Why Ajit Pai may actually hurt "Team Cable"'s businesses by supporting the revocation of Net Neutrality

This image used under Fair Use laws from KnowYourMeme.com

By now, you've probably heard the words "Net Neutrality" in a sentence. You've probably also heard it's going away, or that the current chairman of the FCC is a shamelessly-corrupt corporate puppet, or that Netflix is going to cost more, or some combination of the above.

The story of the month is, the GOP's horrible Reagan-era tax bill made it through Congress just about effortlessly. But that's another story.

The other horrible thing happening this month is, the current chairman of the FCC, Ajit Pai, went through with an unpopular (to say the least) vote to revote the Internet's status as a Title II public utility, which guarantees it certain protections and regulations under Federal law.

But what, you may ask, is "Net Neutrality", and why should I give a shit? Well my friend, that's why I'm here - to let you in on a few crucial details about the Net Neutrality issue that news corporations like NBC and Fox are too busy interviewing celebrities from the Food Network, covering Trump's massive political or economic fuck-up du jour, and blaming Obama for the shitty economy to cover with an ounce of journalistic integrity.


Here's how Net Neutrality works, in case you haven't already read as many articles about it as there are words in Leo Tolstoy's "War and Peace":

1. The Internet is like a series of highway systems that intersect at various points.
2. At these points, the electronic data that will eventually manifest on your computer as video, audio, or the contents of an email (to list a few examples) are transferred in "packets" from whichever server you requested it. For example: your favorite Youtube video is requested from your computer, Youtube's servers then send it to you in the form of a series of "data packets", but first they stop at one or more of these intersections.
3. At these intersections, complex computer algorithms determine which packets to send first, in order to make the process the most efficient for everyone.
4. "Net Neutrality" means that the people who provide Internet service or manage servers can't intercept these data packets, nor prioritize which packets go where, under penalty of law.
5. "Net Neutrality" is currently protected by US law, only because it is currently a "Title II Public Utility", which means it's a piece of technology regulated by the government because it's an essential component to our way of life, and thus should not be subject to the discretion of private companies, even the ones which provide that service.

Why give a shit, you ask? Because it will definitely affect your lifestyle, no matter who you are, unless you're rich as fuck.

1. Revoking the Internet's Title II Utility status means that there's no law governing how private corporations manage Internet traffic. This includes, but is not limited to, the freedom to make individuals and businesses pay more for "streamlined", or priority, service. 
2. There has also been speculation that the revocation of this protection would eliminate any legal obstruction currently keeping Internet providers from "bundling" Internet access. In other words, there would be nothing stopping them from making you pay extra for an Internet "package" that allows unrestricted access to Facebook, Twitter, Youtube, and other popular sites. This means that smaller websites just starting out would have a hell of a time competing with larger, established sites since they'd be less likely to be included in such service packages.
3. Essentially, the issue is that if this becomes the norm, the Internet will cost more for businesses to use, for individuals to utilize - and that means fewer people will have access to the Internet, as many may simply lose the ability to affordably access the Internet on their personal devices.
4. The Internet isn't like cable TV. Many modern, especially newer businesses are based solely on the Web and don't have the capital to switch to the old-fashioned brick and mortar business model...or, their business model would be far less efficient to sustain itself this way, or without the Neutral Web. Mvmt Watches, for example, are able to maximize their profit by eschewing the traditional model of selling wristwatches through storefronts. They eliminate much of the overhead associated with this  model by cutting out the need for distributors - instead, they advertise on the Internet, and sill directly from the manufacturer. Larger, established businesses like Costco, Target, Walmart, and Amazon will also lose money - as will government agencies - if Internet providers decide to price-gouge their clients for profit.
5. The counter-argument is that eliminating Net Neutrality may allow service providers to crack down on spam, viruses, and reduce the frequency of slow or dropped connections. Those who argue this point often gloss over that, in order to accomplish this, Internet providers will absolutely have to charge their customers more, meaning those who pay more will have better Internet, while everyone else will have slower or non-functioning Internet capabilities. The other major argument for eliminating Net Neutrality is that getting rid of Net Neutrality won't necessarily mean that telecommunications companies will make the service more expensive and inaccessible to more people, or that if they do, smaller ISP's (Internet Service Providers) will spring up, offering better deals, curbing unchecked throttling of the Internet; in other words, such problems won't happen because the Free Market will fix them organically. The problem is, there is almost no historical evidence of the free market working this way. Back in the 90's and early 2000's, there actually were a ton of small, independent ISP's. The reason they don't exist now is that all of them either got bought up by larger telecom companies or went out of business.  99% of the time, corporations seek to maximize profits and eliminate competition. This logically follows that the Internet will switch to a "Tier" system. 
6. Basically, if the Internet stops being "Neutral", it will affect every facet of the economy, which has become dependent on the Internet to function. The only ones who will benefit from this are huge telecom companies, who happen to also be the only real supporters of revoking Net Neutrality.
7. Did I mention that the current FCC Chairman Ajit Pai used to work as a corporate lawyer for Verizon? Did I also mention that he has gone on record saying he intends to deliberately disregard public outcry opposing his vote to repeal, citing "bot spam" as evidence that most of his opposition consists of non-human computer programs controlled by a minority with an agenda? Because both of those statements are also a matter of public record.
8. It's possible that the "bots" Pai referred to were actually template messages sent by organizations in favor of protecting Net Neutrality, such as "Battle for the Net", which use such a system. These messages aren't "bots", however, as Pai suggests. Each one is sent by individuals who have to enter their name, email address, and phone number, then push a button to send. While it's certainly possible that one person could send multiple bots using a single email address with a little tech-savvyness, it is impossible that this would account for oppositional communications on the scale that Pai is suggesting. 
9. Basically, Pai is leveraging his position to appease his "former" corporate overlords, and he's not above laughing in our faces about it.

Real class act, this guy. By the way: that video he made that went viral technically violates copyright law. Which is enforced by the FCC. Which he should know because that's exactly his job.

"Know what would be funny?" you may be saying now, "wouldn't it be ironic if it turned out Net Neutrality was actually a good thing for the same big Telecom companies that are pushing to have it revoked, and revoking it could actually seriously harm their own businesses?"

Guess what?

This is Burnie Burns.

He and a group of his friends founded a Web-based company called "Rooster Teeth" back in 2003. They made Internet videos out of an apartment, including the award-winning animated show "Red vs. Blue", which is still in production today.

Back in 2006, Burns was honored as the keynote speaker at South by Southwest, an annual congregation of film, interactive media, music festivals and conferences held in the North American Southwest. The subject of Burns' talk was telecommunication companies like Time Warner, and how their multi-faceted business models might unintentionally subvert each other.

For example, Time Warner is an Internet and cable provider. Since the dawn of the age of streaming services like Netflix, viewership of traditional cable television, as well as on-demand TV, have been plummeting. Thus, Time Warner's Internet services, which host websites like Netflix, end up hurting their own cable TV business and, more importantly, on-demand television provision, the other arms through which they get their revenue. Since they're not getting paid for/by Netflix, they've ended up on the losing side of that arrangement.

Once more, Time Warner is also a media company; they make movies for profit. Instead of making money off of renting individual movies to customers on-demand, they're losing money to Netflix, which charges a flat fee for access to a huge library of shows and movies, some of which are not accessible to Time Warner's on-demand services. Instead of making royalties off of movie rentals, they're making pennies off of providing Internet data services. In fact, since fewer people are watching TV, the value of ad space (through which cable television profits) likely decreases as well.

The bottom line is, rather than adapt and restructure, big companies are trying to control the conditions of the market so they not only don't have to change their strategy, but also rake in tremendous profits in the process. While their typical PR rationalization for this behavior usually tends to mention the thousands of families these companies employ, the bottom line is, the people who make these decisions aren't necessarily thinking primarily about the families of their employees. Usually, these decisions are made by their corporate CEO's who, again, historically don't often consider the good of the many over their ultimate goal of maximizing profits and eliminating competition.

It's not like they're trying to be evil...corporate restructuring, especially for businesses as gargantuan as Time Warner or Comcast, are extremely time-consuming and costly ventures. This is why preserving on-demand and cable TV is preferable, from a business standpoint, to restructuring the core of their business model. Though the tide may be shifting to digital streaming, that doesn't mean that most people have jumped on board; currently, there is still a huge demand for cable TV, after all.

It's not like cable companies are unaware of the issues presented by their competitors like Netflix and Hulu, not to mention Youtube, and the thousands of sites like Rooster Teeth that offer additional content for "premium" subscriptions. This shift has inevitably caused a major increase in Web traffic, especially since now, anyone with a smartphone can stream Internet data anywhere at any time. It's probably why they're trying to make Net Neutrality disappear in the first place. Comcast, for example, originally offered unlimited data plans to compete against other cable companies. Unfortunately, this increased the flow of Web "traffic" to a horrendous degree, increasing the cost of server maintenance, ultimately losing them money. AT&T made the same mistake; back in 2012, AT&T's Randall Stephenson told the New York Times that his "biggest regret" was offering unlimited data for iPhones.

Now, Comcast offers unlimited data as part of an extra package that costs $50 a month, in addition to whatever you're paying for cable, Internet, etc. In other words, it's not like we have to "wait and see" if Comcast, Verizon and AT&T will cap, tier or throttle data - they've already started making the Internet a tiered system.

"Team Cable" according to BattleForTheNet.com

Going back to Burnie Burns, though - his company, Rooster Teeth, is another interesting case study in itself. Although Rooster Teeth representatives, including Burnie Burns, have publicly voiced their fervent support for Net Neutrality on numerous occasions, there is a deeper issue surrounding their own corporate structure.

Rooster Teeth was acquired in 2015 by Fullscreen Media, Inc. for millions of dollars. Through this acquisition, they have turned the formerly-independent Rooster Teeth Productions into the Rooster Teeth/Let's Play Network, which includes media studios headed by many of the (also) formerly-independent leading names in gaming journalism and entertainment. This includes Machinima's Inside Gaming (re-branded as Funhaus), several former employees of Screw Attack (now called Game Attack), IGN's Greg Miller (he now runs a studio called Kinda Funny), and others, including notable Youtubers like Steven Suptic (formerly of SourceFed and the Youtube channel, SuperPanicFrenzy).

Fullscreen Media acquired all these gaming media giants, effectively turning a series of former competitors into an inter-connected media network under their payroll.

Fullscreen is owned by Otter Media. Otter Media is owned and operated as a joint venture...between The Chermin Group, and none other than AT&T.

This was likely a power move by AT&T against Time Warner and Comcast, in order to capitalize on the major change in viewership trends among young viewers - kids, teens, and young adults aren't watching as many cartoons and sitcoms because they're busy watching Let's Play videos and independent animation shows on Youtube.

This creates a similar problem for companies like Time Warner unintentionally allowing Netflix to sink the media arm of their business by operating on "their" network. With the popularity of Youtube Red and premium services on sites like RoosterTeeth.com, which has a huge, dedicated following of fans specific to their brand, not just in the U.S....you guessed it. This translates to fewer people watching TV or paying for on-demand TV services, which is bad for that arm of AT&T's business.

The acquisition of Rooster Teeth was a decisive move by AT&T - it shows their understanding and acceptance of the changing landscape of media because of the Internet. Now that they have a stake in a huge gaming media empire, they have positioned themselves to shift their investments from the dying medium of standard TV, and over to Internet-based content, long before their competitors.

The only problem is, AT&T supporting the revocation of Net Neutrality hurts their newly acquired assets, in the form of the Rooster Teeth Network, into which they have invested hundreds of millions of dollars and created thousands of jobs in order to remain competitive.

The Rooster Teeth Network producer Funhaus recently released a podcast on Net Neutrality. During the course of the episode, the Funhaus crew discussed Net Neutrality and what losing it would mean to businesses like theirs. Essentially, if they had to pay more just to use the Internet to the extent that they would need in order to regularly upload and host videos, the company would lose so much money it would cease to be viable. Funhaus member Lawrence Sontaag explained, "the immediate effect to [the viewer] as it relates to us is that we'll probably have less money to do stuff with. If Rooster Teeth has to pay Internet service providers to deliver video to you so that when you go to RoosterTeeth.com it doesn't take like a minute to load...and then most people just get tired after five seconds and close the tab...for us to remain competitive, we'll probably just have to pay more. Which means, we have less money to put into production, which means we won't be able to hire as many people, and we get to do less cool stuff."

Layoffs would be certain, and being a small production studio, this will affect the amount of time and money they are able to invest into their content. It will doubtless affect the morale of the company itself.

Worst-case, yet not an unlikely scenario is, this could lead to conditions that would force the company to close its doors for good. Member James Willems mentioned that if Net Neutrality is revoked, conditions of content producers like them would likely end with many simply getting frustrated and switching jobs. "Now is as good a time as any to get involved in the political process. We especially, being an entertainment-focused channel do get blowback from people that say, 'woah, I don't want to have to hear [political discussion] here'...that...(sighs)...I don't know if that flies anymore.

"What's happening is that this realm in which we work is so volatile...and it's starting to feel like it's not even fuckin' worth it. Between [Youtube] fucking with us [de-monetizing Funhaus videos as an alleged act of censorship], and now this...all of us have skillsets here that we don't 'need' to be doing this. We do it because we like it...honestly, if Funhaus is the kind of thing you want to stick around for awhile, you have to be willing to put your opinion out there and make it heard...because it's starting to feel like, 'why bother?'"

Rooster Teeth's contribution to the economy and culture of the Internet, as well as the United States, doesn't lie simply in media production. For years, Rooster Teeth and its associated producers have consistently been one of the largest contributors to the Extra Life drive, an annual charity drive in which numerous gaming sites within, as well as without the Rooster Teeth Network, broadcast live 24-hour streams to raise money for Children's Miracle Network hospitals. This year, Rooster Teeth raised $1.2 million in 24 hours, and they're planning on raising even more next year.

AT&T won't be the only huge telecom company who will be hurting - CBS, which is owned by National Amusements Inc., currently owns and operates a number of popular websites, including Giant Bomb, GameSpot, Metacritic, and more. While established and popular, these sites can't compete with huge social media platforms like Facebook, so the "bundling" issue could jeopardize their viewership, which could jeopardize their ad revenue upon which CBS relies to run the site and turn a profit.

It makes little sense that AT&T would support Net Neutrality then, since Comcast and Time Warner, both joint owners of the popular streaming service and Netflix competitor Hulu, stand to gain an edge over AT&T if the Rooster Teeth Network suffers. Netflix and Hulu have wider audiences, so they're more likely to be prominently featured in a bundle package. If anything, AT&T should be vociferously defending Net Neutrality; they've managed to corner a huge market that Time Warner and Comcast have no leg in whatsoever, one that depends on Net Neutrality to function.

Here's what you can do to stop this rampant dip-shittery:









CALL. YOUR. REPRESENTATIVES.

NOT SURE WHO THEY ARE OR HOW TO CONTACT THEM? 
CLICK HERE TO FIND OUT.









As jaded as I and many others are at this point, the government is at least still a democracy in name. There are representatives committed to fighting this decision, and soon, they will vote on the decision to overturn the FCC's decision in both the Republican-controlled House of Representatives and the Democrat-controlled Senate.

Believe it or not, both Democrats and Republicans are against this decision. Even the very creators of the Internet are speaking out against the FCC's repeal. The only ones not doing so are corporate lawyers and CEO's working for major telecom corporations. This includes AT&T who, as I've explained, have actually a lot of stake in Net Neutrality for the future of their business.

Also, check out BattleForTheNet.com to see if your representatives are for, against, or undecided on this issue. Please, please, PLEASE do this, especially if you live in a traditional Red state. Most representatives in favor of repeal tend to be Republican party members, but there may be a few Democrats in that camp, too.

Net Neutrality must be preserved. The US economy can't take a hit like this right now.