War! It's the FANGs vs the ISPs -- and We’re All Collateral Damage

Former Federal Confusion Commission FCC Chairman Tom Wheeler rammed Title II regulatory oversight of the internet through during his term That meant that the government could among other things regulate prices much as it does with telecom companies amp160But then President Trump came on the scene amp160His pick to replace Wheeler at the FCC Ajit Pai promptly dumped Title II amp160Instead he proclaimed the FCC would return to the preWheeler amp8220lighttouchamp8221 regulatory regime of Title 1 amp160Which means to some extent hands off the eversacred business modelThis made some internet players the infrastructure that provides the connection to the internet aka the media nexus very happyamp160 It made some others the FANGs my shorthand for Facebook Amazon Netflix Google and their ilk very very unhappyamp160 Scared even amp160Which isnamp8217t a surprise given that they have had a pretty much free ride on the internet for virtually all their existenceIt also made 50 senators unhappy enough to work hard to overturn the FCCamp8217s decision That includes all 49 Democrats plus Maine Republican Susan Collins amp160The 60day clock for Congress to act starts today February 22 amp160That39s obviously not enough to get Title II reinstated in the Senate and as for the House well really can you see the Republican majority voting for anything that includes greater government control amp160Except of course when it comes to your morals but that39s another story amp160In any case with DC out of the picture a number of states have opted to impose Net Neutrality behavior aka back to Title II on any Internet Service Provider ISP that gets any state businessamp160 amp160A very unusual move against a federal decisionOf course the FANGamp8217s Internet Association is all on board with the idea of returning to Title II regulation amp160Why amp160It39s back to that free ride folks The edge players of FANG donamp8217t like the idea that the infrastructure companies could begin to charge them for socalled fast lanes amp160They39d much rather have all lanes via cable cellular 5G sometime sooner or later satellite yes really and legacy telephone company spectrum whether inside a cable fiber optic cable or open air ISP connection or whatever open to anyone all the time at the same priceCanamp8217t really blame themamp160 Canamp8217t blame the infrastructure folks ATampampT Charter Comcast Verizon et al eitheramp160They39d much rather be able to charge the FANG folks for their prodigious bandwidth use amp160And then there39s the question of all that data amp160The FANG players make a mint off all the amp8220personalamp8221 information they gather on the 39net which the media nexus folks canamp8217t by law use amp160To add insult to injury the FANGs also have devoured most of the advertising revenue that once belonged to news and media companies which includes most of the nexus guys amp160amp160And theyamp8217re after more as they develop their own techno ecosystems which all work over the connection you and I pay for via the media nexusamp160 Just ask AlexaIn short all those fireworks you see over the question of 39net neutrality have at their base a hard cold economic reality amp160Just consider what ATampampTamp8217s Randall Stephenson said on CNBC a couple weeks ago quotReality is the biggest distributor of content out there is totally vertically integrated amp160This happens to be something called Netflix amp160They create original content they aggregate original content and they distribute original content amp160They have 100 million subscribersamp160 Look at Amazon amp160They39reamp160doing the exact same thing amp160Amazon Studios is creating aggregating distributing Google YouTube Hulu this thing is prolificquotThose guys are obviously making a killing while riding the internet amp160So what39s the answer for the infrastructure folks amp160Well as I see it the only way to really challenge the FANGs is to move toward the Comcast modelamp160 Which is just what Stephenson would like to do amp160He already has infrastructure landline fiber to the node cellular and satelliteamp160 He wants content specifically Time Warner in order to compete with the FANGsThanks to some smart dealmaking by Comcastamp8217s Brian Roberts his company owns Xfinity cable and NBC Universal that is conduit the nexus content and a theme parkamp160 And Comcastamp8217s Xfinity has wifi and voice controls and is developing all sorts of inhome services such as security with more to comeThatamp8217s the model ATampampT wantsamp160 Look for Charter Verizon and others to followBut enter the governmentamp160 Remember them The handsoff business guys amp160The Department of Justice has sued to prevent ATampampT from acquiring Time Warneramp160 That39s partly because President Trump threatened to do just that when running from officeamp160 Besides he really doesn39t like CNN which is currently owned via Turner by Time Warner amp160Of course the Department of Justice says politics has no part in its decision to sue for the first time ever to block a socalled vertical merger of companies that do not compete with one anotheramp160 A judge last week denied ATampampTamp8217s request for access to any DoJWhite House correspondenceamp160 No word on whether or not CNNamp8217s Jeff Zucker will volunteer to testifyWell the politics over that court case should provide some interesting fireworks amp160Unfortunately that is the case for most everything these daysamp160 In the meantime we have a schizophrenic government with Federal Confusion Commission Chairman Ajit Pai versus President Trump and his Department of Justiceamp160 What do you thinkamp160 Any chance they actually see the irony is all thisRandom NotesFrom the burythelede model of reporting comes the news that Americaamp8217s intelligence services suggest you do not buy your phone from Chinese companies Huawei or ZTE because of you know spyingamp160 There was no mention though of the number of cable ISPs which use Huawei or ZTE amplifiers and other equipmentamp160 Probably nothing to worry about thoughamp160 Full disclosureamp160 I skied badly for the Huawei team at an Adaptive Spirit meet once some years agoThe software behind the cryptocurrency explosion is coming to a cable system near youamp160 Comcast has created a task force to look at the blockchain technologies for managing infrastructureClick the social buttons above or below to share this content with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writersamp160

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War! It's the FANGs vs the ISPs -- and We’re All Collateral Damage

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Paul S. Maxwell

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War! It's the FANGs vs the ISPs -- and We’re All Collateral Damage

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