April 28, 2014
Volume XLVII, Issue 12
FCC Internet Broadband Plans Stir "Net Neutrality" Debate
Excerpted from Seattle Times Report by Jim Puzzanghera and Meg James
Consumers could end-up the losers in a high-stakes battle among regulators, broadband providers, and online entertainment giants over access to the Internet's fastest speeds.
Thursday's proposal from the head of the Federal Communications Commission (FCC) would allow network owners such as AT&T to levy extra charges on Netflix and other video purveyors for speedier delivery of content.
Those costs, consumer advocates said, ultimately would land on consumers' monthly bills. The hotly debated changes also could push smaller video content providers out of business, driving up costs for those services as well, the advocates warned.
"It could create a tiered Internet where consumers either pay more for content and speed, or get left behind with fewer choices," warned Delara Derakhshani, Policy Counsel for Consumers Union.
It would be a major victory for the network providers, which spend billions of dollars a year maintaining and upgrading their networks. They long have argued that companies consuming the most bandwidth — usually with video streams — should pay extra for that privilege.
The content providers have countered that equal access is necessary to maintain a level playing field in an exploding marketplace for streaming video.
"The proposed approach is the fastest lane to punish consumers and Internet innovators," video streaming company Netflix said Thursday. The plan would be particularly bad for smaller businesses and their customers, said Patrick Clinger, Founder and Chief Executive of ProBoards, an online forum service.
"If smaller companies can't afford the faster lane, they won't be able to compete with larger companies," he said. "Customers of smaller companies would have a lower quality experience, and that could cost companies more business."
FCC Chairman Tom Wheeler sharply defended his plan Thursday, signaling the start of an intense debate likely to roil the industry in the coming months.
He pointed out that federal courts already have tossed out the FCC's Net Neutrality rules twice — most recently in January — so consumers are already unprotected from the vagaries of broadband providers and Internet companies. The agency, he said, needed to revise its approach or risk another reversal by the courts.
He said his plan would not allow Internet service providers (ISPs) or online companies to abuse consumers or small entrepreneurs.
"To be very direct, the proposal would establish that behavior harmful to consumers or competition by limiting the openness of the Internet will not be permitted," Wheeler argued Thursday. His said his plan would prohibit network owners from blocking legal content and require them to provide a baseline level of service to subscribers.
The FCC also would make broadband providers act in a "commercially reasonable manner" to avoid any harm to consumers. And any deals for faster content delivery would be subject to FCC review.
The agency, for instance, could allow a faster connection that would allow a doctor to check information from a heart monitor on a patient being treated at home, said an agency official, who spoke on condition of anonymity because details of the proposal have not been made public.
The FCC has released only an outline of Wheeler's plan. A detailed version was circulated to the FCC's four other commissioners Thursday. It is expected to be released publicly May 15th, when the members are scheduled to vote on starting the rule-making process and soliciting comments from consumers and businesses.
Wheeler, a Democrat, is open to even tougher rules for Internet traffic, such as putting broadband providers in the same highly regulated category as telephone companies, the FCC official said.
Many Democrats have advocated such a move. President Obama was a strong initial supporter of the concept that the government should make sure ISPs don't act as gatekeepers of legal content.
But consumer advocates and public interest groups have lambasted Wheeler's proposal. And that could make it difficult for him to get the votes of his fellow Democrats on the FCC.
Net Neutrality is strongly supported by liberals, and Democratic lawmakers said they would be watching closely to make sure the rules aren't weak. Republicans strongly oppose any Net Neutrality rules, arguing the Internet has flourished because it has been mostly free of government regulation.
Report from CEO Marty Lafferty
 In an unprecedented editorial decision, we dedicate this edition of DCINFO to just two timely and extremely important issues: the US Federal Communications Commission's (FCC) proposed Internet rulemaking and the Supreme Court's hearing of the Aereo case.
Readers will recall that the US Court of Appeals for the second time struck down the FCC's Open Internet Order in January.
However, the court also affirmed that the FCC had authority to regulate broadband, giving the agency a new opportunity to bring back non-discrimination and no-blocking regulations for Internet service providers (ISPs).
The FCC now intends to vote May 15th on new so-called "Net Neutrality" rules circulated internally at the FCC on Thursday by Chairman Tom Wheeler.
The draft rules will then be formally proposed and available for public comment and it remains the Chairman's ambitious goal to conclude this proceeding and have enforceable rules by the end of the year.
Chairman Wheeler also released a statement Thursday intending to clarify his proposed new rules in the wake of a plethora of sharply critical reports of their potentially harmful impact on the Internet.
His proposal, explains Wheeler, would reinstate the Open Internet concepts adopted by the Commission in 2010, but subsequently remanded by the DC Circuit.
According to the Chairman, it would not change the underlying goals of transparency, no blocking of lawful content, and no unreasonable discrimination among users established by the 2010 Rule.
Rather, the new rules would follow the roadmap established by the Court as to how to enforce rules of the road that protect an Open Internet.
They would codify the prohibition of behavior harmful to consumers or competition by limiting the openness of the Internet.
Regarding claims that earlier policies of the Commission are being abandoned, Wheeler's response is that the Court of Appeals prescribed a standard of "commercially reasonable" conduct for Internet service providers (ISPs), that the FCC must act within that guidance, and that even the application of common-carrier status to the Internet would only ban "unjust and unreasonable discrimination."
The FCC proposes to use the "commercially reasonable" test to protect against harm to competition and consumers stemming from abusive market activity.
Chairman Wheeler summarizes his Notice as follows:
"1. That all ISPs must transparently disclose to their subscribers and users all relevant information as to the policies that govern their network;
2. That no legal content may be blocked; and
3. That ISPs may not act in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity."
While it's hard to argue with the Chairman's stated goals, we have to ask whether his proposed rulemaking is the best approach.
Virtually all large ISPs have pledged to abide by the principles of open Internet reinforced by these rules.
But without a formal rule, could voluntary pledges be rescinded over time and leave the door open for unequal treatment?
A supportive metaphor for permitting a fast lane to be introduced on the Internet for those content providers and consumers willing to pay extra for it is this one: package delivery in the physical world.
FedEx, UPS, and the US Postal Service each offer tiered services with different delivery speeds and levels of protection, and these systems are not perceived as broken or grossly unfair to the public.
But as in any such system, the devil will be in the details.
The rules are expected to require that network operators disclose how they manage Internet traffic, prohibit the restriction of consumer web surfing activity, and prescribe a case-by-case approach to reviewing practices adopted by Internet providers.
However, the rules are not expected to address the issue of interconnection or the agreements under which content providers compensate operators for faster access.
Wheeler's interpretation is that the scope of FCC rulemaking is limited to the last leg of the network that reaches the consumer.
Using the physical package delivery model, this would mean that rules to ensure equitable treatment would only apply to the final truck-roll, leaving out the jet, rail, and/or truck transport of a package preceding its final delivery.
The problem with that approach is fairly clear.
For the DCIA's part, we are seeking a common ground among our Member companies that include the range of players most affected here: broadband network operators, major cloud computing solutions providers, content rights-holders, and web-based start-up companies.
Together these organizations have accomplished unprecedented advances in communications technologies and businesses built upon them, largely without and in some ways thanks to the absence of heavy-handed government intervention.
We will respond formally following the May 15th disclosure of the proposed rules by the FCC, and meanwhile welcome your views, which you may submit to info@dcia.info for consideration. Share wisely, and take care.
FCC, in a Shift, Backs Fast Lanes for Web Traffic
Excerpted from NY Times Report by Edward Wyatt
The principle that all Internet content should be treated equally as it flows through cables and pipes to consumers looks all but dead.
The Federal Communications Commission (FCC) said on Wednesday that it would propose new rules that allow companies like Disney, Google, or Netflix to pay Internet service providers like Comcast and Verizon for special, faster lanes to send video and other content to their customers.
The proposed changes would affect what is known as Net Neutrality — the idea that no providers of legal Internet content should face discrimination in providing offerings to consumers, and that users should have equal access to see any legal content they choose.
The proposal comes three months after a federal appeals court struck down, for the second time, agency rules intended to guarantee a free and open Internet.
Tom Wheeler, the FCC Chairman, defended the agency's plans late Wednesday, saying speculation that the FCC was "gutting the open Internet rule" is "flat out wrong." Rather, he said, the new rules will provide for Net Neutrality along the lines of the appeals court's decision.
Still, the regulations could radically reshape how Internet content is delivered to consumers. For example, if a gaming company cannot afford the fast track to players, customers could lose interest and its product could fail.
The rules are also likely to eventually raise prices as the likes of Disney and Netflix pass on to customers whatever they pay for the speedier lanes, which are the digital equivalent of an uncongested car pool lane on a busy freeway.
Consumer groups immediately attacked the proposal, saying that not only would costs rise, but also that big, rich companies with the money to pay large fees to Internet service providers (ISPs) would be favored over small start-ups with innovative business models — stifling the birth of the next Facebook or Twitter.
"If it goes forward, this capitulation will represent Washington at its worst," said Todd O'Boyle, Program Director of Common Cause's Media and Democracy Reform Initiative. "Americans were promised, and deserve, an Internet that is free of toll roads, fast lanes and censorship — corporate or governmental."
If the new rules deliver anything less, he added, "that would be a betrayal."
Mr. Wheeler rebuffed such criticism. "There is no 'turnaround in policy,' " he said. "The same rules will apply to all Internet content. As with the original Open Internet rules, and consistent with the court's decision, behavior that harms consumers or competition will not be permitted."
Broadband companies have pushed for the right to build special lanes. Verizon said during appeals court arguments that if it could make those kinds of deals, it would.
Under the proposal, broadband providers would have to disclose how they treat all Internet traffic and on what terms they offer more rapid lanes, and would be required to act "in a commercially reasonable manner," agency officials said. That standard would be fleshed out as the agency seeks public comment.
The proposed rules would also require ISPs to disclose whether in assigning faster lanes, they have favored their affiliated companies that provide content. That could have significant implications for Comcast, the nation's largest provider of high-speed Internet service, because it owns NBCUniversal.
Also, Comcast is asking for government permission to take over Time Warner Cable, the third-largest broadband provider, and opponents of the merger say that expanding its reach as a broadband company will give Comcast more incentive to favor its own content over that of unaffiliated programmers.
Mr. Wheeler has signaled for months that the federal appeals court decision striking down the earlier rules could force the Commission to loosen its definitions of what constitutes an Open Internet.
Those earlier rules effectively barred ISPs from making deals with services like Amazon or Netflix to allow those companies to pay to stream their products to viewers through a faster, express lane on the web. The court said that because the Internet is not considered a utility under federal law, it was not subject to that sort of regulation.
Opponents of the new proposed rules said they appeared to be full of holes, particularly in seeking to impose the "commercially reasonable" standard.
"The very essence of a 'commercial reasonableness' standard is discrimination," Michael Weinberg, a Vice President at Public Knowledge, a consumer advocacy group, said. "And the core of Net Neutrality is nondiscrimination."
Mr. Weinberg added that the Commission and courts had acknowledged that it could be commercially reasonable for a broadband provider to charge a content company higher rates for access to consumers because that company's service was competitively threatening.
"This standard allows ISPs to impose a new price of entry for innovation on the Internet," he said.
Consumers can pay ISPs for a higher-speed Internet connection. But whatever speed they choose, under the new rules, they might get some content faster, depending on what the content provider has paid for.
The fight over Net Neutrality has gone on for at least a decade, and is likely to continue at least until the FCC settles on new rules. Each of the last two times the agency has written rules, one of the ISPs has taken it to court to have the rules invalidated.
If anything, lobbying over the details of the new Net Neutrality standard is likely to increase now that the federal court has provided a framework for the FCC to work from as it fills in the specifics of its regulatory authority.
The proposed rules, drafted by Mr. Wheeler and his staff, were circulated to the agency's other four Commissioners on Thursday and will be released for public comment on May 15th. They are likely to be put to a vote by the full commission by the end of the year.
News of the FCC proposal was first reported online by The Wall Street Journal.
US "Net Neutrality" Goes Viral and Venal
Excerpted from TechZone Report by Peter Bernstein
One would think that all of the commotion set off by the disclosure/leak on April 23rd by the The Wall Street Journal about US Federal Communications Commission (FCC) head Tom Wheeler's decision to put out a Notice of Proposed Rulemaking on April 24th was a sign of the Apocalypse. Before Chairman Wheeler had a chance to present his proposal, comments from those in favor of what they thought would be included and those against went viral.
Depending on one's perspective a revised Open Internet regime (aka "Net Neutrality) from the FCC— in the wake of the US Supreme Court overturning the current regulatory structure in Verizon v. FCC -- is the end of the world as we know it, or the dawn of better days ahead. Interestingly, it could be both.
Just as a quick explanation, the "venal" reference in the headline speaks to the rush to publish comments that characterized Wheeler's proposal as "Payola." There were even postings that spoke of this as a "pay-to-play" regime and that Wheeler was returning to his roots as a cable and cellular industry lobbyist. Implied is that this falls into the category of the classic definition of venal as being capable of being bought or obtained for money or other valuable consideration and typically refers to acts of corruption, especially bribery. This is grossly unfair, but certainly made for eye-catching copy.
Net Neutrality as regulators around the world have found in struggling with the issue is extremely complicated. It gets to a myriad of fundamental issues concerning free speech, commercial interests (whose ox may or may not get gored and who will prosper) and the universal availability to state-of-the-art digital communications in an increasingly connected world. And, that is just the proverbial tip of the iceberg.
In fact, rather than review here the pros and cons, I cannot recommend enough the special guest posting by Daniel Dimov, who is a legal consultant to the InfoSec Institute, titled, The Net Neutrality Debate: What You Need to Know.
As Dimov correctly concludes, Net Neutrality is a delicate balancing act. It is one where regulators have yet to find an equilibrium point, and here in the US a combination of past FCC transgressions and now the court have only made things that much more complicated. As he explains the conundrum, "Any major involvement of the ISPs in the way their customers lawfully use the Internet leads to a wave of social protests and initiates political discussions. In turn, any proposal for a mandatory network neutrality raises fears about excessive government intervention in the market of Internet services and unintended consequences on the players of that market."
This is very serious and very tough stuff, and regardless of what policies do or do not get adopted when the dust settles, the probability that this will end up back in the lap of the Supreme Court is high. It is also likely that this will become a political hot potato. The reason is that in an election year, the temptation to collect for so many deep-pocketed interests is simply irresistible.
All of the above is cited as context for everyone to follow along as the drama that is Net Neutrality continues to unfold. Indeed, as a level-set, there is an additional posting that deserves to be read in its entirety. It is a posting from FCC Chairman Tom Wheeler on the FCC's official blog called Setting the Record Straight on the FCC's Open Internet Rules.
While I understand Wheeler's looking to the Verizon v. FCC decision for guidance, and I was with him certainly on the need for transparency and the resolve to not allow blocking of legal content, there is something that does not sit well when it comes to the term "Commercially Unreasonable." Hence, I am a bit conflicted as to how I feel about where we are.
I happen to be a bit old-school in the beliefs that cost-causers should be cost bearers. Thus, if Netflix and Google who are bandwidth hogs, the cost of which ultimately is reflected in our ISP rates, want to provide better quality experiences, I think ISPs should have the ability to make them pay for it.
Here in the US in many major cities like Orlando, FL and Houston, TX, there are now toll roads that parallel existing "freeways" which during rush hour will save lots of time if you are willing to pay for the privilege. Communications networks may not be totally there yet, but creating the toll portion of the superhighway for those who want me to have a better experience, seems both logical and inevitable. It is not hard to imagine a day when users have a choice of Netflix classic and Netflix premium, for example. It is called choice.
I chose Netflix as an example because as a fan of the hugely popular "House of Cards" I will continue to subscribe despite the fact that Netflix just this week announced it is raising prices on its streaming service. In other words, whether there is Net Neutrality or not I am going to be paying more. The question that Net Neutrality is deciding is whether I just pay Netflix more directly or I pay more to my ISP because I can get Netflix. History says, I will actually pay them both more. What I can hope is that if ISPs can introduce tiered pricing to content providers, particularly road hogs looking to improve their deliverables, is that the revenues realized are used to upgrade the network for all of us and not just the big guys.
I also happen to be very old school and agree with the foundational tenets of competition as articulated in historic FCC attempts to assure equal access and open interconnection. If ISP XYZ decides to offer a competing service to an over-the-top (OTT) or other content provider, that service should be under the same terms and conditions that apply to competitors. Indeed, the entry by ISPs into such markets with their own offerings are one way to assure prices charged for premium access and transport are commercially reasonable. And, while I feel for "innovators" without deep pockets who might not be able to afford to compete because of the cost of premium ISP services, that is a business decision that has to be factored into their plans and at least they would know what the costs of doing business were up front. This might be a damper on innovation, but to categorically say it will seems problematic at best.
Where the commercially unreasonable test as administered by the FCC on an ad hoc basis becomes a problem is that this hardly seems like an area the Commission needs to pursue. It only begs for the creation of a new annuity stream for the Federal Communications Bar Association. The FCC does not need to be in the business of managing markets.
At the risk of seeming neutral on Net Neutrality, my problem is the same as policy makers in that I see convincing arguments in support of those in favor and those against it. Like Dimov, there is no escaping that this is a complicated and delicate balancing act that needs to be dynamic rather than static, reflecting the realities of the accelerating pace of change that has engulfed every aspect of ICT around the world. One can only hope for a Solomon-like version of rough justice that leaves the Internet, which will be the only "public network of the future" sooner rather than later, open for business and for everyone.
The Wheeler proposal will be open for formal comments. If nothing else they should be appreciated for the entertainment value since hyperbole is always the order of the day in such comments because of the interests that at involved and the money at stake.
Back in January I wrote a column with my predictions on tech trends for 2014. I accurately predicted that Verizon's position on Net Neutrality would be upheld with major consequences. It is only April and it has already been a big year for those consequences to manifest themselves. Fasten your seat belts because it is going to get a lot bumpier.
Net Neutrality: We Need a Better Deal
Excerpted from BitTorrent Blog by CEO Eric Klinker
The FCC's new proposal for Net Neutrality rules include effectively abolishing it: proposing preferential treatment for certain traffic. In the wake of February's Netflix and Comcast deal, it becomes obvious that only companies willing to pay for access have traffic worthy of preferential treatment. The open Internet has been paywalled shut.
How did we get here?
The FCC's proposed path for Net Neutrality is a response to a profound shift in how our everyday Internet is now used every day. Our Internet architecture, inherited from the 1960s, was designed during a different era to address a different problem: sharing resources and moving text around between a few users. Today, this framework must move video, photo streams, and massive data sets — among 30 billion devices.
Because our Internet is destination-based, it relies on identified users and destinations. And as it has evolved into a vast content network, it increasingly presents ISPs and regulators with a great temptation: to easily identify and interfere with known heavy bandwidth users, like streaming video.
Photo and video represents the future of our everyday digital lives as rich media experiences. We've designed content for the Internet. But we didn't design the Internet for content.
Building an Internet for content.
The open Internet ushered in an era of sweeping social change. It democratized information and commerce. It triggered GDP growth; a rising standard of living. And it marked an age of nearly unprecedented innovation. We may never see anything like it again, if lawmakers have anything to do with it.
This is by its very definition discrimination. And it's not abstract; bits or bytes. In a world where we speak in shared photos and video streams, to bias traffic is to bar free speech. In a world where Internet access is fundamental to enterprise and invention, to bias traffic is to effectively end innovation. The stakes are this high. We are short changing-future generations.
We have fundamentally wronged the Internet. But also, for a decade now: we were doing it wrong. The FCC is regulating what code did not. The architecture of the Internet is not built for 21st century content consumption. And now we are paying the price.
Can we re-architecture the web for equality?
Many smart researchers are already thinking about this problem. Broadly speaking, this re-imagined Internet is often called Content Centric Networking. The closest working example we have to a Content Centric Network today is BitTorrent. What if heavy bandwidth users, say, Netflix, for example, worked more like BitTorrent?
If they did, each stream — each piece of content — would have a unique address, and would be streamed peer-to-peer (P2P). That means that Netflix traffic would no longer be coming from one or two places that are easy to block. Instead, it would be coming from everywhere, all at once; from addresses that were not easily identified as Netflix addresses — from addresses all across the Internet.
To the ISP, they are simply zeroes and ones.
All equal.
As we know from experience, it's not so easy to block or censor a Content Centric Network. Historically, attacks from ISPs seeking to spoof the BitTorrent protocol have been easily solved with encryption, assuming an ISP wanted to take such steps of manipulating traffic on their network.
Furthermore, in P2P systems, each consumer is also a producer. They are, in theory, symmetric. That means that the resulting traffic on the peering links that still must carry the content should be nearly symmetric as well. And that is the economic foundation for settlement free peering: a situation where it's in each party's interest to directly connect.
Making video services P2P is a manageable step. BitTorrent technology today delivers orders of magnitude more content for a fraction of the cost. And with innovations like BitTorrent's Micro Transport Protocol, or uTP, a transport protocol that is designed to ease congestion, this would be some of the friendliest traffic on the Internet. It could work.
This is just a start, and BitTorrent is but the first glimmer of what it could mean. A more fully formed Content Centric Network is an area of considerable research that, once realized, should take us well beyond these working examples; towards the Internet we deserve: an Internet of What, not an Internet of Where, and not an Internet of Who.
Decentralized technology could reintroduce equality into the post-neutral web; solving what regulation will not.
Caching content could eliminate the need for bias, by reducing congestion.
April 24th's proposal is also a state of the union on Internet nation. Our pipes weren't built for the Internet of Things (IoT). Preferential traffic is presented as a response to congestion, but it looks more like a response to greed. Because congestion is also something that could be solved with technology.
Caching content is one way to improve the efficiency of delivery. It seems logical that delivering one copy of the content to a cache inside the ISP network would alleviate a large amount of congestion currently being experienced at the peering links.
We could cache content at the very edge of the network, inside a living room, or on a mobile device. Content cached here could be delivered off peak, when the network is under-utilized.
For example, it could be cached at 4 AM, instead of 9 PM, when everyone wants to use the network. Furthermore, that content could be improved versions of the same, including very high quality 1080p or even 4k content. This content could then be viewed without the slightest buffering event.
Good for the network, good for consumers, and presumably good for the web's platforms as well.
Sounds easy, right? And who wouldn't want a high quality Internet experience that "just works"?
A more likely scenario can be found in what the FCC has already allowed in cable.
The economics of our cable bill will be familiar to all; with rates rising faster than inflation.
And now that cable essentially equals Internet access, why should we expect anything other than a fully compliant regulator engineering the same preferential economics?
Only this time it is something far more fundamental to our future than 400 channels of nothing on.
Netflix Researching "Large-Scale P2P Technology" for Streaming
Excerpted from Ars Technica Report by Jon Brodkin
When we wrote about the possibility of Netflix using a peer-to-peer (P2P) architecture for streaming earlier today, it seemed like more of a thought experiment than a real possibility.
But it turns out Netflix is looking for an engineer to research this very type of system. By searching Netflix job postings we found an opening for a senior software engineer who would work on Netflix's Open Connect content delivery network while researching how P2P technology could be used for streaming.
"Netflix seeks a seasoned Senior Software Engineer with a special focus in peer-to-peer networks," the listing says. Responsibilities include: research and architecture of large-scale P2P network technology as applicable to Netflix streaming; liaise with internal client and toolkit teams to integrate P2P as an additional delivery mechanism; and design and develop tools for the operation of P2P enabled clients in a production environment.
The successful applicant is required to have "At least five years of relevant experience with development and testing of large-scale P2P systems." Preferred qualifications include "Knowledge of and proven experience with P2P, CDN/HTTP cache/proxy technology."
The job posting appears to be at least a month old. When asked whether the company intends to stream video using P2P, a Netflix spokesperson replied only that "the best way to see it is that we look at all kinds of routes."
Our story this morning was spurred by a blog post written by BitTorrent CEO Eric Klinker, who argued that a P2P architecture would help Netflix deliver its traffic without having to pay Internet service providers (ISPs). We spoke with Klinker this afternoon, and he expanded on his thoughts.
"Netflix has a hard time getting traffic onto these networks. It's because they are in a hub-and-spoke model where the traffic flows in only one direction, from Netflix to the consumer," Klinker told Ars.
"Decentralized technology" could bring equality back to the web, the CEO says.
Netflix is paying Comcast for a direct connection to its network, even though it claims it should be eligible for "settlement-free peering," an exchange of traffic without money changing hands. Comcast (and other ISPs) say Netflix should pay up, since the video streaming company sends more traffic to consumers than vice versa.
"The foundation for settlement-free peering is you need something resembling a balance in traffic," Klinker said. "If you could make Netflix traffic look more like that, then you would have an opportunity to ride the same settlement-free economics that all the Tier 1 ISPs use to connect with each other."
Netflix CEO Reed Hastings himself has made the same point, writing that the company has asked ISPs "if we too would qualify for no-fee interconnect if we changed our service to upload as much data as we download—thus filling their upstream networks and nearly doubling our total traffic."
Given Netflix's job posting, that may be something the company is seriously considering.
Klinker stressed that his own idea is just a thought experiment and that he hasn't talked to Netflix on this topic. However, we asked him to describe how the system he envisions would work.
"I think you could use torrent technology in ways that provided a different user experience than torrents do today," Klinker said. "You could integrate torrents into something that looks exactly like Netflix today. It could even be a hybrid solution where they would begin to stream from servers, but over time if the content were particularly popular most of that load could be picked up by peers around their customer base."
This wouldn't be entirely unprecedented. The Vudu video service used P2P technology when it launched in 2007.
Movies would be downloaded by customers if Netflix adopted such a model, Klinker said. Naturally, that would raise concerns about copyright and piracy. "I would imagine the rights holders for the content would insist on some basic locking technologies," Klinker said. Movies or TV shows could be downloaded by consumers even before they became available to the general public, so it could be "living on my storage ready to go once that release date comes and the technology unlocks it," he said.
This wouldn't necessarily make it easier to copy and redistribute Netflix movies to non-subscribers, he argued, noting that shows like "House of Cards" are already pirated. "Is there a foolproof way to lock content? No there isn't, and even Netflix isn't one," he said.
Klinker pointed to a technology that his company developed a few years ago called BitTorrent DNA as a possible model for Netflix.
"For content companies that wanted to integrate a hybrid hub-and-spoke and P2P solution, the consumers would access the content on the servers first and begin to get the streams flowing from Netflix servers," he said. "But quickly the peer-to-peer components would kick in and determine how available the underlying content was throughout the peer network and then the clients would regulate how much came from the servers and how much came from other peers based on that availability. There's a lot of intelligence that was built into the edge of this network in BitTorrent DNA that did all that balancing and regulation and filling the buffer and keeping the playback smooth."
Consumers would need to have control over whether they participate and how much they download, in part because they might need to be mindful of data caps imposed by their ISPs.
We asked Klinker why consumers would want to help a multi-billion-dollar company like Netflix reduce its costs, and he noted that Netflix could pass on benefits with lower prices and better quality. "The consumer could see value just in a better experience or Netflix could share in the value of this solution to consumers. In other words it could be a discount on their subscription," he said.
The system would have to adapt to all the different devices consumers own. While a desktop or laptop and some gaming consoles could store video, plenty of other devices that connect to Netflix cannot.
"Over time you could integrate storage into the Rokus and the Apple TVs," Klinker said. "I would expect Netflix to take a very broad approach to the market where they would simply have the technology and make it available for devices that have storage."
While Netflix could sell its own hardware to solve the storage problem, Klinker said, "I wouldn't expect they would do that. I think their approach to the consumer electronics market is the right one, where they integrate and license their technology to all players and that way they get broad market adoption."
Theoretically, BitTorrent could help Netflix with building a P2P system, but Klinker said there haven't been any discussions along those lines. "We have done licensing deals in the past. It's not our core business, which today is largely focused on enterprise applications like BitTorrent Sync and our consumer clients," he said.
In Aereo's Supreme Court Case, What's Really on Trial Is the Cloud
Excerpted from NextGov Report by Zachary Seward
Anyone can stick an antenna in the air to watch broadcast television for free in the United States. And courts have said it's fine to record TV shows for watching later.
Aereo does both of those things. The start-up has put tiny antennas on rooftops in 11 American cities to pick up TV signals, which it then transmits over the Internet. Customers pay Aereo $8 to $12 a month to watch live and recorded broadcast television. It appeals to those who don't want to pay for cable TV but still want to watch "The Good Wife" on CBS or the Oscars on ABC -- cord cutters, in other words.
All of the major broadcast networks sued Aereo, calling it an obvious copyright violation. Under the law, TV shows can only be performed publicly by their copyright holders or those with a license, such as cable companies. The question before the US Supreme Court is whether Aereo's service amounts to a "public performance" of TV — which would be illegal, since Aereo has neither a copyright nor a license to do that — or something else that's actually legal.
Bars aren't allowed to charge money to watch a football game on a large television set because that's a public performance of a copyrighted work. Hotels can't buy one copy of a movie and transmit the signal to any room that requests it. Department stores need a special license to play music over speakers to all their customers. Courts have ruled that those are clearly public performances.
Aereo's status is less clear. The networks note that the Copyright Act of 1976 considers a performance to be public even if people watch it in different places at different times, which would seem to include Aereo. Of course, when that law was written, storing TV shows in the cloud would have seemed like science fiction; the Supreme Court hadn't even yet ruled that recording television on a Betamax tape was OK. But that may be beside the point: one reason Congress wrote the 1976 law in the first place was to prevent companies from retransmitting broadcast TV without a license. The technical details, arguably, don't matter.
In its defense, Aereo points to a 2008 appeals court ruling known as Cablevision, which said it was fine to record TV shows with a cloud-based DVR and watch them later. That's a private performance, the court found, and doesn't require a copyright license. Aereo constructed its service expressly to comply with that ruling. For example, Aereo uses one antenna at a time per customer and stores separate copies of TV programming — not the most efficient way to run the service — in an effort to keep things private and avoid a public performance. The court that issued the Cablevision ruling agreed last year that the same principles apply to Aereo and said the startup could keep doing its thing.
The Supreme Court heard arguments in that same case on April 22. That the justices took the case in the first place suggests they want to review the Cablevisiondecision, and may have a different interpretation of what constitutes a public performance. If so, that's bad news for Aereo.
Then the question becomes how sweepingly the court will rule. A broader judgment overturning Cablevisioncould make other technology that relies on cloud storage or transmits TV over the Internet seem like a copyright violation, too. How about Slingbox? Or Apple's iCloud? Or Amazon's Cloud Player?
That's what makes the Aereo case more significant than the fate of a small start-up. The networks argue that Cablevision was a bad decision and should be overturned. For its part, Cablevision, a small cable TV provider that pioneered the cloud DVR in question, thinks the Supreme Court should uphold the previous ruling but still find that Aereo is violating copyrights using narrower logic. The US government also maintains that Aereo's service is illegal but that the decision "need not threaten cloud computing." Ultimately, the legality of Aereo's service will matter less than how the justices choose to approach the question.
Here's the simplest way to think about Aereo: a TV antenna attached to a DVR with a very long cord. That would seem to be perfectly legal. But since the long cord is actually the Internet, what's really on trial at the Supreme Court is the cloud.
Supreme Court Concerned That Aereo Ruling Will Harm Cloud Computing
Excerpted from The Daily Examiner Report by Wendy Davis
The Supreme Court today didn't seem particularly concerned with the fate of Aereo, a start-up backed by Barry Diller that allows people to stream over-the-air television to iPhones and other devices.
But the justices appeared keenly aware that any ruling against Aereo could also pose a risk to cloud services like Dropbox. That's because the broadcasters contend that Aereo is "publicly performing" television shows when it streams them from its antenna farms to users' computers. But if the act of streaming a program is a public performance, then cloud storage systems -- which also stream content from remote lockers to people's computers -- also arguably engage in performances.
The Obama administration, which weighed in against Aereo, says that cloud services are different from Aereo because users themselves place content in the cloud. The DoJ argued in its papers that cloud-computing services merely "offer consumers more numerous and convenient means of playing back copies that the consumers have already lawfully acquired."
Paul Stewart, who argued for the DoJ today, reiterated that point. "If you have a cloud locker service, somebody has bought a digital copy of a song or a movie from some other source, stores it in a locker and asks that it be streamed back, the cloud locker and storage service is not providing the content. It's providing a mechanism for watching it."
But Aereo's lawyer, David Frederick, pointed out that not all content in digital storage systems has been purchased. "The cloud provider can't tell what is legal or what is not legal. Some stuff could be up there pirated. Some stuff could be up there perfectly licensed. That's why the cloud industry is very concerned that if you have too expansive an interpretation of the public performance right, you are consigning them to potentially ruinous liability."
Justice Stephen Breyer indicated several times that a ruling that Aereo publicly performs programs could have unforeseen consequences that no one wants. He said that he doesn't understand how the decision will affect other technologies. "I've read the briefs fairly carefully, and I'm still uncertain that I understand it well enough," he said.
At the same time, several judges seemed troubled that Aereo apparently engineered its system to take advantage of a perceived loophole in the copyright law. Aereo uses thousands of tiny antennas to capture television programs, and then streams them to users. The company says at its performances are private because they're made on an antenna-to-user basis.
Justice Ruth Bader Ginsburg asked Aereo whether there was any "technically sound reason to use these multiple antennas."
Chief Justice John Roberts pressed the point, saying the system appeared designed solely to avoid copyright infringement -- but he added that doing so wasn't necessarily problematic. "I'm just saying your technological model is based solely on circumventing legal prohibitions that you don't want to comply with, which is fine. I mean, that's -- you know, lawyers do that," he said.
Toward the end of the hearing, Justice Sonia Sotomayor asked the broadcasters' attorney, Paul Clement, what would happen to Aereo if it lost this battle. "If they actually provide something that is a net benefit technologically, there's no reason people won't license them content," he replied. "But on the other hand, if all they have is a gimmick, then they probably will go out of business and nobody should cry a tear over that."
Aereo Analysis: Cloud Computing at a Crossroads
Excerpted from Ars Technica Report by David Kravets
The question of whether online broadcast television is to remain in the hands of a stodgy industry that once declared the VCR the enemy is being put directly before the Supreme Court.
In 1976, what was Congress saying about the future of television?
Broadcasters' latest legal target is 2-year-old upstart Aereo — which retransmits over-the-air broadcast television using dime-sized antennas to paying consumers, who can watch TV online or record it for later viewing. Broadcasters like ABC, CBS, FOX, NBC, and others haven't given Aereo permission to do that, and they say it violates US copyright law.
The industry asked the Supreme Court during a Tuesday hearing to kill the New York-based Aereo service. The high-stakes oral arguments come 30 years after Hollywood told the justices that the VCR — and its time-shifting elements — would doom television and its producers forever.
An outcome perhaps more important than who controls the broadcast airways has generated a great amount of concern, and it's not just the expected chorus from the copyleft. Companies like Google, Microsoft, Mozilla, Yahoo, and others are worried that a victory for the broadcasters could upend the cloud.
They contend that the broadcasters' position "would threaten one of the most important and emerging industries in the US economy: cloud computing.
The companies, in briefs from trade associations, told the justices in a recent filing that the "dramatic expansion of the cloud computing sector, bringing with it real benefits previously only imagined in science fiction, depends upon an interpretation of the Copyright Act that allows adequate breathing room for transmissions of content."
For the moment, a federal appeals court has deemed Aereo's service legal, and the cloud-computing market, expected to be a $1.1 trillion industry by next year, is safe, at least until the justices rule in the months ahead.
For Aereo, unless the Supreme Court says otherwise, it's free to retransmit broadcast signals without paying licensing fees to the broadcasters. That's something not even the cable companies can get away with, and it's got broadcasters and cable companies seething.
But a federal appeals court said that Aereo's service is akin to a consumer putting a broadcast antenna atop their dwelling. Aereo, the appeals court ruled, "provides the functionality of three devices: a standard TV antenna, a DVR, and a Slingbox.
Not so fast, the broadcasters claim. They say it's a copyright breach because Aereo hasn't paid fees to the broadcasters to retransmit their content. They say that the dissemination of the content amounts to a "public performance" requiring the broadcasters' consent.
The broadcasters said that it's far-fetched to analogize Aereo to the likes of services like Dropbox, Box, Google Drive, and other cloud services. Claims that cloud storage hangs in the balance are overblown, they said.
"There is an obvious difference between a service that merely stores and provides an individual user access to copies of copyrighted content that the user already has legally obtained, and a service that offers the copyrighted content itself to the public at large," they said.
Aereo isn't exactly a cloud provider. Yet what the broadcasters say it can't do has the cloud industry closely following the startup's legal battles and business model.
In a growing number of markets nationwide, Aereo customers rent up to two tiny, dime-sized antennas that are housed in facilities across the country. They capture local, over-the-air broadcasts, and funnel them to local customers in real time. The content is freed to stream to most any Internet-connected device. Another antenna syncs with a DVR for later viewing for about $12 monthly.
Broadcasters decry it as "technological gimmickry" to skirt copyright and other retransmission laws.
Aereo essentially maintains that they are providing offsite "rabbit ears" for their customers, allowing consumers to record freely available content that their rented antennas captured in their local markets.
If Aereo is blocked from allowing consumers the ability to stream their content at will, what's preventing rights-holders from making the same claim against cloud-storage providers?
John Bergmayer, a senior attorney at Public Knowledge, boils down the case to this.
"Consider any file-hosting service that allows people to store their own material, such as Dropbox. What if it can be shown they are storing copyrighted work. Do they need a license?" he asked in a telephone interview.
Mitch Stoltz, an Electronic Frontier Foundation attorney, said in a telephone interview that, "If the Supreme Court rules in favor of the broadcasters, their opinion might create liability for various types of cloud computing, especially cloud storage."
Chet Kanojia, Aereo's founder, likens the Aereo flap to the VCR litigation three decades ago, when Hollywood sought to block people from recording content obtained from their roof antennas.
"The idea that each individual consumer can have their antenna remotely located wins on its own," he said in a telephone interview. "There's no basis in law of any kind to prohibit that activity."
Luckily for Hollywood, consumers, and innovation, a deeply divided 5-4 Supreme Court ruled in 1984 against Hollywood and issued a stamp of legitimacy to the VCR, sparking in its wake a multi-billion dollar home entertainment market.
Fast forward to Tuesday's oral arguments before the Supreme Court, and we're right back to the VCR case of 1984.
"Underneath all the legal arguments and legal labels that we've thrown around in this case, the case is really very simple and straightforward," Stephen Kroft, a Hollywood lawyer, told the justices three decades ago during the arguments in the VCR case. "Petitioners have created a billion dollar industry based entirely on the taking of somebody else's property, in this case copyrighted motion pictures, each of which represents a huge investment by the copyright owners."
Just months ago, in their October petition to the justices urging the high court to kill Kanojia's service, the broadcasters said that "The disruption threatened by Aereo will produce changes that will be difficult, if not impossible, to reverse."
What's more, the broadcasters said, "The works provided by commercial television broadcasters to a remarkably broad swath of the public cost millions of dollars to produce. Petitioners rely on their ability to control how their programming is used by others in order to recoup those significant investments."
Sound familiar?
Coming Events of Interest
CLOUD COMPUTING EAST 2014 — May 15th-16th in Washington, DC. Three major conference tracks will zero in on the latest advances in the application of cloud-based solutions in three key economic sectors: government, healthcare, and financial services.
US Cyber Crime Conference — April 27th to May 2nd in Washington, DC. This unique event combines digital forensics training with an interactive forum for cyber professionals and covers the full spectrum of topics facing defenders as well as law enforcement responders. Sessions will cover intrusion investigations, cyber crime law, digital forensics, information assurance, R&D, and testing of forensics tools.
International Conference on Internet and Distributed Computing Systems — September 22nd in Calabria, Italy. IDCS 2014 conference is the sixth in its series to promote research in diverse fields related to Internet and distributed computing systems. The emergence of web as a ubiquitous platform for innovations has laid the foundation for the rapid growth of the Internet.
International Conference on Cloud Computing Research & Innovation - October 29th-30th in Singapore. ICCRI:2014 covers a wide range of research interests and innovative applications in cloud computing and related topics. The unique mix of R&D, end-user, and industry audience members promises interesting discussion, networking, and business opportunities in translational research & development.
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