BLP Perspective: Foxes and Chicken Coops

internetTom Wheeler, the FCC’s Chairman came out with the statement that he was “good”with Netflix and others paying cable TV providers to move their content to the Internet Fastlane. What happened to Net Neutrality? As of May 15th, it may be dead.

A few days after Wheeler said he favored a tiered approach to the internet, he came out saying that he would not allow the internet to be slowed down. Which one is it, Mr. Wheeler? You can’t have both. My interpretation is that”regular”content will move at highway speeds equivalent to 35-40 mph, while Netflix and YouTube will move at the equivalent of 100 to 150 mph. Netflix and YouTube are the entrenched players. They can afford to pay for a fast lane, and pull up the moat behind them.

All this sounds OK, until one looks at the strategic importance of the Internet and how crucial it is to innovation and America’s competitiveness. And consider that Korea and certain European countries have internet speeds several times that in the United States.

To quote InfoWorld’s Paul Venezia[1]:

I mused that perhaps new FCC Chairman Tom Wheeler, despite coming out of the industry he now regulates, would have some kind of crisis of conscience and do what is ever so clearly the right thing to do: Preserve the open Internet. I didn’t have much hope that this would be the case, but it was worth a shot.

Sadly, there was no crisis of conscience to be had. Wheeler has stepped right in line with his telecom lobbyist roots and has proposed something actually far worse than doing nothing at all. He wants to actively promote a tiered Internet through a dual fast-lane and slow-lane approach. This is no form of regulation or control over an increasingly monopolistic industry, this is going the other direction entirely — this is the U.S. government actively promoting the death of the open Internet.

 

FCC Chairman Tom Wheeler was President of National Cable Television Association (NCTA) President and CEO of the Cellular Telecommunications & Internet Association (CTIA). Which brings me to regard Chairman Wheeler as the fox guarding the chickens in the chicken coop.

A little background might be germane. As a banker, selling high tech or new tech to a cable company has always been a fool’s errand. Cable management are screwdriver and wrench people. They wouldn’t know a semiconductor if they stepped on it, what SaaS stands for, or that a cloud is anything other than what they see in the sky.

I’ve opined that internet providers should provide internet—fast internet. Not the OK stuff that I get in Londonderry, And guess what? New Hampshire has among the fastest internet speeds in the United States.

Thanks to TARP or the Troubled Asset Relief Program, the big bank bail out, my house in Taos as of today has fast internet. The internet in Des Montes has gone from dirt road speed of 50 to 100 kbps to 22 mbps. No kidding. Before, YouTube, Netflix, or any other videos, didn’t play over the internet. Last month’s CenturyLink phone bill came with an offer for three years of high speed internet for $19.95 per month. The scissors came out, the phone service was cut and the internet added along with a VOIP service from Ooma. By the way, for those of you who think you have POTS (Plain Old Telephone Service) think again. POTS totally died a few months ago, and it’s all VOIP.

So write the FCC, your Congressman and Senator to let them know that you don’t quite understand Chairman Wheeler’s double speak.

To Contact the Commissioners via E-mail

  • Chairman Tom Wheeler: Tom.Wheeler@fcc.gov
  • Commissioner Mignon Clyburn: Mignon.Clyburn@fcc.gov
  • Commissioner Jessica Rosenworcel: Jessica.Rosenworcel@fcc.gov
  • Commissioner Ajit Pai: Ajit.Pai@fcc.gov
  • Commissioner Michael O’Rielly: mike.O’Rielly@fcc.gov

Contact your Congressman and Senator through:

http://www.contactingthecongress.org/

On May 15th, the FCC hearing is on:

Protecting and Promoting the Open Internet:

The Commission will consider a Notice of Proposed Rulemaking addressing the D.C. Circuit Court of Appeals’remand of portions of the Commission’s 2010 Open Internet Order and proposing enforceable rules to protect and promote the open Internet.

My reading is that the FCC is not considering an open internet, but a more restricted internet. Those at the FCC definitely took their marketing courses.

Make your voice heard.

All the best,

All the best,

 Margaret Johns

Founder & Chairman

Affiliates:

SiVal_Logo

Jan Robertson

SiVal Advisors, LLC

Bic Stevens

Stevens Capital Advisors

 

Chartworth2Susan Woods and Vlad Harris

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Margaret Johns is the Founder and Chairman of BlueLake Partners, a boutique M&A investment bank based in the Greater Boston Area.  Prior to founding BlueLake she was an employee founder and Managing Director at Needham & Company where she worked in Corporate Finance in New York City and headed up its Boston office.  She now lives in Londonderry, New Hampshire with her husband, 16 year old step-daughter and three pugs.  When she’s not working with clients, FINRA or writing blogs she competes on the Granite State Penguins Masters Swim Team, skis, rides her bike or is out walking her pugs.

Content researched, edited and reviewed on a best efforts basis.

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We make no claim to being comprehensive in our review, as the contents are companies and topics we, ourselves, find of interest.

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This newsletter is currently being proofed by Dave Henshaw, which is much appreciated. Dave is my USMS swimming lane mate, and Granite State Penguin team-mate. He is retired from MIT, where he used to produce and proof their annual financial report. Exactly what we need.

[1] InfoWorld/DataCenter/The Deep End May 5, 2014