Technology

The American View: American Pai

The US government scuttled Net Neutrality regulations last week, entirely as predicted. Business Reporter's resident U.S. 'blogger argues that the self-destructive decision was never in doubt. The FCC’s plan for facilitating monopoly exploitation of consumers  was as predictable and disheartening as a by-the-numbrers low-budget sex comedy.

The new Star Wars movie came out this weekend. My youngest spent the weekend working the kitchen at our neighbourhood theatre, cooking dinner for the hordes of Star Wars fans who came out to see their favourite franchise’s latest instalment. He told us Monday that most fans seemed generally pleased with The Last Jedi; it apparently met viewers’ expectations while still providing some memorable surprises. That sounded about right; the new Disney-owned Star Wars empire is trying to play it safe: appeal to long-term fans by offering exciting new stories inside a rigidly-controlled framework. Fun and excitement, without the risk of inadvertent alienation.

I didn’t get to see Jedi this weekend; instead my darling bride went in for spine surgery before dawn on Last Jedi’s opening day. [1] About a half-hour after she left Post-Op, we learned that the Federal Communications Commission (FCC) voted to repeal Net Neutrality regulations. We’d been paying close attention to the issue in the weeks leading up to the vote, so we had zero confidence that the commission would do the right thing for the American people. As expected, the voting commissioners dutifully restored their corporate masters’ legal ability to exploit their monopoly power for even-greater profits at the expense of consumers. That’s been this administration’s objective since day one: anything that they can’t personally exploit (like tax cuts for the oligarchy) has to be destroyed (like universal healthcare) in order to ensure that the super-rich get even richer.

In that respect, the newsreaders who tried to tie the FCC vote to the premiere of the new Star Wars film got things entirely wrong. This wasn’t a tense drama with the potential for sudden reversals based on conflicted principles. This was a cheap farce, as predictable as a cheap teen sex comedy. I liken it to the execrable American Pie series that launched back in 1999. If you don’t remember it (and it’s mercifully forgettable), you don’t need to. The trailer reveals the entire story: some naïve teenagers want to lose their virginity. The lead character is told that sex feels like ‘warm apple pie.’ Frustrated teen then is caught having relations with a pie. There is no suspense. There is no drama. The story unfold exactly as the trailer proclaims, and the result is thoroughly disappointing. That’s the Net Neutrality vote in a nutshell. We knew this would happen. Hell, we all saw this story’s entire plot laid out in the teaser-trailer published by the head of the FCC himself.

Video bufferingCome to think of it, you might not be able to see any of the videos that I’ve hyperlinked. 

I was talking with a businessman (let’s call him Bob) about this mess and how we were all about to get royally worked over by our broadband providers in the coming months while waiting for my bride to be released from hospital. Bob was indignant. ‘How can you say that every broadband and mobile phone provider will bite the hands that find them?’ he argued. ‘Maybe a few companies will get greedy and abuse their power, but most companies will do what’s right for consumers!’

I asked Bob why a for-profit corporation would give up a chance to legally plunder its helpless customers. That’s how and why monopoly power works: one it’s possible and legal for a monopolist to exploit its customers, it is inexorably driven to do so. Its marketing hacks swear that they have no intention of doing anything exploitative or harmful, but you’d be a bloody fool to believe them.

The purpose of a corporation is to make money for its owners. No matter how much the CEO or President or Executive Director may have moral reservations against committing an exploitative act, the company’s shareholders and owners aren’t willing to let a single cent go without pressuring upper management to go after it. It’s like the chase instinct hard-wired into predators. That why the previous administration fought so hard to put those Net Neutrality regulations into effect.

‘That’s where you’re wrong!’ Bob snapped. ‘There’s no monopoly on Internet access. If a customer doesn’t like the service that he or she pays for home Internet service or mobile phone service, they can simply take their money to another provider. The companies that choose to exploit their power will see all their customers defect to competitors that don’t. That’s how the free market works!’

I asked Bob where I could find this fantastical ‘free-market.’ It sounded like a lovely place, where everyone’s happy all the time. I think he might have realized that I was yanking his chain.

Man with chained hands holding contract and moneyTo be fair, I didn’t need to yank his chain myself. Merely not intercede while he choked himself on his own cable bill

The thing is (I said), I live in Texas. Politically, Texas is a very pro-kleptocrat, anti-consumer state. When it comes to regulations, Texas loves monopolies (mostly, because they make great campaign contributions). That’s why the notion of ‘take your money elsewhere’ is ludicrous for 90%+ of Texas consumers. I have one – only one – broadband provider because Texas’s cable TV markets were divvied up city-by-city based on old long-distance provider monopolies. I’ve lived in the same house for nigh-on twenty years. In that time, I’ve had my ‘cable provider’ change hands seven times. Every ‘change’ was simply one company trading our city’s market for some other. The physical infrastructure never changed at all … but every change of name on the monthly bill made my monthly charges increase. A captive audience is one that can be ignored, abused, and exploited.

Why not get some other form of service? I’ve tried all of the alternatives. DSL doesn’t work at all because the city’s physical phone infrastructure is too old (and won’t ever be upgraded). Satellite service doesn’t work reliably because of trees, clouds, and rain. There is no ‘fibre-to-the-premises’ in our city because neither of the companies offering it feel any inclination to build out the necessary delivery infrastructure to reach us. That leaves us just one cable pipe. Whichever brand owns it offers abysmal service as grossly inflated prices. That’s not a ‘free’ market by any stretch.

So, now, I said to Bob, I can expect my broadband provider to start throttling my access to third-party Internet services (like Netflix and YouTube) until and unless they get those companies to pay the broadband provider a hefty bribe (which us consumers will wind up paying for in the form of new or higher existing subscription fees). Meanwhile, there’s nothing at all stopping my broadband provider for also charging us for access to those ‘high-demand’ services on a per-service basis. Why not? They can, therefore they will. Inevitable, I said.

‘Just because your city doesn’t have competition doesn’t mean that you’re hopelessly stuck.’ Bob stammered. ‘You can always move to another community where there is healthy competition.’

Pulling money out of thin air Another reason why it’s awesome to be wealthy. Most problems can be made to go away just by flinging money at them. 

Ah, yes. Of course. Bob bought in to the old Neo-Liberalist ‘if you don’t like your circumstances, then change your circumstances’ dodge. That sounds great … until you look at numbers. The Dallas area faces both a housing shortage and bubble-level housing price inflation. I can probably sell my house for £100k, but the houses in the next city over (where they have fibre-to-the-premises) now cost £850k and up. Oddly enough, no; I’m not a millionaire (like all of the other business journalists). For everyone but the super-rich, I told Bob, ‘moving’ to get better service isn’t a realistic option.

I can’t get mad at Bob for his political ideology; it was clear that he passionately believed in the corrective power of the free markets. So much so that the very idea of regulating businesses to prevent them from doing evil things (like exploiting customers) was both repugnant and unnecessary in his world-view. He parted on semi-antagonistic terms. He thought I was a doomsayer. I thought he was a naïve fool, duped into actively working against his own long-term self-interest.

I almost regret that I didn’t get Bob’s business card before we parted. After I got my wife home from hospital and propped her up in a comfy chair to rest, I tried bringing up a YouTube video for some light background noise while she drifted in and out consciousness. Oddly enough, every video that I pulled up that night and the next morning had a long buffering lag that either delayed the start and/or frequently interrupted the video. Even stranger, none of the on-demand videos supplied by my broadband provider (the ones with the unescapable commercials) had any lag at all ... Almost as if the broadband provider was choking off all content but its own in order to exploit its own customers and the Internet services they prefer in order to drive up more punitive fees …

Unfortunately for all of us, this isn’t a 90-minute long comedy. Yes, it’s trite, tired, and entirely-predictable, but it isn’t going away anytime soon. We’re stuck with this mess, and we’ll all be paying a price to try and mitigate it until some systemic corrective action can be applied. Now, more than ever, it’s infuriating that our legislators and legal experts tend to be out-of-touch and technophobic. If their favourite content was negatively impacted by this blatant cash-grab, maybe we’d get some help putting the protective leash back on the profit-crazed amoral monopolies.


[1] She’s recovering now, thanks for asking.

 

Title Allusion: Adam Herz (writer), American Pie (1999 film)


POC is Keil Hubert, keil.hubert@gmail.com

Follow him on Twitter at @keilhubert.

You can buy his books on IT leadershipIT interviewinghorrible bosses and understanding workplace culture at the Amazon Kindle Store.

Keil-Hubert-featuredKeil Hubert is a retired U.S. Air Force ‘Cyberspace Operations’ officer, with over ten years of military command experience. He currently consults on business, security and technology issues in Texas. He’s built dot-com start-ups for KPMG Consulting, created an in-house consulting practice for Yahoo!, and helped to launch four small businesses (including his own).

Keil’s experience creating and leading IT teams in the defense, healthcare, media, government and non-profit sectors has afforded him an eclectic perspective on the integration of business needs, technical services and creative employee development… This serves him well as Business Technology’s resident U.S. blogger.