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Mike Larson is on assignment in Germany. His column will return tomorrow. Mark Najarian, the managing editor of Money and Markets, is filling in.
President Obama is in China, having already met with world leaders at the Asia-Pacific Economic Cooperation summit and preparing for the G20 gathering in Australia later in the week. But a few comments he made before he left, and posted on the Internet, are creating a sensation in this country.
The president came out forcefully in favor of “net neutrality.” It’s a complicated issue, the type of debate that often confuses people. But it is an extremely important matter for those of us (nearly everyone these days) who use the Internet.
Here’s how the Wall Street Journal explains the president’s action: “Mr. Obama specifically called for the FCC to reclassify broadband Internet access as a utility, and then to ban broadband providers from blocking or slowing down traffic, or striking deals to give some websites special treatment. He also argued that any rules should apply to both mobile and fixed networks, a departure from the FCC’s previous set of net neutrality rules in 2010.”
What it comes down to is that net neutrality is favored by Internet content providers, such as Netflix, activists and academics (and generally Democrats). Those opposed are Internet providers, such as Comcast Corp. and AT&T Inc. (and generally Republicans).
|President Obama came out forcefully in favor of ‘net neutrality.’|
But let’s forget politics and get to the heart of the matter. Supporters of net neutrality say that without the regulation, Internet providers will be able to demand payment from content providers to allow them to reach customers on an efficient basis. In other words, if Netflix pays enough to the Internet provider, the provider can speed up the Netflix website to favor it over, say, Hulu or some other streaming video site. Or Walmart can pay up, and the Internet provider can make its website faster to use than, say, Amazon.com.
In effect, proponents of net neutrality say, your local Internet provider can influence where you shop. It can also influence whether you read the Fox News, MSNBC or Washington Post website. It can depend on who pays the most, but who’s to say it won’t depend on the political leanings of the top boss of the local Internet provider? A news source discovers corruption by a politician? Your local provider supports said politician? That news source’s website is set so slowly that it never reaches your computer screen. You’re a start-up website looking to compete with an established player? Good luck paying enough to get equal treatment for your site.
|“Net neutrality proponents say that, without the new rules, your local Internet provider can influence where you shop and what you read.”|
Opponents of net neutrality say that it’s just more regulation. They say that the Internet’s freedom to grow and develop on its own has led to great innovations and prosperity.
“Heavily regulating the Internet will lead to slower Internet growth, higher prices for consumers, and the threat of excessive intervention by the government in the working of the Internet,” National Cable and Telecommunications Association (NCTA) President Michael Powell said.
Opponents also say that it will stymie investment in the industry, slowing growth in infrastructure and technical innovation. They say the president is trying to use legislation that’s 100 years old and which was designed for the old telephone monopoly in the country.
Perhaps you can tell where I stand from the amount of space I’ve given to the supporters of net neutrality. As I said, it’s a complicated issue and there are always at least two sides to the story. But I want to keep the Internet as free as possible, and I don’t want my local Internet provider to decide on, or hamper, the websites I read.
Of course, the president won’t decide the outcome of the debate. That will be left to the Federal Communications Commission to draft new rules, and it’s in the process of doing that. Many observers say it will take a middle ground, seeking to prevent discriminating behavior but also allowing Internet providers to charge content companies in some way.
To be fair, I’ve gathered some links (below) that discuss the issue from neutral, pro-neutrality and anti-neutrality view points. But the Internet is full of stories and opinion pieces today on the issue, and I would urge you to examine the issue yourself and to express your own viewpoints by clicking here.
* Here’s a piece in favor of net neutrality.
* Here’s a piece in today’s Wall Street Journal opposing net neutrality.
* Here’s the full statement by the NCTA in opposition to the president’s call for net neutrality.
|Our Readers Respond|
Wow! A column on the minimum wage has brought in a massive response from our readers. The comments have pretty much been evenly split — many feel raising the minimum wage will lead to more spending power for lower-income folks and allow them to better support a family with jobs such as those at fast-food outlets, while others say that those jobs were never intended to be long-term employment and should only be seen as entry-level positions.
Reader Richard supported a higher minimum: “I think about 100 years of history has shown us that raising the minimum wage is good for the economy because that money goes from the paycheck directly into the economy. It may be tough on the mom and pop stores, but most larger small businesses do just fine. Unfortunately, Republican thinking to the contrary, it never provides enough money for minimum wage workers to establish a health-care fund or a college fund for their children.”
Reader Leon took the other side: “In a true free market there would be no minimum wage laws. Supply and demand would, over the longer term, even things out. Hiking minimum wage laws, I believe, will actually cut the number of workers employed. Further, ultimately a person’s skills and dedication to the job will pay off with promotions and increased pay, or the person will obtain a better job elsewhere.”
The debate continues. Mike Larson will be back from his trip to Germany tomorrow and will surely review the comments and have some views of his own. Click here to join the conversation.
|Other Developments of the Day|
Speaking of the president’s trip to China, a big cover-up has garnered much of the attention. Russia’s Vladimir Putin wrapped a shawl around the shoulders of the wife of Xi Jinping, the Chinese president. Apparently, the gesture made Putin look kind-hearted, and it started a whole series of jokes about the romantic intentions of the Russian president. Initially, the scene was broadcast by the Chinese state broadcaster. But soon it was wiped away from the Chinese Internet.
“China is traditionally conservative on public interaction between unrelated men and women, and the public show of consideration by Putin may provide fodder for jokes, which the big boss probably does not like,” Beijing-based historian and independent commentator Zhang Lifan said, according to CBS news.
Staying in Asia: A court in South Korea sentenced the captain of a ferry that sank in April, killing more than 300 people aboard, to 36 years in prison. Capt. Lee Joon-seok, was convicted of gross negligence but he was acquitted of more serious homicide charges. His conviction related to his deserting the ship and its passengers in the disaster. The captain, age 69, “abandoned his passengers, knowing that they were waiting for instructions from the crew and that if they were not evacuated, their lives would be at risk,” the presiding judge, Lim Joung-youb, said in his ruling, according to the New York Times.
Divorce at $995 million. Harold Hamm, one of the richest men in America, has been ordered to pay nearly $1 billion to his ex-wife, Sue Ann, 58, in a divorce settlement. Of course, Mr. Hamm won’t have to come up with all that money at once. The judge ruled that he’ll have to pay about one-third by the end of this year and the rest paid at a rate of at least $7 million a month. According to the New York Times, the oil man married Sue Ann in 1988 (his second wife) and his wealth has multiplied many-fold since then. Mr. Hamm is CEO of Continental Resources (CLR, Weiss Ratings A-) and his holdings in the company are worth about $14 billion, so he should have enough to pay the judgment.
Remember, you can comment on these or any other matters by clicking here.
Until next time,
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