Matt Wilcox Pro

The FCC repeal of 2015 net neutrality regulations took effect yesterday, so this seemed like a good time to share the following, originally posted here on January 3, 2018.

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It all started in 2008, when the people at Comcast noticed a curious thing. File-transfer giant BitTorrent was consuming more and more Internet bandwidth. More, it seemed, than Comcast cared for them to consume.

Comcast’s solution was to “throttle” BitTorrent’s and other large users’ bandwidth. That is to say, they slowed down their Internet speed.

When the practice came to light, the FCC slapped Comcast’s wrists. Or, rather, tried to. The rules were vague then, so Comcast emerged with wrists intact, albeit with a bit of mud on their face.

The BitTorrent case and others like it eventually led, in 2015, to the FCC’s lumping Internet Service Providers (ISPs) in with telecommunications service providers. ISPs could no longer, as NPR put it, “decide which websites load faster or slower, or charge websites or apps to load faster.”

Except, that wasn’t exactly true. ISPs have been allowed to do exactly that, and that’s not necessarily a bad thing. Moreover, the conversation may be less about ending neutrality and more about revising the rules.

Net neutrality matters for financial institutions

Having worked in the banking industry since age 17, I’m well aware of the burdens that overzealous regulators can impose. With banks in particular, it seems whenever Washington feels a need to regulate, overkill is part of the mandate. So I tend to look favorably upon any suggestion of simplifying or doing away with rules.

But net neutrality has implications for the banking industry. I probably don’t need to point out that digital banking rather relies on a fast Internet. Without net neutrality, banks couldend up paying extra to ensure speedy transactions, which doesn’t bode well for institutions not in eager pursuit of increased overhead.

Note that I said banks could end up paying extra. No one is entirely sure just what the repeal portends. As recently as November 22, @Comcast tweeted this promise:

We do not and will not block, throttle, or discriminate against lawful content. We will continue to make sure that our policies are clear and transparent for consumers, and we will not change our commitment to these principles.

That should reassure. Unless, like Ars Nova’s Jon Brodkin, you’re concerned about wording changes in Comcast’s stated positions over time, past abuses, and the fact that …

… Comcast has drawn a distinction between “paid prioritization” and “anti-competitive paid prioritization.” Paid prioritization should not be banned entirely, but “anti-competitive paid prioritization” should be limited, the company has argued.

Those who want to keep the current rules, and those who want to revise them

Besides the lion’s share of consumers, those who argue to keep net neutrality include the likes of Apple, Google, Mozilla, Amazon, Dropbox, Facebook, Microsoft, Netflix, Snap, and Spotify, to name a few. Here’s an excerpt from a statement by the nonprofit organization Mozilla:

Our position is clear: the end of net neutrality would only benefit Internet Service Providers (ISPs). That’s why we’ve led the charge on net neutrality for years to ensure everyone has access to the entire internet.

Apple had this to say in its Reply Comments to the FCC:

The result would be an internet with distorted competition where online providers are driven to reach deals with broadband providers or risk being stuck in the slow lane and losing customers due to lower quality service. Moreover, it could create artificial barriers to entry for new online services, making it harder for tomorrow’s innovations to attract investment and succeed. Worst of all, it could allow a broadband provider, not the consumer, to pick internet winners and losers, based on a broadband provider’s priorities rather than the quality of the service.

But let’s not be naive. Apple, Google, et al have shareholders to please, which means we shouldn’t assume they have only the public’s best interest at heart. Indeed, the issue is not as simple as they make it sound. These companies enjoy serious advantages under current regulations, so it’s no wonder they would want to maintain status quo. A recent post by science writer Brian Dunning points out that …

… from an infrastructure perspective, there is no such thing as a “fair” Internet. The biggest content providers—Google, Facebook, Netflix, Akamai, Amazon, and others—are directly connected to Tier 1 networks, the highest-level networks over which data flows worldwide without having to go through anyone else’s routing, negotiation, or settlement. You and I don’t have that …

… Facebook is already enjoying “king of the hill” status as a Tier 1 service. Theirs is an easy position to take from where they sit.

Not surprisingly, ISPs are keenly interested in revising net neutrality rules. And they have their allies in the press. Writing for Forbes, Nelson Granados observes:

… the internet as a neutral platform for content providers and consumers has pretty much remained so during three regulatory regimes: One with no specific rules of anti-discriminatory behavior, one with explicit rules, and 2017 with an FCC that had no intention to enforce the rules. So there’s no major reason to fear a doomsday scenario going forward.

However, he adds, “That doesn’t mean there are no reasons to worry in the longer term.” He goes on to name a few, including “a more competitive environment in industries that could clog the internet pipes, like video streaming services.” Moreover,

… since 2015 ISPs have increased vertical integration into content (e.g., AT&T acquired DirecTV and Time Warner; Verizon acquired Yahoo and launched Go90) and they have natural incentives to favor their own content.

The net has never been neutral

“Unfettered access” may sound pleasing to some, but in fact it’s not possible. One of the problems in conversations about net neutrality is that the subject is too often treated as an all-or-nothing proposition. Workable solutions to managing the Internet are to be found between extremes on more than one continuum.

The Internet is a limited resource for which demand varies throughout the day. Without some form of “traffic shaping,” highest level users would utterly consume capacity, such that there would be no so-called free access at all. To wit, Dunning addresses the ins and outs of Internet traffic, taking into account not just ideological and economic factors but technical ones as well:

Let’s look at the basic example of Internet on a plane. You buy the service, and you find out that streaming video is blocked. No YouTube or Netflix on a plane. Why not? Because you would suck up all the bandwidth, and nobody else on the plane would be able to check their email or work on a Google doc. It’s necessary for the airline provider to impose this restriction to keep the service more useful for more people. It’s an example of an absolutely necessary fundamental violation of net neutrality.

The airline example is a microcosm of every other Internet environment. Your neighborhood broadband provider has to do this too. They generally do slow abusive users, peer-to-peer file sharing networks, denial of service attacks, even streaming video. It’s called traffic shaping. It’s done on a dynamic basis all day long, and it’s the basic principle for maintaining network quality of service. Your home broadband service would be terrible if your provider was not, right now, prioritizing some traffic, and delaying other traffic.

To Dunning’s point, The Palmer Group CEO Shelley Palmer writes in AdAge that what we’ve been calling net neutrality for the past two years hasn’t been all that neutral anyway:

Under net neutrality there were fast lanes and slow lanes, and a loophole called zero-rating which allowed services like T-Mobile’s “Binge On” to exempt certain streaming services from its data counts. There were other loopholes written into the rules where specific clauses included phrases such as, “Subject to reasonable network management,” which basically meant ISPs could throttle traffic if they thought they had to.

What the real debate needs to address

It’s important to avoid treating net neutrality as a choice between two extremes. No one wants absolutely free trade—the need for rules is understood—and no one who is informed on the subject wants absolute net neutrality. The debate should not be whether or not to have rules. It should center around what the rules should be, how far they should go, and who gets to make them.

EVERY TIME a new communication technology emerges, people lose no time predicting the demise of an existing one. 

The printing press was going to ruin the human mind. Motion pictures, radio, and TV were all going to eliminate reading. TV and, later, streaming were going to do in movie theaters. Digital media threatens the death of printed newspapers. 

There may be something to that last one—time will tell—but the other doomsday prophecies never came about. But now podcasting has some people worried about the survival of radio.

If you listen to podcasts, you’re not alone. Last month, Fast Company reported that there are over a half-million to choose from. That number comprises some 18.5 million episodes in over 100 languages in 155 countries. Two months ago, Apple Podcasts alone passed 50 billion episode downloads and streams.

Not counting prototypes—because counting them would be something of a stretch—podcasting as we know it today had its start in 2004. It received a significant boost from Apple in 2005 with the ability to download podcasts via iTunes. Since then the growth has been explosive. 

Of course, iTunes isn’t the only game in town. Android device users can use Google Play to download podcasts. And iOS and AOS support Spotify, Pocket Casts, Overcast, and others.

Top ten podcasts of 2017

According to Podtrac, the ten most downloaded podcasts of 2017 were:

1. S-Town
2. Serial
3. This American Life
4. Radiolab
5. Dan Carlin’s Hardcore History
6. TED Radio Hour
7. Invisibilia
8. Freakonomics Radio
9. Dirty John
10. Wait Wait… Don’t Tell Me!

With hindsight, podcasting’s explosive growth shouldn’t be surprising. These days pretty much anyone can produce studio-quality music, on-demand books, movies, and radio-like content, all from home. And it’s almost as if pretty much anyone does. Of course, content and quality are all over the board, and not every podcast is a hit. Still, there is no shortage of hits, and that has traditional stations and networks taking note. Not a few wonder if podcasting is poised to put them out of business.

A number of factors make podcasting a tough competitor. Advertisers are lining up to sponsor them. Sheer volume and variety of content ensure programming for every taste and interest area. Podcast content is not under the same FCC restraints as radio content. Fans can tune in to podcasts when it suits them rather than according to a broadcast schedule. Podcasts allow for binge listening and catching up on past episodes. And a couple of people in a garage studio can be more nimble, more cost-effective, and more free of red tape than a major radio corporation. 

Still, I think it’s a bit soon to make funeral plans for radio.

For one thing, radio can and does steal podcasts’ thunder by making content available in podcast format at broadcast time or shortly thereafter. Perhaps you noticed that three of the above-listed top ten podcasts are NPR programs.

For another, there are things radio can do that podcasts can’t. Here’s a big one: Radio can provide up-to-the-minute news, but podcasts can’t. Even better, radio can provide up-to-the-minute local news, weather, and traffic, all of which local markets need. (For the same reason, satellite radio hasn’t done in local radio.)

For another note of encouragement, consider that the Pew Research Center found that radio listenership has remained more or less constant from 2002—a full two years before podcasting took off—to the end of 2014—a full ten years into the boom.

Podcasting presents an opportunity for financial institutions.

Short of starting your own podcast—which may not be a bad idea—banks can advertise on podcasts that are popular in their markets. It’s possible to run prefab spots or, even better, let the podcasters write and deliver spots for you. That gives you the advantage of an implied endorsement in the style of the very people the market tunes in to hear.

If you’re not a podcast listener, I recommend giving it a try, not least in order to keep up with the way your customers experience technology. With over a half-million available, there’s a good chance you can find at least one to your liking.

“Luddite” sounds like an indestructible substance over which wars are fought in the Marvel Universe. 

The word originally referred to workers in early 19^th century Nottinghamshire, England, who protested low wages and poor working conditions by destroying their employers’ machines. Today, Luddite has morphed into a reference to people who oppose technological advances.

Contemporary Luddite-type voices arise with nearly every innovation, from smartphones, to digital music, to self-driving cars, to gene splicing. Concerns range from “it’s bad for character” to “you shouldn’t mess with nature” to “it’ll put people out of work.” The first two have yet to hold up, but the last often does. It’s difficult to name a field where technology has not eliminated jobs. To be sure, technology also creates jobs, though it is by no means a lateral shift. It’s not as if the average laid-off assembly line worker can move into a newly created animator job at Pixar.

Job loss is, unfortunately, a brutal reality of progress. Despite what some politicians aver, the majority of phased-out American jobs have not gone to immigrants or overseas companies, but to automation and digitalization. That doesn’t lessen the heartbreak and very real consequences of losing a job or a once-thought secure career. It only explains the underlying why.

When grocery chains install self-checkout lanes, not a few customers express a bit of indignation. In something of a reverse-Luddite concern, some feel they are taking over a task once performed by employees and thus entitled to a discount. It’s more complicated than they realize, of course. If there are savings, they may come in the form of an avoided or delayed price increase rather than a discount. Perhaps more important, the if in if there are savings is a sizable if. According to the academic journal The Conversation, self-scanners do not reduce a store’s costs at all. In fact, The Atlantic recently reported that for many stores self-scanners increase costs by providing a too-tempting, easy way to steal.

Yet “we deserve a discount for doing the store’s work” may not reflect economic naiveté so much as not seeing value in a brand. That should be of concern to all, not least the financial services industry. 

It goes without saying that digital technology has eliminated or reduced the need for many a position in the banking industry. Outside of investment advice, consultation, and large commercial deals, fewer and fewer banking transactions require interaction with a live body. Portable devices, PCs, and ATMs pretty well cover the gamut from account set-up, to loan applications, to deposits, to payments, even to cross-selling. Today, a loyal customer might realistically have no need to set foot in a bank lobby for years. Clients using a bank’s technology might, like grocery shoppers, begin to wonder if they, not the bank, are doing most of the work—and, therefore, if they’re really getting enough value for fees paid.

That, of course, can lead to price-shopping, a brand’s worst enemy.

Banks in general have long faced the challenge of the parity-product, utility, or necessary-evil perception. Slogans like “The friendly bank” do nothing to help and, worse than going unnoticed, risk inducing eye-rolls. 

Client-banker relationships can offer an effective differentiator, but are inconsistent and tend to build loyalty not to a bank but to an employee—who may move on and take clients along. More disconcerting, however, is that client-banker relationships today are giving way to technology that becomes the client’s primary point of contact with the bank. 

Replacing bankers with screens requires a user interface that conveys perceived brand value. As I have written before, it is difficult but not unattainable. One need look no further than the fierce loyalty users have for their Android or iOS devices, which are, with all due respect to your smartphone of choice, all but parity products.

Every digital banking innovation deserves to heralded as a significant step forward in efficiency, accuracy, and service. From a marketing standpoint, it’s important to communicate the advantages of technological advances often—and convincingly—in order to ensure that clients continue see value. That can help ward off potential Luddites and reverse-Luddite protests.

Of course, it bears remembering that ensuring clients see value begins with ensuring that financial institutions first deliver it.

I have empathy for writers of futuristic science fiction. It’s almost impossible to correctly envision the future.

You may have noticed, for instance, that 2001 came and went without the discovery of an obelisk on the moon.

But last week, Google’s I/O Conference apparently conjured up visions of 2001: A Space Odyssey’s rogue robot Hal for a few attendees and bloggers. 

It began when Google CEO Sundar Pichai played a recording of a phone call to a salon to book a haircut appointment. Normally such a conversation would be unremarkable, and this one would have been, too—had not the caller been an artificial intelligence app called Duplex. Astonishingly, the salon employee who took the call couldn’t tell. Duplex handles conversation adeptly and naturally, even tossing in convincing ums and ahs, hesitations, and tonal variations. Even after being clued in, audience members had a hard time believing the caller wasn’t a real person.

To hear Duplex make the salon appointment, click here. To hear it make a dinner reservation, click here.

It’s a marvelous technological achievement with untold potential to be useful. Yet, perhaps even predictably, no small number of people were creeped out. NPR reported:

While Google wowed developers with the realness of the bot’s speech, many observers immediately took issue with how the technology apparently tricked the human on the line.

“Google Assistant making calls pretending to be human not only without disclosing that it’s a bot, but adding ‘ummm’ and ‘aaah’ to deceive the human on the other end with the room cheering it… horrifying. Silicon Valley is ethically lost, rudderless and has not learned a thing,” tweeted Zeynep Tufekci, a professor at the University of North Carolina at Chapel Hill who studies the social impacts of technology.

“As digital technologies become better at doing human thingsDuplex-Salon appt Duplex-dinner reservation, the focus has to be on how to protect humans, how to delineate humans and machines, and how to create reliable signals of each—see 2016. This is straight up, deliberate deception. Not okay,”

Entrepreneur and writer Anil Dash agreed: “This stuff is really, really basic, but: any interaction with technology or the products of tech companies must be exist within a context of informed consent. Something like #GoogleDuplex fails this test, _by design_. That’s an unfixable flaw.”

To which I say, oh come on. 

Development is in the early stages. If the thought of unknowingly speaking with a machine need really be troubling, and I’m not convinced it need be, it’s a simple matter to program Duplex to open a conversation by identifying itself. Let’s not lose sight of the Wow! by inventing pseudo-moral dilemmas.

Last year, another AI experiment was blown out of proportion in the media. Perhaps you heard about it: Facebook shut down a pair of AI-esque bots because they had invented their own secret language and, for all we knew, were plotting humankind’s overthrow. At least, that’s what you might have thought from irresponsible headlines and stories. In fact, Facebook was conducting an experiment to see if the AIs could manage a simple negotiation. In the process, the bots improvised their own shorthand, which, when you think about it, is remarkable. Facebook stopped the experiment not because a program in which they couldn’t understand the bots was dangerous, but because it was useless. 

A few weeks ago I wrote about the Cambridge Analytica situation, a case in which it’s too early to tell if fears and accusations are grounded, hyperbolic, or a bit of both. In the meantime, Mark Zuckerberg appears to be getting serious about privacy. I suppose being called before a Senate panel can do that to a person. As I write, Facebook staffers are busily digging through a mountain of apps—a fishing expedition to find out who has been on a fishing expedition, as it were. Facebook’s Newsroom page just announced, 

Facebook will investigate all the apps that had access to large amounts of information before we changed our platform policies in 2014—significantly reducing the data apps could access. [Zuckerberg] also made clear that where we had concerns about individual apps we would audit them—and any app that either refused or failed an audit would be banned from Facebook.

The investigation process is in full swing, and it has two phases. To date thousands of apps have been investigated and around 200 have been suspended—pending a thorough investigation into whether they did in fact misuse any data. Where we find evidence that these or other apps did misuse data, we will ban them and notify people via this website. It will show people if they or their friends installed an app that misused data before 2015—just as we did for Cambridge Analytica.

And not just Facebook. Chances are you, as I, have of late received privacy policy statements or reassurances from search engines, social media sites, financial institutions, and others. Try clicking on a link that takes you Twitter, and you’ll be asked to click OK on a screen that says, “By playing this video you agree to Twitter’s use of cookies. This may include analytics, personalization, and ads.” 

Where will it end? I’m expecting a privacy statement from the pizza delivery dude any day now.

I don’t know whether or not all of the preventive disclosures are overkill, but if they are I don’t mind. Something about “safe” scoring a little higher than “sorry” on the Preferred Outcome Scale.

There’s nothing quite so entertaining as an incompetent bank robber. Alas, as digital banking marches forward, we may see fewer and fewer of them. Before the art all but disappears, here are some favorite tales of mishaps and ineptitude.

• Never underestimate a teller. In Dallas, a would-be robber demanded a teller hand over the money in her till. Fine, she said, but first she would need to see two forms of ID. Which—I’m not making this up—the man produced. She took her time copying down his information, giving police plenty of time to greet him as he exited the bank. AOL.

• The Royal Bank of Scotland in the town of Rothesay has two unique robbery prevention devices. One is a revolving door. A trio of men bent on robbing the branch entangled themselves in it and needed help from bank staff to free themselves. A bit embarrassed, they left to regroup. They successfully navigated the door on their second foray, although it took some doing to convince amused bank personnel that they were serious about committing robbery. It was then that the second prevention device, a counter, went to work. It dealt a broken ankle to the robber who tried to jump over it. His accomplices tried to flee, but in their haste forgot to beware the revolving door. They remained trapped until police came. Anvari.

• After dashing out of a Virginia Beach bank with stolen cash, a robber decided he’d better return and retrieve his robbery note. Whew, he must have thought, that was close. His next thought might have been, Crap! I left the car keys at the bank. Opting not to return for them, he ran home and told his roommate that someone had stolen the car. The roommate, who was the car’s owner, reported the alleged theft. Police found the car, matched it to the keys left at the bank, and arrested the robber. The roommate was no doubt relieved to be spared the uncomfortable “you’ll need to find someplace else to live” conversation. Dumb Criminals.

• The car keys thing may be going around. In January of this year in Taylorsville, Utah, a man left his car keys at the credit union he had just robbed. Taking off on foot, he snagged and tore his bagful of cash. He could only watch (and, possibly, swear a blue streak) as the wind carried some of his booty into hands of eager passersby and the rest of it down a storm drain. To add to his ill luck, police promptly apprehended him. With this incident and his already-lengthy criminal history, I suspect he is in jail as I write. Miami Herald.

• The note seemed clear enough: “I have a gun. Gimme your money or else.” But to the robber’s bafflement, the teller handed back the note unread. This was Harbor Bank of Maryland, she explained, and she couldn’t accept a Maryland National transaction slip (on which he’d written the unread demand). The man took his note and left, leaving the teller unaware that she had just thwarted a robbery attempt. We’d be unaware, too, and the would-be robber might not have been apprehended if not for a woman who, waiting in line behind him, read the note over his shoulder. Baltimore Sun.

• Two of my favorites happened close to home in Salt Lake City. In one, a man handed a robbery note to a teller only to learn, the hard way, that two armed FBI agents were in line behind him. In the other, a man ordered a teller to empty her till into a paper sack. When she handed him back the back, he shoved it down the front of his pants and fled the bank. Seconds later, he, too, learned something the hard way: Dye packs burn at about 400 degrees. Apprehending the man wasn’t difficult. Neither was identifying him. Personal conversations.

• Thieves who rely on robbery notes would do well to invest in blank paper. A man arrested in Englewood, Colorado, wrote the robbery note on one of his personalized checks. To his credit, first he blacked out his name. Not to his credit, he didn’t black it out very well. Neowin.

• Another fellow at least had the good sense to use a nameless starter check. But the thing about checks, even starter checks, is that they have account numbers. Tracing the check’s account number to the thief was an easy matter. Barstool Sports.

• A Pennsylvania robber was smart enough not to use a personalized document, but he managed to make up for it in other ways. Asking the teller for a blank deposit slip, he wrote, “Just give me the money and nothing else will happen”—and then signed his own name. Norfolk Daily News.

I hope you enjoyed reading these anecdotes as much as I enjoyed sharing them. Fair being fair, I’m going to wrap up with a story where ineptitude took place on the side of the law. It happened a while ago, so I won’t be embarrassing any of Idaho’s finest.

You have doubtless heard of Butch Cassidy, famous for making withdrawals at gunpoint. (His former hideout is a few hours’ drive from my home.) In 1896, Cassidy and two accomplices robbed the Bank of Montpelier, Idaho, making off on horseback with $13, worth roughly $352 today. Instead of chasing the robbers on horseback as any sane person would do, the first responding deputy hopped on one of themthar newfangled bicycles. He didn’t get far. 

Every town is entitled to its claim to fame. Montpelier celebrates the robbery with an annual Butch Cassidy Cook Off and Reenactment. The town even has its own Butch Cassidy Museum, and, out front, a Hollywood-style sidewalk star pays tribute to the robbery.