Cory Doctorow: Stanford’s Futurity interviews Stanford Law expert Ryan Singel and International Studies expert Didi Kuo about the meaning of a non-Neutral internet, and the pair make an excellent and chilling point about the subtle, profound ways that Ajit Pai’s rollback of Net Neutrality rules to pre-2005 levels will distort and hobble the future internet.

The Pai rules allow ISPs to block rival services, but the real impact is likely to be much more subtle (and thus harder to spot in the moment and stop while there’s still time).

The ISPs are much more likely to approach the existing internet services like Netflix and demand money in return for a guarantee that their bits will reach you, the ISPs’ customers. The services, in turn, will simply raise their prices to make up the difference, resulting in you paying your ISP twice: once to connect to the internet, and a second time to subsidize the blackmail payments the internet services you make are now obliged to make to your ISP.

There’s another, even subtler and scarier distortion at work here. The ISPs want to create steady revenue streams from these services, and so the blackmail payments they demand will not exceed the services’ ability to pay. But they will limit who else can enter the market: Netflix and Youtube and the other established players were able to start because the capital needs of a video-on-demand service did not include a line item for blackmail to ISPs.

Future Netflix and Youtube challengers will have it different: their startup costs will include millions for hard-drives and marketing and bandwidth — and millions more for bribes to the telcos.

This is bad news for people who like watching videos, but it’s even worse news for people who make videos. With upstarts permanently, structurally frozen out of the market, today’s incumbent providers will become much like the telcos themselves: cozy, cooperative, and more interested in colluding than competing. Some of that will take the form of explicit conspiracies, but highly concentrated, stable industries can collude without conspiring: the executives tend to have worked at all the major firms at some point in their careers, know each other socially, understand one-another’s turf and territories, maintain out-of-work friendships and even intermarry. Without anyone having to draw up an agreement, these industries are perfectly capable of creating arrangements that are mutually beneficial and that freeze out any new entrants.

The online service providers understand that Pai’s rules mean that they’re just going to have to divert some profits to the telcos, but will not face an existential threat. They’ll always have a seat at the table: but the companies that don’t exist yet? They never get a seat at the table.

Here’s how to understand Net Neutrality: you get in a cab and ask it to take you to a Safeway, and you notice that it’s circling the block for no reason, delaying your arrival. “What gives?” you ask. The cabby explains that Whole Foods has paid for “premium carriage” by the cab firm, and so it gets “fast lane” service — which means that everyone else gets the slow lane. The cab driver explains that running a taxi is expensive and hard work, and that choosing one grocer over another helps the cab company fund its maintenance, operations and upgrades.

That’s nice for the cab company, but you didn’t get into the cab to be taken to the most profitable destination for the cab company — you got in to be taken to the place you wanted to go.

The cabbie says, “Hell, why are you being so particular? Safeway and Whole Foods aren’t that different. Besides, Safeway makes decisions about what food you buy: they don’t carry every possible grocery item, and they arrange their groceries in the way that suits them, not you. Why do you get pissed off when the cab company steers you toward the stores of its choosing, but you’re happy to shop at a store that sends you to the items of its choosing?”

The answer, of course, is that it’s none of the taxi’s business. Maybe Safeway is gouging its suppliers for endcaps, and maybe it isn’t, but that’s between you and Safeway. You might choose to tackle that yourself, or it might not matter to you. It’s not the cab company’s job to tell you where to go: it’s their job to go where you tell them.

Singel: The effects we’re likely to see will affect users secondarily. Verizon, for instance, can now go to a Yelp or a Netflix and say, “You need to pay us X amount of money per month, so your content loads for Verizon subscribers.” And there’s no other way for Netflix to get to Verizon subscribers except through Verizon, so they’ll be forced to pay. That cost will then get pushed onto people that subscribe to Netflix.

So what users do online will become more expensive, we’ll see fewer free things, and thus the internet will become more consolidated. Websites, blogs, and startups that don’t have the money to pay won’t survive. I like to think of it as the internet is going to get more boring.

Kuo: The worst-case scenario would be if ISPs blocked access to websites based on their content, but that scenario seems unlikely outside of a few limited applications, such as file-sharing. The ISPs have an interest in being apolitical and letting the internet remain “open,” at least in the ways that will be most apparent to consumers.

More likely, the rollback of net neutrality will have consequences for start-ups and companies with a web presence. It will allow ISPs to charge companies more to reach consumers. While large technology platforms can afford to pay for fast access, start-ups and competitors will have a far more difficult time.

What could net neutrality’s end mean for you? [Futurity]

(via Naked Capitalism)

The post The catastrophic consequences of the non-Neutral Net will be very hard to spot, until it’s too late appeared first on P2P Foundation.

John Robb shares the winning formula that has allowed Netflix to reinvent itself three times. Apart from setting a very different example to the special interest group-led P2P witch hunts of the mainstream entertainment industry, there may be a lesson here regarding ongoing, more focused peer-production projects. The article was originally published in HomeFree America

This means the role of management isn’t oversight, it’s focused on providing employees with context. A context that helps employees make better decisions because they fully understand the bigger picture. Context includes any and all information needed for good decision making, from product strategy to economic performance to customer feedback. In other words, the role of management is to help employees orient their decisions correctly, and let them decide what to do on their own.

Technological change occurs so quickly now, companies need to reinvent themselves every decade just to stay relevant.

That’s extremely tough to do. I’ve seen it first hand when a company I founded grew from a dozen people to over hundred in a year. As our company grew beyond a couple of dozen employees, we fell into the classic growth trap:

For a company to increase its impact, it grows. It adds people, new geographies, and new products. This growth adds complexity to the business. Increasing complexity creates chaos as it outstrips the ability of the start-up’s informal management system to handle it. To reduce this chaos, the company must put in place processes and rules as well as an administrative bureaucracy to manage them.

These rules lock-in the existing business model and enables efficiency improvements that allow the company to rapidly scale revenues and profits in an orderly way. The kind of growth that Wall Street celebrates. However, these rules, processes, and bureaucracy have a pernicious impact. The locked business model drives out the majority of the innovative people, due to the mindless oversight and the limits on what is possible.

Then, inevitably, the marketplace shifts as the technology changes. The company needs to reinvent itself but it can’t because the existing business model is locked into place and most of the people able to make the reinvention possible have left. Unable to adapt, the company “grinds painfully into irrelevance.”

Fortunately, there is a way to avoid the ossification brought on by this trap, and remain innovative despite corporate growth. Given the change underway, it’s something nearly every company is going to need to learn sooner than later or face failure. A great example of this is what Reed Hastings did at Netflix. Reed had an experience similar to mine at his first successful start-up, Pure Software. The growth of the bureaucracy at Pure made the company lethargic and impossible to change. So, when Reed decided to start Netflix, he was determined to find a way to grow without bureaucracy. Despite the odds against him, he pulled it off. Netflix has a market capitalization of over twenty billion dollars and dominates the market for online video distribution. Further, Netflix accomplished this feat by defeating challenges from both Wal-Mart and Blockbuster.

How did Netflix pull this off? Reed hired the right people by throwing out the rule book on hiring. He didn’t hire the brightest people, or the most experienced, or the most ambitious as most other companies do. Those simply weren’t the traits he was looking for. Instead, he hired people according to the quality of their decision making. Simply, could they make great decisions (again and again with regularity), despite uncertainty and without oversight.

With people like that at Netflix, Reed was able to grow and grow without the ossification normally seen at big firms. This allowed Netflix to remain flexible and innovative despite rapid changes in the marketplace and in the technology underlying their offering. This flexibility allowed Netflix to reinvent itself three (!) times in the last fifteen years:

In late 1999, Netflix changed from a classic movie rental business to a subscription service.
In 2008, Netflix added streaming movies and TV shows to its subscription offering.
In 2013, Netflix began offering stunning original programming.

Speaking as a customer of Netflix, I’m a fan of what they’ve done. This record of innovation is why I’ve been a loyal subscriber to the company since 2000. This is an amazing product that gets better and better nearly every year, at a price that’s about the same as it was when I first subscribed to it. So, how exactly did Netflix pull this off? How did they grow in a way that allowed them to reinvent themselves three times when most companies can’t even do it once? Reed Hastings did this by hiring people who used a method of decision used to great success across American history. It’s something I call the American Way (for more on this, check out my short, and to the point, e-book) because it’s more common to find here than anywhere else and it’s responsible for all of the economic progress the US has enjoyed to date.

Specifically, Reed did this by looking for responsible decision making in new hires. People that Netflix calls internally: “fully formed adults.” These are people who who make all of their decisions using a balance of interests — personal, company, co-workers, and customers. They aren’t overtly selfish or blindly loyal like children. They can take care of themselves and they strive for independence, yet they do so in a way that increases the success of others. They constantly seek win-win-win decisions. People like this also see work differently than others. They see their work as a meaningful part of their life and not a chore. For them, work is one of the main ways they achieve success in their lives, and they treat it as such.

People that make responsible decisions don’t need much, if any oversight. They can be relied upon to make the right decision again and again. This capacity eliminates the need for most of the administrative overhead typically seen in companies as they grow. For example,Netflix doesn’t track the hours employees work, count their vacation days, or nit pick them over travel expenses. The employee is expected to manage this themselves.

This means the role of management isn’t oversight, it’s focused on providing employees with context. A context that helps employees make better decisions because they fully understand the bigger picture. Context includes any and all information needed for good decision making, from product strategy to economic performance to customer feedback. In other words, the role of management is to help employees orient their decisions correctly, and let them decide what to do on their own.

However, this emphasis on independence doesn’t mean that employees treat work as a shark tank or financial boiler room. Internal competition based purely on self-interest would increase the number of wrong decisions to an unacceptable level, and necessitate the return of bureaucratic oversight. Instead, Netflix has eliminated competition for a limited number of positions that drives so much selfish behavior in bureaucracies. Instead, if an employee has demonstrated he or she can routinely make great decisions, the company will treat them as an asset that can be employed on new projects.

Sound different than the company you work at? It should. There are very few companies that operate like this, but we’re going to see many more like them in the future. The speed of change underway demands it. It should also be apparent that the type of people Netflix hires could easily become entrepreneurs and start their own firms. They have the capacity to do it. However, they choose to work at Netflix because they get all of the benefit of an innovative entrepreneurial environment, great co-workers to invent the future with, all at a scale and level of impact that only the most successful start-ups can achieve.

The post “To Grow Without Bureaucracy, Only Hire Fully Formed Adults…” appeared first on P2P Foundation.

Jon Brodkin, Ars Technica

Source: arstechnica.com. As  the allegedly illegal (and apparently now defunct) PopcornTime app showed, it is possible to combine streaming video and P2P torrent-style downloading. In fact despite the demise of the original app, others inspired by it have started to appear.

So given that such a hybrid technology is possible, why should a copyright-respecting company like Netflix not make use of a similar technology, and thereby circumvent the monopolistic bandwidth tolls levied on it by dinosaur ISPs in the USA?

Job ad says Netflix wants to “integrate P2P as an additional delivery mechanism.”
by Jon Brodkin – Apr 25 2014, 10:45pm CEST

When we wrote about the possibility of Netflix using a peer-to-peer architecture for streaming earlier today, it seemed like more of a thought experiment than a real possibility.

But it turns out Netflix is looking for an engineer to research this very type of system. By searching Netflix job postings we found an opening for a senior software engineer who would work on Netflix’s Open Connect content delivery network while researching how P2P technology could be used for streaming.

“Netflix seeks a seasoned Senior Software Engineer with a special focus in peer-to-peer networks,” the listing says. Responsibilities include:

Research and architecture of large-scale peer-to-peer network technology as applicable to Netflix streaming.
Liaise with internal client and toolkit teams to integrate P2P as an additional delivery mechanism.
Design and develop tools for the operation of peer-to-peer enabled clients in a production environment.

The successful applicant is required to have “At least five years of relevant experience with development and testing of large-scale peer-to-peer systems.” Preferred qualifications include “Knowledge of and proven experience with P2P, CDN/HTTP cache/proxy technology.”

The job posting appears to be at least a month old. When asked whether the company intends to stream video using P2P, a Netflix spokesperson replied only that “the best way to see it is that we look at all kinds of routes.”

Our story this morning was spurred by a blog post written by BitTorrent, Inc. CEO Eric Klinker, who argued that a peer-to-peer architecture would help Netflix deliver its traffic without having to pay Internet service providers. We spoke with Klinker this afternoon, and he expanded on his thoughts.

“Netflix has a hard time getting traffic onto these networks. It’s because they are in a hub-and-spoke model where the traffic flows in only one direction, from Netflix to the consumer,” Klinker told Ars.
Read more at Ars Technica

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