Explaining Net Neutrality

Last week, the Federal Communications Commission (FCC) voted 3-2 to open the debate over net neutrality to the public. The fundamental question at hand is whether or not companies can pay to have Internet Service Providers (ISPs) deliver their information faster than other Internet users, including bloggers, new businesses and independent online media. The implications for ending net neutrality are far reaching, which address key issues regarding the democratic nature of the Internet as a socio-political, cultural and commercial space.

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A partial map of the Internet from 2005 based on lines drawn between nodes. Each node represents an IP address; the length of the lines represents the delay between them. December 1, 2006 (The Opte Project/Wikimedia Commons).

If one accepts that the public has a right to send mail using a common carrier that does not discriminate, then a natural extension of those rights is the right to send information over the Internet without any kind of discrimination. Basically, if I send mail from my local post office in South Central Los Angeles, then I will get the same quality of service as the rich and famous at their local Beverly Hills post office. On the Internet, this translates to content from Bloomberg News being delivered just as fast as the content from the independent blog I follow to stay up to date on French Politics.

Proponents of net neutrality maintain that the Internet was intended to be an open, free democratic space. In the US, supporters appeal to civil liberties such as the freedom of speech. Those arguing against net neutrality in the US, such as Viacom, Verizon and Time Warner, make the case that net neutrality laws place an undue regulatory burden on their industry. They also argue that being able to allocate bandwidth would help spur innovation and help recoup investments in developing networks. However, companies such as Amazon, Facebook and Google stoutly reject these notions. Google has even begun providing network neutral Internet Service with Google Fibre which currently exists in select American cities.

Where does the US compare to other countries when it comes to net neutrality? The debate internationally has taken place over a similar timeline. Chile was the first country to pass laws explicitly upholding net neutrality in 2010. Shortly thereafter, most of Europe followed suit as well as Brazil, Israel and Japan. Brazil went as far as to enshrine net neutrality in an “Internet Constitution” – a Bill of Rights for citizens on the Internet, the first of its kind.

The two countries that do not uphold net neutrality are the Russian Federation – on the grounds of “security” – and the People’s Republic of China. China has always tightly controlled the flow of information within its borders to preserve political stability and authority. So, even if the US ends up striking down net neutrality in the interest of private telecommunications companies, the “City on the Hill” would join a list of countries that, quite frankly, it should not be on.

The views expressed by the author do not necessarily reflect those of the Glimpse from the Globe staff and editorial board.

The “Crocodile in the Yangtze”

Alibaba group Headquarters

Alibaba Group Headquarters in Yu Hang District, China. April 14, 2012. Thomas Lombard (Wikimedia Commons)

China’s largest e-commerce company, Alibaba, is set to make history in the coming months. Founded in 1999, Alibaba has the potential to set the largest initial public offering (IPO) in the US for a Chinese company and even exceed Facebook’s initial valuation in 2012.

While Alibaba has declined to comment on why it moved its IPO from Hong Kong to New York City, its decision is largely based on a disagreement between company executives and the Hong Kong Securities and Futures Commission. Unlike Hong Kong’s stock exchanges, the NYSE and the NASDAQ do not maintain a one-share per one-vote standard, allowing Alibaba’s key partners to maintain control over its board of directors.

Holding its IPO in the United States could also facilitate future acquisitions of American companies. Its recent investments in the Silicon Valley start-ups Tango and AutoNavi indicate that Alibaba is seeking market expansion at the international level. More than just a middleman between sellers and buyers, Alibaba allows its customers to pay bills, buy insurance, and even take out loans. Its wide range of services and competitive pricing structure are enticing to both consumers and venders. Moreover, Alibaba’s capital is substantial. In the past fiscal year, its estimated sales exceed $420 billion, which dwarfs the combined revenue of Amazon and eBay. Further, it boasts 300 million customers across China – a number that will surely grow in accordance with increased Internet penetration.

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Jack Ma Yun, Chairman and Chief Executive Officer, Alibaba Group, speaks during The Future of the Global Economy: The View from China plenary session at the World Economic Forum Annual Meeting of the New Champions in Tianjin. China 28 September 2008. Copyright World Economic Forum (www.weforum.org)/Photo by Natalie Behring (Wikimedia Commons)

The big question that remains is whether Alibaba is capable of competing with established Western brands in the global e-commerce marketplace. Jack Ma, Alibaba’s founder and former CEO, responded to doubts of Alibaba’s competitiveness: “Ebay is a shark in the ocean. We are a crocodile in the Yangtze River. If we fight in the ocean, we will lose. But if we fight in the river, we will win.” Ma’s tempered confidence is justified. Although Alibaba has enjoyed tremendous success in the People’s Republic of China, it may not enjoy viability in the global marketplace. Alibaba’s prospects of successful market penetration are poor, particularly in the United States where the market is already saturated with established firms, such as Amazon and Zappos. Alibaba’s micro-lending, insurance market, and investment services, however, could prove highly successful in several Latin American and African economies where such service industries are severely underdeveloped.

Yet, Alibaba’s main obstacle to success may be the Chinese Communist Party. Consider yuebao, Alibaba’s financial investment service that provides a 5% return on risk-free investments. Yuebao offers a fantastic yield in China where millions of laymen deposit their hard-earned yuan into bank accounts only to see its real value depreciate from an inflationary tax. As Yuebao continues to threaten Chinese banks’ monopoly on savings, its days may be numbered before the Communist Party intervenes. Only time will tell if Alibaba can fend for itself in the vast ocean of e-commerce. Continued expansion within China and throughout the developed and developing world may prove impossible. One thing is for certain: Alibaba’s biggest threat to global development no longer lies in America, but in Beijing’s Politburo.

The views expressed by the author do not necessarily reflect those of the Glimpse from the Globe staff and editorial board.

The Amazon on Life Support?

Deforestation in the Amazon as seen by satellite (by NASA, via Wikimedia Commons).

Every minute, an area the size of 50 soccer fields is destroyed in the Amazon Rainforest.  Over the past 40 years, nearly 20% of the forest has been destroyed – an area roughly the size of Alaska. Simply put, in less than half of a century more of the rainforest was destroyed than in the previous 450 years – combined.  High-resolution satellite images tell a story of devastating deforestation in the planet’s largest and most diverse rainforest. Many areas that were once a sea of lush greenery have been transformed into a barren, muddy landscape.

The Amazon represents more than half the remaining rainforest on the planet.  Humans depend on these ecosystems as a source for the planet’s carbon, water, and climate systems. Thus, it isn’t surprising that losing 2.3 million square kilometers of forest in a mere 13 years, as new research indicates, is of great concern to both environmental groups and national governments. While the majority of the Amazon is located in Brazil, the forest expands across nine countries making deforestation an international crisis.

With 20% of the forest already cut down and another 20%, as expected by scientists, to be on the chopping block over the next two decades, it is only a matter of time until the Amazon’s ecology will begin to collapse. Adding global warming to the mix makes the outlook seem worse. Over 100,000 miles of illegal roads, forged by loggers who aim to reach the prime hardwood trees deep in the forest, snake through the labyrinth of vegetation. Consequences of these new roads turn out to be equally as destructive as the actual logging. Land sharks slide in unnoticed and claim the land making land thievery a common crime. As is the case with many lucrative businesses, with high profits comes violence and corruption. Armed guards, hired gunmen, and corrupt government officials all help to facilitate these illegal activities.

It isn’t all bad news for the Amazon, however. Since the devastating revelation in the early 2000s, Brazil and other South American countries have committed to reversing the damage. New data shows that while Brazil still suffers from very high rates of forest clearing, the country has cut the annual rate of forest loss to half of what it once was. In turn, many of the strategies that Brazil has implemented as a deterrent to deforestation will help policymakers in other countries respond to the troubling rates of forest decline.

Nonetheless, the deforestation rates of 2013 were far from encouraging. It is clear that changes have to be made, as deforestation is threatening the local populations’ basic needs. In the most recent Amazonia Security Agenda, it was reported  “compromising Amazonia’s ecosystems, deforestation is now threatening not only the wellbeing and rights of the region’s people, but also the economic sustainability of the very industries that it has enabled.” Scarcity of food, water, and even energy are all threatened by exploitation of the Amazon.

Escalations in forest clearing are primarily being blamed on the weakening of legal protections in the Brazilian Forest Code that were passed under Brazilian President Dilma Rousseff. The reform was riddled with controversy, and was heavily supported by members of the farmer’s lobby known as the ruralists. In Brazil, where agriculture accounts for 5% of the country’s GDP, lobbyist influence has indirectly led to increased deforestation by loggers and farmers. At the United Nation’s Summit on Climate Change, the environment minister, Izabella Teixeira, chose to focus on Brazil’s triumphs, noting the overall trend was has been positive. She attributed the elevation in deforestation to organized crime and acknowledged that the government had taken steps to fight back, saying: “What is happening are crimes, we have 3,921 police investigations, some of them involving civil servants. We are cutting into our own flesh.” Teixeira strongly emphasized that eliminating illegal deforestation remained the goal in the eyes of the government and the crimes of loggers would not be tolerated. Going forward, it is up to the Brazilian government and their counterparts, as well as the global community, to secure the future of the world’s most important forest.