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Monthly Archives: March 2014

24
Mar
2014

US Senator Franken: Comcast-Time Warner Merger Threatens the Nature of the Internet

by Bill

net neutralitySabre-rattling over major mergers, net neutrality and the way bandwidth will be allocated continues to capture headlines. Now the US Senate is stepping into the fray and imploring regulators to be cautious with Comcast. US Senator Al Franken (D-MN) has raised what he describes as serious concerns about the proposed acquisition of Time Warner Cable by Comcast and its effects on consumers. The deal, he said, “could jeopardize the open nature of the Internet by tilting the balance of power from people to huge corporations.”

In a letter addressed to the Department of Justice’s Antitrust Division, Franken stated: “The Internet is an open marketplace where everyone can participate on equal footing, regardless of one’s wealth or influence – and I believe that’s the way it should be. The Internet has been a platform for innovation and economic growth since its inception. It also has connected Americans in unprecedented ways, facilitating the free exchange of information and ideas. Simply put, the Internet belongs to the people, not to huge corporations. Comcast’s proposed acquisition of Time Warner Cable could disrupt this balance of power, resulting in higher costs and fewer choices for consumers. Without open Internet protections, Comcast, Time Warner Cable, and other broadband service providers could block, degrade, or charge extra fees to transmit Internet traffic.”

Franken also wants to make peering an issue in the merger review. While big network operators have traditionally engaged in “settlement-free peering,” exchanging traffic without payment, recently consumer ISPs like Comcast have begun demanding, and getting payments from Netflix and its traffic providers, and is currently in a battle with Cogent, another one of the companies Netflix pays to distribute its traffic across the Internet.

Sen. Franken noted that prior to the NBC Universal acquisition, Comcast was sanctioned by the FCC for degrading traffic. That FCC ruling dates from 2008 and found that Comcast had “secretly degraded” peer-to-peer traffic on their network. As a condition on the approval of their acquisition of NBC Universal, Comcast is not allowed to block or discriminate against Web traffic, but Franken noted that “Comcast’s net neutrality obligations expire in January 2018, which raises the question of what happens after that time.”

The Comcast Time Warner Cable merger will be reviewed by both the FCC and DOJ, and in response to Franken’s comments, Comcast issued the following statement: “The Comcast Time Warner Cable transaction will bring millions more Americans under the Open Internet rules as soon as our deal closes. We fully expect that the FCC will have in place Open Internet rules that will apply to all companies by the time our current condition from the NBCUniversal deal expires in 2018. That condition was always meant as a bridge to enforceable rules that would be applicable to all companies in the industry. Comcast has supported the Open Internet rules since they were first proposed and is the only company that is currently required to abide by them.”

What makes these moves interesting is that appear to all be aimed at slicing and dicing the pie among a very small group of top end players with mention of consumers only insofar as it affects these monolithic deals on data usage. How these landmark moves will impact individual site owners and their visitors remains to be seen, and NationalNet will continue to track each plot-point for our customers to find as many innovative ways to create a competitive advantage as we can find.

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18
Mar
2014

US Commerce Department To Relinquish Remaining Control Over The Internet

by Bill

domains

US officials announced plans last week that would see the final vestiges of US authority over domain names and web addresses that is currently managed by a contract between the US Commerce Department and the Internet Corporation for Assigned Names and Numbers (ICANN), and is set to expire in September 2015.

The transition from US federal government authority to a new, yet to be determined, oversight system, and an international meeting to discuss the future of Internet is scheduled to start on March 23 in Singapore. The Commerce Department’s National Telecommunications and Information Administration has declared that the new governance model must ensure that ICANN is free from government influence. The plan must also fulfill several other conditions, such as preserving the security and stability of the Internet while keeping it open and free from censorship.

Business groups and some others have long complained that ICANN’s decision-making was dominated by the interests of the industry that sells domain names and whose fees provide the vast majority of ICANN’s revenue. Concern about ICANN’s stewardship has spiked in recent years amid a massive and controversial expansion that is adding hundreds of new domains, such as .book, .gay and most controversially: .sucks, to the Internet’s infrastructure. More than 1,000 new domains are slated to be made available, pumping far more fee revenue into ICANN.

Senator Jay Rockefeller, chairman of the Senate Commerce committee, in a letter to ICANN, blasted the “.sucks” domain as “little more than a predatory shakedown scheme,” designed to “force large corporations, small businesses, non-profits, and even individuals, to pay ongoing fees to prevent seeing the phrase ‘sucks’ appended to their names on the Internet.” One of the registry companies seeking to manage .sucks domain registrations has indicated that they plan to charge as much as $25,000 for brand registrations, which certainly lends credence to the “shakedown” accusations levied against the proposed new domain.

As the world seems to be shifting away from US regulation and ICANN continues to add new TLDs to the open market, the future of domaining appears to be as unsettled now as it once was when the first gold rush of .com domains were made available to the public. Question about who will own, regulate or market each new domain product are largely unsettled and with branding being such an

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10
Mar
2014

The Inherent Hypocrisy of Modern Tech Patent Protections

by Bill

Patent StampThe 21st century has witnessed the age of the patent troll come to fruition, with several corporate patent-hoarding entities and unlikely consortiums created for the express purpose of taking tech companies to court, sometimes on the slimmest cases of alleged infringement, creating, in essence an innovation tax, with the litigation used as cudgel to extract payment from the companies targeted.

Twitter meanwhile has charted a different course, supposedly wants to reform the patent system by creating its own Innovator’s Patent Agreement (IPA) where it insists that its patents will be only used for “defensive purposes” and not in “offensive litigation” without the permission of all the inventors listed within the patent – hoping that the required unanimity will stall any lawsuits except in the most egregious cases of infringement. While it remains to be seen whether this is a viable policy for patent defense, Twitter still inhabits the real world, and recently paid IBM $36 million for a portfolio of 900 patents to avoid becoming embroiled in a lawsuit with Big Blue.

Whether Twitter’s IPA is the answer to the the problem of patent trolling or just the latest destined to fail attempt at thwarting the practice of patent trolling, it is widely agreed that the monetary and intellectual costs associated with defending lawsuits and the threat of litigation is a drag on innovation and corporate resources and something needs to be done sooner than later. The irony is of course that those corporations who decry patent trolling the loudest are often while engaging in it themselves, with companies such as Google, Microsoft, Samsung and Apple all fighting it out in high-profile patent disputes, their position on the fairness of patent trolling seems to shift from case to case based on whether they are the defendant or the plaintiff at that particular moment.

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04
Mar
2014

Netflix And Carriers Start Dealing While Advovates Lament The Outcome

by Bill

internet usageIn an agreement announced last week, Netflix will be paying Internet Service Provider (ISP) Comcast an undisclosed amount to “relieve internet congestion,” which is promised to improve Netflix’s streaming performance for Comcast’s customers. The Netflix/Comcast deal comes hot on the heels of Comcast’s announcement that it plans on acquiring Time Warner Cable for $45 billion which, if approved by federal regulators, will result in an ISP behemoth, dwarfing the nearest competitors and providing even more leverage for Comcast when negotiating with content providers like Netflix for adequate throughput to their shared customers.

The Comcast/Netflix deal is being called by many the death knell of net neutrality, even as the FCC scrambles to devise a strategy to ensure content providers have unfettered access to customers in the wake of recent court ruling on the issue, creating facts on the ground and precedent of a major content provider “willingly” paying for it’s bandwidth usage on their customers’ ISP.

Netflix’s streaming services has grin by leaps and bounds in recent years, reportedly constituting over 30% of all internet traffic during peak viewing hours, And Comcast and other ISPs have long been seeking to monetize the traffic. Under what has become the traditional internet business model, backbone providers would receive money from subscribers, whether from consumer ISPs or from businesses, but data transaction between backbone providers were handled via “settlement-free peering,” washing backbone transmission costs. Under this new model, ISPs who are already being paid by their subscribers on one side have realized a whole new source of revenue.

Netflix entering this deal says a lot about the likely future of net neutrality, and while Netflix is benefiting by entering this agreement, it is the other content providers that don’t have as deep pockets as the movie giant that the effects will be most pernicious. It’s not difficult to imagine Hulu, YouTube and other big players inking similar deals, but as industry heavyweights they can doubtlessly afford to pay to play. The unanswered question is what the future holds for the next internet breakthrough service, as it will face an uneven playing field, going up against the structural advantage the big players will now have baked into the mix.

It also remains to be seen how far down the hierarchy of content providers the ISPs are willing to go seeking additional revenue, and it’s not far-fetched to imagine a tiered pricing system imposed to extract every last nickel possible from those who contribute to the content of the internet from the giants like Netflix to the less bandwidth intensive but popular sites that would see having slow-throughput as a competitive disadvantage, given that today’s internet users are notoriously impatient when it comes to page loading times. With so much money at stake and and loading times mattering more than ever, having a reliable host optimizing your own bandwidth is also an increasingly important part of any successful business plan online.

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