I had a really busy week at work and I’m just catching up on some of the tech news of the week. None of the stories are positive developments for we the denizens of Internet nation, sadly.
Headline A that caught my attention was Verizon Wireless announcing pricing for its new super-fast, fourth-generation mobile broadband service. I’ve long been a customer of Verizon’s current 3G service, which is more dependable and widespread than the service I get either from AT&T (with my iPhone) or Sprint (with an Overdrive). But for 4G, Verizon has decided to go with data limits that make the service’s super-fast speeds practically useless. They are going to charge $50 a month for 5 gigabytes of data or $80 for 10 gigabytes. As a headline from PC Magazine noted, you can blow through your month’s data allocation in 32 minutes!
I’m slightly surprised by the news, since my 4G-capable Sprint Overdrive costs $59.99 a month for unlimited 4G downloads (though it carries a 5 gigabyte cap when it defaults down to 3G speeds). Supposedly one part of the appeal of mobile 4G networks was relief from overcrowding that hampered 3G networks and required all these onerous bandwidth caps in the first place.
Of course, the Journal’s spin was more upbeat, as they noted that the new 5 gigabyte cap was priced $10 a month less than the old Verizon 3G plans with the same data limits. But since the whole point of getting on a faster 4G plan is to download more, to me, the fact that the cap is the same is a killer. It reminds me of that line from the movie You’ve Got Mail that the purpose of a VCR is to record TV when you leave the house but the whole point of leaving the house is to skip out on watching TV. The reason to get a 4G connection is to download more data but the reason for Verizon’s stingy cap is to prevent you from downloading more.
Things became clearer when the paper explained some of the thinking behind the pricing.
Verizon Wireless is able to offer the five-gigabyte plan at a lower rate than its 3G plan because it costs less to deliver that wireless traffic on 4G, Chief Technology Officer Tony Melone said. But he expects most people to sign up for the high-capacity $80 plan because the higher speeds will lead to more usage.
I don’t know if they’re serious but the market for people who are willing to pay $80 a month for mobile Internet service can probably fit in the front pocket of Tinkerbell’s blouse. I mean, really. The fact that 4G is fast enough to replace wired home broadband connections for many people — like those millions sold by Verizon — might explain some of the pricing strategy.
Another downer this week came from broadband provider Level 3. The company just grabbed the contract to send Netflix customers streamed movies and TV shows. But Comcast, which is now the largest retail broadband provider, is demanding some mega-payments to allow Level 3 to send Netflix streams to Netflix customers who use Comcast.
The debate quickly descends into some pretty technical historical details of the connections among different kinds of Internet and broadband service providers. But suffice it to say that if Comcast can price Level 3′s Netflix customers away from NetFlix, they’ve gone a long way to protect their lucrative cable television franchise. Hmm, sensing a theme yet?
The back and forth prompted law professor Susan Crawford to cut through the crap and get to the point with some painfully pointy rhetorical questions.
The takeaway from today: No market forces are constraining Comcast – or any of the other major cable distributors, none of which compete with each other. How will consumers and innovation be protected from their machinations? The FCC is currently facing two defining moments in US telecommunications policy, and it’s unclear what the Commission is going to do in either case. Will the FCC act to relabel high-speed Internet transmission services, reversing the radical Bush-era deregulatory turn? Will the FCC block the Comcast/NBCU merger? Can we expect that anything will happen (at all) to ensure that local monopoly control over communications transport isn’t leveraged into adjacent markets for devices and content?
What will the legacy of the FCC be, as the looming cable monopoly stops looming and starts muscling levers into place?
Finally, whatever you think about Wikileaks and its controversial founder Julian Assange, the way big Internet companies have reacted scares some free speech and civil rights advocates. Dan Gillmor, writing for Slate, warns that online, the censors are scoring big wins. Internet hosting and address companies booted Wikileaks out so quickly and so cavalierly that Gillmor worries for the future when we all depend more and more on information stored in the “cloud.”
The WikiLeaks affair is highlighting the Internet’s soft underbelly: the intermediaries on which we all rely to store our information and make it available. We are learning, to our dismay, that we cannot trust them. Combine that with increasing government intervention, we’re also learning that the Internet is somewhat easier to censor than we’d assumed.
This should worry anyone who believes that we’re going to move our data and online lives into the fabled “cloud” — the diffused online array of hardware and services where, proponents say, we can do our online work, play and commerce without the need for storing data on our own personal computers. Trusting the cloud is becoming an act of faith, and it’s time to question that faith.
And that’s it for GravitationalPull dot net today. Hopefully, cheerier postings ahead.