Net Neutrality Is No Longer The Rule !

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Readers it’s Friday and time for our weekly shoot the shit. By now, I hope you’ve done all of your Christmas shopping. Keep in mind that if you delay, you risk the opening of the alien portals and having to contend with the fruitcakes. So, get your shopping done pronto! This season, I’m a little bummed out by the fact that stores are not providing gift boxes and gift wrapping. Thank God, a local Barnes and Nobel store has a charity on site wrapping for donations.

To participate in a shoot the shit you don’t need to know anything about the subject, you can make unsupported comments, use uncensored profanity, criticize anyone you wish or change the subject. We’ve found that shoot the shits are far superior to paying $150 per hour to a jackass that studied psychology so they could understand themselves. So, feel free to participate and let us hear from you.

On the issue of Net Neutrality…

One of the few regulations that the previous administration put in place was the concept of “Net Neutrality.” In its simplest form, net neutrality requires the local exchange carriers and ISPs to treat all internet traffic equally. In other words Netflix streaming could not be prioritized over John or Jane Doe’s new product video. If ISPs and  local exchange carriers were allowed to prioritize, then there’s a very good chance that the Doe’s video would be pixilating and of a lower quality.

Bandwidth is not unlimited, and it costs money to expand and maintain. The internet is a matrix of interconnected computers, switches and routers via coaxial cable, multimode and single mode fiber. An ISP ( your local internet provider ) connects to the outside world by connecting to those external resources using backbones provided by the local exchange carriers (AT&T, Verizon, etc.). Traffic between computers within the ISP’s local area are routed through the ISP’s network and equipment; however, traffic destined to Italy, for example, would use a local exchange carrier’s backbone to get to Italy.

The Internet is critical infrastructure; if you don’t believe that try living without it for a week. The government delivers services via the internet, companies provide sales and customer support via the internet, and in 2017 virtually anything can be ordered and supported via the internet, including medical services.

So, what’s up with today’s FCC decision…

By repealing “Net Neutrality, ” what the FCC has done is to end the treatment of the ISP and local exchange carrier as utilities and rebranding them as information providers.  As such, they are no longer required to provide connectivity or they can differentially price connectivity to limit anyone they see as a competitor or potential. Those of you old enough to go through divestiture know exactly what I’m talking about. Just ask anyone that was in a senior management position at MCI and Sprint.

Think of it this way. The lanes you are allowed to use on a highway is a function of how much you are willing to pay for your vehicle registration. And, in some cases, your vehicle could be denied use of the highway altogether.

At this stage, it’s impossible to fully asses what the impact of Ajit Pai’s, FCC Director, and a former Verizon employee, decision will be; however, rest assured it won’t be good for the millions of subscribers and businesses of all sizes.

The FCC’s decision had one simple goal and that is profit maximization for ISPs and local exchange carriers – now classified as information providers. Under net neutrality, access to the internet has made it possible for even the smallest of businesses to gain global exposure, and today Internet commerce runs into the billions of dollars. With today’s FCC decision, if your business relies on internet services for its day to day operations you need to plan to spend considerably more for access.

There’s nothing wrong with profit maximization, it’s part and parcel of the efficient allocation of investment capital, but when it impacts critical infrastructure it needs a very careful eye. Unfortunately, Mr. Pai relied principally on input from AT&T, Comcast and Verizon in making his decision. Making matters worse, the FCC, as part, of its net neutrality decision made no effort to establish minimum performance requirements on these providers. In making his decision Mr. Pai has done a great disservice to President Trump’s Administration, the American people and the overall U.S. economy.

With today’s decision, the FCC has planted seeds which will lead to conditions similar to those encountered by startup companies in the early 1980s during divestiture. In this period, startups like MCI, U.S. Sprint and several others incurred millions of dollars in legal fees filing complaints with the FTC against the local exchange carriers.

Happy Holidays to all of our readers. Happy Hanukah and Merry Christmas to all. Be safe and spend some quality time with your buds and family.

 

Modified to include the full text of the Net Neutrality Rules. Readers should note that what they are hearing from the news media is misinformation. The document is 400 pages of text. My suggestion to readers is that you get through the Introduction and Executive Summary, about 50 well written pages. It will give you an excellent overview of what the FCC was trying to accomplish when net neutrality was codified. Read it, it’s well worth the time and effort.

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