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A couple power points in the internet ecosystem were on display this week.
On Monday, a Gizmoda report charged that Facebook employees were biasing the “trending” bar by avoiding stories popular among conservatives, and even outright blocking conservative news outlets. Facebook responded in a statement that did not completely reject the report, “There are rigorous guidelines in place for the review team to ensure consistency and neutrality. These guidelines do not permit the suppression of political perspectives. Nor do they permit the prioritization of one viewpoint over another or on news outlet over another.”
In not providing an outright rejection Facebook makes clear what we likely know about this accusation anyway, that something was awry likely because of people.According to reports, at Facebook people play a role in choosing the words, people pay a role in what news sites and publications are searched, and even whether some news stories were injected in the list without actually “trending.” People being involved is not shocking. It is a good idea to have people involved so that algorithms do not return silly or unwanted results. No one is really interested in the consistently most searched item on the web, pornography, “trending” every day.
So were conservatives being left out? Were people biasing the results? Did Facebook do something, or did their independent contractors act outside of corporate policy? Honestly who cares? Market competition could arise to Facebook if in fact it were applying any sort of bias as part of actual operations. If this practice was disclosed then what difference does it make? If not, there is a problem. But Facebook has made the alleged bias, however it came to be, a problem given the company’s loud argument that strict net neutrality should be the standard for service providers while not including themselves in the new sticky web of government control. Taken together this is exactly the sort of hypocritical, inauthentic talk and action that voters are rejecting in droves this election.
Also this week, Google announced that they will ban advertisements from payday lenders. In this case that information was announced very publicly, including providing the reason that Google does not like that the pay day lenders charge high interest rates. Who knows who Google won’t like next.
In both cases it’s fair enough – their website, their rules, their power. And that is the important point to take from this week’s news.
These stories demonstrate that there is “power” in various parts of the Internet ecosystem. Market power is not a bad thing and consumers wield it as well. Contrary to the FCC’s bias as expressed in the current privacy rule-making, it is not the service providers alone who might have some ability to effect a user’s experience, and neither are the consumers powerless . This proven reality exposes that the FCC’s proposed privacy rules will do nothing to increase consumer protection, but instead will burden only one part of the ecosystem with intrusive regulation even while backing away from the so called consumer protections in other areas. In short, the FCC is merely acting politically, and recklessly.
The power of various players in the internet ecosystem has been made clear this week, in neither case were service providers involved and yet end results were altered. If the FCC insists in playing in the privacy field despite plenty of other government oversight, then rather than creating fantastical windmills of unproven marketplace power for a quixotic FCC to tilt, it should be seeking to create clear rules that consistently protect consumer data end to end while promoting competition and innovation in the online marketplace.
The Permanent Internet Tax Freedom Act (PITFA), receiving a large bi-partisan approval in the House of Representatives earlier this year, is supposedly going to be taken up in the Senate this week. The provision has been added into the conference report (the final version of a bill to be considered by both chambers of congress) of the Trade Facilitation and Trade Enforcement Act of 2015.
PITFA would continue the Internet Tax Freedom Act (ITFA) which was extended multiple times over the last seventeen years. ITFA was first signed into law in 1998. Originally intended to be permanent but negotiated to be temporary, the Act bans federal, state and local governments from imposing discriminatory taxes on online sales and Internet access, and protects consumers by limiting taxes on transactions to one state.
If ITFA expires then Internet using consumers will be burdened with at least $16.4 billion a year in new taxes. Given a still sluggish economy one may be tempted to think that passage the Senate would be eager to avoid this tax. After all, what politician wants to go on the campaign trail this fall bragging that they have imposed a massive new tax specifically targeting Internet users? What politician wants to explain why that while the federal government spends millions on making broadband available to citizens that they voted to fleece those very same citizens, driving up costs and hence reducing the amount of broadband usage in the U.S.?
To date, only one thing has prevented passage of a permanent moratorium and the elimination of disparate, discriminatory tax treatment of the Internet–politics. That threat remains for the upcoming vote but the tactics have gotten even more desperate.
For years, big-government pro-taxers, particularly in the Senate have put off a permanent fix in an effort to force Congress, and the nation, to accept a massive tax increase and the radical expansion of government authority with a legislative vehicle once oxymoronically named the Mainstreet Fairness Act. They have often deployed the parliamentary tricks that voters increasingly reject to thwart the vote. This time, however, there may be nowhere to hide.
Rumor has it that Senators Enzi of Wyoming, Alexander of Tennessee, and Durbin of Illinois will attempt to strip the PITFA language from the proposal and support the tax using a parliamentary trick. To be successful the three Senators need 57 other Senators to side with them.
Simply put, Senators who side with Senators Enzi and Alexander are supporting a massive tax increase. Those who oppose this trick are voting against a tax increase, standing to protect the Internet and its users from a discriminatory tax.
Opposing the Internet crushing tax, a broad coalition of 45 organizations from across the country, including Madery Bridge, recently sent a letter to the U.S. Senate urging its leadership to finally, permanently ban taxes on Internet access and end the game-playing with national policy.
The vote is an easy one to make for those who oppose massive government and huge tax increases. Finally called out of the shadows to vote in the light of day, the people will see where their Senators line up on the issue allowing citizens to decide for themselves whether their Senators should be ordered out of the U.S. Senate.
The Oxford Dictionary defines capitalism as “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.” A new poll on the topic from Harvard received some attention yesterday, garnering headlines about millennial’s view of capitalism. The poll is challenging to interpret given that most people likely have a connotative sense of capitalism, but helpfully Harvard dug a little deeper by interviewing a group of people regarding their view of capitalism. As it turns out those who were wary of capitalism were not so much rejecting it but rather were concerned that today it seems unfair and leaves some people out.
One blog immediately opined in part, “It’s no surprise that a generation of people who grew up in the era of ‘everyone gets a trophy’ reject the idea of unequal rewards based on hard work. Millennials were educated largely by public schools obsessed with the idea of fairness and afraid in some cases to let children play the game of tag.” In fact, the benefits of the marketplace are being returned in various ways, some of which were likely not considered by those polled.
Take just one example. As announced yesterday Comcast will begin providing all of their customers in internet data trials a terabyte of data, more than triple what is offered now. For extremely heavy users who want even more data, they will have options to increase the amount of data either in an unlimited way or in more discreet chunks.
Why the change? The market reacted and Comcast responded. Comcast listened to its customers and are exceeding their needs, given that most customers do not come close to using a terabyte of data in a month. How much data is it in real terms? Enough to watch more than 29 days straight, with no sleep, of HD video. Enough for more 16 people to play online games for the entire month.
This follows a string of other announcements from Comcast including that subscribers will now be freed from having a “cable box,” but rather will be able to stream video to connected TV devices, such as a Roku box. And last month Comcast announced the expansion of the Internet Essentials to include ConnectHome, a partnership with HUD to provide broadband for access for those with the greatest financial challenges.
The public is taking notice. During earnings calls this week Comcast reported an increase of 53,000 new subscribers, a nine year record new subscribers during the first quarter of the year.
When examined individual by individual capitalism can be challenging if one thinks that regardless of one’s industry and talent that all should be monetarily equal. However, if viewed appropriately,one can see that the marketplace works in delivering benefits to many when the marketplace has a demand. Comcast has responded in offering data that is increasingly inexpensive and abundant, freeing consumers from the cost of a “cable box,” and still investing in our communities by providing the most needy with broadband. This is the free market at work.
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