Uber is much more than a taxi firm

To most people, Uber is just a cheap and convenient way to get home after a few drinks, but the scope of the business is extraordinary.

While the inclusion of Uber at a broadband conference might have raised a few eyebrows, the overview given by Global Head of Connectivity Rahul Vijay demonstrated the creativity, innovation and stubborn drive which has ensured Silicon Valley and its residents are some of the most influential in the world.

First and foremost, no-one should consider Uber as a taxi company anymore, at least not in the traditional sense. The taxi’s might still account for the majority of annual revenues, but the team is expanding into so many different areas it is difficult to sum up the business in a single sentence.

Aside from the taxi business we all know and love, Uber has a commercial business working with the travel teams at large corporations, the food delivery business unit is solidly position in a fast-growing segment, the team also work with insurance companies to make sure patients make it to their hospital appointments and it is also making promising moves into the freight world. In markets in south east Asia, the team has launched a 2G-compatible app and is also applying the same business model to mopeds and scooters. In Croatia, Uber has launched a boat taxi service.

These are the ideas which are up-and-running or currently being live trialled, though the R&D unit is also playing around with some interesting ideas. Autonomous vehicles, flying taxis and drone delivery initiatives are just some of the blue-thinking projects. This is a company where a lot is going on.

The interesting aspect of the autonomous vehicles is not just the technology but the supporting connectivity landscape.

“Without mobility there is no Uber,” Vijay said at Broadband World Forum in Amsterdam.

Some have suggested that Uber will never be profitable until autonomous vehicles are commonplace through the fleet, though it doesn’t seem to be the technology which is worrying Vijay; connectivity is too expensive today.

The test vehicles which are currently purring around the highways of North America transmit as much as 2 TB of data a day. This is not only a monstrous amount of information to store and analyse, but the economics of taking this data from the car to the data centres is not there. Vijay said it is still by far and away cheaper to transmit this data through optical cables than over the air, which is not practical. Until 5G arrives, and is scaled throughout the transportation infrastructure, autonomous vehicles are not a commercially viable concept for Uber.

This also opens the door up to another very useful revenue stream for Uber. With more than 110 million users around the world, 200 new trips are started every second. These vehicles are travelling through cities, countryside’s and down highways. The amount of information on mobile signal strength or the performance of mobile handoff between cell sites is boggling. These are only two areas, but Vijay suggested there could be hordes of valuable information which could be collected by the vehicles as they fulfil the core primary business objective.

For telcos, regulators, governments or cloud companies, this insight could be incredibly valuable. It could inform investment strategies or encourage policy changes. If data is the new oil, Uber is sitting on a very significant reserve.

As it stands, the company brings in a lot of money, but the prospect of profits are questionable. In the three months ending June 30, Uber revenues attributable to bookings stood at $15.756 billion. The loss from these operations was $5.485 billion. The transportation game operates on very fine margins. Share price has declined by 28% since this earnings call, though there is hope on the horizon.

If Uber can gain traction in the new markets it is pushing aggressively into there will be increased revenues, though in monetizing assets which it creates organically, the data collected from taxi trips, there could be some interesting developments.

Battle for control of connected car ecosystem has not been decided – Renault

It might be slightly unusual to have one of the worlds’ automotive giants presenting at a broadband conference, but despite the odd fit, there were some very interesting points made.

Speaking to Telecoms.com on the side-lines of Broadband World Forum at Amsterdam, Renault’s Chief Sales and Marketing Officers for the services unit Benoit Joly, gave a statement which will come as a tsunami of relief to the telco industry; the battle for control of the connected car ecosystem has not been decided yet.

This has been the worry of many industry analysts and commentators. When a new segment of the digital economy emerges, can the telcos move quick enough to capitalise on the newly created revenues?

A perfect example of this is in the living room. When the idea of the smart home emerged, the telcos got very excited. Here was an opportunity to move beyond the realms of connectivity service provider and into the promised land of digital services provider. However, progress was too slow, and now it looks like the OTTs own this space through their smart speakers.

In this instance, aside from a few rare examples around the world, the telcos have been relegated to commoditised connectivity providers. In the connected car segment, this is not the case, not yet anyway.

As Joly pointed out, there is a space for the telcos in the connected car segment, above and beyond the dreaded utility tag. Renault is of course working closely with the telcos in this fast evolving but still embryonic area, but it is also working alongside the OTTs. Business models are evolving, and services are still being created, this is an exciting area.

The interesting element for the consumer is going to be the seamless nature of the connected car as an element of the wider digital life. The telcos already have skin in the game, as the connectivity provider, however so do the OTTs; the fraternity which owns the customer experience will reap the profits.

From a purely commoditised revenue perspective, there is of course opportunity. Joly highlighted that the car could be seen as an additional element to monetise, though it is not exactly nailed down how. Should connectivity in the car be seen as an extension of existing consumer mobile tariffs or do the telcos wholesale mobile connectivity to the automotive OEMs?

This element of the equation will perhaps depend on who owns the connected car platform and the supporting ecosystem. Should the telcos win out over the OTTs, there will be a lot more influence to dictate the state of play, or perhaps the OEMs would want to wholesale connectivity? The automotive giants do not want their product to be commoditised, therefore this could be a way in which the OEMs add value to customers beyond the point-of-sale of a vehicle.

There are still a lot of moving parts in this fast-evolving segment of the digital economy, and many questions which need to be answered. The OTTs will of course want to own the ecosystem, and the newly created revenues which come with it, however the telcos will be relieved to hear there is still a chance they can move up the value chain in this segment at least.

Italy readies itself for tax assault on Silicon Valley

The Italian Government is preparing to join the UK and France in taking a tougher tax stance against Big Tech with the introduction of a 3% sales tax.

Designed to target the elusive technology giants which have been slipping between the mountains of red-tape to take advantage of cheaper tax destinations, the levy will be based against revenues realised in the market as opposed to tax. While it might be possible to move profits to different markets in the bloc, it is much more difficult to disguise payments taken from individuals who physically reside in Italy.

While it still might be early days in tackling the abuses of the taxation landscape, momentum is starting to gather. According to sources, the new tax regime could be announced during the next budget and set in place January 2020. The new budget from the coalition is due to be submitted to the European Commission today [October 15].

Although details are relatively thin for the moment, take any predictions or leaks with a pinch of salt. It would be fair to assume Italy is heading down the same route as the UK and France in holding Silicon Valley accountable to a fair and reasonable tax position, though due to the complicated political situation in the country, what form this could take is unknown for the moment.

During the 2018 Italian election, no political group or party won an outright majority resulting in a hung parliament. Numerous coalition governments could have been formed, and after a few failed attempts, the centre-left Democratic party and the anti-establishment Five Star Movement were sworn in last month.

These policies have been in the works for some time now, though what eventually comes out of the wash remains to be seen. Interesting enough, the failure of this latest coalition could force the country into another election, potentially a new government and perhaps a new line on tackling Big Tech.

That said, the only thing which is clear coming out of this political kafuffle is that Silicon Valley is a target.

Across Europe there are several member states who are becoming increasingly frustrated with the flamboyance of the internet giants accounting departments. There are of course a few who have scuppered a pan-European approach to new digital tax rules, the likes of Ireland and Luxembourg of course benefit from the unfair status quo, though with several member states going it alone, the writing is on the wall for Big Tech.

This is just one element of the changing landscape for tech. Alongside a rethink on tax rules, regulation and legislation governing data, privacy, surveillance, free speech, political advertising and artificial intelligence are in the works. Governments and regulators are attempting to drag bureaucracy and the rulebook into the digital era, and it might be a bit uncomfortable for some of Silicon Valley’s residents.

California proposes strictest privacy rules in the US

California Attorney General Xavier Becerra has unveiled new privacy proposals which have the potential to rival the impact of Europe’s GDPR on the digital economy.

When Europe announced its General Data Protection Regulation the digital economy was thrown into chaos. Businesses around the world had to audit monstrous amounts of data, as well as reconfigure business models, data collection procedures and relationships to ensure compliance. The rules being proposed here are slightly different, but Becerra is enforcing a privacy first mentality which might not sit comfortably with some in the digital economy.

There are three components of this proposed legislation to keep an eye-on. Firstly, the consumer has the right to request details on the data being stored by companies. Secondly, they have the right to demand this information be deleted. And thirdly, companies will have to seek consent from the consumer to monetize the data.

“Knowledge is power, and in the internet age knowledge is derived from data,” said Becerra. “Our personal data is what powers today’s data-driven economy and the wealth it generates. It’s time we had control over the use of our personal data. That includes keeping it private.

“We take a historic step forward today to protect Californians’ inalienable right to privacy. Once again, California leads the way putting people first in the Age of the Internet.”

However, before the privacy enthusiasts get too excited, there are some hurdles to negotiate. The original California Consumer Privacy Act (CCPA) has been passed, and will come into effect on January 1, though there have been additional bills passed to water-down the strength of these rules.

Although this will hit some like a bad smell, this is the reality of politics. Lobbyists in the US are incredibly powerful, and they are being fuelled by a very profitable technology industry with a lot to lose. This is not to say the new rules will not make an impact, though they might not be as revolutionary as some would hope when they come into effect.

That said, this will create the strongest privacy legislative regime across the US, ironically, in the home of the company’s who play so carelessly with privacy rights.

Looking at the similarities with GDPR, it does seem there has been some inspiration drawn from the rules. The right to request more information, as well as the right to demand deletion, are two elements which seem to be taken from GDPR. The final element mentioned above is very interesting and we suspect will be the focal point of the lobby efforts as these rules gather momentum.

The inclusion of a ‘Do not sell my data’ link is an aspect no-one in the data-sharing economy will want to see. The industry has largely profited to date through inaction. No-one can do anything about the monetization of data short of refusing to download the app. Consumers are effectively being forced into participating in the digital economy as there are no rules to provide an alternative. This element of the legislation would certainly cause a stir.

Some people will not like the fact companies are making money off their personal data if they are not getting a share of the rewards, irrelevant as to whether they are getting a service for free. Some will object on ethical grounds. Some will reject the concept as the risk of data breaches or leaks is deemed too great. Some will feel uneasy as there are still so many unknowns regarding the darker corners of the world wide web.

Irrelevant as to why an individual might not like the current status quo, as there has been no alternative, it has mattered little. The introduction of an alternative presents a lot of unknown scenarios. More moving parts will have to be factored into risk assessment protocols. It presents uncertainty, which is the enemy of profit.

Interestingly enough, Becerra seems to have learnt the residents of Silicon Valley have very elusive lawyers. Also included in the rules are definitions of those who would be subject to the rules. The company would have to:

  • Have revenues in excess of $25 million
  • Buy, receive, or sell the personal information of 50,000 or more consumers, households, or devices
  • Derives 50% of annual revenues from selling data

These are quite crafty conditions and could potentially cover every type of organization out there. The lawyers will have to be on top-form to find the grey areas here.

The rules still have to negotiate the turns and throws of the political aisles before the digital economy gets too worried, but California is setting the pace when it comes to tackling privacy concerns in the US.

Italy challenges Netflix tax strategy

The Italian Government is investigating Netflix after the streaming giant failed to file a tax return in the country.

According to Bloomberg, an investigation has been opened to ascertain whether Netflix is liable to pay tax in the country. Although Netflix does not have offices or staff in the country, it does own fibre-optic cables and servers. The probe will aim to determine whether this is deemed a presence which makes it liable for tax.

Italy is currently in the process of cracking down on multi-nationals which it deems does not contribute a reasonable and fair amount of tax to the national coffers. Gucci owner Kering SA has already agreed to pay $1.37 billion to settle an investigation, while Mastercard is also facing scrutiny. With such a wide-ranging remit, it was only going to be a matter of time before Silicon Valley was brought into the picture.

While it might be causing political friction with the US, the residents of Silicon Valley are facing more scrutiny when it comes to creative taxation strategies. Owing to the nature of the internet and there being no need to maintain a ‘physical’ presence in some countries, many of the Big Tech fraternity have been employing creative tax strategies for years, paying what some would consider miserly in comparison to the profits made.

Europe has had enough of Big Tech seemingly avoiding paying fair and reasonable tax back to the societies they benefit so richly from, and Italy is just one of the cogs in the machine. The UK and France are two other countries taking a more strident approach, though a bloc-wide approach from the European Commission has been scuppered to date by self-serving members such as Ireland and Luxembourg.

What this does have the potential to cause is greater conflict between Italy and the US.

The relationship between the two is increasingly fraught. Yesterday, the US threatened Italy over any potential relationship with Huawei, while it is also on the verge of imposing new tariffs which would threaten the export of Italian wine and cheese. President Trump has already suggested ‘digital taxes’ are a way of Europe bleeding US success, and we suspect few will be happy with Netflix being targeted here.

What is worth noting is that these are very early days in the probe, though there could be some interesting precedent set. If the government argue correctly that hardware counts as a physical, and taxable, presence in a market, it could open the door for more probes into other internet companies who maintain they do not have a physical presence in a market.

What we are unsure about is why Italy is going down this route instead of taking a similar path to the UK and France. Netflix can be forced to declare how many subscribers it has in the Italian market, and therefore how much revenue it is realising. It seems a much simpler means to success to simply apply a sales tax on the revenue which is being taken from Italian subscribers.

UK, US and Australia demand security delay from Facebook

Politicians from the UK, the US and Australia have penned an open letter to Facebook CEO Mark Zuckerberg requesting the team delay end-to-end encryption plans.

Signed by UK Secretary of State Priti Patel, US Attorney General William Barr, Acting-Secretary of Homeland Security Kevin McAleenan, and Australian Minister for Home Affairs Peter Dutton, the letter requests that before any encryption technologies are applied to messaging services Facebook includes a means for enforcement agencies to access the content transmitted across the platforms.

Once again, politicians are defying logic by requesting the creation of a backdoor to by-pass the security and privacy features which are being implemented on messaging platforms and services.

“We are committed to working with you to focus on reasonable proposals that will allow Facebook and our governments to protect your users and the public, while protecting their privacy,” the letter states. “Our technical experts are confident that we can do so while defending cyber security and supporting technological innovation.”

It is as if the politicians do not live in the real world. We understand governments have a duty to protect society, and part of this will include monitoring the communications and activities of nefarious individuals, but this is not the right way to go about doing it.

Using the argument of security to undermine security and make citizens less secure is a preposterous idea, almost laughable. The ‘technical experts’ might be confident a backdoor can be built, but how do you protect it? This letter is requesting the construction of a vulnerability into security features, and once a vulnerability is there, it is only a matter of time before it is exposed by the suspect individuals in the rotting corners of society.

What is being suggested here is similar to building a high-security facility in the real world, with 15-foot, electrified walls, guards and watch-dogs, helicopters patrolling overhead, but then asking to leave the backdoor unlocked. It doesn’t matter how good defences are, eventually someone will find their way to the backdoor, open it and then let all his/her friends know how it was done. Chaos would eventually find a way.

This is of course a theoretical situation, the hackers might never find a way to or through the backdoor, but why tempt fate? No-one leaves their home believing they might be burgled that night, but they lock the door in any case. Why create a situation where the prospect of chaos is a possibility, irrelevant as to how faint? This seems like nothing more than simple logic.

As mentioned before, police forces and intelligence agencies are being tasked with keeping society safe. This is a very difficult job, especially with the progress of technology. Facebook, and others in the technology industry, should assist wherever possible (and legal), though this is not the right way to go about the situation.

This does put Facebook in a difficult position. The company is currently attempting to repair the damage to its reputation, as well as re-gain trust from both governments and wider society. However, it is increasingly looking like an impossible situation to satisfy both parties.

In March, Facebook CEO Mark Zuckerberg outlined a new focus for the company; it would hold the concept of privacy dear, and all new services will be built with privacy at the forefront of demands. Thanks to the Cambridge Analytica scandal, Facebook’s reputation as a guardian of personal information has been severely damaged, thus this new approach is critical to regaining credibility in the eyes of its users.

However, end-to-end encryption is a key element of this privacy strategy. Facebook cannot fulfil its promise to the user and satisfy the demands being laid out in this letter. If it was to build in a vulnerability, it could not tell the user in all honesty it has done everything possible to ensure security and privacy.

As the letter states, Facebook is doing more to clean-up its platform.

“In 2018, Facebook made 16.8 million reports to the US National Center for Missing & Exploited Children (NCMEC) – more than 90% of the 18.4 million total reports that year,” the letter states. “As well as child abuse imagery, these referrals include more than 8,000 reports related to attempts by offenders to meet children online and groom or entice them into sharing indecent imagery or meeting in real life.”

This is the situation which Facebook is in. It is never going to be able to remove all the hideous conversations and activity on its platform, but governments will demand it does. Something will always slip through the net, and the sharp stick of the law will be there to punish the company. Facebook will never be able to do enough to satisfy the demands of governments, and therefore will always be a defensive position.

However, you should not be distracted by the rhetoric which is being put forward in this letter. Yes, there are some horrendous activities which occur on the platform. Yes, Facebook should, and probably could, do more to assist police forces and intelligence services. Yes, the digital economy has largely shirked responsibility in the years leading to today. But no, building vulnerabilities in the system is not the right way forward.

These politicians are saying the right things to gain public support. These actions are in the pursuit of catching child molesters and terrorists; who wouldn’t want to help? But you have to look at the collateral damage. Users would be left open to identify theft, fraud and blackmail. These messaging platforms are used to have private conversations, exchange bank account details and discuss holiday plans. The number of criminals which could be caught is nothing compared to the billions who would be exposed to hackers on the web.

The idea which is presented here does have good intentions, but it pays no consideration to the collateral damage. The negatives of introducing a backdoor vastly outweigh the positives.

Quite frankly, we are still surprised to be having this conversation. Undermining security is no way to improve security. Governments need to understand this is not a viable option.

Google takes a step towards accessibility and personalisation

Google has announced the launch of Action Blocks, allowing users to customise commands for its personal assistant.

Based on a concept developed by one of its own software engineers, Lorenzo Caggioni, Action Blocks have initially been designed to aid users with cognitive disabilities. The feature allows users to build action commands which trigger a specific outcome. The outcome and the command can be customised to suit the individual user.

“The Action Block icon—for example, a photograph of a cab—triggers the corresponding Assistant command, like ordering a rideshare,” said Google’s Ajit Narayanan. “Action Blocks can be configured to do anything the Assistant can do, in just one tap: call a loved one, share your location, watch your favourite show, control the lights and more.”

While this announcement has been geared around accessibility, the feature could be made applicable to every Google user.

Google has often preached it capabilities to personalise the experience for each user, and while this has been successful to date, this feature could take it up a level. With Action Block, the power of personalisation is put in the hands of the user. Each user will want their device to perform in a different way, and this is one step in that direction.

Right now, the commands are triggered by an icon on the desktop, though there is no reason why this can’t be blended with the voice user interface in the future.

Securing a ride home is a good example. The command could be set at ‘get me home’ which could trigger several different actions. One might be to launch Uber and order a taxi, another could be to open-up Google Maps and the navigation features. This is only one example, but if applied correctly, there is no reason why such triggers could not be applied to almost any feature on the phone. The voice user interface is one which is gathering momentum and it opens-up a plethora of new ways users can interact with devices and the digital economy.

The Action Block feature is currently in trial phase, though this is something which we very much like the look of. Firstly, Google is increasing accessibility of its services to those who are often ignored by society, and secondly, the idea could be developed into something which is applicable to everyone. There is potential to put personalisation into the hands of the user.

Zuckerberg comes out swinging in face of break-up tension

Via a leaked audio-recording of a Facebook townhall meeting with employees, Facebook CEO Mark Zuckerberg has taken a combative position in the face of increasing pressure.

Taking questions from Facebook employees, Zuckerberg has taken a much more forthright and confident stance than he generally does when in the shiny lights of the public domain. The leaked audio files, courtesy of the Verge, paint a picture of a man who is prepared to go to war to protect the gargantuan company he has built over the last decade.

“So, there might be a political movement where people are angry at the tech companies or are worried about concentration or worried about different issues and worried that they’re not being handled well,” Zuckerberg said.

“That doesn’t mean that, even if there’s anger and that you have someone like Elizabeth Warren who thinks that the right answer is to break up the companies … I mean, if she gets elected president, then I would bet that we will have a legal challenge, and I would bet that we will win the legal challenge.”

Presidential hopeful Elizabeth Warren, the Democrat Senator representing Massachusetts, is looking like the biggest political opponent of Silicon Valley. And it is becoming increasingly clear Facebook is enemy number one.

But perhaps these comments indicate just why Washington and its political leadership is acting so aggressively towards the likes of Facebook, Google and Amazon. These are companies who no-longer fear the political establishment. They are arguably more influential, and as you can see from the comments above, they believe they have the upper-hand when it comes to legal arsenals.

As we have mentioned before, this is one of the reasons we suspect politicians are taking such a firm stance against Silicon Valley in 2019. Not only are the actions and business models of these firms’ easy pickings for PR points, Washington DC seemingly does not like it is not the most influential neighbourhood in North America anymore.

On the other side of the debate, Warren has not kept her opinions about Facebook to herself or even attempted to disguise that some of the tweets have been directed towards Zuckerberg.

“We have to fix a corrupt system that lets giant companies like Facebook engage in illegal anticompetitive practices, stomp on consumer privacy rights, and repeatedly fumble their responsibility to protect our democracy,” Warren said in one tweet.

“Zuckerberg himself said Facebook is ‘more like a government than a traditional company’. They’ve bulldozed competition, used our private information for profit, undermined our democracy, and tilted the playing field against everyone else,” she said in another.

“Facebook’s anti-competitive mergers mean they face no real pressure to tackle disinformation. They won’t even do the bare minimum to improve transparency. Tech giants shouldn’t be able to wield enough power to undermine our democracy,” a final one read.

Facebook seems to be the focal point of Warren’s anger, though this might be down to the leaked audio, as well as the concentration of power at Facebook. Zuckerberg himself has admitted that his voting power at the company has made him a target for the politically ambitious, though this is not the only company which is facing pressure.

All of the major players in the Big Tech fraternity are becoming targets and it the raising temperature might hit boiling point before too long. Some of these companies might be willing to accept fines simply because they don’t make that much of a dent in the spreadsheets, but it would not be a surprise to see some aggression coming back the other direction before too long.

Silicon Valley and Washington DC both have ambitions to be the most prominent voice in the ears of the US consumer, but only one can secure that mantle.

Backdoor to Google services closed for Huawei Mate 30

There was a brief glimmer of hope for Huawei users that Google services might have been an option for its latest smartphones, but the workaround has now been closed.

Yesterday on Medium, security researcher John Wu posted a way in which Google services could be downloaded to the latest range of Huawei devices. Many would have been searching for a way to get around the Huawei ban on using Google services, and while we suspect there will be some still out there, this one has at least been closed   .

Wu goes into some detail in his post, though through manually installing Google Mobile Services via an app called LZ Play, users were able to take advantage of an oversight. For a very brief period, some users were able to install Google applications such as Gmail, Maps and Google Pay on their devices, though this has now been removed.

Interestingly enough, this could open-up some uncomfortable questions for Huawei.

It might be deemed a suspect situation to download the app, which requests system-level access, though when you start to look at how it works, it becomes a little more nefarious. Wu suggests the app makes use of undocumented Huawei APIs which can somehow bypass Android’s security system.

To make the situation a bit more complicated, it is now very difficult to find LZ Play on the internet, aside from in news stories. There is one German company and a translated-page which the Google search engine is no-longer able to connect to. It does appear a lot of the traces of this app and the developer has been erased.

Perhaps this is a development US rule makers and Google should take a very close look at. How did an app developer manage to circumnavigate the security blocks which were put in place so easily? This is not proof of nefarious activity elsewhere, but it does indicate some are aware of the cracks in Google software.

US courts open the door for net neutrality fragmentation

A US Court of Appeal has seemingly put the final nail into the net neutrality coffin at a federal-level but has opened-up the option for state-specific rules.

It could be seen as somewhat of a mixed-ruling for the telcos, perhaps leading the US regulatory landscape towards the realms of fragmentation. It is a bit difficult to see whether this is a victory for industry or not.

The United States Court of Appeals for the District of Columbia Circuit was being asked to make a ruling on the decision from the Federal Communications Commission to undo net neutrality rules set in place by a previous administration in 2015. The Republican swaying FCC of 2018 voted 3-2 to remove the rules, which placed greater restrictions on the telcos, though this decision was challenged by various internet companies, local authorities and consumer advocacy groups.

The legal battle between the telco-supported FCC and those representing the OTT ecosystem has been raging for some time, though it was thought this ruling would kill-off the dispute.

“Today’s decision is a victory for consumers, broadband deployment, and the free and open Internet,” said FCC Chairman Ajit Pai. “The court affirmed the FCC’s decision to repeal 1930s utility-style regulation of the Internet imposed by the prior Administration.”

In 2015, a Democrat-majority FCC wrote net neutrality rules, placing the telcos under more utility-orientated regulation and limited the restrictions which could be placed on internet traffic for profit. In undoing these rules in the 2018 vote, Pai opened the door for telcos to offer premium services to content providers. In short, the telcos now have more freedoms to monetize the delivery of content and, subsequently, the consumer experience.

There are good arguments on both sides of the equation. The telcos should be entitled to monetize the assets which the OTTs have come to expect for nothing. That said, without net neutrality the major content players could effectively extinguish competition through throwing cash at better performance. Start-ups simply won’t be able to afford to be able to deliver the expected experience.

Strict net neutrality rules limit the opportunity for telcos to recover the vast sums spent on money. It is the internet industry biting the hand which feeds it. However, an absence of the rules favours the content giants and restricts potential competition or the ability of new disruptions to emerge.

The see-saw regulation which we have seen in recent years does not answer the question which is being asked.

“When the FCC rolled back net neutrality it was on the wrong side of the American people and the wrong side of history,” FCC Commissioner Jessica Rosenworcel.

“Today’s court decision shows that the agency also got it wrong on the law. The agency made a mess when it gave broadband providers the power to block websites, throttle services, and censor online content.”

On one side of the aisle you have a strict regulatory regime which probably goes too far and, on the other, you have a regulatory landscape which is perhaps too light-touch. That said, finding the middle-ground in today’s political climate never seems to be an achievable pursuit.

The issue which we potentially foresee is one of fragmentation.

“We uphold the 2018 Order, with two exceptions,” the ruling states. “First, the Court concludes that the Commission has not shown legal authority to issue its Pre-emption Directive, which would have barred states from imposing any rule or requirement that the Commission ‘repealed or decided to refrain from imposing’ in the Order or that is ‘more stringent’ than the Order.”

In California, the State Senate has passed its own version of net neutrality. A slightly different set of net neutrality rules have also been passed in Washington State. As you can see in the statement above, the courts have not ruled out the opportunity for the States to implement their own rules. This does not mean they are protected from legal challenges, though it does create a potential headache for the industry.

Any corporation which operates in multiple jurisdictions will crave consistency. Having to adhere to regional variances in regulation can prove to be difficult, especially when you are dealing with something as complex as the internet. There will of course be online services which traverse through different states. Being compliant with different regulatory circumstances could potentially be troublesome.

This nuance of the ruling could also test the legal strength and depth of the FCC.

Those States who argued against the FCC’s actions to repeal net neutrality rules include: New York, California, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Maine, Maryland, New Jersey, Vermont and Virginia. If all of these states were to pass their own net neutrality regulation, the FCC would have to fight numerous legal battles simultaneously. It would have the support of the telcos of course, but it would have to face an army of reinforcements.

The Electronic Frontier Foundation, The American Council on Education, eBay, Twilio and The City of New York, as well as 27 other local authorities also supported the petitioners. It would be safe to assume numerous other content creators and distributors would also support net neutrality.

Some might have thought this ruling would have put an end to the prolonged net neutrality debate, however the curve ball thrown from the courts creates a very complicated regulatory tapestry moving forward.