, which told the FBI to screw itself when they were asked to put a backdoor into their encryption. It’s important that we work to protect our data and support companies that do so in terms of Net Neutrality and encryption.

What companies do you support that encrypt and fight for net neutrality?