What the US FCC Ruling on Net Neutrality Actually Means

The US FCC Ruling favouring Net Neutrality is a definitive step toward the shift of  Internet-regulation-power from the Parliament to the Government.

It is of little importance whether the FCC endorsed or rejected the (notably wrong and unjust 1) idea of Net Neutrality. What actually counts is that somebody else than a Parliament self-advocated a ruling power affecting fundamental rights that should have remained under the legislative assembly shield.

The US case is not the first and is not alone. Italian Autorità garante per le comunicazioni (a sort of FCC-like independent body) has since longtime passed regulations and opinions about issues that should be a prerogative of the Parliament.The most notably case is the anti online piracy regulation that superimpose a due-process infringing, parallel investigation and trial system to the actual, court-led criminal trials.

  1. The idea of an equal, non discriminated access to the Internet is not bad as such. But if a State wants to provide this opportunity, it shouldn’t be done at the ISPs and Telcos expenses. In other words: traffic shaping and – in general – the techniques that make possible to prioritize the packet’s transit – allow small companies to compete with bigger ones without the need of huge infrastructural investments. Why smaller companies should be banned by the competition “just” because somebody “wants” a free access? This “need” ought to be satisfied by the State itself with a Net-Neutral, publicly-owned and managed network leaving the private sector free to compete. I understand, of course, that this “socialist” approach is out-of-history and is not backed by an economic rationale. And this is exactly the reason why Net-Neutrality is wrong or – at least – non sustainable if its burden is on the private-sector only.

Google and Germany’s Ministry of Justice: A Wrong Idea of Dominant Position

The Germany’s Ministry of Justice asked Google to disclose its search algorithm because of the Mountain View company dominant position on the relevant market.

The request is not legitimate at least for two main reasons.

First: Google’s current “market position” is not based on a “users’ lock-in” as in the file-format case (for longtime, not being able to open a .doc file has been an effective method to have the users stuck to Microsoft Word). Everybody is free to use whatever search engine of choice. Yes, because Google is not the only kid in town: Yahoo!, Bing, DuckduckGo are in the same business, but steps behind Google. Sure, Google is THE search engine, as Altavista was a few years ago. But who but (some) historians still remember about the Google’s predecessor? And here comes the point: Google’s success is made by the people who use it: give them a better search engine (and additional features) and Google will fall on a fingers’ snap. This is the last iteration of a wrong concept of “dominant position” and “monopoly” when matched with a successful digital business model based on information as quid-pro-quo for providing (partially) free services.

Second: even if the “dominant position doctrine” were relevant to this case, the German solution would be possibly worst than the disease to be cured, because it would set the precedent that a company, for the sake of the “free market”, should be forced to disclose its industrial and trade secrets. Try to tell this to the pharmas or the automotive manufacturers and wait for the answers!

So the bottom line is: If you want to beat Google, instead of tying its hands, do create a better one.



Iphone for Business? At Your Own Risk

Buying a Iphone as a business tool from a mobile operator is – at least in Italy – a problematic issue.

As I have personally experienced, if the devices breaks after the first, Apple granted, warranty period, you can’t do anything else but drop it in a local store, having shipped to a repair facility, and hope for the best, without being given a spare device.

The conclusion is: before subscribing a plan that includes an Iphone, do check if the mobile carrier is offering some insurance or other form of assistance (of course, at extra-cost) that doesn’t let you naked in the middle of Trafalgar Square on New Years Eve.

Here are the facts:
– On Nov. 2012 I purchased from Vodafone Italia an Iphone 5 with a 24month voice and data plan,
– The warranty is on behalf of Apple for the first 12 months, and on behalf of Vodafone for the next 12
– The battery of the phone died and I asked an official Apple centre if they could change (upon payment) the battery,
– The Apple Centre told me that since the phone is now under Vodafone warranty they can’t even touch it,
– I called Vodafone and they told me to give them the phone, with no actual idea of the time needed for the repair (to be on the safe side, it shouldn’t be less than a month) without giving me a back up phone.

That said, my option are:
– stay possibly one month waiting for the Iphone to come back. But this is impossible: it’s a work tool, so I should buy another Iphone in the meantime. Why should I care – then – to repair the first one?
– buy a new smartphone. Again, why should I repair the old one?
– change the battery on my own, losing what lasts of the warranty and risking to break it. Spend money, finally buy a new phone.

Thus, whatever the option, to solve my problem I’m supposed to buy a new Iphone just because there is no way to just change a died battery of an otherwise perfectly working device. Maybe this business strategy might work for a consumer that can just wait for the smartphone to come back from the repair garage, but it is non acceptable for a business user.

Web tax in Italy. Why just “web” companies?

An article published by The Financial Times, supports the idea that the companies making monies from the digital buy/selling of goods and services should pay taxes without “eluding” the fiscal regulation. The Italian newspaper Huffington Post – and its sibling, Repubblica.it – jumped on this article using as leverage to sustain the feasibility of  the infamous Italian “Web Tax” that makes mandatory to buy online advertising from companies with an Italian VAT number as a way to force (primary) Google to pay taxes in Italy.

It is astonishing – astonishing – how this people just forget that “tax heavens” and “fiscal elusion” are standard business of the whole international – and Italian – economy. Just look at which (Italian, or Italian-based) companies have a branch, a shell, or whatever “thing” the fiscal engineers have devised that are located abroad, and above all, since when. Just to name a recent court case, the “Mediaset Trial” that pushed Mr. Berlusconi out of the Italian Parliament was based on the accusation that the Italian-based media company Mediaset traded the acquisition of broadcasting rights from the USA by way of a triangulation with an off-shore company. The investigation started in 2005, way before the rise in Europe of the big digital companies.

So, my point is simple: this is the free economy and you have to live with it. You can’t both endorse “capitalism” as a way of life and complain if some companies are smarter than others, by exploiting the different way and level of taxation. To put it short, the free economy is based on difference and polarization, i.e. competition, and there is nothing that the odd-day-capitalists-even-day-communists can do, unless taking an AK-47 and start a socialist revolution against themselves.

EU:a State-approved professional to connect a router to a socket? Italy already got it

The “discovery” that Italy is going to enforce the EU directive 2008/63/CE by imposing that only a State-approved professional can connect a router to a socket has generated some sort of  hype among those who’re not familiar with the Italian legal system. Since 1992, in fact,  the decree of the Ministry of communication n.314 already establish such burden (and sanction those who don’t comply.)

The true news is that – should the government actually revise the old regulation – things can only get worse…

Amazon.it to infringe Italian data protection law?

I’m an old Amazon.com customer and I’m very happy that the Company finally landed in Italy.
It is odd, nevertheless, that Amazon.it’s data protection policy (informativa sul trattamento dei dati personali) is not fully compliance with the Italian Data Protection Code, since mandatory information are missed:
– the identity of the data controller (responsabile del trattamento)
– how long will Amazon handle the personal data
– what will happen when the data handling is no more necessary
– the rights belonging to the data subject (diritti dell’interessato) under sect. 7-13 of the Italian Data Protection Code
Further more Amazon.it’s privacy procedure fails to collect the explicit consent of the data subject for the data processing and didn’t collect the specific consent to handle the sensitive data (those related to customers who purchase political, philosophical, and/or healt-related books.)
This situation, then, poses an interesting question: is Amazon.it actually infringing its customer personal privacy rights?
Strictly speaking, the answer is yes because the law has been breached. Nevertheless I’ll keep purchasing books through Amazon services since I feel more protected by Amazon ethical commitment than by a bunch of legal lingo.
Fact is that bureaucracy asks for its lamb to be sacrificed.

On Apple’s Adobe Flash Ban(g)

So, according to MacRumors, Apple’s explanation for the ban over Adobe’s Flash-to-Iphone compiler is deadly simple: Apple doesn’t want to loose its grip on the users. They invested monies in creating product, capturing a market and now want to raise fences to prevent other eating on theyr own dish (or, better, hunting in the same hunt-resort.

Adobe’s supporters – on their side –  shout fire accusing Apple of being unfair, etc. etc. etc. …

Well, I might agree with those criticism against Apple, were the accusation coming from the open source community (where Mac OsX is supposed to come from?) but honestly I can’t accept that an hyper-proprietary company such Adobe (member of Business Software Alliance, among other things) might complain against a business strategy that is entirely into the “mood” of this industry sector. This is the market, catch-it or leave-it.

This is not to say that I do like or approve Apple behaviour.

Preventing user from having multiple choices, liberty in other words, is by definition an unfair move. I think Apple should learn from Google, whose “power” stays firmly in users’ hands.

One may think that this is wrong too. Maybe, but between a leaving in a golden cage (as soon as you can afford it) or be free in the wild I would go for the latter.

Google executives acquitted in Italy from defamation charges

Today the Court of Milan made public the decision in the criminal trial against four Google executives, charged of defamation and illegal personal data handling in relationship to the publication on the video sharing platform  of a video containing act of bullyism against a person affected by the Down Syndrome.

The legal basis for the charges, following the prosecutor’s theory of the case, was that those executives failed to exercise a pre-emptive control over the contents published by Google final users’, thus allowing the infringement of the reputation of the concerned person and of an NGO representing Down-Syndrome-affected persons.

The Court acquitted all the defendant from the charges of defamation, while found them liable of the illegal personal data handling charge. The whole sentence (including the legal technicalities that support the decision) will be public within the next 30 days.

This indictment is the last component of a long series of court decisions that kill Network Neutrality and turn ISPs and Telcos into Digital Vigilantes while, in the meantime, no actual protection is given to the victims of online crimes.

The Peppermint and The Pirate Bay cases, the legal argument against Youtube and the one between an entertainment-backed lobbying group by one side and Telecom Italia, the ISP’s association and the Data Protection Authority on the opposite and – finally – this indictment are all linked through the same connection: to erode the absence of the legal duty to preemptively contol internet users’ activity established by the UE directive on e-commerce.

What is bizarre, in this Google trial, is that for the very first time the existence of the ISP’s duty to perform a mass-control of user activities has been asserted thank to the data protection regulation. The same data protection regulation that forbade the disclosure of the identities of people allegedly accused by the entertainment industry of copyright infringement through P2P networks.

Is still to early to understand the Court mind (since the basis for the decision will be disclosed within the next 30 days. It is, nevertheless possible to try an educated guess based on the Court records. To put it short, here is a probable explanation for the decision:

1 – there is a rule of law into the Criminal Code that says: to not stop a fact equals to cause it,
2 – data protection law requires a prior authorization to be obtained before handling personal data,
3 – a video to be posted online is personal data,
4 – therefore Google executives had to check whether the user who posted the video got the preemptive authorisation from the people of the video, and
5 – by failing to do so, they infringed the data protection law
6 – furthermore, by not controlling in advance, they let the video to libel the victim of the violence (this charge has been dismissed.)

It is too early to assess the damages provoked by this decision, but it is not unreasonable to imagine that – should this court decision become “case law” – the telco market will suffer an alteration of the competion among the various players. The smallest one can’t handle the increasing risk (and cost) of being sued or investing in momentum-generating policies. Big international players might find Italy a lesser attractive place to do business in.

An essay on Network Neutrality

Axel Spies, a friend and a brilliant Washington-based high-tech lawyer just sent me this paper on Net Neutrality in the US. A must reading.

Net neutrality continues to be fiercely debated in the United States. The new Democratic FCC leadership has committed to expanding and enhancing existing net neutrality restrictions. The current FCC Chairman, Julius Genachowski, recently announced that he will initiate a rulemaking to codify the FCC’s existing network neutrality principles. Those principles, originally set forth in a 2005 “Internet Policy Statement,” declared that to “encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to:”

* access the lawful Internet content of their choice.
* run applications and use services of their choice (subject to the needs of law enforcement).
* connect their choice of legal devices that do not harm the network.
* competition among network providers, application and service providers, and content providers.

The Chairman has publicly stated that he plans to propose a fifth nondiscrimination principle that would prohibit broadband providers from discriminating against particular Internet content or applications. However, providers would be able to offer “managed services” in some limited contexts. A sixth principle of “transparency” is also debated to require broadband Internet access providers to disclose network management practices.

The FCC’s informal announcement stirred the ongoing debate over the extent to which broadband and other network providers will maintain control over their networks, free from government restrictions, to “manage” their networks, including the ability to block or slow certain traffic, for the benefit of all users. Proponents of a “neutral” network, including Google, Yahoo!, eBay, consumer rights, free speech advocacy groups, and generally the three Democratic FCC commissioners (Chairman Genachowski, Copps and Clyburn), are concerned that without government rules, service providers will act anticompetitively by restricting content, sites, or platforms, on the kinds of equipment that may be attached to the network, and on the modes of communication allowed. In contrast, Internet Service Providers (ISPs), incumbent local exchange carriers (ILECs), including AT&T and Verizon, some cable providers, such as Comcast, free market advocacy groups and generally the two Republican FCC Commissioners (McDowell and Baker) oppose net neutrality obligations.

Earlier legal rulings regarding net neutrality fell short of setting forth a comprehensive policy. The FCC embedded some net neutrality policies in conditions placed on the Verizon/MCI and SBC/AT&T merger approvals. In 2008, the FCC, then led by Republican Kevin Martin, sought to enforce the Internet Policy Statement principles on cable TV provider Comcast when allegations arose that Comcast had blocked consumers from using several peer-to-peer applications. That decision is currently being debated in a federal court appeal. In addition, the FCC principles are currently being imposed on recipients of broadband stimulus funds. “

More on the Italian Antitrust investigation upon Google News

The strongest claim supporting the Italian Antitrust investigation upon Google News is the alleged Google “dominant position” that would make Italian publishers poorer (better, less rich) by not getting advertising revenues from their online contents.

There is some doubt, nevertheless, that  Google’s market role could be defined as a “dominant position”. 1

Although it is undeniable that Google is the users’ preferred choice, and that Google has created from scratch a new business model attracting a huge quantity of customers, its legal status can hardly be defined as “dominant” in the Antitrust meaning. A characteristic of “dominant position” is the customer’s “locked-in syndrome”. Once you buy a product (or a service), its technological, purposely created oddities – such as non-standard file format etc. – make it almost impossible to switch to another similar, competing product. The most blatant example is the operating system market, where Microsoft was able to secure its market quota through its dominant position.

In Google’s case, au contraire, users are not “locked-in”: they can buy advertising services wherever they like, and use other search-engines at their will. Furthermore, Google can’t do anything to force its users to use its services, except by improving efficiency and quality. This means, in other words, that Google might lose its business power on the snap of finger. To put it short, cannot rest on its laurels.

As for the specific claims of the Italian publishers, there is neither a contract with them, nor a broader legal obligation falling on Google’s shoulders, to force the search engine to actually find “everything” on the Internet. 2 If they don’t like Google’s “banning attitude” (that still has to be demonstrated, by the way) they can simply find different agreement with Google’s competitors, thus forcing users to change their search engine of choice. Provided – of course – that Internet users find those contents of some value, but this is a horse of a different colour.

  1. “Dominant position” is a concept belonging to the Antitrust law and depicts a situation where a company stays in its market in a much stronger position than its competitors, thus setting the rules for competition.
  2. Oddly enough, this is the first time, at least in Italy, where Google is “charged” with not making contents available, while in the past its management has been accused of not removing “disturbing contents” from its indexes