Posts Tagged ‘Internet’

Firefox Maker Battles to Save the Internet—and Itself

May 22nd, 2015

In Silicon Valley, most pioneers pursue big ideas and giant personal fortunes with equal zeal. Then there’s Mozilla, an innovation dynamo that refuses to get rich.

More than 500 million people worldwide use Mozilla products. The company’s Firefox Internet browser is the top choice in countries ranging from Germany to Indonesia. But the company has no venture capital backing, no stock options, no publicly traded shares. It hardly ever patents its breakthroughs. Instead, Mozilla has a business model that’s as open and sprawling as the World Wide Web itself, where everything is free and in the public domain.

For a long time, it seemed as if Mozilla’s idealistic engineers understood the future better than anyone. By building the Firefox browser with open-source software, Mozilla made it easy for all kinds of people to cook up improvements that the whole world could use. Independent developers in dozens of countries pitched in, creating add-ons that speeded up downloads, blocked unwanted ads, and performed other useful services. Firefox rapidly became the browser in which state-of-the-art development took place–on shoestring budgets.

Suddenly, though, the Internet looks nightmarish to Mozilla. Most of the world now gets online on mobile devices, and about 96 percent of smartphones run on either the Apple iOS or Google Android operating systems. Both of these are tightly controlled worlds. Buy an iPhone, and you’ll almost certainly end up using Apple’s Web browser, Apple’s maps, and Apple’s speech recognition software. You will select your applications from an Apple-curated app store. Buy an Android phone, and you will be steered into a parallel world run by Team Google. The public-spirited, ad hoc approaches that defined Mozilla’s success in the Internet browser wars have now been marginalized. Developers don’t stay up late working on open-source platforms anymore; instead, they sweat over the details needed to win a spot in Apple’s and Google’s digital stores. Rival operating systems offered by BlackBerry and Microsoft Windows have largely fallen by the wayside as well.

“Many of the principles we associate with the Web–openness, decentralization and the ability of anyone to publish without asking permission from others–are at risk,” declared a lengthy blog post written in November 2014 by Mitchell Baker, chair of the Mozilla Foundation, the nonprofit vehicle that serves as the company’s ultimate owner.

No matter that users and software developers seem to be thriving in this more structured new milieu, with nearly one billion Apple iOS and Google Android smartphones being sold each year. From Baker’s perspective, “frankly, this direction for the Internet sucks.”

Baker’s antidote: Firefox OS, a totally different operating system for smartphones, built on the same collegial, open-source principles that make the Firefox browser such a success. Mozilla has entered this battle with financial resources less than one-hundredth those of Apple and Google. And the organization is even shorter on time: the incumbents have enjoyed nearly a decade’s head start in some crucial markets. Is it too late for a radical attempt to crack the mobile duopoly?

No sanctuary

Since mid-2011, Andreas Gal has been Mozilla’s point man on Firefox OS, and he has gained power as the project has grown. In April 2014, the Hungarian-born engineer became Mozilla’s chief technology officer. A close look at Firefox OS’s journey shows why Gal and colleagues feel their mission is so crucial—and why success is going to be very hard to achieve.

Gal, 39, stumbled into his current specialty by accident. In early 2011, as he recalled in an interview, he and another Mozilla researcher, Chris Jones, were chatting in a hotel during an Asian trade show. The two engineers identified a handful of common tasks that couldn’t be done easily on the Web. The first item on their list, opening PDF documents, yielded to their coding skills within weeks. So Gal decided to try something harder.

“We need a hill to take,” Gal, Jones, and two other colleagues wrote in a jaunty post to a Mozilla developers’ group in July 2011. The engineers proposed to create a Web-based mobile OS, which would offer a new way for developers to reach big mobile audiences without needing to pass through the gateways created by Apple and Google. “This project is in its infancy,” the Mozilla developers conceded. If anyone else wanted to pitch in, that would be wonderful.

The first key offer of help arrived within 24 hours. Engineers working for Telefónica, Spain’s largest mobile carrier, had liked Gal’s posting and offered technical support and connections to their business colleagues. The goal: getting the Firefox OS installed on a next generation of phones for Telefónica’s Latin American markets.

It didn’t take long for Gal to realize how tricky this new project would be. Creating basic Web instructions to get a phone to make a call took months; that problem didn’t get solved until 2 a.m. one night in Mozilla’s San Francisco offices. (Other engineers working late that evening recall hearing whoops of joy when the first call went through.) Addressing local market peculiarities–such as Latin American customers’ desires to have an FM radio built into their smartphones–added complexity, too.

Still, Mozilla’s far-flung network of contributors kept solving problems as fast as they arose. Erik Spiekermann, a renowned designer in Berlin, came up with a distinctive typeface for Firefox phones that conveyed a friendly, simple tone even at low resolutions. The keyboard’s swipe function was implemented by a Spanish-born engineer living in Amsterdam. A Canadian designer in her mid-20s created more than 600 emoji, just for Firefox, to satisfy the moods of avid texters.

Partway through development, Gal conceded that Firefox’s mobile displays couldn’t match the iPhone’s elegant look. “Apple has spent years polishing every pixel,” he would later quip. Even so, he felt confident that the Firefox OS could fill a big global need for a smartphone that approached the performance of an Apple or Android phone at much lower cost.

In the summer of 2013, the first Firefox OS-powered phones went on sale in Spain, Colombia, and Venezuela. Many of the best-known handset makers, such as South Korea’s Samsung and Taiwan’s HTC, were already committed to making Android phones. But Gal and Denelle Dixon-Thayer, Mozilla’s senior vice president for business and legal affairs, negotiated alliances with China’s ZTE and France’s Alcatel One. Telefónica agreed to let these phones operate on its networks, while also providing marketing support.

Determined to widen the Firefox phone’s appeal, Mozilla’s team hammered out partnerships in more than two dozen countries. New carriers brought the phone into India, South Africa, southeastern Asia, and Eastern Europe. Major chip makers such as Qualcomm stepped forward to support the Firefox OS design. Handset makers such as South Korea’s LG came on board, too. “Considering how many hurdles we had to clear along the way, it was pretty dramatic progress,” Gal recalls.

What caught Mozilla by surprise was Google’s arrival in the low end of the smartphone market. Originally, Mozilla’s strategists had assumed that Android was too complex an operating system to work well in any phones selling for less than $120 or so. That would have left Firefox a lot of opportunity to woo budget-minded customers with sub-$100 phones. Then Google tweaked Android so that it could adapt to the spartan memory chips and smaller data plans of cheap phones designed for emerging markets.

Suddenly, the low end wasn’t a sanctuary for Firefox. In the Philippines, where a Firefox OS smartphone is a modest 1,499 pesos (equivalent to $33), there’s now an Android alternative for $45. The price gap has become even smaller in Brazil and India. Without a big cost advantage, Firefox and its carrier allies have been in the awkward position of championing an unfamiliar new approach that can’t dodge the competition.

Mozilla won’t discuss sales data, but mobile-market researchers estimate that Firefox is on track to win no more than 1 percent of the global smartphone market this year. Ryan Reith, mobile program director at International Data Corporation, says that on a recent trip to Peru, he found Firefox OS phones sitting “at the end of the shelf in stores, with no marketing support.”


For smartphone buyers, the hardware might be less important than the performance of their favorite applications. While Google and Apple have largely defined that user experience, Mozilla’s leaders insist it’s possible to create something better. Even though Firefox OS phones aren’t widely sold in the United States at present, they can be found occasionally on eBay. So I bought a ZTE Open C phone ($119) and tested its Firefox 1.3 operating system during a one-month contract with T-Mobile ($40).

I found it to be the digital equivalent of a nearly finished house that’s missing its stairway. The ZTE device’s basic design checks out well, once one accepts that it has a small screen, a sassy orange casing, and a still camera only, no video. The home-page layout is crisp and orderly. Twenty small, bright icons introduce core services such as e-mail, Wikipedia, and the always handy Firefox browser. But where are the apps? The smartphone offers its own marketplace, in which everything is free. Google and Apple can charge for apps; that’s not Mozilla’s way of doing things. As a result, the ZTE phone offers a limited collection of obscure games.

A new model coming from Verizon next year is likely to determine whether the Firefox OS can ever compete effectively in developed markets.

In Mozilla’s ideal world, companies would create Web-based mobile sites that work just as nicely on Firefox phones as iOS and Android apps do on their intended devices. For now, though, everything is hit or miss.

Several news providers, including the New York Times, Reddit, the Huffington Post, the Guardian, Fox News, and CNN, have smooth-running mobile sites. Twitter and Facebook work well, too. But LinkedIn’s mobile site renders pages slowly and doesn’t scroll smoothly. To date, Mozilla hasn’t regarded better support for LinkedIn as a top priority, says Bill Walker, Mozilla’s senior manager for Firefox’s mobile marketplace, adding: “It isn’t the No. 1 thing they need in Senegal.” Minor coding incompatibilities make parts of BankAmerica’s site show up on the ZTE phone as full-size Web pages in microscopic type. Yelp is especially vexing. Because of a formatting glitch, the site’s reviews are confined to a thin ribbon on the left side of the page. Brief reviews sprawl down for 60 or 70 lines, with no more than a few syllables per line.

Walker contends that these problems will vanish with Version 2.0 of Firefox’s OS, which is available in Japan and is headed to other markets. In a demonstration of that software, Yelp and LinkedIn did look smoother.

However, to Mozilla’s chagrin, many developers are too starved for time to focus on anything except the ever-changing demands of looking good on Android and iOS. A case in point is WhatsApp, the widely used messaging service, which started operation in late 2009. For its first five years, WhatsApp focused entirely on Android and iOS, amassing more than 600 million users that way. Only in January 2015 did the debut of a WhatsApp Web version provide the beginnings of a Firefox option.

Also missing from the Firefox phone is the seamless fusion of maps, directions, speech recognition, hotel listings, and local bus schedules that can be found on an Android or iOS phone. Each of those services exists independently on the Firefox phone, but it takes a lot of work to pull them together. Mozilla’s engineers don’t believe in locking users into a single, proprietary system. As admirable as that principle of standalone services may be, it makes travel planning much harder.

The ZTE phone is hardly the last word regarding Mozilla’s mobile ambitions in the United States. Verizon has agreed to launch a new Firefox model next year that will run on its big wireless network. In a sign of how competitive Mozilla wants to be, Walker showed me a new mapping system developed in partnership with TomTom that provides excellent turn-by-turn driving directions on tricky routes. That’s a huge improvement over a musty Nokia map service currently offered on the ZTE phone. Overall, the Verizon project’s success or failure is likely to determine whether the Firefox OS can ever compete effectively with the Android/iOS duopoly in developed markets.

The long run

Mozilla’s overall financial picture looks good for now. Figures for 2014 haven’t been released yet, but in 2013, the Mozilla Foundation booked $314 million in revenue. That comfortably covered outlays of $197 million for software development, as well as smaller amounts for marketing, overhead, and foundation programs.

The Mozilla Foundation doesn’t formally report a profit. Even so, net assets grew $15 million, or 6 percent, in 2013. If the foundation needs money to pursue its civic and commercial goals, it has $255 million in cash, investments, and other holdings. Beyond that, Mozilla benefits from its vast network of informal contributors around the world. These allies pitch in, free of charge, on various projects because they find the work exciting and in keeping with public-spirited ideals.

If fewer people use the Firefox browser, the money spinner stops spinning.

Such volunteers have been a crucial part of Mozilla’s success, going back as far as 1999, when Mozilla began taking shape as a nonprofit spinout from Netscape Communications, a pioneering Internet browser company. Netscape largely vanished in a series of corporate reshufflings, but an informal army of Mozillians took over browser development in 2003. Outside Mozilla’s San Francisco offices, a 14-foot-high black monolith salutes, by name, the efforts of more than 4,000 such contributors.

In the long run, however, Mozilla’s revenue depends on the Firefox Web browser’s usage. Search-engine companies will pay handsomely for the privilege of being the browser’s default search engine, knowing that if they can collect billions of search requests from Firefox users, those queries will generate a big boost in ad revenue. Google traditionally paid as much as $300 million a year to be Firefox’s default search engine worldwide. Mozilla switched to a more lucrative and diversified strategy last year, splitting privileges regionally among Yahoo, China’s Baidu, and Russia’s Yandex.

If fewer people use the Firefox browser, the money spinner stops spinning. That’s one of the reasons Mozilla doesn’t want to sit idly during the vast migration toward mobile services.

Mozilla’s Gal contends that everything is moving along, right on course. “I think we’ve successfully transformed a desktop company into a mobile company with this project,” he declares. “I don’t think we saw the full extent of how much Firefox OS could influence the whole mobile industry.”

Market data, however, tells another story. The Firefox browser’s overall market share has sunk to about 11.6 percent lately, about half of what it was at the start of 2012. Most of that traffic comes from desktop computers, where Firefox still enjoys about a 17 percent share. Its mobile browser share is in very low single digits. Once consumers settle into the far-reaching embrace of the Android or iOS mobile experience, there’s hardly any chance of their voluntarily adding the Firefox browser to the mix. Doing so would be as pointless as bringing one’s own fork to a restaurant.


Warning over internet security flaw

March 4th, 2015

Millions of people may have been left vulnerable to hackers while surfing the web on Apple and Google devices, thanks to a newly discovered security flaw known as “FREAK attack”.

There is no evidence so far that any hackers have exploited the weakness, which companies are now moving to repair.

Researchers blame the problem on an old US government policy, abandoned over a decade ago, which required American software makers to use weaker security in encryption programs sold overseas due to national security concerns.

Many popular websites and some internet browsers continued to accept the weaker software, or can be tricked into using it, according to experts at several research institutions who reported their findings on Tuesday.

They said that could make it easier for hackers to break the encryption supposed to prevent digital eavesdropping when a visitor types sensitive information into a website.

About a third of all encrypted websites were vulnerable as of Tuesday, including sites operated by American Express, Groupon, Kohl’s, Marriott and some US government agencies, the researchers said.

University of Michigan computer scientist Zakir Durumeric said the vulnerability affects Apple web browsers and the browser built into Google’s Android software, but not Google’s Chrome browser or current browsers from Microsoft or Firefox-maker Mozilla.

Apple and Google both said they have created software updates to fix the “FREAK attack” flaw, which derives its name from an acronym of technical terms.

Apple said its fix will be available next week and Google said it has provided an update to device makers and wireless carriers.

A number of commercial website operators are also taking corrective action after being notified privately in recent weeks, said Matthew Green, a computer security researcher at Johns Hopkins University.

But some experts said the problem shows the danger of government policies that require any weakening of encryption code, even to help fight crime or threats to national security.

They warned those policies could inadvertently provide access to hackers.

“This was a policy decision made 20 years ago and it’s now coming back to bite us,” said Edward Felten, a professor of computer science and public affairs at Princeton, referring to the old restrictions on exporting encryption code.


The Right Way to Fix the Internet

October 14th, 2014

If you’re like most people, your monthly smartphone bill is steep enough to make you shudder. As consumers’ appetite for connectivity keeps growing, the price of wireless service in the United States tops $130 a month in many households.

Two years ago Mung Chiang, a professor of electrical engineering at Princeton, believed he could give customers more control. One simple adjustment would clear the way for lots of mobile-phone users to get as much data as they already did, and in some cases even more, on cheaper terms. Carriers could win, too, by nudging customers to reduce peak-period traffic, making some costly network upgrades unnecessary. “We thought we could increase the benefits for everyone,” Chiang recalls.

Chiang’s plan called for the wireless industry to offer its customers the same types of variable pricing that have brought new efficiencies to transportation and utilities. Rates increase during peak periods, when congestion is at its worst; they decrease during slack periods. In the pre-smartphone era, it would have been impossible to advise users ahead of time about a zig or zag in their connectivity charges. Now, it would be straightforward to vary the price of online access depending on congestion and build an app that let bargain hunters shift their activities to cheaper periods, even on a minute-by-minute basis. When prices were high, consumers could put off non-urgent tasks like downloading Facebook posts to read later. Careful users could save a lot of money.

Excited about the prospects, Chiang patented his key concepts. He dubbed his new service GreenByte and formed a company, now known as DataMi, to build the necessary software. Venture capitalists and angel investors put more than $6 million into the company. A seasoned wireless executive, Harjot Saluja, signed on to be the chief executive, while prominent people such as Reed Hundt, a former chairman of the Federal Communications Commission, joined DataMi’s advisory board. Everything seemed aligned for Chiang and Saluja as they set out to make “smart data pricing” a reality.

Today, GreenByte has vanished from sight. Nobody on DataMi’s team is working on the project anymore. The startup has regrouped in favor of two other services, including one that helps businesses calculate how much of their employees’ cell-phone bills should be reimbursed because of work-related usage. The reasons for the switch have nothing to do with GreenByte’s technical ability to make good on its promise. In early user tests, smart data pricing delivered everything that DataMi’s patents predicted.

But politics got in the way.

A huge debate has erupted about the degree to which Internet carriers should be subject to a concept known as net neutrality. In its simplest form, the idea is that Internet service providers such as AT&T, Comcast, and Verizon shouldn’t offer preferential treatment to certain types of content. Instead, they should send everything to their customers with their “best efforts”—as fast as they can manage. Nobody can pay your ISP for a “fast lane” to your house. Carriers can’t show favoritism toward any of their own services or applications. And nobody providing lawful content can be slowed or blocked.

At this point, net neutrality is only a principle and not a law. Though the FCC put an ambiguously worded version on the books in 2010, it was struck down this year by a federal district court. But now, as the FCC is deliberating how to redo the policy, it’s facing passionate demands to restore and possibly even tighten the rules, giving ISPs even less leeway to engage in what regulators have typically called “reasonable network management.”

Until about a year ago, Chiang and his colleagues thought their data-pricing idea had so much common-sense appeal that no one would regard it as an assault on net neutrality—even though it would let carriers charge people more for constant access. But then, as the debate heated up, everything got trickier. Ardent defenders of net neutrality began painting ever darker pictures of how the Internet could suffer if anyone treated anyone’s traffic differently. Even though Chiang and Saluja saw variable pricing as pro-consumer, they had no lobbyists or legal team and decided they couldn’t afford a drawn-out battle to establish that they weren’t on the wrong side.

For network engineers, DataMi’s about-face isn’t an isolated example. They fear that overly strict net neutrality rules could limit their ability to reconfigure the Internet so it can handle rapidly growing traffic loads.

Dipankar Raychaudhuri, who studies telecom issues as a professor of electrical and computer engineering at Rutgers University, points out that the Internet never has been entirely neutral. Wireless networks, for example, have been built for many years with features that help identify users whose weak connections are impairing the network with slow traffic and incessant requests for dropped packets to be resent. Carriers’ technology assures that such users’ access is rapidly constrained, so that one person’s bad connection doesn’t create a traffic jam for everyone. In such situations, strict adherence to net neutrality goes by the wayside: one user’s experience is degraded so that hundreds of others don’t suffer. As Raychaudhuri sees it, the Internet has been able to progress because net neutrality has been treated as one of many objectives that can be balanced against one another. If net neutrality becomes completely inviolable, it’s a different story. Inventors’ hands are tied. Other types of progress become harder.

Rather than debate such subtleties, net neutrality’s loudest boosters have been staging a series of simplistic—but highly entertaining—skits in an effort to rally the public to their side. In September, popular websites such as Reddit and Kickstarter simulated page-loading debacles as a way of getting visitors to believe that if net neutrality isn’t enacted, the Internet could slow to a crawl. That argument has been picked up by TV comedians such as Jimmy Kimmel, who showed a track meet in which the best sprinters represented cable companies with their own fast lanes. A stumbling buffoon in his underwear portrayed the shabby delivery standards that everyone else would endure.

Even President Barack Obama has been publicly reminding regulators of his commitment to net neutrality. In August he declared, “You don’t want to start getting a differentiation in how accessible the Internet is to different users. You want to leave it open so the next Google and the next Facebook can succeed.”

Clearly, most Americans aren’t happy with their Internet service. It costs more to get online in the United States than just about anywhere else in the developed world, according to a 2013 survey by the New America Foundation. In fact, U.S. service is sometimes twice as expensive as what’s available in Europe—and slower, too. Meanwhile, the University of Michigan found in a recent public survey that U.S. Internet service providers rank dead last in customer satisfaction scores against 42 other industries. Specific failings range from unreliable service to dismal call-center performance.

With lots of U.S. consumers wanting the government to do something about Internet service, strengthening net neutrality feels like a way to do it. Given that most Internet providers are urging the FCC to let this principle disappear from the books, it’s natural to call for the opposite approach. Yet that would probably be the wrong move. It’s possible to overdose on something even as benign-sounding as neutrality.


The two sides in the net neutrality debate sometimes seem to speak two different languages, rooted in two different ways of seeing the Internet. Their contrasting perspectives reflect the fact that the Internet arose in an ad hoc fashion; there is no Internet constitution to cite.

Nonetheless, many legal scholars like to point to their equivalent of the Federalist Papers: a 1981 article by computer scientists Jerome Saltzer, David Reed, and David Clark. The authors’ ambitions for that paper (“End-to-End Arguments in System Design”) had been modest: to lay out technical reasons why tasks such as error correction should be performed at the edges, or end points, of the network—where the users are—rather than at the core. In other words, ISPs should operate “dumb pipes” that merely pass traffic along. This paper took on a remarkable second life as the Internet grew. In his 2000 book Code, a discussion of how to regulate the Internet, Harvard law professor Lawrence Lessig said the lack of centralized control embodied in the 1981 end-to-end principle was “one of the most important reasons that the Internet produced the innovation and growth that it has enjoyed.”

The Internet has progressed because net neutrality has been one of many objectives that can be balanced against one another. If neutrality becomes completely inviolable, it’s a different story.

Tim Wu built on that idea in a 2002 article published when he was a law professor at the University of Virginia. In that and subsequent papers, he wrote that the end-to-end principle stimulated innovation because it made possible “a Darwinian competition among every conceivable use of the Internet so that only the best survive.” To promote that competition, he said, “network neutrality” would be necessary to eliminate bias for or against any particular application.

Wu acknowledged that this was a new concept, with “unavoidable vagueness” about the dividing line between allowable network-management decisions and impermissible bias. But he expressed hope that others would refine his idea and make it more precise.

That never happened. The line remains as blurry as ever, which is one reason the debate over net neutrality is so intense.

Barbara van Schewick, a leading Internet scholar at Stanford and a former member of Lessig’s research team, expresses concern that if profit-hungry companies are left unfettered to choose how to handle various types of traffic, they “will continue to change the internal structure of the Internet in ways that are good for them, but not necessarily for the rest of us.” She warns of the perils of letting Internet providers promote their own versions of popular services (such as Internet messaging or Internet telephony) while degrading or blocking customers’ ability to use independent services (such as WhatsApp in messaging or Skype in telephony). Such practices have occasionally popped up in Germany and other European markets, but they have rarely been seen in the United States, a disparity that van Schewick credits to the FCC’s explicit or implicit commitments to net neutrality.

Internet service providers such as AT&T have publicly insisted that they wouldn’t ever rig their networks to promote their own applications, because such obvious favoritism would cause customers to cancel service en masse. Skeptics counter that in many locales, consumers have little choice but to stick with their current broadband provider, because there is barely any competition.

Van Schewick also argues that it would be a mistake to let the likes of AT&T or Comcast charge independent content and service creators (including Internet telephony providers such as Skype or Vonage) to secure the best possible access to end users. Though such access fees exist in other industries—cereal and toothpaste companies, for example, pay “slotting fees” to major grocers in order to get optimal shelf space in stores—van Schewick warns that charging such fees to online companies would “make it more difficult for entrepreneurs to get outside funding.” In other recent writings, she has said it would be ill-advised to let carriers decide without input from customers whether to optimize different versions of their services for different types of traffic, such as video versus speech and text.

But while van Schewick and other advocates are trying to promote an “open Internet,” codifying too many overarching principles for the Internet makes many engineers uncomfortable. In their view, the network is a constant work in progress, requiring endless pragmatism. Its backbone is constantly being torn apart and rebuilt. The best means of connecting various networks with one another are always in flux.

“You can’t change congestion by passing net neutrality or doing that kind of thing,” says Tom Leighton, cofounder and chief executive of Akamai Technologies. His company has been speeding Internet traffic since the late 1990s, chiefly by providing more than 150,000 servers around the world that make it possible for content creators to store their most-demanded material as close to their various users as possible. It’s the kind of advance in network management that helped the Internet survive the huge increases in traffic over the last two decades. To keep traffic humming online, Leighton says, “you’re going to need technology.”

If some people want their Internet connections to deliver ultrahigh-resolution movies, they might be better served by flexible arrangements that eschew strict equity for all bits and instead prioritize video.

A central tenet of net neutrality is that “best efforts” should be applied equally when transmitting every packet moving through the Internet, regardless of who the sender, recipient, or carriers might be. But that principle merely freezes the setup of the Internet as it existed nearly a quarter-century ago, says Michael Katz, an economist at the University of California, Berkeley, who has worked for the FCC and consulted for Verizon. “You can say that every bit is a bit,” Katz adds, “but every bitstream isn’t the same bitstream.” Video and voice transmissions are highly vulnerable to errors, delays, and packet loss. Data transmissions can survive rougher handling. If some consumers want their Internet connections to deliver ultrahigh-resolution movies with perfect fidelity, those people would be better served, Katz argues, by more flexible arrangements that might indeed prioritize video. Efficiency might be more desirable than a strict adherence to equity for all bits.

House of Cards

About a year ago, Netflix’s customers noticed something disquieting when they tried to stream popular shows such as House of Cards. Their download speeds became annoyingly slow and some shows wouldn’t load at all, regardless of whether these customers relied on Time Warner Cable, Verizon, AT&T, or Comcast. Network congestion had taken hold—with transmission speeds dropping as much as 30 percent, according to Netflix’s own data. Last March, Netflix’s CEO, Reed Hastings, lashed out at the major U.S. Internet service providers, accusing them of constraining Netflix’s performance and pressuring his company to pay big interconnection fees.

Over the next few months, Netflix and its allies portrayed this slowdown as an example of cable companies’ most selfish behavior. In communications with the FCC, Netflix called for a “strong version” of net neutrality that would block the companies from charging fees to online service providers. In his blog, Hastings declared that net neutrality must be “defended and strengthened … to ensure the Internet remains humanity’s most important platform for progress.”

But the situation isn’t as black-and-white as Hastings’s indignant posts suggested.

For many years, high-volume sites run by Facebook, YouTube, Apple, and the like have been negotiating arrangements with many companies that ferry data to your Internet service provider—backbone operators, transit providers, and content delivery networks—to ensure that the most popular content is distributed as smoothly as possible. Often, this means paying a company such as Akamai to stash copies of highly in-demand content on multiple servers all over the world, so that a stampede for World Cup highlights creates as little strain as possible on the overall Internet.

There’s no standard way that these distribution arrangements are negotiated. Sometimes no money changes hands. In other situations, content companies pay for distribution. In theory, distribution companies could pay for content. In Netflix’s case, as demand has skyrocketed for its movies and TV shows, the company has negotiated a wide range of ways to help route its content around the Internet as efficiently as possible.

As Ars Technica reported earlier this year, Netflix started to realign its distribution methods in mid-2013. As its traffic soared, that created greater demands on all the Internet service providers that needed to handle House of Cards and its kin. By some estimates, Netflix last year was accounting for as much as one-third of all U.S. Internet traffic on Friday evenings. One of Netflix’s distribution allies (Level 3) restructured its terms with Comcast, reflecting the expenses associated with extra network connections, known as peering points, that Comcast needed to install in order to handle this rising traffic. Another (Cogent Communications) balked at the idea of defraying Comcast’s costs, and as a result, additional connections from Cogent to Comcast weren’t installed.

The result: Netflix’s videos began to stutter. In the short term, Netflix resolved the problem by paying for more of the peering points that carriers such as Comcast and Verizon required. More strategically, Netflix is arranging to put its servers in Internet service providers’ facilities, providing them with easier access to its content.

In the long run, carriers and content companies are likely to keep tussling about the ways they connect—simply because these are the sorts of business contracts that must be revisited as circumstances change. That’s why Hundt, FCC chairman from 1993 to 1997, says it’s a mistake to portray Netflix’s scuffle with the carriers as a critical test of the neutrality principle. It’s more like a routine business dispute, he says. “This is a battle between the rich and the wealthy,” he adds. “Both sides will have to figure out, on their own, how to get along.”

Hundt says the Netflix fight shouldn’t distract regulators who are trying to figure out the best way to keep the Internet open. They should be focusing, he says, on making sure that everyday customers are getting high-speed Internet as cheaply and reliably as possible, and that small-time publishers of Internet content can distribute their work. It’s worth noting that much of the lobbying in favor of net neutrality is coming from large, publicly traded companies that make momentary allusions to the well-being of garage-type startups but are mainly focused on disputes that apply to the Internet’s biggest players. A tiny video startup doesn’t generate enough volume to force Comcast to install extra peering points.

Zero Rating

In the rest of the world, where net neutrality is not insisted on, innovative approaches to wireless Internet pricing are catching on. At the top of the list is “zero rating,” in which consumers are allowed to try certain applications without incurring any bandwidth-usage charges. The app providers usually pay the wireless carriers to offer that access as a way of building up their market share in a hurry.

In much of Africa, people with limited usage plans can enjoy free access to Facebook or Wikipedia this way. In Europe, many music-streaming sites have hammered out arrangements with various wireless carriers in which zero-rating promotions become a major means of marketing. In China and South Korea, subsidized wireless options are springing up too. Such arrangements can help hold down mobile-phone bills and possibly even get people online for the first time.

Much of the lobbying in favor of net neutrality is coming from large, publicly traded companies that make momentary allusions to the well-being of garage-type startups.

In the United States, T-Mobile lets customers tap into a half-dozen music sites, such as Pandora and Spotify, without incurring usage charges. And AT&T has been experimenting with zero rating. But overall, things are moving slowly.

Consumers around the globe may find zero rating delightful, but net neutrality champions such as Jeremy Malcolm, senior global policy analyst at the Electronic Frontier Foundation, object on principle because it lets content providers pay carriers for access to consumers. In his view, carriers can’t be trusted in any situation that involves special deals for certain services.

When Tim Wu talked about net neutrality a decade ago, he framed it as a way of ensuring maximum competition on the Internet. But in the current debate, that rationale is in danger of being coöpted into a protectionist defense of the status quo. If there’s anything the Internet’s evolution has taught us, it’s that innovation comes rapidly, and in unexpected ways. We need a net neutrality strategy that prevents the big Internet service providers from abusing their power—but still allows them to optimize the Internet for the next wave of innovation and efficiency.


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