The Future of the Internet

I've long subscribed to the philosophy that this existence basically widdles down to two things: energy and information. The issue with energy is obvious although its solution might not be so straightforward. Information is more conceptual. It comes down to management really. How do we deal with it?

Information is about content and delivery and its the segregation of these two concepts that we continue to struggle with. While the two should exist independently, they cannot exist exclusively of each other. Great content is meaningless if the target audience can't get access and infrastructure is irrelevant if there isn't interesting stuff driving demand.

The dawn of the Information Age began with the Internet for good reason. It's the ultimate content delivery system. The problem? Some of the largest industries on the planet have been prospering for decades without it as their primary platform and its in their personal best interest to resist such change and continue to control both content and delivery.

So who are the important players? This week it's all about AT&T, Netflix and China.

First, in the wired world, AT&T decided last week to start capping their broadband Internet services, which from a technological perspective is a total disgrace. Sure, we have no idea what the actual cost numbers are for obvious reasons but as far as we know, bandwidth continues to get cheaper. There's two likely scenarios here and they both make the 4th largest non-oil company in the U.S. look stupid.

If the issue is capacity then this whole debacle speaks very poorly for AT&T management and their long term investment in infrastructure, a situation that certainly falls in line with their inability to deal with the influx of smartphones post-iPhone exclusivity.

If the issue comes down to dollars and cents, as some are suspecting, then a grueling battle lies ahead. The idea here is that AT&T assumes their typical customer won't care (98% will never reach the cap). Better yet, if it's a problem, they either pay more or they adjust their behavior. Both outcomes hinder forward progress.

The recent surge in Netflix traffic since the company’s transition to streaming services means that rising problem for ISP’s is no longer the nerdy pirate torrenting massive amounts of porn at 4 a.m. but rather the mainstream user coming home to watch television after work.

So how much Netflix can you watch with a cap of 150GB / month? About 7 hours a day (calculated using Netflix’s data), less if it’s HD and even less if you have roommates or a family.

You can hear the tectonic plates shifting (Too soon?). More than a content provider, Netflix is now a content creator. It is a testament to the growing industry clout of a company once known for loaning DVD's by mail. Now they have their own David Fincher series. http://online.wsj.com/article/SB10001424052748703512404576208972975699708.html

Video's final migration to the Internet has always made complete sense from a practical perspective. People want exactly what they want, when they want it, for as long as they want it. It's bar none, the most efficient manner of content delivery. With the technology in place, it should only be a matter of time.

But the biggest hurdles for the likes of Google, Amazon, and Apple in truly invading the living room is legal access to content. Really, the only thing stopping the revolution is the establishment.

Netflix is the anti-establishment. It's already the reason why so many users are using up so much bandwidth during peak hours and a potential motive for any ISP considering caps on broadband Internet access.

AT&T dominated wireless carrier news as well as the company announced the acquisition of T-Mobile, putting the company firmly at the top of the heap when it comes to total users leaving Verizon in second and Sprint a distant third.

So the company that wooed users with iPhone exclusivity is revising its customer acquisition strategy: let's just buy them outright! (For the measly price of $39 billion.)

Is it then any surprise that AT&T has by far the worst 4G speed out of all its major rivals? This is exactly what this industry doesn't need — less competition.

The overriding theme here is of net neutrality, the idea that data can flow freely without discrimination, and it's fundamental to the Internet as we know it. We had a candid conversation with Tim Wu, founder of the term and FTC senior advisor.

Topics of discussion? Net neutrality, information empires, and freedom.

A key aspect of content and delivery is filtration. Moving forward, filters will become a defining part of our life as we learn to deal with increasing noise, but it's a double edged sword.

For instance, I truly appreciate it when Gmail blocks spam. Sometimes, important e-mails get lost in the shuffle. This is more of an algorithmic issue. What happens then when governments control the filter and it's not spam they're blocking but real news.

For most Chinese, this is their everyday reality and in light of protests in the Middle East, Beijing has upped the ante, killing gmail, disabling VPN's, and blocking more websites.

In the last year or so, I've noticed a surge in the number of Facebook friend requests from attractive females. Despite what my ego would like to imply from this stat, the majority of these 'hotties' are bots, designed either to propagate spam or mine personal information.

This is, on the surface, one of those harmless distractions of the Internet, just another indicator of where Facebook is in it's cycle of relevance. It seems though that this may be part of a much broader trend, one in which real people online could soon become vastly outnumbered by controlled or autonomous botnets.

For some, it's part of the fabric of what the Internet is: "a place where you can pretend to have girlfriend.

For others, like the U.S. government, it's yet another means of mass control, propaganda in the digital age.

Just like global warming, piracy has a huge PR problem. It's fitting that the real world equivalent of these Internet 'thieves' are a bunch of Somalian anarchists. That's exactly the kind of imagery they'd want you to connect it with, they being the government along with the music, film, and video game community.

But this couldn't be further from the truth. In fact, in one of the few independent studies on the subject, most people see piracy as totally normal. There's no stigma attached and the practice is growing by the day.

Derivative of a free and neutral Internet, piracy is a fundamental driver of change. It's a natural hedge against a non-competitive market environment. Really what it often is is a statement: your shit ain't worth buying. (At least at the stated price.)

According to the aforementioned study, people are generally more than willing to pay for their goods, as Americans have been doing in spite of freely available pirated material easily available.

It's in impoverished nations where the real issues lie, nations with limited technology industries. If a copy of Microsoft Office costs you two months pay, you're probably going to get the 'cheaper' version.

The bigger issue now is how the government decides to deal with it. The answer? With great enthusiasm. Yup, in an effort to help industries of middle-men keep their jobs, the White House will now be treating illegal streamers as if they were terrorists.

Look, I get that big business needs to protect its content yet piracy remains a red herring for what is, in the long run, a failing business model in desperate need of revamping. Blaming piracy won't make people buy shitty albums or care about 3D movies. Suing (and now wiretapping) them will just piss them off.

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