Net neutrality:
Now it’s official

Net neutrality protestThe FCC repeal of 2015 net neutrality regulations took effect yesterday, so this seemed like a good time to share the following, originally posted here on January 3, 2018.

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It all started in 2008, when the people at Comcast noticed a curious thing. File-transfer giant BitTorrent was consuming more and more Internet bandwidth. More, it seemed, than Comcast cared for them to consume.

Comcast’s solution was to “throttle” BitTorrent’s and other large users’ bandwidth. That is to say, they slowed down their Internet speed.

When the practice came to light, the FCC slapped Comcast’s wrists. Or, rather, tried to. The rules were vague then, so Comcast emerged with wrists intact, albeit with a bit of mud on their face.

The BitTorrent case and others like it eventually led, in 2015, to the FCC’s lumping Internet Service Providers (ISPs) in with telecommunications service providers. ISPs could no longer, as NPR put it, “decide which websites load faster or slower, or charge websites or apps to load faster.”

Except, that wasn’t exactly true. ISPs have been allowed to do exactly that, and that’s not necessarily a bad thing. Moreover, the conversation may be less about ending neutrality and more about revising the rules.

Net neutrality matters for financial institutions

Having worked in the banking industry since age 17, I’m well aware of the burdens that overzealous regulators can impose. With banks in particular, it seems whenever Washington feels a need to regulate, overkill is part of the mandate. So I tend to look favorably upon any suggestion of simplifying or doing away with rules.

But net neutrality has implications for the banking industry. I probably don’t need to point out that digital banking rather relies on a fast Internet. Without net neutrality, banks couldend up paying extra to ensure speedy transactions, which doesn’t bode well for institutions not in eager pursuit of increased overhead.

Note that I said banks could end up paying extra. No one is entirely sure just what the repeal portends. As recently as November 22, @Comcast tweeted this promise:

We do not and will not block, throttle, or discriminate against lawful content. We will continue to make sure that our policies are clear and transparent for consumers, and we will not change our commitment to these principles.

That should reassure. Unless, like Ars Nova’s Jon Brodkin, you’re concerned about wording changes in Comcast’s stated positions over time, past abuses, and the fact that …

… Comcast has drawn a distinction between “paid prioritization” and “anti-competitive paid prioritization.” Paid prioritization should not be banned entirely, but “anti-competitive paid prioritization” should be limited, the company has argued.

Those who want to keep the current rules, and those who want to revise them

Besides the lion’s share of consumers, those who argue to keep net neutrality include the likes of Apple, Google, Mozilla, Amazon, Dropbox, Facebook, Microsoft, Netflix, Snap, and Spotify, to name a few. Here’s an excerpt from a statement by the nonprofit organization Mozilla:

Our position is clear: the end of net neutrality would only benefit Internet Service Providers (ISPs). That’s why we’ve led the charge on net neutrality for years to ensure everyone has access to the entire internet.

Apple had this to say in its Reply Comments to the FCC:

The result would be an internet with distorted competition where online providers are driven to reach deals with broadband providers or risk being stuck in the slow lane and losing customers due to lower quality service. Moreover, it could create artificial barriers to entry for new online services, making it harder for tomorrow’s innovations to attract investment and succeed. Worst of all, it could allow a broadband provider, not the consumer, to pick internet winners and losers, based on a broadband provider’s priorities rather than the quality of the service.

But let’s not be naive. Apple, Google, et al have shareholders to please, which means we shouldn’t assume they have only the public’s best interest at heart. Indeed, the issue is not as simple as they make it sound. These companies enjoy serious advantages under current regulations, so it’s no wonder they would want to maintain status quo. A recent post by science writer Brian Dunning points out that …

… from an infrastructure perspective, there is no such thing as a “fair” Internet. The biggest content providers—Google, Facebook, Netflix, Akamai, Amazon, and others—are directly connected to Tier 1 networks, the highest-level networks over which data flows worldwide without having to go through anyone else’s routing, negotiation, or settlement. You and I don’t have that …

… Facebook is already enjoying “king of the hill” status as a Tier 1 service. Theirs is an easy position to take from where they sit.

Not surprisingly, ISPs are keenly interested in revising net neutrality rules. And they have their allies in the press. Writing for ForbesNelson Granados observes:

… the internet as a neutral platform for content providers and consumers has pretty much remained so during three regulatory regimes: One with no specific rules of anti-discriminatory behavior, one with explicit rules, and 2017 with an FCC that had no intention to enforce the rules. So there’s no major reason to fear a doomsday scenario going forward.

However, he adds, “That doesn’t mean there are no reasons to worry in the longer term.” He goes on to name a few, including “a more competitive environment in industries that could clog the internet pipes, like video streaming services.” Moreover,

… since 2015 ISPs have increased vertical integration into content (e.g., AT&T acquired DirecTV and Time Warner; Verizon acquired Yahoo and launched Go90) and they have natural incentives to favor their own content.

The net has never been neutral

“Unfettered access” may sound pleasing to some, but in fact it’s not possible. One of the problems in conversations about net neutrality is that the subject is too often treated as an all-or-nothing proposition. Workable solutions to managing the Internet are to be found between extremes on more than one continuum.

The Internet is a limited resource for which demand varies throughout the day. Without some form of “traffic shaping,” highest level users would utterly consume capacity, such that there would be no so-called free access at all. To wit, Dunning addresses the ins and outs of Internet traffic, taking into account not just ideological and economic factors but technical ones as well:

Let’s look at the basic example of Internet on a plane. You buy the service, and you find out that streaming video is blocked. No YouTube or Netflix on a plane. Why not? Because you would suck up all the bandwidth, and nobody else on the plane would be able to check their email or work on a Google doc. It’s necessary for the airline provider to impose this restriction to keep the service more useful for more people. It’s an example of an absolutely necessary fundamental violation of net neutrality.

The airline example is a microcosm of every other Internet environment. Your neighborhood broadband provider has to do this too. They generally do slow abusive users, peer-to-peer file sharing networks, denial of service attacks, even streaming video. It’s called traffic shaping. It’s done on a dynamic basis all day long, and it’s the basic principle for maintaining network quality of service. Your home broadband service would be terrible if your provider was not, right now, prioritizing some traffic, and delaying other traffic.

To Dunning’s point, The Palmer Group CEO Shelley Palmer writes in AdAge that what we’ve been calling net neutrality for the past two years hasn’t been all that neutral anyway:

Under net neutrality there were fast lanes and slow lanes, and a loophole called zero-rating which allowed services like T-Mobile’s “Binge On” to exempt certain streaming services from its data counts. There were other loopholes written into the rules where specific clauses included phrases such as, “Subject to reasonable network management,” which basically meant ISPs could throttle traffic if they thought they had to.

What the real debate needs to address

It’s important to avoid treating net neutrality as a choice between two extremes. No one wants absolutely free trade—the need for rules is understood—and no one who is informed on the subject wants absolute net neutrality. The debate should not be whether or not to have rules. It should center around what the rules should be, how far they should go, and who gets to make them.

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Effects of digital media

system-3382515_1280I approach this topic with some reluctance. In no way do I wish even to appear to side with doomsayers who in every technological advance see the end of humankind. Not enough can be said about the wealth of important advances that digital technology has brought to modern life, from the convenient to the lifesaving. Besides, I make my living in digital banking.

Prophets of technological doom have been around a lot longer than you might think. A little over 2,400 years ago, none other than Socrates warned that the written word would bring about the demise of human memory. And five hundred years ago, physician and scientist Conrad Gessner foresaw in the nascent printing industry an avalanche of data that would prove “…both ‘confusing and harmful’ to the mind.”[1] In the last century, radio and television were going to render us illiterate. (That, and “TV will ruin your eyes if you sit too close.”) Today not a few blame video games for violent behavior despite no evidence of causality.

Still, some concerns about our emerging digital world are worth attention.

Literacy—Purists, pedants, and the obsessive-compulsive fret that keyboarding obviates the need for penmanship, and that texting makes u forget how 2 spell & punctuate lol  But perhaps of greater concern is the diminishing need to get out the door and interact face-to-face. 

Interaction—We can shop, attend college, do our banking, see movies, check out library books, research, work, converse, share photos, make friends, and more, all while cloistered within our homes. As a result some erosion of interpersonal skills may be going on.[2] And there’s no question that digital anonymity opens a door to untoward behaviors many would suppress in person.[3] While there’s nothing new about bullying—which is not meant to condone or trivialize it—the cyberbullying phenomenon belongs uniquely to this millennium. Its solution is not as simple as blogging or not logging on. And as has been amply and repeatedly demonstrated, social media have the power to bring undo attention and spark over-the-top outrage. For an example, look no further than the Herriman, Utah, teen whose “crime” was to wear an Asian-style dress and assume an Asian stereotype pose for a photo. Regardless of which side of the argument one endorses, surely we can agree that the attention brought upon the teen was out of proportion.

Feedback loops—According to a recent Pew poll, 62 percent of U.S. adults get their news from social media. That doesn’t bode well for those of us who value an informed public. Social media and search engines create a feedback loop by learning and playing to individual biases.[4] They create an illusion that marginal views are widely shared and supported by fact. They can lead to dehumanization of those with opposing views by use of one-dimensional dismissals such as snowflake, libtard, bigot, right/left winger, or Nazi. Moreover, it’s all but impossible to detect a feedback loop from within.

Evolution of retail space—The effects of digital commerce on retail aren’t hard to miss. Retailers are desperately looking for ways to tear customers away from online shopping for a visit to the store. And they must beware customers who arrive to check out products only to return home, find a better price online, and order.

Review site abuses—Retailers also have a healthy respect for, or, depending, fear of ratings sites such as Yelp. Ratings sites are useful for consumers looking for reliable feedback, but they are not necessarily bastions of fairness. Consumers with a grudge, whether reasonable, unreasonable, or fabricated, abuse them with abandon. The human tendency to complain when unhappy and clam up when pleased doesn’t help the situation.

On a more positive note

I haven’t scratched the surface of the perils digital media may enable. But equally long or perhaps longer would be a list of its positive effects. To end on a positive note, let’s remember the many ways in which digital technology is a boon to medicine, education, connectedness, efficiencies, commerce, communication, participation, savings, and more. 

In the end, technology is neutral; it is our use of it that turns out either beneficial or harmful. How technology serves or harms is up to us.

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Don’t be downcast
about podcasts

microphone-639192_960_720EVERY TIME a new communication technology emerges, people lose no time predicting the demise of an existing one. 

The printing press was going to ruin the human mind. Motion pictures, radio, and TV were all going to eliminate reading. TV and, later, streaming were going to do in movie theaters. Digital media threatens the death of printed newspapers. 

There may be something to that last one—time will tell—but the other doomsday prophecies never came about. But now podcasting has some people worried about the survival of radio.

If you listen to podcasts, you’re not alone. Last month, Fast Company reported that there are over a half-million to choose from. That number comprises some 18.5 million episodes in over 100 languages in 155 countries. Two months ago, Apple Podcasts alone passed 50 billion episode downloads and streams.

Not counting prototypes—because counting them would be something of a stretch—podcasting as we know it today had its start in 2004. It received a significant boost from Apple in 2005 with the ability to download podcasts via iTunes. Since then the growth has been explosive. 

Of course, iTunes isn’t the only game in town. Android device users can use Google Play to download podcasts. And iOS and AOS support SpotifyPocket CastsOvercast, and others.

Top ten podcasts of 2017

According to Podtrac, the ten most downloaded podcasts of 2017 were:

  1. S-Town
  2. Serial
  3. This American Life
  4. Radiolab
  5. Dan Carlin’s Hardcore History
  6. TED Radio Hour
  7. Invisibilia
  8. Freakonomics Radio
  9. Dirty John
  10. Wait Wait… Don’t Tell Me!

With hindsight, podcasting’s explosive growth shouldn’t be surprising. These days pretty much anyone can produce studio-quality music, on-demand books, movies, and radio-like content, all from home. And it’s almost as if pretty much anyone does. Of course, content and quality are all over the board, and not every podcast is a hit. Still, there is no shortage of hits, and that has traditional stations and networks taking note. Not a few wonder if podcasting is poised to put them out of business.

A number of factors make podcasting a tough competitor. Advertisers are lining up to sponsor them. Sheer volume and variety of content ensure programming for every taste and interest area. Podcast content is not under the same FCC restraints as radio content. Fans can tune in to podcasts when it suits them rather than according to a broadcast schedule. Podcasts allow for binge listening and catching up on past episodes. And a couple of people in a garage studio can be more nimble, more cost-effective, and more free of red tape than a major radio corporation. 

Still, I think it’s a bit soon to make funeral plans for radio.

For one thing, radio can and does steal podcasts’ thunder by making content available in podcast format at broadcast time or shortly thereafter. Perhaps you noticed that three of the above-listed top ten podcasts are NPR programs.

For another, there are things radio can do that podcasts can’t. Here’s a big one: Radio can provide up-to-the-minute news, but podcasts can’t. Even better, radio can provide up-to-the-minute local news, weather, and traffic, all of which local markets need. (For the same reason, satellite radio hasn’t done in local radio.)

For another note of encouragement, consider that the Pew Research Center found that radio listenership has remained more or less constant from 2002—a full two years before podcasting took off—to the end of 2014—a full ten years into the boom.

Podcasting presents an opportunity for financial institutions.

Short of starting your own podcast—which may not be a bad idea—banks can advertise on podcasts that are popular in their markets. It’s possible to run prefab spots or, even better, let the podcasters write and deliver spots for you. That gives you the advantage of an implied endorsement in the style of the very people the market tunes in to hear.

If you’re not a podcast listener, I recommend giving it a try, not least in order to keep up with the way your customers experience technology. With over a half-million available, there’s a good chance you can find at least one to your liking.

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and value

$?Luddite” sounds like an indestructible substance over which wars are fought in the Marvel Universe. 

The word originally referred to workers in early 19th century Nottinghamshire, England, who protested low wages and poor working conditions by destroying their employers’ machines. Today, Luddite has morphed into a reference to people who oppose technological advances.

Contemporary Luddite-type voices arise with nearly every innovation, from smartphones, to digital music, to self-driving cars, to gene splicing. Concerns range from “it’s bad for character” to “you shouldn’t mess with nature” to “it’ll put people out of work.” The first two have yet to hold up, but the last often does. It’s difficult to name a field where technology has not eliminated jobs. To be sure, technology also creates jobs, though it is by no means a lateral shift. It’s not as if the average laid-off assembly line worker can move into a newly created animator job at Pixar.

Job loss is, unfortunately, a brutal reality of progress. Despite what some politicians aver, the majority of phased-out American jobs have not gone to immigrants or overseas companies, but to automation and digitalization. That doesn’t lessen the heartbreak and very real consequences of losing a job or a once-thought secure career. It only explains the underlying why.

When grocery chains install self-checkout lanes, not a few customers express a bit of indignation. In something of a reverse-Luddite concern, some feel they are taking over a task once performed by employees and thus entitled to a discount. It’s more complicated than they realize, of course. If there are savings, they may come in the form of an avoided or delayed price increase rather than a discount. Perhaps more important, the if in if there are savings is a sizable if. According to the academic journal The Conversation, self-scanners do not reduce a store’s costs at all. In fact, The Atlantic recently reported that for many stores self-scanners increase costs by providing a too-tempting, easy way to steal.

Yet “we deserve a discount for doing the store’s work” may not reflect economic naiveté so much as not seeing value in a brand. That should be of concern to all, not least the financial services industry. 

It goes without saying that digital technology has eliminated or reduced the need for many a position in the banking industry. Outside of investment advice, consultation, and large commercial deals, fewer and fewer banking transactions require interaction with a live body. Portable devices, PCs, and ATMs pretty well cover the gamut from account set-up, to loan applications, to deposits, to payments, even to cross-selling. Today, a loyal customer might realistically have no need to set foot in a bank lobby for years. Clients using a bank’s technology might, like grocery shoppers, begin to wonder if they, not the bank, are doing most of the work—and, therefore, if they’re really getting enough value for fees paid.

That, of course, can lead to price-shopping, a brand’s worst enemy.

Banks in general have long faced the challenge of the parity-product, utility, or necessary-evil perception. Slogans like “The friendly bank” do nothing to help and, worse than going unnoticed, risk inducing eye-rolls. 

Client-banker relationships can offer an effective differentiator, but are inconsistent and tend to build loyalty not to a bank but to an employee—who may move on and take clients along. More disconcerting, however, is that client-banker relationships today are giving way to technology that becomes the client’s primary point of contact with the bank

Replacing bankers with screens requires a user interface that conveys perceived brand value. As I have written before, it is difficult but not unattainable. One need look no further than the fierce loyalty users have for their Android or iOS devices, which are, with all due respect to your smartphone of choice, all but parity products.

Every digital banking innovation deserves to heralded as a significant step forward in efficiency, accuracy, and service. From a marketing standpoint, it’s important to communicate the advantages of technological advances often—and convincingly—in order to ensure that clients continue see value. That can help ward off potential Luddites and reverse-Luddite protests.

Of course, it bears remembering that ensuring clients see value begins with ensuring that financial institutions first deliver it.

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Google’s Duplex et al:
Wow or Yikes?

technology-3389904_960_720I have empathy for writers of futuristic science fiction. It’s almost impossible to correctly envision the future.

You may have noticed, for instance, that 2001 came and went without the discovery of an obelisk on the moon.

But last week, Google’s I/O Conference apparently conjured up visions of 2001: A Space Odyssey’s rogue robot Hal for a few attendees and bloggers. 

It began when Google CEO Sundar Pichai played a recording of a phone call to a salon to book a haircut appointment. Normally such a conversation would be unremarkable, and this one would have been, too—had not the caller been an artificial intelligence app called Duplex. Astonishingly, the salon employee who took the call couldn’t tell. Duplex handles conversation adeptly and naturally, even tossing in convincing ums and ahs, hesitations, and tonal variations. Even after being clued in, audience members had a hard time believing the caller wasn’t a real person.

To hear Duplex make the salon appointment, click here. To hear it make a dinner reservation, click here.

It’s a marvelous technological achievement with untold potential to be useful. Yet, perhaps even predictably, no small number of people were creeped out. NPR reported:

While Google wowed developers with the realness of the bot’s speech, many observers immediately took issue with how the technology apparently tricked the human on the line.

“Google Assistant making calls pretending to be human not only without disclosing that it’s a bot, but adding ‘ummm’ and ‘aaah’ to deceive the human on the other end with the room cheering it… horrifying. Silicon Valley is ethically lost, rudderless and has not learned a thing,” tweeted Zeynep Tufekci, a professor at the University of North Carolina at Chapel Hill who studies the social impacts of technology.

“As digital technologies become better at doing human thingsDuplex-Salon appt Duplex-dinner reservation, the focus has to be on how to protect humans, how to delineate humans and machines, and how to create reliable signals of each—see 2016. This is straight up, deliberate deception. Not okay,”

Entrepreneur and writer Anil Dash agreed: “This stuff is really, really basic, but: any interaction with technology or the products of tech companies must be exist within a context of informed consent. Something like #GoogleDuplex fails this test, _by design_. That’s an unfixable flaw.”

To which I say, oh come on. 

Development is in the early stages. If the thought of unknowingly speaking with a machine need really be troubling, and I’m not convinced it need be, it’s a simple matter to program Duplex to open a conversation by identifying itself. Let’s not lose sight of the Wow! by inventing pseudo-moral dilemmas.

Last year, another AI experiment was blown out of proportion in the media. Perhaps you heard about it: Facebook shut down a pair of AI-esque bots because they had invented their own secret language and, for all we knew, were plotting humankind’s overthrow. At least, that’s what you might have thought from irresponsible headlines and stories. In fact, Facebook was conducting an experiment to see if the AIs could manage a simple negotiation. In the process, the bots improvised their own shorthand, which, when you think about it, is remarkable. Facebook stopped the experiment not because a program in which they couldn’t understand the bots was dangerous, but because it was useless

A few weeks ago I wrote about the Cambridge Analytica situation, a case in which it’s too early to tell if fears and accusations are grounded, hyperbolic, or a bit of both. In the meantime, Mark Zuckerberg appears to be getting serious about privacy. I suppose being called before a Senate panel can do that to a person. As I write, Facebook staffers are busily digging through a mountain of apps—a fishing expedition to find out who has been on a fishing expedition, as it were. Facebook’s Newsroom page just announced, 

Facebook will investigate all the apps that had access to large amounts of information before we changed our platform policies in 2014—significantly reducing the data apps could access. [Zuckerberg] also made clear that where we had concerns about individual apps we would audit them—and any app that either refused or failed an audit would be banned from Facebook.

The investigation process is in full swing, and it has two phases. To date thousands of apps have been investigated and around 200 have been suspended—pending a thorough investigation into whether they did in fact misuse any data. Where we find evidence that these or other apps did misuse data, we will ban them and notify people via this website. It will show people if they or their friends installed an app that misused data before 2015—just as we did for Cambridge Analytica.

And not just Facebook. Chances are you, as I, have of late received privacy policy statements or reassurances from search engines, social media sites, financial institutions, and others. Try clicking on a link that takes you Twitter, and you’ll be asked to click OK on a screen that says, “By playing this video you agree to Twitter’s use of cookies. This may include analytics, personalization, and ads.” 

Where will it end? I’m expecting a privacy statement from the pizza delivery dude any day now.

I don’t know whether or not all of the preventive disclosures are overkill, but if they are I don’t mind. Something about “safe” scoring a little higher than “sorry” on the Preferred Outcome Scale.

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