Why Net Neutrality Matters For Big-Data Apps

New businesses like Uber and Tesla depend on big data analytics to provide cutting-edge services. They need a fast and free Internet to flourish.

Nikki Rouda

November 18, 2014

4 Min Read
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Politics bother me. I'm glad we're past another election, but of course that just means the politicians will now begin fundraising and campaigning for 2016. In the interim, we can expect to see a lot more of the partisan bickering, but not much of the underhanded lobbying that nonetheless dominates policy.

One political issue that was hardly mentioned in the midterm election campaigns was net neutrality. It's a horrible term, but a critical concept.

The big ISPs will tell you that they need to charge more to support infrastructure investments, which essentially means that they won't build better networks if they aren't guaranteed monopolies to exploit. Where I live in the technology-focused Bay Area, we pay nearly $80 per month for cable Internet alone -- no TV, no telephone, just network access. For that hefty fee, I get under 15 Mbps download speeds; that's about $5.33 per megabit per second.

Compare this to other regions of the world, and you see it's about 50% worse than the EU average, and more than double the UK. So, American consumers are definitely not getting good value today.

By the way, there isn't any viable alternative: satellite, DSL, and wireless offerings have even worse speed/dollar ratios. No one else can offer the same infrastructure for the connection, so yes, that's a monopoly. What's the industry's proposed solution? Let's give the ISPs the ability to selectively charge more!

Besides hurting consumers, this idea also is anti-innovation. Internet service providers (and their paid minions in Congress) are pushing for the ability to pick winners and losers, by ransoming off priority access to the highest bidders. They want to throttle those companies that can't or won't pay a pretty premium for priority service. And by throttle, I mean choke. This isn't just desire for more profit; this is a power play of infrastructure versus applications. It also means dominant network incumbents demanding unfair rents from content providers.

It gets way worse when you then look at the implicit threats, and this is where the "ransom" comes into play. A typical disruptive technology startup has great ideas but few resources. A typical dominant technology incumbent has great resources but few ideas. Which one can afford to pay extra tolls for better network speeds?

From a user and consumer point of view, a slow application is as frustrating (or worse) than an unavailable application. Either way, the user quickly gives up trying. This effect greatly reduces customer adoption of new applications, as people are generally resistant to change anyway.

Now, I'm the big data guy at ESG, so why the rant about networking? Because innovative, new, data-driven services need a fast and free Internet to grow.

For example, the taxi industry for many years has offered mostly dirty, poorly maintained cars with unreliable, unsafe drivers. Services like Uber can use big data and analytics to deliver better quality service, but what if the app won't load because they haven't sufficiently bribed the network providers? People would give up on Uber and we'd be back where we started. It's worth noting that the incumbent taxi industry is lobbying heavily to legislate against car-sharing services, with mixed results.

Another example is Tesla. Their cars are rolling data-generators, enabling entirely new approaches to predictive, proactive, and prescriptive maintenance and improvement of the vehicle's hardware and software. Other long-standing car manufacturers are still trying to figure out how to make in-car Bluetooth work with cellphones to play music on the stereo.

If Tesla couldn't communicate with its cars, would this exciting, new American automaker be able to leverage its differentiation? Probably not so much. Again, we see traditional car manufacturers and dealerships trying to influence lawmakers to fight against Tesla's direct sales model, and stall for time or strangle its fledging growth.

There are many more examples, but you get the point. The "information superhighway" needs to be a fair playing ground for competition and innovation. It's rare that I argue for more government regulation, but the networks are essential to service delivery of new big data-based applications. We cannot let them be restricted to the highest bidders, by those with the most powerful lobbyists. Infrastructure providers shouldn't be able to dictate who can drive how fast on the roads.

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