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Verizon makes it clear. They are a media company

Verizon’s Craig Silliman published a blog post discussing the appropriate regulatory framework for the application of net neutrality principles. He reiterated the broadband provider’s support for no blocking, no throttling, no paid prioritization, and a general conduct standard for protecting consumers and competition. What I found interesting was Mr. Silliman’s description of Verizon’s media efforts. In Mr. Silliman’s words:

“We have invested billions in businesses that depend on the ability to reach customers over the networks and platforms of others. We invested in digital ad technology through our $4.4 billion purchase of AOL and own content through properties like the Huffington Post, MapQuest, and TechCrunch. We have an expanding presence in the digital media and entertainment space; Verizon Digital Media Services helps content companies deliver their services in digital form to any screen or device, anywhere in the world.”

To me, Verizon sounds more like a content delivery network. A content delivery network is a large distributive system of servers deployed in multiple data centers across the internet. The goal of a CDN is to serve content to end users with high availability and high performance.

Akamai, a company that touts itself as the global leader in content delivery services, might vehemently disagree with me about Verizon being a content delivery network given Verizon’s position as a gatekeeper to end-user customers. End-users don’t use Akamai to get on to the internet. Access is that functionality that pulls Verizon into the Federal Communications Commission’s sandbox.

As Verizon continues to evolve in the media space, however, it increasingly distinguishes itself from T-Mobile and Sprint whose claim to broadband fame is strictly as a mobile broadband access platform.

Although Verizon has expressed its willingness and the importance of complying with net neutrality principles, should those principles intrude into its content delivery operations? If yes, then should content delivery services provided by edge providers like Akamai also fall under the Commission’s transparency principles? Why should Verizon’s content delivery components be treated differently from Akamai’s content delivery services? Verizon’s evolution will force the Commission to address these questions.

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Would more transparency on the part of data brokers be good for investors?

Posted September 9th, 2015 in big data, Broadband, data brokers and tagged , by Alton Drew

I came across an article in The Wall Street Journal about “device fingerprinting.” Device fingerprinting is information collected about a remote computing device for the purpose of identification. Data brokers use fingerprints can be used to fully or partially identify individual users or devices even when cookies are turned off.

Back in 2014, the Federal Trade Commission produced a report addressing the lack of transparency in the data broker industry.  While the report does not explicitly use the term device fingerprinting, the FTC does describe web crawling on particular websites containing public information and the use of application programming interface among the methods used to collect information.  Based on its description, device fingerprinting appears to take its place among these collection methods.

The FTC has recommended that Congress pass legislation that would provide consumers with access to the information data brokers collect on them.  It was also recommended in the report that consumers be allowed to opt out of a data brokers collection efforts. For further transparency, the FTC also recommended that a central website listing data brokers and describing their data collection policies be created.

In March 2015, Senator Ed Markey, Democrat of Massachusetts, introduced S. 668, the Data Broker Accountability and Transparency Act of 2015.  The thrust of the bill appears to focus on the accuracy of the data collected and shared; the transparency about why information is being collected; and the ability of the consumer to review the information collected and requesting that information not be used for the purposes collected.

It would be surprising to see the bill go beyond these three main restrictions.  Congress has shown over the past two decades a wariness about regulating commerce on the internet.  Regulating broadband, the on-ramp that gets the consumer to the information superhighway is one thing.  Regulating the actual commerce moving on that highway is a different story.

Ironically, it would especially put net neutrality advocates in a tight position between so called openness and privacy.  It is the open network architecture of the internet that allows for apps to capture information from websites and transmit the information to third-parties for packaging and analysis.  This is the openness that net neutrality types were advocating for. The millions of Americans who supported the open internet campaign may not like the result of net neutrality, that their privacy may have been put in some jeopardy.

S. 668 has been in committee for six months and shows little sign of moving to a vote much less the floor.  Since the language of the bill does not necessarily sound the death bells for the data broker industry, even if it passes and compliance costs increase, the increase in demand for data that the industry provides may offset these costs.

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Why be afraid of big data?

Posted August 11th, 2015 in big data, Broadband, Federal Trade Commission and tagged , , by Alton Drew

Between April 1982 and November 1984 I worked at a Burger King in Tallahassee, Florida.  I was a student back then at the Florida State University.  The restaurant was located across the street from campus so from time to time I would see some of my friends come into the restaurant to eat.  One would think that putting together a Whopper was no big deal but to some people it is, from getting the condiments right to simply trusting the employee who made the sandwich.

I had two schoolmates that were pretty particular about who made their grub.  One schoolmate, Charlotte Jones, was very particular about me making her food.  One day I was getting off my shift and heading back to Smith Hall. Charlotte was heading to BKs to eat.  She saw me heading to the dorm and asked where I was going.  I said back to my room. At that point she did an about face and headed back to Smith Hall and made sure that she knew my schedule from that day going forward.

Another schoolmate, Candace Pope, liked her fish sandwich done a particular way.  It got to the point that if I saw her coming into the restaurant, I would have her sandwich prepared before she got to the cash register.  All I had to do was say, “It’s up.”  She would then direct the cashier to the sandwich already made.  I was prepared to take care of my friends based on having accumulated data on their buying habits at Burger King. I was able to anticipate their needs.

Fast forward thirty one years and technology is able to do on a massive scale what I was able to do on a micro scale.  Today technology allows business to capture information on their consumers, send that information to data brokers and other information gatherers who categorize and prepare that information for use by advertisers.  It’s an information trade where broadband networks providing the platform upon which information is traded at light-speed.  And part of that information trade takes place in a $120 billion advertising market.

What does this information trade mean for broadband deployment and investment?  The information trade creates the value that signals capital to enter the market.  Capital, seeing high returns from the trade, will move toward entrepreneurs that build digital mousetraps and to broadband facility providers willing to build the infrastructure upon which the digital data trade winds flow.

Data, information, knowledge have been flowing between people, groups and societies from the time man has been on the planet.  My little Burger King example shows how we use business data about consumers every day.  What scares people and in particular regulators, is the abundance of it.  According to Maria Ogneva, 2.5 quintillion bytes of data is created every day.

A forum hosted by the Federal Trade Commission in September 2014 addressed some of these fears, centering on regulator concerns about consumer privacy and the commercial use of data without consumer permission. Panelists were concerned about how data analytic techniques may be either skewing unflattering ads to minority populations, or populating data bases with incorrect or biased information about consumers based on their buying habits or location where they make their purchases.  While only one panelist explicitly mused about regulating data, it was apparent to me that at least some of the panelists were thinking about regulating how data is accumulated, analyzed, and distributed.

The FTC has been recommending that Congress get a bit more aggressive with data brokers, the entities that collect, analyze, and sell consumer data to advertisers.  For example, from a summary of a report the FTC conducted on data brokers in 2014:

“As the Report states, ‘In light of these findings, the Commission unanimously renews its call for Congress to consider enacting legislation that would enable consumers to learn of the existence and activities of these data brokers and provide consumers with reasonable access to information held about them by these entities.’  With respect to brokers that sell marketing products, a majority of the Commission had four specific suggestions for Congress:

  1. Consider giving consumers a way to easily identify which brokers have data about them and where they can go to access it or opt out.  One way to do that:  A central online portal.
  2. Consider whether data brokers should have to clearly disclose that they not only collect raw data, but also combine it with other information to draw inferences about people.  That’s especially important when it comes to sensitive topics like health conditions.
  3. Consider requiring data brokers to reveal more about their sources.  That would make it easier for consumers to track down and correct the source of inaccurate information (for example, a mistake in a public record).
  4. Consider whether consumer-facing businesses should have to clearly disclose that they share information with data brokers and to give consumers choices, including opting out.  For sensitive data – health information is one example – the FTC is asking Congress to consider legislation to require consumer-facing sources to get people’s affirmative express consent before they collect it in the first place.”

Democrats in the U.S. Senate have taken up the FTC’s call for legislative action. Last March S. 668, the Data Broker Accountability and Transparency Act of 2015, was introduced in the Senate, but given the control Republicans have of the Senate and the House, this bill poses little if any political risk to the data broker industry.  The value being brought to the information markets via data brokers continues unhindered by new legislation or regulation.  This is good for broadband deployment as well since, as I stated before, the information trade drives deployment of broadband.