Venture Bytes #41 - Net Neutrality - A Solution in Search of a Problem?

Net Neutrality -A Solution in Search of a Problem?

The FCC board has scheduled a vote on December 14 for a new order that repeals net neutrality protections it voted for in 2015. Republicans, led by Chairman Ajit Pai, hold an advantage of three to two on the five person board. The net neutrality mandate is a solution in search of a problem and should be repealed, according to the Chairman. Is he right?

The core argument on both sides of the divide is clear. The proponents believe that the net neutrality mandate has ensured a free Internet which the FCC intends to annul. The Internet, the argument goes, has always been a bastion of equality, a level playing field where all websites load at the same speed without having to pay any tolls. Thus, allowing paid prioritization would allow discrimination and irrevocably change the Internet. The repeal lobby, led by the FCC chairman, believes that the net neutrality order is not necessary. This camp believes while the idea of free and equal access for all is indisputable, competitive market forces, not regulations, will provide the necessary checks on the carriers to ensure free and fair access for all, while fostering the right climate for new investments and innovations.

Both arguments have merit. But given how the Internet infrastructure has evolved over time, how content is delivered today, and the how a handful of players drive a disproportionate share of the traffic, we believe that the repeal lobby has a stronger case. The Chairman is right.

The whole argument for supporting net neutrality is based on the idea of equal access for all. Alas, this idea has proved to be utopian. Even with the mandate, the Internet has been far from neutral. To begin with, small start-ups are nearly always at a disadvantage — and the Internet is no exception. The start-up road is littered with examples of companies that had to sell themselves to larger companies. YouTube, Instagram, Tumblr and WhatsApp come to mind. That’s because multiple factors affect content delivery speeds, and regulations have not ensured across-the-board equality. Large companies have always been able to pay for faster Internet service — and the biggest ones are already spending billions to get it. For instance, just about all major websites pay for content delivery networks (CDNs) such as Akamai, to carry their traffic. Those CDNs build network of servers across the country to store website data. Furthermore, many of the largest companies like Google, Apple, Amazon, and Microsoft build their own data centers to ensure a smooth service for their users, investing billions of dollars to give their websites an edge over the competition. A startup in the proverbial garage has a very high hurdle to jump over to start a high-quality video streaming site without paying for some intermediary to handle traffic. The site would grind to a halt as soon as a significant number of people tried to use it.

Yes, a free and fair Internet should be the norm. But the practical reality skews the advantages to the bigger companies at the expense of the small companies. The right approach is to remove the ineffective “regulatory hammer” and let market forces reign. Competitive and political pressure will ensure a fair and efficient Internet.

Hey Alexa – What’s Next in Tech?

It is that time of the year when we look ahead to the “next big thing” from the tech world. With so much talk on AI and machine learning, we believe 2018 will be the year when digital assistants come of age. Amazon’s Echo and Alphabet’s Google Home are increasingly becoming “must-have” devices at home. Apple’s HomePod speaker with the intelligence of Siri is expected to make a big splash in 2018.

Digital assistants and the technology behind them have reached an inflection point; they have become more powerful in interpreting natural language and responding to commands or inquiries with accuracy. The artificial intelligence behind these assistants is fuelled by more advanced machine learning. Amazon, Google, and Apple leverage their massive volumes of user data to power their innovations in artificial intelligence.

The assistants are better than ever at understanding their user’s natural speech and producing the desired response with increasing accuracy. For the average household, this means users can expect more seamless and granular control over the devices around them, made possible by the ever-more ubiquitous Internet of Things (IoT) ecosystem.

The market hasn’t always looked so favorably upon digital assistants. When Amazon first debuted the Echo speaker in 2014, consumers and tech journalists alike wrote it off as a gimmick. Fast forward four years, however, and we’re seeing quite the opposite. Indeed, the market for AI digital assistants is projected to reach $12 billion by 2020. If this expectation materializes, it would converge with the expected growth of the IoT market which, according to market estimates, is expected to reach 24 billion total devices globally by 2020. The IoT market is already well on its way to meet these expectations, with the upcoming release of Apple’s HomePod speaker and recent rumors of Alphabet reincorporating the smart-thermostat company Nest into its main Google brand.

Should the stars align per the expectations above, and AI continue its current rate of growth, the effects of digital assistants will be wide-reaching in both the consumer and enterprise spaces. On the enterprise side, companies such as Amazon are hoping that digital assistants will help push e-commerce even further on its meteoric growth path. Many consumers are often faced with an overwhelming flood of options when shopping online, especially on major sites such as Amazon. A contextually aware digital assistant could cut through the fluff and more directly present its users with product recommendations for a more limited set of curated goods, eliminating the need to face a daunting, endless list of recommended products.

Whether they are accessed on a phone, smart speaker, or computer program, these digital assistants will open up a new level of access and ease to users. They will streamline experiences and work, and will connect businesses to their consumers in more personal and innovative ways. While the mainstream adoption is just picking up, the extent of its role in our lives is still unclear. As these assistants grow increasingly complex, which they are expected to do, users will become more capable of interfacing with the web without ever having to look at a screen.