I must preface that I am not a certified or self-trained expert in computer networking, the Internet, or Information-Technology (IT). The following views are mine and have been arrived at by listening to/reading up on the issue of net neutrality from partisan and non-partisan sources. Well-informed and fact-based views from experts on the subject are most welcome and highly sought.
The Trump administration placed net neutrality on the chopping block and AjitPai did the honors by repealing it. The issue created a large furor in the world of Internet and social media with divergent explanations floated by both sides.
Conservatives and right-wingers supported the repeal stating that the government shouldn’t impose itself on service providers and get to have a say in their operations. Folks on the left claimed that the Internet is no longer free and that loss of net-neutrality will usher in tiered tariffs and throttling/blocking of web content at the whim of the service providers (ISP).
It’s increasingly difficult to take a purely scientific approach towards technical issues in a culture where the pettiest things are used to smear the opposition and play partisan political games. With much effort, I have attempted to put aside politics and look merely into the nerdy details of this extremely obtuse concept of net-neutrality.
The premise of net neutrality hinges on the aphorism that the Internet/Web (* a nuanced, yet significant, distinction between the two will be discussed briefly later) is a public utility, hence, should be made available and accessible to everyone equally, just like electricity, cooking gas, and water. Corporations are profit-driven and heartless, as a result, the government should get involved in the markets and make sure that everyone gets these utilities and nobody is left in the lurch.
So, is the Internet a public utility?
The science of economics describes two characteristics for a service to qualify as public utility: non-excludability (people cannot be denied the product regardless of whether they have paid) and non-rivalry (consumption by one doesn’t reduce availability for others).
The Internet certainly doesn’t meet the non-excludability criterion, in that people who don’t pay for the service don’t get to use it. Major cities across the US have set up public Wi-Fi in a bid to provide Internet to all, but such “access-for-all” isn’t standard across the vast majority of the nation.
Thankfully, the Internet doesn’t fail to meet the non-rivalry criteria. A huge slug of new users might overwhelm existing service capabilities transiently, but additional hardware can be added to accommodate the growing demand. Thus, for all practical purposes, the Internet qualifies the non-rivalry criterion.
In summary, the Internet isn’t a public utility, at least not now.
But I would like to make additional depositions to make my case well-rounded and cogent.
The Internet was conceived in the 1960s as an effort on part of the US federal government to transfer data over foolproof communication networks run by computers. What started as a nascent and clunky project involving huge machines and laughable transfer speeds evolved into a means of global networking, telephony, and information transfer at incredibly fast speeds. This evolution was majorly spearheaded by researchers at several government agencies from different parts of the world. In the 1990s, the Internet was opened up to private players for commercial usage. Thus, the Internet has been built and developed using taxpayer money. Also, of note is that the Internet is a decentralized space that no one has hegemony over.
Now, over to the Web. Thrown around carelessly and interchangeably to describe the Internet, the Web is actually different from the Internet. The Web is an application developed by Sir Tim Berners-Lee, during his time at CERN – a multi-government funded organization – to access documents, pictures, videos and other files on the Internet that are marked in a distinguished manner. It’s one of the several ways to access stuff on the Internet and communicate with one another. By corollary, the Web was thus crafted by an individual using public’s (taxpayer)money. It’s this little, yet extremely important, corner of the Internet that this brouhaha is all about.
ISPs function as middlemen connecting end users to the Internet space, mainly through the World Wide Web or the Web or WWW. Neither did they create the Internet or the WWW, nor do they maintain it.
Effectively, private corporations are helping us access a digital space that was created using public’s money. Moreover, the creators of this space – whether it be governmental agencies or individuals – in all their largesse decided to open up the space for commercial use and allow people to freely (not to be conflated with ‘for free’) use the space.
Over the years, the Web has grown from an information archive and emailing medium to a source of employment, a means of starting and running a business, a tool to reach out to people across the world, a place to broadcast yourself and your work, and much more. While the Web doesn’t qualify as public utility, it does serve as one of the few ways by which people in first countries can augment the socioeconomic momentum of the Industrial Revolution using digital technology and by which people in third countries can change their destinies by creating an app, or by engaging in commerce across borders, or educating themselves for free.
Repealing net neutrality gives ISPs a kind of hegemony, not over the Web or the Internet, but over what we consume from this public-utility-hopeful. While larger corporations can find a way around by paying the large sums of money ISPs might demand for a certain degree of visibility on their respective services, it is almost difficult for an entrepreneur or a blogger or an independent journalist to pay the same sum for the same degree of visibility on those services.
“Take your business over to Facebook or on some other social media outlet and you won’t be discriminated against,” one might argue. Not quite true! Social media have tailored news feeds and show you what you have already seen. It will be difficult to market your business on fronts that are slowly devolving into echo chambers. Also, one cannot be certain that social media giants are unbiased in the way they deliver content, as has been the case with Facebook, which was accused of manipulating the ‘trending’ feature to suit their political leaning.
The gravity of the problem is further compounded when one factors in the regional monopolies that ISPs enjoy in the US. Competition is scarce because of the cost-intensive nature of running cables under the streets and setting up hardware. Overbuilders (ISPs using existing hardware and cables to provide an alternative) can increase competition, but financial feasibility and ROI of such ventures are pretty dim. In this regard, the Web certainly functions like a public utility and requires some sort of accountability on part of the ISP.
There is also a technical angle to the importance of net neutrality, which is lucidly explained here.
Repeal of net-neutrality should get everyone disconcerted, especially, small business owners, entrepreneurs, innovators, and the most vulnerable – alternative news media outlets, especially the ones with unsavory views – many of which tend to be on the political right. Cheering along to your own demise because your guy did it is the gold standard of intellectual indolence and buffoonery.
I would like to once again post face that I am not a certified or self-trained expert in matters of the Internet, computing, or networking and would welcome fact-based feedback on this subject.
Having said that, I can tell you two things with certainty: 1. Capitalize the first letter of Internet and Web and place the definite article the before these words when referencing them; and 2. We use the Web to get on the Internet to do stuff.
Digital Spending Increases, Greater Focus on Digital Strategy Is a Top Need for State Auditors
The 2018 Digital Government Transformation Survey released today by Deloitte and the National Association of State Auditors, Comptrollers and Treasurers (NASACT) reveals how its members are investing more in digital transformation, yet only 35 percent of respondents are satisfied with their organizations’ responses to digital trends. This is a drop of 29 points from the 2015 survey. Additionally, less than half of respondents stated they have a clear and coherent digital strategy.
“The survey reveals an eagerness for state financial professionals to use digital technologies on par with the private sector,” said R. Kinney Poynter, executive director, NASACT. “Our members want to take advantage of emerging technologies, but clearly impediments to being more digital remain.”
“One clear takeaway from the survey is that those NASACT member organizations who have a clear and coherent digital strategy consider their digital capabilities to be comparable or ahead of the private sector,” said Christina Dorfhuber, principal, Deloitte Consulting LLP, and a government and public services ERP strategy leader. “We also saw how respondents with a digital strategy were more satisfied with their organization’s reaction to new trends and more confident in their organization’s readiness to respond to new ones, demonstrating that much of an organization’s digital prowess hinges on that strategy.”
“The expectations for digital strategies and opportunities are clearly increasing for all organizations, including governments,” said Clark Partridge, state comptroller of Arizona and president-elect of NASACT. “As we expand our understanding, we can appropriately identify opportunities to leverage technology to re-engineer our processes and enhance the capacity of our workforce. The result is a greater capacity to successfully accomplish the work of government and deliver quality outcomes to citizens.”
The survey reveals three key themes:
A digital strategy is important. Most, but not all, respondents reported having a digital strategy and believe that there is more that needs to be done. Those with a digital strategy were more satisfied with their organization’s reaction to digital trends (54 percent versus 18 percent of respondents) and confident in the understanding of digital trends by their leaders (87 percent versus 30 percent).
Investing in automation and cognitive technologies. With more funding, organizations must determine which technologies to invest in. Currently only 11 percent of organizations reported a broad use of automation and cognitive technologies. Increasing these numbers will be critical as more audits are likely to be augmented by these technologies in the coming year.
Addressing the digital skills gap. While 65 percent of organizations indicated that training staff would be a key focus, 39 percent of organizations also noted they would augment staff with consultants and contractors. Additionally, only 48 percent of respondents believe their employees have sufficient skills to execute a digital strategy while 43 percent believe that employees have the skills for automation and cognitive technologies.
The report examined the need for more training and a skilled workforce in these new emerging technologies to eliminate the skills gap.
“Emerging technologies can have tremendous benefits for state organizations, but preparation is needed,” said William D. Eggers, executive director for Deloitte’s Center for Government Insights. “Public finance leaders looking to capitalize on emerging technologies should devise a roadmap for integrating these technologies into their day-to-day operations.”
The previous survey was conducted in 2015. This year’s survey includes feedback from more than 70 NASACT member offices. A more detailed analysis of the survey can be found here, including data specific to auditors, comptrollers and treasurers.
AI Creating Big Winners in Finance but Others Stand to Lose as Risks Emerge
Artificial intelligence is changing the finance industry, with some early big movers monetizing their investments in back-office AI applications. But as this trend widens, new systemic and security risks may be introduced in the financial system. These are some of the findings of a new World Economic Forum report, The New Physics of Financial Services – How artificial intelligence is transforming the financial ecosystem, prepared in collaboration with Deloitte.
“Big financial institutions are taking a page from the AI book of big tech: They develop AI applications and make them available as a ‘service’ through the cloud,” said Jesse McWaters, AI in Financial Services Project Lead at the World Economic Forum. “It is turning what were historically cost centres into new source of profitability, and creating a virtuous cycle of self-learning that accelerates their lead.”
The report points to Ping An’s One Connect and BlackRock’s Aladdin platform as prime examples of the trend:
In China, One Connect sells AI-powered services ranging from credit adjudication to instantaneous insurance claims settlement to hundreds of small and mid-sized Chinese banks and is expected to fetch up to $3 billion at public sale
In the US, Aladdin provides sophisticated risk analytics and comprehensive portfolio management tools that leverage machine learning to a range of asset managers and insurers and is expected by BlackRock’s Chief Executive Officer Larry Fink to provide 30% of the firm’s revenues by 2022
The report, which draws on interviews and workshops with hundreds of financial and technology experts, observes that the “size of the prize” driven through these as-a-service offerings and other applications of AI is much larger than that of the more narrow applications that drive efficiency through the automation of human effort.
The report predicts that AI will also accelerate the “race to the bottom” for many products, as price becomes highly comparable via aggregation services and third-party services commoditize back office excellence.
“AI’s role in financial services is often seen narrowly as driving efficiency through the automation of human effort, but much greater value can be driven through more innovative and transformative applications,” said Rob Galaski, Deloitte Global Banking & Capital Markets Consulting Leader.
As such, financial institutions are seeking to build new sources of differentiation on the back of AI, such as on-the-fly product customization and free advisory services built into products.
Canadian lender RBC is providing its automotive dealership clients with sophisticated demand-forecasting tools that complement the existing credit products it provides to these firms
IEX, a young New York-based stock exchange, is exploring the use of machine learning in creating new order types that protect trades from execution during unstable, potentially adverse conditions
The net result for customers will be “self-driving finance” – a customer experience where an individual’s or firm’s finances are effectively running themselves, engaging the client only to act as a trusted adviser on decisions of importance.
“A small business won’t go to a bank for a revolving line of credit,” said Bob Contri, Deloitte Global Financial Services Leader. “It will seek out a liquidity solution that anticipates how their need for growth capital will evolve and provides customized products to meet those needs,” he said.
But the expanding presence of AI in finance doesn’t come without tensions and risks.
First, financial institutions will be drawn closer to big tech since cloud computing is central to most AI strategies. But there is a chance that most of the benefits will escape them.
Second, the report warns that AI will raise new challenges for the financial ecosystem, particularly around regulation. The divergent path being taken by regulators around the world towards customer data could create a new form a regulatory arbitrage, project participants said.
Finally, the report points to systemic and security risks from creating a more networked finance system, where a few AI databases contain most clients’ information.
Your new digital rights across Europe during summer holidays
This summer, European citizens will enjoy more digital rights than ever before. Following the end of roaming charges across the European Union last year, holidaymakers can now travel with their online TV, film, sports, music or e-book subscriptions at no extra cost. In addition, everyone across Europe can enjoy world-class data protection rules that ensure all Europeans have better control over their personal data.
Andrus Ansip, Vice-President for the Digital Single Market said: “Europeans are already starting to feel the benefits of the Digital Single Market. This summer you will be able to bring your favourite TV programmes and sports matches with you wherever you travel in the EU. By the end of this year, you will also be able to buy festival tickets or rent cars online from all over the EU without being geo-blocked or re-routed.”
Věra Jourová, Commissioner for Justice, Consumers and Gender Equality added: “The digital world offers tremendous opportunities, but also challenges; for example, our personal data is a useful asset for many companies. With the modern data protection rules we have put in place, Europeans have gained control over their data whenever they shop, book their holidays online or just surf the internet.”
Mariya Gabriel, Commissioner for the Digital Economy and Society said: “We are improving the daily life of our citizens, be it end of roaming charges or safer online environment. By completing all our digital initiatives we will bring even more positive change to consumers and businesses alike.”
Digital rights already in daily use
Since June 2017, people have been able use their mobile phones while travelling in the EU just like they would at home, without paying extra charges. Since the EU abolished roaming charges, more than five times the amount of data has been consumed and almost two and a half times more phone calls have been made in the EU and the European Economic Area.
Since April 2018, consumers can access online content services they have subscribed to in their home country also when travelling across the EU, including among other films, series and sports broadcasts (see examples in factsheet).
Under the new data protection rules which have been in place across the EU since 25 May 2018, Europeans can safely transfer personal data between service providers such as the cloud or email; everyone now has the right to know if their data has been leaked or hacked, or how their personal data is being collected. Furthermore, with the ‘right to be forgotten’, personal data has to be deleted upon request, if there are no legitimate reasons for a company to keep it.
Finally, with the net neutrality rules applying since spring 2016, every European has access to open internet, guaranteeing their freedom without discrimination when choosing content, applications, services and information of their choice.
With some digital rights already in place, there is more to come in the upcoming months. From September, Europeans will have increasingly the right to use their national electronic identification (eID) across the whole EU to access public services.
As of December, everyone will benefit from the free flow of non-personal data, as they will have access to better and more competitive data storage and processing services in the EU, thus complementing the free movement of people, goods, services and capital. Entrepreneurs meanwhile will have the right to decide where in the EU they store and process all types of data.
As of 3 December, Europeans will be able to shop online without unjustified discrimination wherever they are in the EU. They will not have to worry about a website blocking or re-routing them just because they – or their credit card – come from a different country.
As of next year, citizens will be able to compare parcel delivery costs more easily and benefit from more affordable prices for cross-border parcel delivery.
Agreed rules on value added tax for e-commerce will allow entrepreneurs to take care of their cross-border VAT needs in one online portal and in their own language.
With the recently agreed European Electronic Communications Code, Europeans will have the right to switch internet services and telecoms providers in a simpler way. They will also have the right to receive public alerts on mobile phones in case of an emergency. The new rules will also guarantee a better and more affordable connectivity across the EU.
With the updated rules for audiovisual media, Europeans will have the right to a safe online environment that protects them from incitement to violence, hatred, terrorism, child pornography, racism and xenophobia.
The Digital Single Market strategy was proposed by the Commission in May 2015 to make the EU’s single market fit for the digital age – tearing down regulatory walls and moving from 28 national markets to a single one. This has the potential to contribute €415 billion per year to our economy and create hundreds of thousands of new jobs.
Three years later, the strategy is well on its way: 17 legislative proposals have been agreed on, while 12 proposals are still on the table. There is a strong need to complete our regulatory framework for creating the Digital Single Market. Thanks to this the value of Europe’s data economy has the potential to top €700 billion by 2020, representing 4% of the EU’s economy.
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