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The Net Neutrality Debate

I’ve been seeing a lot of articles and commentary from people regarding Net Neutrality and the ongoing debate about the FCC’s involvement.   It is easy to boil down the issue to a simple “for” or “against” Net Neutrality stance.    Today that generally means “for the FCC involvement” or “against the FCC involvement”.   Like most things in life, the decision is not that simple.

What Is Net Neutrality

In simple terms, I’ll use my version of what Tim Wu said, Net Neutrality declares that Internet Service Providers (ISPs) should not be limiting service to-or-from Internet content.    In other words, Comcast should not make your connection to NetFlix run far slower than a connection to their competing online video services.    Comcast, and others, have used their control of the “Internet pipes” (which Al Gore may or may not have invented) to go to companies like NetFlix and demand a “ransom”.  “Pay us a bazillion dollars or we will make your movies so  slow people would rather read books than use your service.”,  was the general terms of the agreement.    Of course I’m generalizing here and am only using a completely fictional account of past historic events, but something similar to this is already going on.

In general most people, including nearly every single Internet related service in the United States is 100% for Net Neutrality.    Except the ISPs.   Comcast HATES it, mostly because they hate anything that makes their customers happy.     A bunch of other companies including AT&T, Verizon, and many of the other biggest established price-fixing corporations also hate Net Neutrality.    It takes away a big part of the future revenue that continues to bolster their profits by billions of dollars.    The absolutely do not want to rework budget forecasts that make for huge dividends and stock price increases over the next 20 years.

Why Net Neutrality Now Sucks

As seems to be the case any time someone comes up with a good idea, the Federal Government has gotten involved and completely screwed things up.    Leave it to the current administration to make matters even worse.    In a brilliant play, the politicians that want the US Government to control-and-tax every single aspect of your life have commandeered the previously-sane concept of “Net Neutrality” and applied it to THEIR VERSION of Net Neutrality which means “The FCC rules the Internet”.    They do this by reclassifying all Internet Service Providers under Title II of the US Telecommunications Act of 1934 (Title 47, Chapter 5, Subchapter II to be specific).   This is what is generally known in the Net Neutrality discussion as “Title II”.

The short layperson’s version of what this means is that the FCC will make all the rules about Internet access.    They will decide how it operates, what taxes, fees, and related income-grabbing levies to assess.    They will decide WHO gets to provide those services by refusing to grant licenses when a new ISP comes in to threaten established ISPs.     While the incumbent ISPs have fought hard against Net Neutrality in its original form, they are now secretly “doing the happy dance” while the new incumbent-friendly softer version of Net Neutrality managed by the FCC is on the table.

Yes, the incumbent ISPs will be required to adhere to yet more government regulations, but at the end of the day the Title II version of Net Neutrality kills any innovation in “last mile” Internet service (last mile is the part you, as a consumer, care about).     Title II Net Neutrality means you will likely NEVER see a new ISP offering to come onto the market.   Like your electric utility, what you have now is what you’ve got FOREVER.    It also means that you are VERY LIKELY to be paying higher fees to your ISP as they claim the new regulations increase their costs due to compliance.  You will end up paying MORE for the same sucky service you already have.

The amazing part about Title II Net Neutrality is that it does NOT explicitly prevent the ISPs from creating those “Internet fast lanes” you keep hearing about.    It just means that if they do something the FCC doesn’t like they pay a fine.    There are a thousand different ways to craft those fast lanes that are perfectly FINE under Title II which means the ISPs aren’t breaking the rules and won’t have to worry about the FCC stopping them.

Some interesting notes about Title II Net Neutrality.  Tom Wheeler is pushing for it and he was a BIG TIME cable company lobbyist.   The current administration, that gave us unprecedented domestic surveillance, is all for it.    Most Internet content providers, the companies whose services you like to visit most on the Internet are AGAINST this flavor of Net Neutrality.

Bottom line:   Title II Net Neutrality is a BAD idea.

Net Neutrality That Doesnt’ Suck

What is now largely ignored is a proposal for a NEW BILL that has been crafted by John Thune and Ford Upton that provides the version of Net Neutrality that everyone wanted when they said they supported “Net Neutrality”, myself included.     This bill is designed SPECIFICALLY to take control out of the FCCs hands.  Everyone knows the FCC is a regulatory quagmire with a penchant for generally “screwing things up” and making it nearly impossible for a small business to operate in any industry they touch.    The new bill AMMENDS the Communications act of 1934 and specifically prevents section 706 from taking control of Internet services.

This is truly the best approach.      However the Obama Adminstration and the FCC and the incumbent ISPs are STRONGLY OPPOSED to this measure.    In fact it is largely rumored that the current administration has been pushing the FCC to take immediate and decisive action to pass the Title II version of Net Neutrality before the proposed bill can get any traction.     Various pundits have been employed to bury the discussion about the proposed bill.

Most small businesses that live-and-die on the Internet support this type of bill.    Personally I don’t think this bill is perfect, but is a whole-hell-of-a-lot better than Title II Net Neutrality and it is better than “let the ISPs do whatever the hell they want”.

Thune Upton Net Neutrality is a GOOD idea.

Summary

The sad part of all this is that if government control over “last mile” was not already screwing things up we’d have more than one or two true broadband ISPs to choose from  in a majority of cities and towns in America.   If that were the case there would be TRUE COMPETITION in the market and Net Neutrality would be a non-issue.    However we live in a state of Internet access where it is a quasi-government-regulated market where the only person getting screwed is the consumer and the ISPs hold all the cards.

If there is any argument that more clearly highlights why Title II Net Neutrality should NOT be passed, it is that lack of innovation and service selection over the last mile.    You cannot start a company that provides high speed to homes and businesses without incurring major obstacles.  Why?   Government fees and regulations.   This will only get FAR WORSE if Title II Net Neutrality is passed.

Thune Upton Net Neutrality is not perfect.    It is, however, a necessary evil given the current state of affairs with Internet access in America.   Sadly, Thune/Upton SUCK at marketing.   They needed to take over the term Net Neutrality for their own, much like the FCC did.    Now they need to come up with a new “sexy” label they can apply to their bill that the general population can get stuck in their brain.     Maybe something as simple as “Unsucky Net Neutrality”.    OK, I’m not a marketing guy either.

Whatever they call it, they need to get traction NOW before Obama and his FCC cronies do something horrible that permanently damages Internet-centric innovation in America.

Net Neutrality sucks except when it doesn’t.

 

 

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SOPA – Part 2

In response to my first post I received an email that brought up some good questions.   I thought I’d share the conversation with everyone here:

The Inquiry

Hi Lance,
I saw a news story on  this legislation last night on PBS Newhour (not the network news, of course). I am glad to check with you about a couple of things since you’ve had the experience of this sort of strategy already.  I am glad that you are getting involved in this; I assume that companies need to protect their own content better, but I don’t know how they can without some protections within the structure of law.

In 25 words or less, what should the legislation allow that would reduce or stop piracy? I know that is probably an impossible question, but I want to understand what alternatives would be better.

What is the time frame for the legislation’s passage? or defeat? How long do I have to write the Congressional representatives?

I’ve also heard that Wikepedia shut itself down today although I didn’t catch all the details. What good will that do?? Why aren’t they educating folks like me?

The Response

RE: Timeframe
The legislation WAS going to be voted on tomorrow. In typical fashion, our representatives moved the date thanks to all the attention this “Stop SOPA” movement has received & the fact that sites are going dark today. Our elected officials are banking on the fact that the general public has a very short memory & are hoping this whole thing blows over and they can pass this when nobody is looking.

Much like how they held a special Saturday session to vote in the debt increase, specifically choosing a weekend so the publicity via the news outlets would be at the lowest possible point.

As such you now have a few more weeks to let your elected representatives know what you think about all of this.

RE: Wikipedia

As for Wikipedia shutting down, they have executed their strategy perfectly. They shut down to draw attention to the issue. SOPA/PIPA was first drawn up and proposed back in May 2011. NOBODY reported on it. Why? The proponents of the bill include the parents of Fox, CNN, MSNBC, Hearst Publishing, etc. In December they set a date to vote on the legislation for January 19th, 2012.  Again, nobody reported on it.

However, when one of the most visited sites on the Internet suddenly goes dark & puts up a big banner saying “Stop SOPA”. THAT must be reported. How foolish would those media companies look if 5 of the top 10 websites suddenly went offline and they missed the story? Wikipedia forced their hand, giving much needed publicity via the traditional media outlets of print, radio, and television to the story.

If they didn’t do that, the event would never get reported. Here is a perfect example of this:

This morning on my way to work, Fox News was doing the typical morning report. They had literally a 30 second spot “Wikepedia is going offline to protest SOPA, along with dozens of other websites. … Full disclosure: Fox’s parent company fully supports SOPA.”. 30 seconds. That was all. They then did a 2 minute story about a woman at a gas station and the increase of lottery ticket prices. It was blatantly obvious that the reporter had been instructed to downplay and give limited exposure to the “SOPA Resistance”.

Re: Stopping Piracy

“In 25 words or less, what should the legislation allow that would reduce or stop piracy? I know that is probably an impossible question, but I want to understand what alternatives would be better.”

Here is the 25-word version:
The existing SOPA/PIPA legislation is fatally flawed and cannot be easily remedied. It needs to be completely scrapped and a different tact needs to be used.

Why do I say that?

The technical & social mechanisms that drive piracy cannot be remedied by legislation. No amount of law is going to address the fundamental problems. The problem needs to be addressed with a viable business model that addresses the needs that are being filled by piracy. Here are some of the factors involved in piracy that are completely neglected by SOPA/PIPA:

  • Pirated content does not, and often is not, a single-source entity on a named server. You can shut down a site name like “ThePirateBay.org” but that is only a facade. The real content is hosted on a myriad a systems with names like “192.152.13.9” and “155.12.8.7”. Thus the SOPA/PIPA provisions to allow the US Government to shut down the name translation service (DNS) does nothing to prevent access to the content.
  • People are pirating content because they can afford to.  It is free. If these laws worked, which they won’t, then piracy would stop and magically $2.5 BILLION dollars would suddenly start flowing back into the economy. Really? Are people suddenly going to be able to afford that $4.95 for an online movie just because they can’t get a free copy on a rogue site?
  • Pirated content often originates overseas. The content is already illegal to stream online. Yet it is readily available. Do you think “Xaun Wang’s Pirate Content” is going to shut down just because the US Government passed a new law? No.

“Ahh”, you say, “but the US Government can stop US citizens from going to Xuan Wang’s website with these new laws in place (censorship anyone?). THAT will stop them. Not even close. Anyone that has any clue about how to get pirated content has heard of a proxy. The basic principle is that you connect to a third party site in a “friendly location”, like the UK, which does not have a SOPA/PIPA law and they speak on your behalf t Xuan Wang’s site. Mr. US citizen is connecting to an allowed (non-censored) site and then routes through them to get their pirated content.

There are a thousand other things wrong with this law & quite frankly the groups of people doing this stuff are MUCH, MUCH smarter than nearly anyone we have passing the laws in this country. In the end you will only see these laws being abused by the large corporate megaliths in the old-school media & entertainment industries to squash anyone they don’t like. The sad part is they would not be in this position if they would innovate instead of litigate.

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Stop SOPA

Cyber Sprocket Labs is joining the hundreds of sites that are protesting SOPA and PIPA.

SOPA and PIPA are new legislative acts that are being proposed in the US Senate and Congress that are supposed to “protect American businesses against piracy”.    While stopping piracy is a good thing, legislative acts like these are the WRONG WAY to do this.   These acts have a number of significant flaws which prevent them from being effective against the majority of people involved in piracy.   They DO, however, provide a direct instrument for the largest media & entertainment conglomerates to shut down anyone they see as a threat.

Let me restate that point as it is a very important one:
SOPA and PIPA provide an instrument for media & entertainment companies to shut down ANYONE they deem a threat.

While the basic intent of the legislation started out as a good thing, or at least it was being cast in that light by the special interest groups behind it, the reality is that if these acts are passed they will destroy any and all innovation in the media and entertainment market.   Here is one scenario of how these acts would work if they make it through the legislative process.

The SOPA/PIPA Future

I am starting a new high tech media & entertainment company.   Let’s call it Musiplicity.   This new company provides a innovative new way to engage and entertain consumers while they are at their favorite bar, restaurant, or retail store.   It is a great idea and a lot of people are very interested in moving the project forward.   The project gets funded & starts generating a lot of buzz in the industry.

Then Sony Entertainment finds out about it.   They happen to have a new initiative that also provides business-to-business music & entertainment services.  They deem Musiplicity a threat.   They submit a complaint of POSSIBLE copyright infringement on the CONTENT provided by Musiplicity.    Even though Musiplicity has all the proper licensing agreements in place it takes months to prove that the 11-million songs in the system are all covered.   In the meantime SOPA and PIPA have shut down the website, the music servers, the PAYMENT PROCESSORS, the HOSTING COMPANY, the DNS PROVIDERS.  Anyone and everyone that supports Musiplicity simply because Sony Entertainment filed a complaint that “these new little guys might be doing something wrong”.

Litigate Your Competition Out Of Business

This is EXACTLY how the current legislation is written.   Any company that owns copyrighted material can claim breach of copyright and have any other company shut down for an indefinite period of time.   While larger companies like Google, Facebook, and Wikipedia will have deep enough pockets to prove they made the best effort possible to keep copyright materials off their sites, anyone much smaller than that will be literally sued out of business.

This is how the big boys play.   They don’t play fair. They play to win & this new legislation gives them exactly the leverage they need to execute an all-out litiguous attack on anyone they deem potential competition.

They did it to one of my prior startup companies and essentially burned through our entire cash reserves by litigating us out of business even though we were 100% legitimate selling legal US goods to US consumers.   Our playing by the rules did not stop these companies from playing dirty & killing a company that they felt was a threat.   Now they are laying the legal groundwork to do this on a much larger scale with little-to-no ramifications for filing false claims.

We should do everything possible NOW, before SOPA and PIPA get written into law, to prevent the creation of yet another tool that is designed to do nothing more than kill anyone that the “big guys” deem a threat.   In the meantime, the piracy will continue and these bills will do nothing to stop it.   It is a problem that cannot be addressed via legislation.    If legislation worked to stop piracy then DMCA would have stopped the issue many years ago.

Learn More

You can learn more about SOPA/PIPA and the people involved at these locations:

If you live in the State of South Carolina, write to Senator Lindsey Graham and let him know what you think about SOPA, PIPA, and his co-sponsorship of PIPA.  If you disagree with his policies you’ll have the opportunity to vote him out of office in 2014.   You can also tweet your thoughts to him at @GrahamBlog on Twitter.