Year: 2014

Broadband and Burgernomics: Is the Monthly “Netflix Rankings” The New Big Mac Index?

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Some years ago, The Economist developed an informal metric for determining whether currencies were overvalued or undervalued based on purchasing power. They looked at the price of a McDonald’s Big Mac in the target country currency as compared to the price in the U.S. This “Big Mac Index” works on a theory that currencies should converge on the cost of a standardized basket of goods, and Big Macs are an internationally standardized product using pretty standard food goods available locally, which makes them the ideal metric for comparison over time. (Let us set aside for the moment various tweaks for low wages.)

 

As explained by The Economist:”Burgernomics was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible. Yet the Big Mac index has become a global standard, included in several economic textbooks and the subject of at least 20 academic studies.”

 

I thought of this when reading this piece by Jon Brodkin on the decline over time of several major broadband providers in the monthly Netflix Rankings. As reported extremely well and in great depth by Stacey Higginbotham at GigaOm (see here, here and here) and others (see, for example, this long and good piece by Jon Brodkin), a lot of factors go into how well or how poorly your ISP performs — particularly on high-bandwidth applications like video. With no standards by which to judge performance and with variability a factor over time, how can the consumer tell if its really worth it to shell out big bucks for top-tier speeds on your ISP when the video you want may still behave unreliably?

 

Then it occurred to me that the monthly ranking by Netflix of how well its service works on the major ISPs may work as the new Broadband Burgernomics. As I explain below, performance over time allows people to compare relative ISP performance (both the ISP’s performance over time and its comparative performance to competitors – if you are lucky enough to live in a market with good competitors). As with currencies, make a rough estimate as to whether or not the ISP’s speed and performance claims are ‘overvalued’ (i.e., the speed tier purchased does not deliver to the consumer a consistent experience the consumer would expect for the stated speed), accurate, or ‘undervalued’ (i.e., the speed tier purchased delivers to the consumer an experience better than what the consumer would expect based on the stated speed.)

 

I want to stress this doesn’t tell us whether the ISP is doing anything illegal or immoral. It doesn’t tell us anything about blocking or throttling. It also doesn’t tell us whose “fault” it is that performance drops — at least not for month-to-month variations.  But, as I explain below, using the same logic as “Burgernomics,” the “Netflix Rankings” index, taken over time, should provide a reasonable rough indicator for consumers as to whether or not their ISP can make that higher speed tier worth the money for the upgrade, and a possible indicator to policymakers and investors about deeper changes in the market.

 

Before all you carriers and the usual suspects who go apoplectic on the subject of ISP performance metrics and the various policy issues freak out, read my full reasoning below . . .

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The NSA & other USIAN “Surveillance” entities are actually

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in the business of Control, not the business of Watching.

The two go hand in hand. See, for example, this essay by Cory Doctorow

For courage, take a moment to read the transcript of the late, great Pete Seeger’s testimony before the House Unamerican Activities Committee. “Who I associate with is none of your business.” Really, read it, it’s inspiring and eye-opening.

I am not going to answer any questions as to my association, my philosophical or religious beliefs or my political beliefs, or how I voted in any election, or any of these private affairs. I think these are very improper questions for any American to be asked, especially under such compulsion as this.

The NSA “metadata” sweeps are all about collecting exactly the kind of information Seeger mentions, and it leads, inevitably to the kind of state harassment and terrorizing that Cory Doctorow wrote about.

Call your representatives today.



Jessica Rosenworcel And the Mantle of Michael Copps

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The Federal Communications Commission (FCC) moved forward on the transition of the phone system by adopting an order at its February open meeting. By a 5-0 vote, in addition to a number of other important first steps, the FCC adopted a set of governing principles for the transition. The principles focus on core values: Universal Service, Consumer protection, Competition, and Public Safety.

 

These principles did not just drop out of thin air.  Commissioner Jessica Rosenworcel first proposed them in this speech in December of 2012. While few have noticed, Rosenworcel continued to quietly and effectively push this framework, culminating in a unanimous vote with broad approval from both corporations and public interest groups.

 

More amazing for this hyper-partisan and contentious times, the principles capture both progressive values and conservative values, traditionally shared by Republicans and Democrats alike. The idea that access to communications services is so essential to participation in society that the Federal government has a role in making sure that ALL Americans have affordable access goes back to the New Deal and Section 1 of the Communications Act. But the basic precept is even older, going all the way back to Founding Fathers. Article I of the Constitution gives Congress the express power “to establish post offices and post roads” in recognition that ensuring that all Americans can communicate with each other is what helps make us a single country and one people — a core conservative value. As the arteries of commerce and the means of communication have evolved from post roads and post offices to steam trains and telegraphs to the automobile and the telephone, we have continued to preserve this idea of universal service to All Americans as a core traditional value of what it means to be an American.

 

But as essential and shared as these values are, no one was talking about them as the basis for the Phone Transition, or how to bring them forward into what Chairman Wheeler calls “The Fourth Network Revolution,” until Commissioner Rosenworcel started the conversation. From the time AT&T first proposed a “sunset of the Public Switched Telephone Network” during the National Broadband Plan in 2009 until Rosenworcel’s December 2012 speech, no one even talked about values – let alone proposed that a set of fundamental values needed to guide the transition. The conversation remained mired — and stalled — in myopic focus and bickering on the details of specific regulations. Commissioner Rosenworcel understood well before anyone else that the best way to move forward, and the way to keep the process firmly centered on the public interest, required reaffirming our fundamental values as the first step.

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Impact of Net Neutrality Decision On The Phone Transition, or “What Happens When You Can’t Make The Phone Service Work Like A Phone.”

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I suppose I can best sum this up as “sucks to be rural.” On the plus side, it looks like all those lobbyists who went around getting states to pass laws prohibiting any kind of regulation of IP-based services and prohibiting local governments from offering broadband service wasted their money.

Also on the plus side, we can regulate the crap out of IP-based phone services to enhance consumer protection because it is all part of the virtuous circle of innovation. On the downside, if you are Mosque in the middle of small town USA, your local VOIP provider can now totally refuse to serve you. Sure, the fact that we cannot impose a duty to indiscriminately serve the public on VOIP providers (since that is the “hallmark of common carriage”) will only impact a statistically small number of people like the poor, the unpopular, and those in high cost rural areas. But screw it. Protecting the weak and helpless is soooo ‘New Deal.’ Who the #$@! needs a rule of law when we got markets baby!

Sure, some people we like might get rolled over by big companies and have no recourse. But ya know what? Who cares. Cause if a few big companies accidentally run over a few customers now and then, does that really matter? I mean, really?

And the best part of getting rid of that dumb old common carriage stuff? All the people that matter — like the judges making the decisions and the lobbyists arguing how we don’t need this stuff — will never even notice.  They never even have to deal with all those annoying weak, poor, vulnerable or unpopular people that the law protects. It’s like getting rid of the 4th Amendment, or stop and frisk, you only miss it if you’re someone we don’t give a crap about.

Read below to preview the exciting new world that now awaits us as “the fourth network revolution” meets “I can’t do rural call completion but I’m too scared to make VOIP Title II. So suck it rural.”

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Quick First Cut On Network Neutrality Decision — State of Net Neutrality Today

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 I will, eventually, have time to write up a full dissection of he D.C. Circuit’s latest magnum opus on Net Neutrality, Verizon v. FCC.  Until then, I am going to be recycling here posts I wrote and posted on the blog of my employer Public Knowledge. i also highly recommend this blog post from my Public Knowledge colleague Clarissa Ramon on the impact of this decision and Monday’s D.C. Circuit Order staying the FCC’s August decision to regulate the outrageous phone rates charged by prison phone companies communities of color.

 

Below, the current — and now thoroughly confused — state of Net Neutrality and FCC authority as it stands today.

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