32 |MARCH <strong>2015</strong> WWW.KPBJ.COM technology | charles keating Net neutrality debate part of new evolution of the Internet Since last May when I covered this topic, much has transpired. On its face, net neutrality is about whether carriers can prioritize traffic or charge premiums for faster service, but it’s also about competition in broadband and the future of the Internet. The most recent dustup came when cable firms, which operate most of the broadband connections to end users, wanted to charge video providers for “excess” bandwidth. End users already pay for Internet connections, usually at a fixed price with terms of service assuming most of the time the pipes are not fully utilized. As more people stream video and use cloud services, total bandwidth needs are increasing and providers wanted to recoup costs to upgrade their networks to handle the digital traffic jams. The prospect of paying extra for fast Internet lanes — controlled by a few firms and presumably affordable only to established major providers — was anathema to the vast majority of users and raised the specter of a slippery slope. Which services would be prioritized or discriminated against? The FCC accepted the practice in principle on a case-by-case basis and held out the consideration of regulating Internet services under Title II of the Telecommunications Act if abuses were perceived. That decision was up for ruling on Feb. 28, so by the time you read this we will be likely be moving into new waters. The issue matters not just to providers and carriers, but also to entrepreneurs creating new cloud products, governments, open Internet advocates and everyone between. The history of our telecommunications networks, the Internet and how things have evolved provides background on how this came to be. Prior to the breakup of AT&T (or Ma Bell), there was only one provider of telecommunications services in the U.S. You rented your phone and calling was expensive, especially long-distance and even more for overseas. Taxes were a source of revenue for governments, and fees such as the universal service fund (USF) were used to extend this network to rural users. With development of fiber optics in the 1970s, new networks were developed that could carry vast quantities of all types data. While the United States undeniably had the best analog communications network in the world, over time countries starting with later-generation technologies would leapfrog ahead. Greater innovation and competition were needed, and the breakup of the phone monopoly spun off hundreds of companies offering competition in services, often over the same legacy connections to end users. It was messy but it worked and prices fell. At the same time cable TV, mobile and satellite networks developed and then early Internet came to households via dial-up modems. As non-critical “information services,” cable TV and Internet were deemed less critical infrastructure than the regulated phone services that connected users to 9-1-1. The efficient, packet-switched Internet quickly grew and as millions of users went online, it quickly morphed into the common universal network. Regulators could have changed the classification of the Internet then to reflect its growing importance, but not wanting to cause harm or add taxes to this new, rapidly innovating market, regulators deliberately took a wait-and-see approach. Broadband, once defined as 200Kbps when most users were on dial-up modems, was in January updated to 25 Mbps downstream and 4 Mbps upstream bandwidth. The new standard reflects growing uses, and while nearly 80 percent of homes can receive this level of service, a significant portion cannot and more importantly, most have only a single Internet provider choice at this speed and therefore lack true competition. Worldwide the importance of broadband is recognized, and other countries have approached broadband with national goals to lower costs and promote deployment. There have been many approaches; some leverage competition and many have provided faster speeds at lower prices. Partly this is due to our having a legacy infrastructure that served us well for many years, but the future is a combination of fiber and high-capacity wireless and mobile networks. Given the nearly universal reliance on the Internet, its current classification as a non-essential information service is truly at odds with its current application. The reclassification seems likely and would be on par with regulation in other countries. Like analog TV signals before them, the legacy last-mile network is being supplanted by cable and fiber networks, and regulations preserving the remnants of the old network need to be replaced. Already 40 percent of homes have already dropped their legacy landline phones in favor of VoIP services or mobile phones. Similarly, more “cord-cutting” users are dropping cable and satellite TV packages in favor of unbundled Internet or relying on mobile connections, with the effect of driving cable companies to seek consolidation to negotiate with content providers, raising monopoly concerns over the last-mile connections. As online cloud-only networks grow and compete with the established networks, and the Internet of things moves from concept to reality, all these innovations require low-cost, reliable and secure broadband access to end users. Reclassification does not necessarily mean taxes will immediately soar and innovation die, but it is likely regulators want to move forward with a light touch and will seek ways to promote competition. We are ready to enter a new evolution of the Internet. • Charles Keating is president of Keating Consulting Service, Inc. (www.kcsco.com), an IT consulting firm serving global clients since 1983. He is also a partner in K2 Strategic Solutions (www.k2strategic.com) and Professional Options (www.professionaloptions.com), and current president and co-founding member of West Sound Technology Association (www.westsoundtechnology.org). PeoPle in business Kitsap Bank picks two for employee awards Kitsap Bank announced that Marni White, branch manager at the Pioneer Way branch in Gig Harbor, has been named the bank’s 2014 Volunteer of the Year. Volunteering nearly 250 hours throughout the year, White is committed to making a difference in the community. Marni White Jackie Smith She joined Kitsap Bank in 2011 and has been the Pioneer branch manager since December 2013. She is an active member in the Rotary Club of Gig Harbor-North and The Gig Harbor Chamber, along with helping out with numerous fundraising events and activities. “Marni has done a tremendous job giving back,” Kitsap Bank CEO Steve Politakis said. “Her dedication, commitment and capacity to contribute not only makes Marni a great asset to Kitsap Bank, but also to her community.” Kitsap Bank also named Jackie Smith, who works at the South Park Village Branch in Port Orchard, as named Employee of the Quarter for the fourth quarter of 2014. Smith joined Kitsap Bank in <strong>March</strong> 2011 as a client service representative at the West Bremerton Branch, and was promoted last year to her current position as a financial service specialist. She was selected for this award for her leadership example in representing Kitsap Bank at bank-sponsored events, her contributions to the Social Media committee, and for going above and beyond in assisting her clients and supporting her co-workers.
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