Benner on Tech: Net Neutrality Is Almost Here

Katie Benner is a Bloomberg View columnist who writes about technology, innovation, and the cult and culture of Silicon Valley. She lives in San Francisco.
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People are Talking About…

Today, the Federal Communications Commission votes on its proposed net neutrality rules, which would prevent Internet service providers from playing favorites with Web traffic and would represent a seismic shift in the relationship between regulators and the Internet.

Some people love the proposed rule. Some people hate it. Some people think it wouldn't really be all that effective. The broadband providers, especially the telecom companies, will kick and scream and sue to keep the rule from being implemented. But eventually the proposal will take hold, and the whole kerfuffle will be, mostly, a huge payday for a bunch of lobbyists and lawyers. We’ll be able to watch "House of Cards" at consistent speeds, and the Internet service providers won’t be able to speed up Netflix’s traffic for a fee.

The FCC’s proposal is being described as a move to regulate the Internet like a utility, and to some degree the description makes sense. Broadband companies won’t be able to block or slow websites and will have to treat data equally. But the commission won't oversee pricing for consumers in a material way, and price caps characterize most utilities. We pay for electricity and water, but those charges are regulated to ensure that a company can make money while still providing reasonably affordable access to a vital service. QuickTake Net Neutrality

Internet is certainly a vital service. In this case, there's an idea that competition can keep broadband prices in check. But the FCC’s decision to narrow the definition of high-speed Internet has narrowed the pool of companies that can truly provide connectivity at the newly defined higher speed. As I’ve noted before, cable accounts for more than 80 percent of the country’s high-speed Internet connectivity under the new standards.

The cable guys pretty much have regional monopolies. They compete with the telcos, not one another, to provide high-speed Internet access. With more than 80 percent of the high-speed market, they won’t have a lot of robust competition. I think that our bills could someday reflect this reality, and that Internet access could become a vital service that's priced more like a luxury option. The trade-off, I hope, is that the ISPs use their pricing flexibility to invest in new technology and be more innovative than your typical utility. When’s the last time we saw great innovation come from sewer, water or power companies?

** Related: The Wall Street Journal points out that questions remain for players like Netflix, since it’s unclear whether the ISPs will be able to charge companies (especially those that stream a lot of video) tons of money just to connect with their networks.

** The FCC made last-minute changes to its net neutrality proposal after it received input from Google, Politico reports.  

** A lack of consumer choice pushed the FCC to fight for net neutrality, the New York Times reports.

Ventureland

The Ellen Pao-Kleiner Perkins trial: Former senior partner Chi-Hua Chien -- who was accused of saying that he prefers all-male events because women kill the buzz -- testified yesterday. Re/code has the full breakdown.

Coolan, whose software prevents data-center outages, is the latest startup to come out of Facebook’s Open Compute initiative, the Wall Street Journal reports.

Docker, a startup that lets users package and move apps, is now a business software phenom. CNBC explains how it got so popular.

Jawbone is working on a strategic investment from Google, Re/code reports.

Lyft’s efforts to compete with its bigger, richly-funded, crosstown rival Uber include eliminating fuzzy mustaches and fist bumps, reports Business Insider.

Tinder hopes that you will pay for the privilege of swiping right, Bloomberg reports.

An Uber driver chased down a homeless man with his car, “at times traveling down the wrong side of a street,” the San Francisco Chronicle reports. The homeless man was acquitted of vandalism for smashing the car’s windshield with this skateboard. BuzzFeed says that China’s biggest ride-hailing services aren’t afraid of Uber.

People and Personnel Moves

Michael Morrissey has joined the anonymous messaging startup Yik Yak as vice president of engineering, Re/code reports. He was previously a senior engineering director at Google.

Dick Costolo tells the New York Times that you don’t have to tweet to love Twitter.

Vivek Wadhwa became a polarizing voice when he started using his academic perch to speak on behalf of women in tech, and now he’s the subject of two profiles. The New York Times’ Farhad Manjoo says:

That he became a spokesman for women in tech despite their questions about his message is, they say, symptomatic of an industry that seems bent on listening to men over women.

The Verge’s Nitasha Tiku writes:

We're stuck in a debate about amplifying women's voices that revolves around a man. In order to explain the terms of the debate, the spotlight has to shine back on Wadhwa. And he, in turn, has co-opted terms for abuse that often targets women in order to sideline his female critics.

Companies

Earnings Roundup…

** Salesforce.com shares soared after the company met Wall Street’s quarterly earnings and revenue estimates and said that bookings had been better-than-expected, CNBC reports.

Google…

The company is working on plans for new headquarters that will likely strain the relationship between the company and the sleepy suburb of Mountain View, California, where Google owns or leases the equivalent of three Empire State buildings worth of office space, the New York Times reports. The new payment software, Android Pay, will launch in May, according to Ars Technica. And the Wall Street Journal says that YouTube has 1 billion viewers but just one problem: no profits.

Hewlett-Packard…

The company is working on a deal to buy Aruba Networks, Bloomberg reports.

Samsung…

The Korean manufacturing giant says it will freeze salaries in South Korea in response to a huge slump in the company’s financial performance, Bloomberg reports.

Security Blotter

China has dropped several U.S. tech companies from the Central Government Procurement Center’s list including Cisco, Apple, Intel and Citrix Systems, Reuters reports.

Islamic State or pro-Islamic State groups are using the anonymity of the Dark Web to organize operations, Quartz reports.

Lenovo.com was hacked, and the hacker collective Lizard Squad is the prime suspect, the Verge reports.

Target’s data breach cost it $162 million, TechCrunch reports.

Media Files

BuzzFeed launched an app that’s basically Tinder but for cute animal photos, reports Business Insider.

News and Notes

Apps are turning us into sociopaths, according to a Wired editorial penned by professor Evan Selinger, a fellow at the Institute for Ethics and Emerging Technology.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.