Less than neutral

Apr 24, 2014 22:11 UTC

As foreshadowed by the January Verizon v FCC case, net neutrality looks as though it’s officially dead. For the third time, the Federal Communications Commission is attempting to regulate the speed of the internet. This time, while it proposes preventing internet service providers from blocking internet content, it is likely to allow the creation of “fast lanes” — where big corporations like Netflix or YouTube can pay for their video to be streamed faster than content from other companies.  The commission will vote on the measure at its May 15 meeting.

On the official FCC blog, chairman Tom Wheeler, who was a lobbyist for the cable industry before being appointed to the FCC, tries to calm the concerns about the new regulation, saying that behavior “limiting the openness of the internet will not be permitted”. His post focuses on the idea that, within the parameters of the Verizon case, the FCC is allowed to stop “harmful conduct” if it isn’t “commercially reasonable”. In other words, “internet providers would be required to offer a baseline level of service”, writes Amy Schatz. Above that base level of service, allowing companies to pay to deliver certain content faster to consumers seems to be okay.

Open internet advocates object to the FCC considering any kind of non-equal treatment web content. “If you’re allowing ‘fast lanes’ why regulate at all?” asks Timothy Lee. Ars Technica demonstrates the point by quoting none other than the FCC, circa 2010: “If permitted to deny access, or charge edge providers [like Netflix] for prioritized access to end users [you], broadband providers may have incentives to allow congestion rather than invest in expanding network capacity”. On the other side, James Gattuso calls net neutrality “a dangerously bad idea”, suggesting that consumers are hurt by excessive FCC regulations.

The net neutrality issue goes back to the fact that ISPs historically haven’t been classified by the FCC as “common carriers”, like phone companies are. Because they aren’t treated like telecom companies, they aren’t subject to the regulations requiring that they treat all content equally. After the Verizon case, many advocates — including former FCC commissioner Michael Copps — had hoped the FCC would take steps to reclassify ISPs as common carriers.

Gautham Nagesh writes that “this latest plan is likely to be viewed as an effort to find a middle ground, as the FCC has been caught between its promise to keep the internet open and broadband providers’ desire to explore new business models”. Stacey Higginbotham succinctly sums it up: “The FCC doesn’t want to destroy net neutrality, but it’s going to anyway”. — Shane Ferro

On to today’s links:

Easing Ain’t Easy
QE is like salt in your food – you don’t notice it until it’s not there - Jared Bernstein

New Normal
Maine’s lobster boom (caused by climate change) is busting (because of climate change) - AP

“It is officially time to stop cheering for higher house prices” - Atif Mian and Amir Sufi

Data Points
80% of all condo sales in Florida, Nevada, and New York are all cash - Corelogic

So Hot Right Now
“After years of peddling sugar, salt and fat, the $1 trillion food industry” has re-discovered plant protein - Bloomberg
The new ‘super’ working-class: wealthy professionals who work too much -Management Today

Uber maps where the world’s young and rich live and play - Uber

Like That
How do you pronounce “Tome-AH PEEK-et-ee”? - Kevin Roose

Textus interruptus: how explainers penetrate your mind - The Awl

In upstate New York, the cows milk themselves - NYT

A brief roundup of consumption inequality blogging since the crisis - Mark Thoma

Peer pressure

Feb 25, 2014 23:24 UTC

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The age of monopolistic control over internet traffic is here. “We’re really, really fucking this up”, says Nilay Patel of the new age of pay-to-play internet, ushered in first by the Verizon v. FCC court decision last month, and more recently the Netflix-Comcast peering deal.

In this new deal, Netflix will pay Comcast to deliver its content directly to Comcast customers, rather than going through a traditional middleman like Cogent Communications (which is having its own battle over Netflix traffic with Verizon). In the short term, this is good news for Comcast subscribers, who are guaranteed faster video streaming service — Netflix reports that the speed of its service to Comcast customers had slowed by 25% over the last few months. Over the longer term, though, “the more fundamental issue is that the [internet service providers] have sole dominion over the one link in this chain — the last mile — that can’t be replicated and can’t be circumvented”, says Cardiff Garcia.

Timothy Lee does a good job of explaining how the internet has worked up until now: companies like Netflix pay a middleman to upload their content. You pay a different internet service provider (Comcast, Verizon, TWC) to connect to the internet and download all that content at home or work. All of the many providers share content with one another equally and for free — that’s called “peering”. But, Lee says, Netflix is cutting out the middleman and is now paying for a direct peering agreement with Comcast.

Patel calls the CEOs of Comcast, AT&T, and Verizon “robber barons for a new age of infrastructure monopoly”. Tim Wu, analyzing both the Netflix deal and Comcast’s acquisition of Time Warner Cable, says “the bigger [Comcast] gets, the more credible its threats become, and the more money it drains from everyone”. Guan Yang compares the deal to your apartment building charging Netflix to bring its red DVD envelopes through the door, even though you pay for a mailbox and Netflix pays for shipping. In that case, he says, “you don’t really have a choice of an alternative mailbox/lobby provider if you think their terms are unfair”.

The deal doesn’t directly infringe on the principle of net neutrality; Stacey Higginbothom explains why the FCC left peering out of net neutrality. Lee, however, says that the deal fundamentally changes the problem:

The conventional network neutrality debate implicitly assumes that residential ISPs receive Internet traffic from one big pipe … But in a world where Netflix and Yahoo connect directly to residential ISPs, every Internet company will have its own separate pipe. And policing whether different pipes are equally good is a much harder problem than requiring that all of the traffic in a single pipe be treated the same.

Shane Ferro

On to today’s links:

Data Points
The average American family’s “color wheel” of spending – Derek Thompson

5 reasons why right now is a great time to shrink the US Army – Zack Beauchamp

Ghostbusters is a “Reaganite carnival of ideological triumph” – Matt Phillips

A brutal and truly damning piece on Bill Gross’s management of PIMCO – Gregory Zuckerman and Kirsten Grind
This article could be “be a fatal blow to the career of the greatest bond investor of all time” – Felix

Public policy should focus on raising standards of living, not mobility – James Surowiecki

Please Update Your Records
German austerity is a myth – Paul Krugman

Walmart’s shadow campaign to support raising the minimum wage – Dave Weigel

DealBook goes to great lengths to reveal who’s behind a mildly funny fake Twitter account – Andrew Ross Sorkin
Everyone’s a once-in-a-generation talent, you know – Erik Wemple
Why it’s so hard to get graphs in newspapers – Paul Krugman

“This stool is made of three pieces and no humans have to get involved in assembly” – Gigaom

“Our name-brand financial writers are too big to practice journalism” – Alex Pareene

After announcing 13,000 jobs cuts last year, JP Morgan will cut another 5,000 in 2014 – David Henry and Peter Rudegeair

RBS gives back to the community by having its bankers unload forklifts two days a year – Max Colchester

Great Headlines
Post-Structuralist Mayor Disregards Your Epistemological Conjectures – Alex Balk

Hilarious Jargon
“100% autonomous penetration” – Tesla

Tax Arcana
The real secret elevators are at Credit Suisse. And they’re used for tax evasion – FT

Study Says
Riding the train makes people more inclusive – Boston Globe

Your Daily Outrage
Temps can work at the same company for 11 years – ProPublica

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Speed 2

Jan 14, 2014 23:11 UTC

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Imagine an internet where the biggest companies can pay for high-speed websites, while the rest of the web loads at dial-up speed. You end up using YouTube instead of Vimeo, not because it’s become a better platform, but because Google shells out money for faster upload times.

This morning, the Federal Communications Commission’s rules on net neutrality were struck down in the highly anticipated Verizon v FCC case. The ruling opens the door for private companies to start charging web properties for faster internet speeds: some websites will load fast, others much more slowly. “At stake here is an Internet provider’s ability to charge Web companies such as Netflix for better service, which public interest advocates say may harm consumers,” writes Brian Fung.

Because most consumers only have one or two options in their area when it comes to ISPs, internet companies could potentially discriminate against certain websites. This is especially important because many internet service providers are also content providers. As a result, as William O’Connor notes, Comcast could make NBC, which it owns, stream much faster than any other networks’ video. The greater long-term worry of net neutrality advocates, says Joshua Brustein, is that ISPs will essentially cut out small companies who can’t pay up to get their sites to load quickly.

The ruling strikes down parts of the FCC’s 2010 Open Internet Order, which Sam Gustin summed up nicely when the case was originally argued in the fall. Internet providers like Verizon argue that the FCC doesn’t have the authority to demand net neutrality, thanks to a controversial FCC decision in 2002 to consider internet providers an information service, rather than a telecommunications service. That distinction gives the FCC a lot less regulatory oversight.

Jeff Roberts writes that all is not lost for the FCC. The ruling was decided on technical grounds, meaning the court found that net neutrality is not in itself dead, only the specific way that the FCC went about trying to implement it. In fact, Stuart Benjamin, a former FCC lawyer, thinks this was actually a loss for Verizon, because the court interpreted the FCC’s general regulatory authority over ISPs so broadly: “Insofar as the FCC really wants to promulgate its existing net neutrality rules, it could classify broadband Internet providers as common carriers … and implement the net neutrality regulations that way“.

Geoffrey Manne and Berin Szoka agree that this was a closeted win for the FCC, but they write that net neutrality shouldn’t be in the hands of three unelected commissioners, anyway. “If there’s a silver lining in any of this, it may be that the true implications of today’s decision are so radical that Congress finally writes a new Communications Act”, they say.

Stacey Higginbotham is skeptical that Congress will do anything; nor does she think the FCC is serious about taking a hard line on net neutrality. She thinks it’s more likely that we’ll end up with rules that look similar to the current wireless net neutrality rules, where ISPs can’t block legal sites, but they are “free manage their networks as they see fit”.

If you want to see what that looks like, just look to the new AT&T plan, revealed at CES last week, to have companies sponsor your wireless network usage. We might be, as John Herrman writes, heading toward “an internet that we don’t directly pay for, but that we also don’t control”. – Shane Ferro

On to today’s links:

The expense of being poor – Barbara Ehrenreich

Google and Suntory are literally trying to buy the future – Felix

When an activist hedge fund thinks a company’s salaries are too high, who’s right? – Justin Fox

The case for an antibiotic tax – Brad Plumer

How to lie with bad data – Charles Whelan

Your Daily Outrage
How agriculture subsidies cause flooding – George Monbiot

Primary Sources
JP Morgan’s 4th quarter earnings release: net income falls 7% to $5.3 billion – JPM

Right On
An experiment with guaranteeing the poor a basic income — from 1795 – Frances Coppola

San Francisco is the epicenter of the new artisanal toast craze – John Gravois

Solid Advice
“If you wonder if a hug is appropriate, it probably isn’t” – NPR

Plutocrat Blues
Real estate coup: London property prices are directly correlated with overseas political turmoil – FT

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