Communicators we like to talk to the big thinkers on telecommunications policy. Joining us is university of pennsylvania professor Christopher Yoo, who runs the center for technology, innovation and competition there. Professor yoo, what is that . Guest it is research and education part of the school. We do research, hold eventses and sponsoring joint degree programs to train a new type of professional with both advanced legalling training, engineering and economic training. Host where does the technology and innovation come in when it comes to telecommunications policy. Guest if you look at the way we use devices, even back in 95, it was dialup. We have cable versus dsl. While this is projected to keep questioning through the roof, we now have not just a cell phone or data phone but typically a tablet, a cell phone that migrates on a wifi network, laptops. We have multiple connections tame, often in two hands and its a radically different world. Understanding technology include what that means is a big challenge because while this operates on different principles and in many ways most people dont realize that unless you have an lte phone, its not an internet enabled device. It actually is an old uses old legacy telephone connection to get back to the cell tower and, and that fact alone is something that is a technical fact, that is lost on a lot of policymakers and is uncontroversial from an engineering standpoint. Were trying to bring the conversation raise the level of the debate to get the basics down and work on the real issues. Host taking your example there, whats the legal arguments or the information that people should have about that . Guest about what . Host the apple example you gave. Guest while this should be exactly the same as fixed line, you have to understand you cant actually do that with a thirdgeneration wireless device. The destophic is in communing with the web site, those connect it and you can talk about leaving it in the end users control no change, works front interit in principles. If youre on a thirdgeneration phone your device is not physically capable of operating in the same way as the computer on your desk. In fact it depends on an old legacy phone technology regulate it nature different regime and a different set of rules that apply, and lumping them together is putting apples and oranges together and expecting them to taste the same. Host joining the conversation is gautham na going. Guest the sec is embroiled in rulemaking which touches on issues you mentioned and that records rules for how broadband providers should treat information. The rules have brought heat and debate from both sides, especially over the concept of Net Neutrality. What does Net Neutrality mean to you and mass it existed. Guest its one of the one of these issues that almost defies definition. I keep think of the everyone has a different view. For some people, the original proposal included devices, and when i said that, they said its not about neutrality with respect to devices you should be able to hang any phone you want. And for some people it was. For some people its about the way networks interconnect, some people its how networks hang within a network. The simpleess people who are in having a network favor one application over another, and so if you wanted to favor video or favor voice over applications or favor a particularly video provider or voice provider over others, thats a problem. Host do you think the network has been neutral in the past. Guest this is an exampley Technical Information would be helpful. The answer is, absolutely not. People who oppose prioritization should take a look the internet, it is the guts, the magic that makes the internet work. Something in there called the type of service flag. Thats Different Service classes for high bandwidth services, different forms of prioritization defined el in the enter the net from the beginning. People say thats an old art fast ball. Well, who wendy signed the internet because we ran out of internet addresses, they ken that field and included another field. So if you actually look at the Engineering Design that suggests that this was never intended to bedoor prioritization was never intended to be allowed, a little engineering knowledge goes a long way. Its a design feature or the network from the beginning, and if you talk to the way people use the network, theyre using it today to deliver, for example, Voice Services. We have all been frustrated, the true completely i. T. Based Voice Service to your phone is volting, all use prioritization. And a lot of video and other things work the same. Host lets take half a step back. What do you think of the term Net Neutrality. Guest never been a fan. Its funny. Theres an old debate in law about what does neutrality mean. Neutral we respect to what . In a way youre picking and choosing certain aspects and the choices of what you think are important reflect real thats where the real work in terms of the world. The other thing i dont like about it is the phrase call it net diversity a cell phone is nothing short of amazing. I was in turkey, a u. N. Sponsored organization, one of the things that they were talking about is zero rating programs. So facebook has a product called facebook zero, where they give you a phone, fairly basic phone, and it has facebook as the home page. And if you use facebook, the usage doesnt count against your data cap for the month, and theres twitter zero, wikipedia sow, and google free zone. And its an interesting thing where people would say, theres a number of people who beef these are Network Neutrality violation. Its giving privileged position to one app in terms of visibility on the phone and also its not costing as much as the others. The others count against your data tap and theres objections to that. You go to people from india, china, africa, they say, this is how we get the next four billion connected. It makes service cheaper, it allows people to buy lower data plans, cheaper data plans that dont cost as much, and theyre very, very much committed to it. The other reality is we all dont use the network the same way mitchell sons use social media. Thats all they do. Im an email, i use a mapping function, things they dont use. And to me, theres a vision in onesizefitsall and everything has to be everything to everyone. And were discovering youre narrowing Consumer Choice by not letting providers come up with new solutions and new approaches and neighbor people who there are people that want a great camera on their phone, will pay extra, and maybe we optimize a phone so it done do everything perfectly but its a better phone. Other people want realtime gaming. The world of warcraft, and those are ways moving away from the idea of neutrality where all applications have to pay the same price and operate the same way, when they need Different Things. Ill give you another example. Financial services. We often think about this for video but Financial Services doesnt need a lot of bandwidth. It needs microsecond late sense si latent sis, person records. Not something the internet supports. Very different profile, but because they cant get that from the internet, they have to implement a private network. That bandwidth is not available the genius of otheir entity im not in philadelphia, im not on my computer, im using that bandwidth, other Philadelphia Residents can use it. Its sharing the bandwidth. When you force someone to exit the network was they cant get what they want, your killing the genius that makes the sharing of bandwidth that makes the internet efficient. Host i want to read you a quote by reid hatessings of netflix. We shouldnt have to pay for your network if you dont pay for our content. Guest Reed Hastings its an interesting problem. The way i would analyze the issues is much simpler. One way or the other, the consumer is going to pay for all the content and the services, getting netflix delivered to them. The consumers are the sources of value here. What were basically fighting over is howl the payment will be structured. Just one payment to your cable provider, your telephone provider and thats it, they dont get any money from netflix, or you also pay you pay Netflix Subscription fee. The question is how to structure the two numbers. One thing that strikes me is if you have a world in which netflix pays nothing, and netflix is a third of the internet, and still growing, comcast has to expand its capacity. And theyve have to do that regardless of netflix. Thats the world were in. Unless in a world where theres nothing else going on they have to charge every one of their users more for that higher capacity because its going to cost real costs and thats whether those are netflix users or not. So theres a bunch of people out there who arent netflix users who are going to pay for expanding capacity which is primarily for video today. Another way to struck tire is it saying netflix is benefiting from this expanded capacity. We need more bandwidth from the comcast verizons, at ts of the world. Both parties benefit and both bear the cost, and the way you make sure netflix pays the cost is the arrangements between netflix and comcast and verizon and all these providers, where theyre actually defraying the costs of billing the expansion that makes customers happy. Prefer, one contention by Companies Like netflix that called for Net Neutrality regulations is a fear of having the isp serve as a sort of check on potential Business Plans that in order to gain any sort of leverage and a new high bandwidth service, the question is whether or not you can get an isp to privilege your service. So, does a facebook zero or wikipedia zero for that matter, prevent the emergence of a competitor to one of those services don the road . Guest i think it enhances their ability. You have a different set of partnerships, people who bring expertise, some deal with financing, stability, guarantee attractiveness to the customer. Thats more open and freer. It means were thinking of one of the problems is the Digital Divide. Theres a study by two fcc staffer and two people from an Organization Called connect the nation. A kentuckybased i. C. Building out unserved people. Twothirds of people who dont use the broadband right now would not take it even if it were free. They just dont see the value. And so part of what we see is happening is by saying, i dont see the value, take this phone with facebook and you can talk with your grandkids, and it wont cost it will be free. Or it wont be costing you on me margin anything more. They understand that. One thing were trying to do is crack the nut of people who have not adopted and solve the Digital Divide problems we have and partner with people like facebook wick speeda, twitter. The example in the u. S. Is what the call tmobile musics freedom plan. You can stream music and doesnt count against your balance. Popular with consumers and way tmobile, the number four provider, relatively weak position, is trying to change the way it does business to attract new customers at a time whether where they have had trouble doing that. Thats the genius. All these people are trying a bunch of Different Things which we never thought of before. But does offering lower income consumers a portion of the internet increase the odds of them adopting the full internet or condition them to accept a restricted set of services as online connectivity. Guest we dont have great data on this. Both are plausible. Other people would say, having a limited connection is better than no connection at all. The question is, as opposed to what . And friends of mine studying countries where these plans have been deployed to see what theyre patterns are. What strikes me, is i dont we all dont use the entire internet. If you look at any usage, i go to maybe a dozen placesingly. My email server, my office, my desk top, bank, credit card, blogs. Would i willingly pay more for a better connection to my office even if that meant disadvantaging the others for whom absolutely. That reflects howeye the internet. The idea of people getting stuck on something is a strange conflict because what is stopping them . 48 of phones in the u. S. Last year were feature phones, not smartphones. Feature phones dont do very much. Theyre very locked down. They have strict control over apps by the approval process. What they do is they do a handful of things very well. Like old metro pcs. Youtube, worked very well, and they were cheap. And for some people, that is the right combination of price and value, because they get something that delivers on a good cost basis the kinds of things they need the most. So, in many ways your question may be wrong in the the people some consumers really want in youtube. We ought to find a way to give them a cheap phone that delivers them what they want and in a world where were trading on phones an average of 18 months, a and you get a new plan, i personally think the chances of getting stuck someplacer is very low. Host professor, are people giving up privacy with these partnerships . Guest so privacy the answer is, yes, and it shouldnt surprise them. We talk about free apps, and whether its search, you have google and binge and all bind all the other Search Engines for free, email provider are for free. Word processing, theyre not free. Theyre advertising. And the Research Shows that if they actually look at your private information and target ads based on that, they generate something on the order of twice as much revenue than if they didnt. And in many ways some people look at europe and see their lack of an app environment. They have very restrictive privacy policies and as a result advertisingbased web services dont generate revenue and dont have a good app. One thing that people dishtle my students is if youre getting a software that has value for free, you are not the consumer, you are the product. You are being resold to somebody else. And the opinion is, if you dont want to give up your privacy, you should expect to pay for value. If someone is giving you something you used to pay for in the old online world, like a word processing package or email package for free, you should be fully aware theyre making money off of you through advertising and i guarantee you theyre doing it by looking at your private information. We have solutions and there are a bunch of increasing cloud providers and other places that do completely private actions, and then they leave it up to us, the consumers, to decide where we want to go and that makes a good world. Do you think consumers are aware that they are having their information trafficked or sold to the extent to which you said . And the other aspect of the internet we have been asking discussing, most people agree that the nature of the internet is it is not very secure and we see very large tacks where millions of peoples private information is disseminated. It seems like this is a trend that will continue. How do you think those two dynamics will play out and there is a possibility people will lose trust in the system of free software. Guest yes, theres a problem that it they will potentially use trust. It used to be you couldnt get on unless the department of defense said you could. So, thats a good example to me about how people how the network is evolving, where some people actually want a lot of security on the network if youre doing cloudbased stuff. Your keyboard to your cpa and your hard desk exin under office, now zincing through the network, and cloud stuff is not that cure as we discovered from icloud breakins. Now we have architecture where somebody says maybe not for everything but certain thing is might want security. The problem with security you use these encryption things it slows everything down. Everything has to be processed. You have to mutt in keys and even if its transparent it makes the system cumbersome, and you discovers maybe i adopt knee edescription for videos but ecommerce, do. So well see a very different world where we see is stuff spread out. This is one of the great mysteries you did mention something which is very funny, which is misunderstood. This rash of news, whether its home depot or target and kmart, any one of a number of retailers losing information. I started to look into this a little bit. A lot of times the problem is not the internet. Its the scanners in store which is using 20 to 30yearold old technology, which is extremely expensive to update, which is the weak link. On some level thats not just a network problem. Theres hardware problem at the retail level which would be solved, but is where you have to look into the Technical Details and understand the vulnerables. Host professor yoo, we putting bandaids on the system that wasnt meant to be secure . Guest to some extent, yes. I was port a project where they were trying to rethink, what would happen of if we redesign it from scratch. They said theres a bunch of things the internet doesnt do well. Security being one. Mobile is another one. Not designed to do this, and if you were to call my cell phone right now, you would not go the signal would go to philadelphia and back because otherwise every time i moved they would have to update millions of record all over the internet, he is not in philadelphia anymore, hes now in washington, dc. And so we got bandaids other people said we should do this more directly. The fact is, my computer typically has three connections to the internet. I can be on my physical connection, wifi connection, a usb port, and in fact theres different routes on my computer at any time. Internet doesnt deal with that well. So we started to think about how to resync all this stuff. Other people will say this basic, a text tour that is now 40 years architecture that house years old, has done great. Aint broke, dont fix it, and all these fancy things engineers want to do with it. Theres a good case to say, yes, maybe we are putting bandaids but the bandaids are working and theres an article by Mark Handley University College of london called the internet only just works, and he say, yes, its an airliner flying and were reinventing it but we get the duct tape and the baling wire in the right place every time and maybe that is in the the normal is what he is saying. And thats a good argument, too. And thats something we need to study and make decisions about. Host could you foresee an internet architecture 2. 0. Guest we are seeing it now in parallel. What most people think i hear a lot of talk we cant theres more than one internet. Theres private networking that exists besides the internet. If it needs to be secure, youre not going to put it on the public internet. And so what we see right now is thousands of parallel networks now, and some are using principles that are inconsistent with the internet. Why . Because for the needs of that application, you have to. So ill give you good example. Theres a wonderful Organization Called internet 2, a collection of mostly universities but people want to do research. They used to say, dont prioritize. We tried that, didnt work. They now have a product, an ondemand what we call circuit switched network. You get resources and instead of being internetlike you dedicate them telephone style for large data applications. If we were in a Virtual Reality world where you were in washington and i was in philadelphia and were using dat too to duplicate this environment there would be tons of data moving back and forth. Thats what that is for. That approach violates half a dozen basic internet principles. If you are a network purist you would say its a blight on the beautiful interactive world of the internet. The answer is, to that application, thats the only way its going to work. So thats how i think why i said i think we have to think broadly about it and not be too hypnotized by the use today, which is video. Thats the use case today. Wasnt the use case fired of five years ago. If nye what five years from now would be i would make money and be enjoying my life on the beach. But what we want is none of us are that smart. So coming back to where we started the internet means so many people to so many people and why this Net Neutrality debate has stirred up such a publication reaction. Is it fair to say first this debate seems to be mostly affecting people who already subscribe to Home Broadband service and they seem to be reduck tenant for that to change in any would reluctant for that to change and you spoke to the demographics of that. The second thing is, what do you think of the proposal, as chairman tom wheeler issued it in april . Guest i do think that the Network Neutrality debate is about the quality of connection but presumes people already have connections, and i talked about the zero rating program, theres a separate question maybe we should think about how to system lit investment in the net, network and maker cheaper. Second, if you back at the ol proceedings from the 2010 order, huge number of state and local politicians wrote in almost overwhelmingly democratic. This wasnt a partisan issue. They said, dont do it. 70 house democrats, a third of the marriagity caution, said deposit do it. Host you mean reclassification . Guest if you cant manage the network, the only way you can maintain the throughput is by building more capacity. Building more capacity makes networking more expensive. Making it more expensive makes it harder to reach rural areas so they tend to all be rural politicians who did not want to make net,ing more expensive. Networking more expensive. The other thing is minority populations rely on wireless devices, higher than National Averages on social media. They have a very particular set of profiles, and Senior Citizens have a different set of barriers. We should customize products to reach them because heres the new iphone 6. Thats not going to do it. Ive got parents in their late 70s. Thats not going to do it. When i think about this i actually like tom wheelers original proposal, which was, based on commercial reasonableness, people will criticize that. I actually have done some work. That termcommercial reasonableness, as a Legal Standard issue is used throughout the law in lots of contracts in ways that are helpful. Of the of if its in entry taz its reasonable. If not, we figure if you are trying something world we want a world where if you try somebody new, and you cant do it, thats the thing that kills it. This is likely to withstand legal review under the lost in court twice and dont want to go down that road a third time. Theyre very much bracketed in i and think theyre worried theyve loose this one, it will kick over to the next administration. So if they want to have a say they have to have something that survives judicial review, and its a way to get past the world we are in and letting people innovate and then evaluate on a casebycase basis each of the new innovations and see, has this harmed people, instead the worstcase scenario is what some want to do is apply the old regime of telephone regulations to the internet, which says the default answer is no. Unless you come to the fcc and get permission. And thats what we talk about title 2 and forebearance. They have the regime that applies to everybody, and then you get permission to deviate from it. Well, theres two things. If theyre worried about prioritization, theyll say tight 28 and telephone regulation never prevent you from having different classes of services. And mark cooper, strong support, said you can have nine different clatses or service minimum. So its not going to get to the no prioritization you want. But if youre subject to a rule until you get the fcc to sign an order saying we forebear from this, minimum six months from the procedural requirement. You have to notice it up and replay comments and and thats under the best case scenario. This can take a year, a couple years, or never get done. So that i organized an event two weeks ago where jeff fuller, who invetted he became the father of vonage, and he said, im a dreamer. And to him voip was ham radio talking to people all over the world in the internet age. He said if you make me come to a Washington Agency and get permission before i do it, ill still dream, will just do it somewhere else. And that is the thing the change im the thing i like about the wheeler proposal is i want to preserve that flexibility for people who come up with strange ideas, have the latitude to try them. Host professor Christopher Yoo of the university of pennsylvania. Please come back