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.

Improving Economic Prospects in the Land of Silver

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The Thinker in El Plaza Congreso, adjacent to official government buildings in Buenos Aires, Argentina. December 9, 2010 (David Berkowitz/Wikimedia Commons)

Argentina was a gold mine of economic opportunity in the early 20th century. Blessed with trade surpluses in commodities, an influx of foreign technological innovation and development, and a growth rate of 6% (the fastest in the world at the time), Argentina attracted hundreds of thousands of European immigrants.

With the exception of commodity exportation, Argentina’s recent economic condition has soured. The last half-century has been marked by economic decline, political instability, and diminishing geopolitical influence. Consider that when President Obama visited the Southern Cone in 2011, he flew from Chile to Brazil deliberately passing over Argentina. While significant capital inflows from China largely insulated Argentina from the global economic crisis, economic and political turmoil persist to this day. Inflation estimates are above 30%, its expropriation of Spanish petroleum giant Repsol have made those in the international business community wary of FDI, and its export and import quotas have proven disastrous to farmers, businessmen, and consumers alike.

If President Kirchner’s successor seeks to guide Argentina towards a path of economic and political stability, he/she must assuage concerns of an impending crisis, and work swiftly to ignite a stagnant economy. Reviving the economy will be easier said than done in a country whose Ease of Doing Business ranking is 127 out of 189, trailing, among others, Nigeria and Pakistan. A more challenging hurdle will be reducing Argentinean dependence on natural resource exports. As tempting as it may be to ride the commodity wave to economic solvency, diversification of the nation’s income will prove imperative to Argentina’s future growth and stability. Developments in added-value manufacturing and the service industries will better isolate Argentina’s economy from fluctuations in global commodity prices. Diversification will also require improvements in education and infrastructure, areas in which Argentina is particularly deficient.

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Map of Argentina circa 1929 depicting recent territorial acquisitions (Ufficio cartografico del Touring Club Italiano/Wikimedia Commons)

One thing Argentina is not deficient in is unfounded optimism. An Argentinean economist once lamented that his nation is destined for lackluster development, positing, “Argentina has always been a country with mediocre growth, believing that spectacular growth and riches are right around the corner, and when a good year comes, Argentines say, ‘Ah, here comes the life we’ve been waiting for and so deserve.’” Such misguided expectations must be replaced by shrewdness and sacrifice. Recovering from the current economic turmoil and moving towards a trajectory of sustainable growth will require drastic fiscal and monetary reforms.

Attempts to curtail government spending will likely aggravate an already sluggish growth rate, particularly after several years of costly welfare programs and President Kirchner’s wasteful spending. Also unpopular will be the inevitable currency devaluation once Argentina’s currency exchange is liberalized. Such unpopular policies have been postponed for far too long. Argentina must follow in Chile’s footsteps by increasing economic competitiveness in the global arena. For a country blessed with bountiful resources, its political malfeasance and bureaucracy remains the only thing slowing down what would otherwise be impressive growth. By fostering more competitive industries and implementing basic economic reforms, Argentina may become the gold mine it once was.

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

The Shale Revolution: July’s Snapshot

July was an exciting month in the energy sector. The world’s second largest oil company, Chevron, signed a 1.24 billion dollar deal with Argentina – the world’s second largest holder of shale gas reserves – to develop their oil and gas opportunities. The total scope of Chevron’s investments could exceed 15 billion dollars. Chevron isn’t the only company jumping at the promise of shale. Dow Chemical Company and Bridas Corp., an Argentine-Chinese joint venture between CNOOC Ltd and the Bulgheroni family, have also signed development deals with their South American partners.

Across the pond in Europe, global consulting company Navigant Consulting released a new study backing UK Prime Minister David Cameron’s claim that shale expansion could cut gas prices by a quarter: “… estimates suggest northern England could provide enough shale gas to meet the UK’s needs for more than four decades.” Nonetheless, Cameron still faces an uphill battle. His continental partners in the EU have expressed concern with the potential environmental implications linked to the process of extracting shale oil and gas, known as fracking. Despite the European Union being known for its stringent environmental practices, some EU countries such as Romania and the Netherlands seem to be tiptoeing towards the idea of fracking and its encompassing economic benefits, while others states – France stands as a prime example – are sprinting in the opposite direction. Despite Europe’s unnerving reliance on Russian energy, the EU’s potentially game-changing relationship with fracking continues to move at a glacial pace.

In Asia, the effects of the North American shale boom are being felt. American shale oil opportunities have enticed national midsized energy companies producing abroad to come back home. After being drawn into untapped energy hubs in Asia, companies like Anadarko Petroleum Corp and Newfield Exploration have begun to sell their billion dollar Asian portfolios in Thailand’s natural gas hotspots and China’s Bohai Bay. Subsequently, these companies are beginning their triumphant return to American soil.

Recently predicted by the International Energy Agency to be the world’s top oil producer by 2017, many countries are jumping aboard the American energy bandwagon early. Highlighting the energy-starved nature of today’s world, Chile has shown how serious they are about its American shale gas interests by establishing a chancery in Philadelphia earlier this month. On a three-day trade trip to Pennsylvania, Chilean energy executives not only celebrated the opening of the Chilean Philadelphia consulate with Pennsylvania Governor Tom Corbett, but they also discussed Chilean interests in Pennsylvania’s Marcellus shale gas. Chile, a country whose energy demand is growing at five percent yearly, is preparing for increasing energy consumption rates. Governor Corbett, having visited Chile last April, reiterated to the Chilean executives that he is happy to export Pennsylvania’s natural gas: “As Chile’s manufacturing sector grows, she is clearly going to need energy […] we have it in abundance and we’re blessed by that.”

The global shale boom, supported almost wholly by American reserves, has continued to shake up the positioning of the world’s energy producers. While other countries may move to avoid the fracking boom, most governments seem pleased with America’s progress. Europe may still have the opportunity to ease their reliance on Russian energy with new American natural gas imports; North American energy companies are starting to come back home, which could boost America job creation statistics; and countries are beginning to open consulates in what would otherwise be obscure states. The shale revolution has begun, and it’s a game-changer for global energy.