FU FCC

As recently as February FCC Chairman Tom Wheeler said that “Preserving the Internet as an open platform for innovation and expression while providing certainty and predictability in the marketplace is an important responsibility of this agency.

Late yesterday, Mr. Wheeler had a dramatic change of heart and went all Game of Thrones Red Wedding on us. Apparently, keeping the Internet open for “innovation and expression” is of secondary importance to that of corporate interests.

Yesterday’s decision completely decimated the very principle upon which the Internet was built.

Ladies and gentlemen, the Internet, as we have come to know it, is officially over.

nutshellIn a nutshell, this basically means that big Internet service providers, like Comcast and Verizon, will NOW have the freedom to offer companies faster Internet service to those companies willing to pay for it.

The types of companies that need more bandwidth to stream content. Typically speaking, the larger media companies like Disney, Amazon (the world’s largest retailer is also a rapidly growing media concern), Netflix, etc.

Shortly after Comcast announced its proposed purchase of Time Warner Cable, Netflix announced that they had worked out a deal with Comcast to pay them for direct access to their servers in order to increase streaming speed.

It worked. Netflix streaming speeds on Comcast jumped 65% after the deal:

rankingBy selling this access to Netflix, Comcast seems to have found a legal loophole that allowed them to break the deal they struck with the government when they purchased NBCUniversal. Part of that deal said that Comcast would abide by FCC Net Neutrality rules, even if the rules were modified by the courts.

At the time, Comcast’s David Cohen said “Comcast’s customers want an open and vibrant Internet, and we are absolutely committed to deliver that experience.

The Comcast and Netflix deal allowed them to deliver an even MORE open and vibrant Internet…for those willing to pay.

The fact that Netflix streaming speed jumped 65% after the deal emphatically shows broadband providers are throttling Internet access to the Internet.

Apparently, Mr. Cohen and I have wildly different interpretations of “open and vibrant“.

(Still think that Comcast and Timer Warner deal is a good idea?)

Look, I admit that this stuff is pretty arcane and the PR machines will be working overtime for the next few days spinning all of this as good for the consumer.

When has a decision solely benefiting a corporation or industry EVER been good for the consumer?

What does this mean for small business or developing technologies? It means they’re going to have a much harder time competing. As it stands TODAY, it’s a level playing field regarding access to the Internet. We have, essentially, the same access as Amazon, Google, etc.

Now, it’s an election year and both parties will spend a ton of time blathering about how important small business is to the fabric of America and how much it impacts employment, etc. They’ll bitch piss and moan about the effects of Obamacare on small business and cry and complain about government intervention, etc.

I assure you not one of them will mention how extremely damaging this FCC decision will be to the small business community to compete on a global level.

The criticism of Obamacare is fair, but at its very core, the Affordable Care Act (yes people, Obamacare is legally known as The Affordable Care Act) is an example of government intervention that attempts to help everyone.

Yesterday’s FCC decision is government intervention that doesn’t even pretend to help anyone except a very few number of people and maybe a handful of companies.

This decision just added a TBD percentage to the start-up costs of any small business and added a TBD percentage increase to any existing small business.

This. Is. Bad. Whatever your politics.

What does this mean for us, the consumer? What do you think it means? We’ll pay MORE for LESS. If you don’t think you are going to end up paying (literally and figuratively) for this, you’re not paying attention.

Broadband providers will eventually move towards a bundled Internet program, much like what they do now with subscription networks. Currently, if you want HBO, you gotta get HBO’s 12 other channels and some other crappy networks you’ll never watch.

Because broadband providers have the creative scope and accuracy of a Daisy air rifle, they’ll roll that same model onto their Internet services. You want Amazon AND Netflix? Well, that will cost you $xxx AND you get some other lower tier web sites that you’ll never visit and probably pay a premium to the ISP’s to be bundled with the premier sites.

This cost will all get kicked back to you and I.

To prove this point, let’s look at the recent Netflix and Comcast deal.

Sure, Netflix speed on Comcast is up 65% (but somehow still ranks 5th…makes you wonder how shitty it must have been before) and despite Netflix adding 2.25 million subscribers last quarter (for a total of almost 36 million subscribers in the U.S. alone, paying an average of $7.99/mo) and reporting nearly 1 billion dollars in revenue for the last quarter, Netflix announced they will be raising the price of service between one to two dollars by next quarter (psst, sign up today).

Of course the Netflix party line will be that they need the money to purchase and create more shows to increase their streaming offerings (mostly true). But make no mistake, the dough they spent to tap into the Comcast servers is being directly rolled onto you (technically, future subscribers).

Yesterday’s decision by the FCC effectively gave ISP’s the freedom to clamp the openness under which the Internet was created and under which it has run.

It allows ISP’s to offer a HOV lane for those companies that can afford it, who in turn will roll that cost back to you.

Keep in mind the United States is the only country where Internet service costs keep rising, to the tune of two to three times the rate of inflation (that’s an aggregate increase of 4.6% since 2003).

This decision is the single most important decision that will directly impact you and line the pockets of the ISP’s.

And why did the FCC have this change of heart? Because media companies spent roughly 257 million dollars last year lobbying Washington.

Obviously, the needs and interests of corporations far outweigh the needs and interests of the people.

Old Pledge of Allegiance:

“I pledge allegiance to the Flag of the United States of America, and to the Republic for which it stands, one Nation under God, indivisible, with liberty and justice for all.”

Corporatocracy Pledge of Allegiance:

“I pledge allegiance to the legal tender of the United States of America, and the monetary value for which it stands, one dollar, completely divisible, with liberty and justice for few.”

Further reading:

Payola Internet

FCC Allows Discrimination

Why You Should Care

Comcast’s Real Repairman

ISP’s Don’t Need To Be Neutral

Netflix Streaming Speeds

Netflix Announces Increase

FCC Backs Fast Lane

NYTimes Editorial