As many of you know the FCC approved what is now considered the greatest change in the fundamental underpinnings of how the internet will be both used as well as “allowed” to be used. The regulation now known as Net Neutrality will supposedly make the internet more “fair” or “equal” to everyone. All I’ll ask you to ponder is this: How’s your cable bill working out for you?
There’s a lot of known and unknowns still to be had as we sit here today. Why? Regardless of what you’ve heard or seen written in the press about this regulation; no one, and I do mean, no one knows the details to this new and sweeping regulation.
The reported 330-ish paged regulation was held in a way resembling sealed documents from a court case. The only people who read it are those that wrote it, and voted it into law. We now have to wait and see just how much everything changes.
Every future or current business, entrepreneur, as well as individual that accesses the web will be effected. Along with what everyone now takes for granted about the internet will also be changed. How much if any will remain the same, or even possible going forward no one yet knows. And that’s not hyperbole. Everything that one thought they knew or even assumed has now changed. Period.
What took my breath away was just how many bought into the premise that all this was about (as in solely ) was not allowing ISP or cable providers to throttle content. i.e., Not allow a cable provider to charge more to a content provider for faster access to deliver their content and nothing more. And that regulating the internet would now fix this issue.
The discussions and buttressing of arguments based on examples using monopolies and utilities by those pushing for it showed just how ill-informed many of the so-called “experts” were.
Just how little knowledge people have in their fundamental understanding of the differences between a real monopoly and a business impediment was just shocking. Although I shouldn’t have been so surprised. After all, this was Silicon Valley where unicorns and rainbows still are accepted business plans for a round of VC funding. (but that window is closing far faster than many realize)
Let me use an example to help illustrate. It’s meant to be over simplistic however, it’s far more instructive (in my opinion) than anything I’ve heard from those who are so-called “experts.”
Regardless of what you may think about your cable company or internet provider (and trust me I have no love for mine) the real issue in the end is what is known as “the last mile.” In other words the underlying issue of speed controls is in direct proportion to the ability for data to pass through efficiently in about the last mile to your home or computer. In other words the issue is basically from the pole to your house. Not from the provider to “the pole.” Again this is an oversimplification so please spare me the emails.
The issue that was becoming relevant to where both sides of the content providers along with the customers found themselves was the bottleneck effect happening at the customer’s home. i.e., within that last mile.
There’s only one way to resolve that issue. One and only one: You must build out the infrastructure to accommodate. And that requires money. Big money. The only question is who pays? You? The cable or ISP provider? Or the content creator. i.e., Netflix™ and others.
Currently the “individual” paying is irrelevant for this argument. No one would solely pay the exorbitant amount of money it would cost on an individual level. That would come later in a collective form of billing such as “service fees” of some sort down the road. So it’s left between the providers.
Contrary to what many are touting, a resolution (a private one as in a business to business decision and agreement) was being worked out. i.e., Netflix and others were in fact sitting down, working out monetary agreements and other particulars as to help remedy many current issues. The real issue was: It wasn’t what “issue politics” wanted. And wanted – “Right now!”
Think about it this way. The electricity coming into your home works generally the same way. And this was used by many as an underpinning of their argument to express the “utility” equivalency discussion. Personally I thought it was the exact argument to show just how little many understood rather than solidify it.
If you want more power into your home guess what? You have to pay for the infrastructure not only at your home (e.g. update your wiring and more) but you also might need to pay for the build out from the pole. If you want or need 3 phase power? You’re going to need to spend money. A lot of money. The power is there but if you want it, you’re going to need to pay.
The infrastructure to carry what you currently have you paid for when the home was built. The electric company didn’t pay, the home builder paid when the home was first constructed. If you want more power? You are going to pay. And here’s where this issue really strike home to the “utility” issue used by so many.
If you don’t like the power companies fees, service, regulations et al. Tough. Because you can’t go around them. You can’t build your own better, more customer friendly or compliant power company. They have a true monopoly. And no matter what you say or do, you are going to pay if it’s decided by the regulating authorities, that no matter what – you are going to pay.
Think not? You can go “off grid” you say? You’ll find a way to “hack.” Not so fast. There are reports nationwide where it is illegal to disconnect your home from the “power” companies. Many are finding themselves facing both criminal as well as monetary charges for trying to “disconnect.” Your cable bill (or broadband) is going to fall into this category in coming years. After all, if it’s now deemed as “utility” status why not? Think it’s just the electricity? How about another “utility?”
Try telling many city governments that you just spent $25,000 to update your septic system to a new state of the art standard so you don’t need to connect to the cities new and improved or proposed sewer system. Ask them why you need to pay for some “special assessment” bill of a few thousand dollars payable in 30 days along with receiving a monthly bill for something you don’t need or use?
The response will be: “Sorry, I just work here. Please pay the bill and make sure your property is accessible for the digging crews to connect your property. Have a nice day.” And that’s just the start. Welcome to the world of “utility.” and “monopoly.” Careful what you wish for – you just might get it!
If you think those in the industry as in “Silicon Valley” have more of an understanding that you or I do. All I’ll do is point you to the most recent as well as instructive or insightful understandings on this issue by one of net neutrality’s foremost cheerleaders.
I suggest you watch this short exchange that took place on CNBC™ as to why this must take place and why its necessary for the good of the internet. Then ask yourself this question: The internet just moved from anything you knew it to be, into something no one has any understanding or clue as to what it will morph into from here. All based on a movement propelled on the understandings and insights professed by so-called “experts” as those in this video.
Personally I am stunned on just how little of an understanding of business those in Silicon Valley have. Yet maybe I shouldn’t be. For there is no where else a business can be worth billions in market cap that either can’t turn a profit, or better yet, can’t keep a customer if they so dare as to charge a penny.
But that’s now all about to change too. Because once new “regulation” concerns become part of the mix Wall Street has to think about when deciding who, what, or where will the hot money (if there’s any left) will flow: Silicon Valley is going to find itself with not as much love as they once garnered. For nothing snuffs out the spark of VC free money for “hacking” or lets say “Innovation” like the threat and over arching hand – of regulation. Welcome to the land of utilities. Hope you like the new neighborhood.
Forget about the once “wild west” of hackers. That’s just been handed its death knell by their own hands. For one thing that’s far mightier than a coders hack is a government bodies decree of regulation. There’s no neutrality nor nothing “free” once you allow and call for the interjection and oversight of both the government along with its enforceable hand of law via regulations.
Just wait until all the details become known as well as imposed. I have a feeling net neutrality is going to feel a whole lot more like “net injustice” than anyone dared contemplate. Let alone imagined.
© 2015 Mark St.Cyr