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In space, one can do fast lanes

A great piece in The Economist discussing increasing the deployment of #broadband infrastructure in lesser developed countries.with the use of lower flying satellites, hot air balloons, and drones. These lower cost options relative to those provided by legacy satellite firms are hoped to provide the “backbone infrastructure that connects wireless telephone companies to each other and to the backbone provider making access to high-speed broadband increasingly feasible for consumers in poor countries.

The article discusses briefly the regulatory hurdles that companies like #Facebook may face when attempting to deploy drones. In addition the article notes that transmission speeds may be higher in space where traffic travels 40% faster via dark matter versus through a piece of cable.

I wonder if the FCC would try to extend net neutrality rules in space should Facebook decide that it’s hot air balloon program could work for underserved rural areas in the United States? Probably not. It’s #netneutrality rules apply primarily to the behavior of broadband internet access providers.

According to Section 8.9(a) of the FCC’s net neutrality rules, a person engaged in the provision of broadband internet access service … shall not engage in paid prioritization. This sentence right here would get Facebook or #Google off the hook for being subject to the rule.

What’s also interesting is the definition of “paid prioritization.” Let’s say that Google or Facebook is successful in launching their “where no man has gone before” initiative to connect the globe via low flying satellites or drones. Let’s also suppose that they decide to go head-to-head with Netflix and provide over-the-top streaming content. Given their size and capital, Facebook or Google could afford to enter a “bill and keep” arrangement with broadband access providers to move their traffic to the last-mile on a priority basis without paying for prioritization. The Facebook or Google brand would give them some traction with consumers given Google’s search prowess and Facebook’s growing bankbook of connections worldwide.

Since the Federal Communications Commission​ allegedly has no intention of regulating rates and would have less incentive to deny a traffic exchange agreement that involves no compensation or advantage for a third-party affiliate, The broadband access provider could increase rates to recover the costs of its clogging network.

Now this scenario assumes that Facebook and Google’s global initiatives are a success, but should their drone and hot air balloon programs work, their will be incentives to connect the dots here at home by making these initiatives available to rural America where demand is great.

I hope they try it….. .

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Google has answers and maybe we should pay for them

Posted February 10th, 2015 in Google, Internet search and tagged , , , by Alton Drew

According to this post in The Wall Street Journal, Google is upping the stakes in the market for data moving away from just providing links to providing answers to your search questions.  Critics like the European Union argues that Google is favoriting its own inventory of information and that this is a no-no because it puts other information providers at a disadvantage, particularly those deemed to be providing more relevant data.  Google, according to the Journal, is driven to move from just providing to links to providing answers in part as a result of consumers using smart phones with smaller screens seeking out facts.  In addition these consumers are speaking their searches versus typing them into a search.  Competitive information providers such as Yelp are providing apps that help consumers bypass Google’s search product.

So far U.S. are not as critical of Google’s move to providing answers versus just providing links, but the European view appears to favor a coordinated delivery of information from data generating websites through search engines to the end using data consumer.  What the Europeans appear to be saying is that Google should act akin to an electric grid independent system operator; identifying the electricity generator that can meet the consumers’ electricity needs on demand and at the best price and transmitting that electricity to the consumer. Consumers are free to bypass Google by using an app from Yelp or any other data provider or going directly to the site they desire.  Google is free to play both data provider and data broker.  There are no legal restrictions saying that Google cannot occupy both spaces.

As Andrew Keen shares in his latest book, “The Internet is Not the Answer”, Google could charge for its search services.  If the consumer values the data they are searching for, why not pay their data broker, Google, to find it for them.  This way Google has a financial incentive to submit the most relevant data sources to the consumer.

Regulators can’t force Google to charge a fee for its services but assessing a fee would address a number of concerns like putting a value on search activity including information.

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Google says “We love net neutrality. Why don’t you?”

Google is no longer silent on its position on net neutrality.  It wants to see strong net neutrality, as this blog post in The Washington Post points out.  In fairness to the company, however, it came out of the net neutrality closet to investors a few months earlier based on language in its February 2014 10-K, its annual financial report to the U.S. Securities and Exchange Commission.

Without using the terms, “net neutrality” or “Open Internet”, here is how Google described how the risk stemming from a lack of an open Internet would impact the company:

“business depends on continued and unimpeded access to the internet by us and our users. Internet access providers may be able to block, degrade, or charge for access to certain of our products and services, which could lead to additional expenses and the loss of users and advertisers.
 
Our products and services depend on the ability of our users to access the internet, and certain of our products require significant bandwidth to work effectively. Currently, this access is provided by companies that have significant market power in the broadband and internet access marketplace, including incumbent telephone companies, cable companies, mobile communications companies, and government-owned service providers.
Some of these providers have taken, or have stated that they may take measures, including legal actions, that could degrade, disrupt, or increase the cost of user access to certain of our products by restricting or prohibiting the use of their infrastructure to support or facilitate our offerings, or by charging increased fees to us or our users to provide our offerings.
Such interference could result in a loss of existing users and advertisers, and increased costs, and could impair our ability to attract new users and advertisers, thereby harming our revenues and growth.”
Google has actually shown it prefers taking action when it comes to net neutrality versus engaging in esoteric debates over an open Internet, as preferred by numerous grassroots advocates.  Back in February 2010 when Google announced its intent to deploy one Gigabit Internet access service, it made clear its intention was “to incorporate the policies we’ve been advocating for in areas like network neutrality and privacy protection.”
If Google Fiber is to have any impact on incumbent broadband operators such as AT&T, Comcast, or Verizon, it may only be in forcing them to upgrade the speeds at which the incumbents provide high-speed access.  By incorporating net neutrality principles in its high-speed service, Google is merely following AT&T, Comcast, and Verizon’s model for complying with net neutrality; they’ve been following net neutrality principles without Google’s help.
I don’t see why the Federal Communications Commission would be moved by Google’s announcement of its position on net neutrality.  If anything the Commission should be asking Google what took you so long to verbalize your support.

 

 

 

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Google must not be worried about the possibility of Title II reclassification

An article in The Wall Street Journal posted last Friday talks about Google’s on-demand broadband deployment in a number of American cities.  Google is circumventing the traditional universal service approach forced upon cable carriers as part of their franchise agreements with an on-demand approach that has the world’s largest Internet search portal deploying fiber in neighborhoods that are willing and able to pay for the facilities.

Not that Google is cherry picking, according to the article, but the company’s pursuit of higher margins coupled by other broadband providers slowing down their high-speed roll-outs created an environment that gave some localities no choice but to allow Google to serve higher demand neighborhoods.

Question is, does the action by these localities help aid broadband deployment?  I don’t think so, especially where Google’s services will be prevalent, but not exclusive to, more affluent neighborhoods.  Broadband providers that are obligated under existing franchise agreements to build out their facilities may be at a competitive disadvantage to a cash cow like Google that deploys only where it sees demand.

On the other hand, Google’s approach is standard economics 101.  They are serving customers most responsive to their service’s price points and right now it’s those customers with the right amount of wealth.

So, how does this square with the Federal Communications Commission’s proposed Open Internet rules?  So far I see no conflict as long as the FCC stays on the section 706 path versus the common carrier/Title II route.  Google’s approach should send a signal to Free Press and Public Knowledge that the reality on the ground when it comes to broadband deployment is not in sync with their common carrier narrative.

Title II would bring back the slow old days of tariffs, price regulation, and inter-carrier compensation, a regulatory framework that would disincentivize Google from deploying broadband.  I expect that Google would eventually reduce prices and offer tiered offerings thus allowing broadband deployment into less affluent neighborhoods.

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Broadband: Why would an edge provider let FCC see its business model

Technocrat’s Anne L. Kim blogged on comments Consumer Electronics Association CEO and president Gary Shapiro made at a recent Brookings Institution event.  Here is an excerpt from her post:

On net neutrality, Shapiro wants more of a hands-off approach from the government. He wants to see government allow industry and nongovernmental organizations establish principals. “And if the principals are violated, then act,” he said.

“I personally am fearful of all of a sudden sending those companies into a new area of regulation like utilities,” referring to the FCC considering using Title II of the 1996 Communications Act to rewrite net neutrality rules.

He said he likes things the “way they are” and that he’s rather not see them changed, adding that “good intentions scare me.”

Take a look at Title II, something more edge providers need to do, and you can appreciate some of Mr. Shapiro’s fear.  For example, section 211 of the Communications Act requires that common carriers (a classification that net neutrality advocates want applied to broadband providers) file copies of all contracts that they have with other common carriers.  So, if Google, a broadband wannabe, has peering or transit contracts with Comcast, Google will have to file its contracts with the Federal Communications Commission, and probably with state public utility commissions as well.  If these contracts contain information regarding traffic from certain edge providers a la Netflix, Netflix wouldn’t be happy that some aspect of its business model may be on public display with the FCC.

This type of transparency may bring joy to net neutrality proponents but not to the edge providers they purportedly are so concerned about.  In my opinion, letting the government have a copy of a contract entered into autonomously is the same as the government regulating your free speech.  Unless there is a dispute to be resolved between two parties to a contract, I see no reason to let the government have access to its contents.  If edge providers want to see a slippery slope created that takes regulation right to their doorsteps, Title II will lay the bricks for that driveway.

My walk down the Yellow Brick Road of regulation gets scarier when I take a look at section 215.  Section 215 allows the FCC to examine transactions involving the furnishing of services, supplies, equipment, personnel, etc., to a carrier.  Also, the FCC, pursuant to this section, may examine transactions that impact charges a common carrier assesses for provision of wire or wireless services.  Section 215 also allows the FCC to determine how reasonable these charges are.  Also, the FCC may report its recommendations to Congress as to whether charges are invalid and should be modified and prohibited.

Now, not to knock on Google, but since they are the Internet flavor of the week given the disclosure of their perceived wretched diversity in hiring practices, disclosing matters regarding personnel much less on their services should make the company and its investors think twice about supporting net neutrality brought to you via Title II classification.

All of Title II should be scary to venture capitalists, private equity, and their investor clients, but section 218 should bring great pause. This section allows the FCC to inquire into the management of all common carriers.  The FCC may obtain management information not just from the carriers, but from entities that directly or indirectly control them.  That, in my mind, includes private equity firms or venture capitalists that may have a controlling interest in some little regional or rural broadband provider.  With the SEC stepping up its scrutiny of private equity via the Dodd Frank Act, does private equity want another alphabet soup agency knocking on its door?

Here is one more, especially for the app developers.  Section 231 speaks to app developers, or more definitively access software providers.  This section prohibits the use of the World Wide Web to transmit material harmful to minors.  I wonder how many apps fall under this category.

When you look behind the curtain of good open network intentions, you can find some scary stuff.