Tag Archives: Net Neutrality

Net Neutrality Vs. Title II – They Aren’t the Same

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Since Title II passed I’ve seen a lot of articles that either indicate buyers remorse or have always been against Title II and are gloating that it’s going to be overturned. For example, Wired had an Op-Ed yesterday that used major points from Chairman Pai’s dissent against using Title II. Title II is clearly a divisive issue, as the guys over at KBMOD, where I also write, are completely divided over the supposed benefits of Title II. I sincerely hope that when we look back at this debate that we see this discussion as a confusing bit of history, because nothing happened. Where the Internet didn’t change and remained an open platform for everyone to easily and equally use.

Net Neutrality and Title II are not the same thing. Title II is an old law originally written in 1934 to regulate a single monopoly with the hopes of create more competition. It wasn’t successful but the legacy of Title II played an important role in the creation and development of the Internet. Title II was the policy regime that APRANET was developed. Whenever a scientist at MIT wanted to use a graphically powerful computer in Utah Title II was in full effect on that data system. Furthermore, Title II was the law of the land for all of dial up Internet. Which was actually a very good thing. The fact that there was Local-Loop unbundling meant that you could have an Internet service that was different than your phone company. It was also likely, given how low the costs were, that these ISPs didn’t have to pay many of the taxes that the Phone company did that you used to buy access to the Internet. We already know that Title II has and can foster a culture of innovation.

Net Neutrality is different than Title II because it was the architectural approach the initial designers took for creating the internet. There were a few key reasons for this, it was easier, required less computing power, and the majority of the early pioneers believed in what became the Open Source movement. In many cases it was the exception rather than the norm, early on, for scientists to patent their computer research. It’s likely because most of these researchers were Mathematicians and Physicists that came from a military background (WWI and WWII and all), so they weren’t used to patenting due to their educational background and the requirement for secrecy contributing to the war effort.

To provide preferential treatment to one packet of data over another required tools that simply would have prevented the data from arriving at its destination in a timely fashion in the 70’s. Remember this was during the time when a personal computer didn’t exist and computing used mainframes and terminals to do the work (interestingly we’re going back to that a bit with the cloud). This means that the routers would have had to have been mainframes themselves to decode the data and figure out what type of data it was before sending it to it’s next location. This was seen as a waste of computing power as well as an invasion of privacy. The point of the Packets was to help keep the data save and secure as much as to maximize capacity on lines connecting the computers.

One of the largest complaints about implementing Title II is that there’s not enough economic evidence to support it. I believe that to be true to some extent. It’s hard to forecast something that’s happening as it’s happening. Especially since the FCC was unlikely to get access, legally, to the Netflix-Comcast/Verizon deals to ensure equal access (or maybe preferred) to their lines. It was clearly shown by Netflix that Comcast/Verizon were intentionally causing issues they could easily resolve and they did immediately after they got paid. With Comcast/Verizon planning to foreclose the video streaming market in this fashion and violating the spirit of Net Neutrality, some sort of regulation was needed to prevent this foreclosure.

I would have rather not had any sort of regulation go into effect. However, I believe that the actions that Comcast and Verizon are taking are anticompetitive and anti-consumer. Time Warner Cable supposedly makes 97% profit on their broadband service, which isn’t a surprise whenever you have a local monopoly/duopoly for broadband.

Could there have been a better way? Yes, the FCC could have taken action that would have forced increased competition. Something like setting goals for every city in the US to have no fewer than 3 broadband providers and providing assistance to municipalities that wanted to develop their own to meet that goal. Ironically, the one provision not included in the Title II rule that would help with that is local-loop unbundling, which would reduce the cost of a new ISP entering the market as they wouldn’t have to build their own network, which has slowed Google Fiber down considerably.

New FCC Rules and competition

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A friend retweeted the Tweet below today and it got me thinking about the broader context of the FCC rules that past last Thursday

Two things struck me about this tweet. First, it’s disappointing that the author doesn’t understand Title II better considering he co-founded the EFF. Second, that Title II as implemented was designed to do nothing about ISP competition. As I wrote on KBMOD this week, Net Neutrality has no provision for “Unbundling” which would promote competition amongst ISPs at the local level. Unbudling, according to Wikipedia, is a regulation that requires existing line owners (such as Comcast) to open up their lines to anyone that wants to sell cable, internet, or telephony access. Unbundling, under a much more restrictive Title II, is the only reason that AOL was successful as a business model. Since this provision of Title II was forborne, Title II will not, in fact, be for promoting competition in ISPs at all.

Instead, the FCC, at least in my opinion, looked at the Internet as a general purpose platform technology. They were looking to ensure competition ON the technology not between technology carriers. For example, the FCC wants to see as much competition as possible between companies like Netflix, Amazon Prime Video, Hulu, and Comcast’s Xfinity service. However, they want to make sure that Comcast cannot foreclose on the video delivery service by leveraging their existing monopoly in telecommunications. What that means is that Comcast could create rules or an environment where Netflix cannot compete and Comcast customers MUST use the Xfinity service because alternatives didn’t function well (Foreclosure is the thing that got Microsoft with Web browsers).

The FCC did enact a rule that will impact competition at the local level though. It’s a limited rule because it impacts only Tennessee and North Carolina. It is preempting state law by stating that it is legal for municipalities to develop their own broadband networks. Broadband build out is prohibitively expensive for an entrepreneur to set up a network, however if they had a backing of a municipality that is willing to share the risk and the reward, it might be possible for an entrepreneur to build out their own broadband network on a limited scale. Municipalities aren’t the ideal solution to this, it would be significantly more preferable if other businesses moved into areas and built new broadband networks, however unless they have a massive amount of money, like Google, it’s unlikely to happen. A bridge between is a public-private partnership where private enterprise, which has the telecommunications expertise, partners with a municipality, which has the demand and financial support, to build a network.

With the ruling on municipal broadband being so limited, it’s not going to make much of an initial impact, however it’s likely that other municipalities will try to jump on that bandwagon and overrule laws at the state level (as a note I’m not going to argue if this is something they have the authority to do, I’m just looking at the potential impact of the rule).

Net Neutrality, Let your Voice be heard

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The FCC is currently taking comments on the net neutrality issue. Please contact them. The agency is currently completely overwhelmed with the feedback on Net Neutrality, but even still, more voices might help tip the scales that are pretty obviously stacked against us. It’s like the scales used to weigh if the witch weighs the same as a duck in Monty Python’s Holy Grail. One of the most important things about net neutrality is the scope that the ISPs actually own in this debate. They are dictating the terms of this debate through money – they make the most, they charge the most, and they have monopolies. This cartoon really helps explain what the ISPs actually own (click here or the picture to see all of the comic).

Economix comix depiction of Net Neutrality

That’s right, basically if you live off a street that says “road not maintained by such and such county”(lots of them where I live) THAT’s the portion the ISP maintains. That’s why a lot of these arguments are over “the last mile.” Basically it’s the mile from their data center that connects to the backbone of the internet to your house. In other industries it might be maintained by one company, but any company can use it. Think about back when you had a modem. You could have that service provided by ANYONE – that’s why AOL got so big they offered free time to just about everyone. Almost everyone signed up and anyone could because the last mile wasn’t maintained by your phone company and had to be shared. DSL still has that requirement only Cable and FiOS don’t and that’s because they were classified as a “information service” rather than a common carrier. The highway above is a common carrier.

If you’d like to see this changed, please go to the FCC and comment (if you can) the link is here: http://www.fcc.gov/comments click on 14-28 and try to leave a comment.

It’s up to us to fight for net neutrality. I’ve left at least two comments. I’ve signed several petitions. I’ve donated to mayone.us all because one of these alone isn’t enough. I’ve contacted by Senator and I know he supports Net Neutrality. If your company is an internet company or uses a large amount of bandwidth on a regular basis see if your company will come out in support of Net Neutrality. It’s the only way we’ll win. We need to get over whelming support.

We know that NSA is hurting tech companies – that’s a good thing

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Snowden leaked his documents a year ago. We’ve been getting a slow trickle ever since. However, some of these documents are getting date and surely the NSA is doing more stuff than they had in the past. That being said, they are continually being surprised by a new document that’s released or another. They clearly haven’t fully figured out the full list of documents that Snowden managed to take. Furthermore, they haven’t learned anything by not changing the techniques that they currently use. The NSA should have systematically shut down every program that could have been possibly leaked and moved onto something different. They haven’t, which means that they don’t really feel they need to change anything unless we force them to acknowledge that they’re doing something Americans (and the rest of the world) don’t want.

Today the guy that founded Netscape (a Silicon Valley Venture Capitalist) thinks that the fact the Edward Snowden released these documents hurt US technology companies. He thinks that because we now know that the US government does bad things with OUR tech company’s technology before it reaches a customer is hurting our companies. He blames Snowden. This is the most assinine thing I’ve ever heard. Marc Anderssen should be pissed off at the US government and praising Snowden because NOW US tech companies can DO something about it.

This is what a good manager or leader does. They support and acknowledge the fact that a person raise the attention of a problem, used them to address the root cause of the problem, and move on to the next problem. This is what Lean process improvement is all about. You NEVER shoot the messenger, you shoot the root cause of the problem eliminate it and make sure it never comes back. Saying that Snowden is a traitor because he highlighted the fact that the US government is taking good companies work (Cisco) and add malware is counter productive. We need to know when anyone government or otherwise is intentionally trying to break the internet. I do not believe that Mr. Netscape believes that the person who leaked the TransPacific Partnership is a traitor – when they essentially highlighted a similar problem.

I also believe, that labeling Snowden a traitor implicitly removes any blame from those companies that are being harmed by the US government. In many cases those companies have bee fully complicit with not just the US government, but “rogue” states (Iran, China, and other oppressive regimes) as well as companies (like Comcast, TWC, etc..) through enabling deep packet inspection (which allows anyone to snoop at anything you do. All of these have to have been enabled by a US technology company. These companies found a benefit to their benefit by doing this.

Now other companies, like Google, WordPress, and others are trying to get around both of these by encrypting their data. I actually suggested this as a tool to get around data caps or fast/slow lanes (if all data is encrypted you can’t slow or speed up traffic). This will inherently force a more net neutral internet (baffling deep packet inspection) and defeating much of the tools of the NSA.

All of these are good things. We know this because of Snowden. We know that tech companies need to address problems that the NSA and other government agencies have caused. This is a cause for celebration not condemnation. We need more people like him so that the internet can continue to thrive and be an economic driver. Don’t blame the messenger, if the US government is hurting US tech companies, we need to know so we can stop that from happening.

Comcast and regulation

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I believe that the 300 GB data cap that Comcast is tossing around is tomorrow’s 640k predictions from Microsoft. In 5 years when they are claiming to plan to implement it, 300GB will be woefully small. As it stands many games are 50GB and likely will only grow. As will the size of our movies we stream and other services that will develop in the next five years.

Comcast’s arrogant attitude towards it’s customers can only be described economically in one way: market failure.  If we had a strong competitive telecom market, Comcast would not be able to dictate prices in this way. We know this is true because we can see prices AND speeds that are significantly better elsewhere in the world.

There are two other results of this market failure, pushing regulation that prevents competition and preventing regulation that would prevent a foreclosure of another market. I’ll start with the regulation preventing competition.

In my last blog I mentioned an idea call private public partnership. This is the concept of a municipality working with a private enterprise to spread the risk of implementing a local high speed network because one of the big players won’t. Comcast and other telecoms have pushed and been successful at making these partnerships illegal in a few states. This means a small rural community can’t develop their own fiber network if comcast doesn’t do it for them. It also means a big city like New York couldn’t either. This type of regulation only hurts competition and helps comcast control the market. In the US these partnerships have worked well. Provo Utah sold theirs to Google.

The other way that Comcast is using this market failure is to push the idea that net neutrality is regilation. It is a bit, because it prevents comcast from using a monopoly to foreclose another market. This is what Microsoft got in trouble for with Internet Explorer.  Leveraging the monopoly of Windows to push out other browsers. In the EU the ruling against MS really help other browsers immediately. Comcast will likely try a similar tactic with their Xfinity platform by never having it count against your data cap. Pushing people to their platform and squeezing out Netflix.

The play to get Netflix to pay them is a long term play, hurts Netflix now, but essentially will be funding further development of Xfinity.  Don’t forget, Xfinity will likely get Universal content earlier as they own that conent. This will give their platform a distinct advantage over Netflix. It’s pretty obvious to everyone that the future of in home entertainment is streaming content. Hence, Google looking to buy Twitch.

Comcast is using the anti – regulation faction to fight net neutrality while leveraging that same group’s anti- government sentiment to prevent novel forms of competition to exploit customers and move into new markets. This is a dangerous problem because they will keep doing this to push out other competitors.