The problem with the Burger King video about Net Neutrality

Feature, General

This is a great example of a video trying to claim something but actually proving the opposite. The video starts by claiming that “burger neutrality” has been eliminated and now a Whopper will cost $20 if you want it right away or you have to wait 20min to have it at it’s usual price. Then it shows people being upset by this and then makes the connection that this is why we should care about Net Neutrality.

There is no legislation preventing Burger King from actually doing what they are joking about in this video. Yet they don’t do it. And that is because there’s fair competition in the fast food industry and consumers get to vote with their feet and their dollars.

So, if anything, this video shows that creating a free market, with fair competition and consumer choice is an effective strategy for ensuring Whopper neutrality. And that it would be quite ineffective to try and guarantee this by passing a Whopper neutrality law instead.

The video is trying to prove that we need net neutrality to protect consumers from unfair pricing, but instead, it’s proof that fixing the free market is a much better strategy to achieve that goal.

First of all, as you probably know, what we are actually talking about is a Title II classification for ISPs, making them utilities rather than Information Service Providers. This classification was achieved by passing an Open Internet Order in 2015 and the marketing name of that Order was “Net Neutrality”. It’s not really a net neutrality law – if we had to actually pass a law for actual net neutrality, it would have to involve many more provisions and the consequences would be quite more drastic and pretty far reaching.

There are two main problems with ISPs and it’s worth teasing them apart.

1) The monopoly problem: There isn’t enough competition between ISPs in the US which results in a lack of choice for consumers, less affordability, and slower innovation.

2) The anti-competitive practice problem: An ISP can use their unchallenged competitive advantage to distort and suppress the internet, biasing access and services towards their special interests.

Problem no 1 is fairly validated in practice. We can do a lot better here.

Problem 2 is mainly hypothetical. Prior to 2015, for the *entire* history of the internet, there was *no* real net neutrality law in place. If an ISP tried to engage in any anti-competitive practices – like blocking services or traffic shaping – then the FTC stepped in and set things right. What we are mainly arguing on both sides of the Title II classification now is whether we should empower the FCC instead to police the internet, or whether the FTC is still capable of doing this job. There’s no real “repeal of net neutrality”, it’s the switch between the two gatekeepers. Each gatekeeper comes with its own pros and cons, for sure.

Coming back to the Burger King video. It claims that without neutrality, we will have to wait longer for a burger unless we are willing to pay more for faster service. And yet the way it stands, for as long as we can all remember, whenever we get an internet plan, we can choose our download speeds (and/or sometimes bandwidth) and pay different prices depending on our needs. If we pay more, we can download files faster, our voice calls are clearer, and we can stream music and videos at higher quality. But if we just want to occasionally browse the internet – then we can choose to pay less. We are all very familiar with this differential pricing, it’s literally the first decision we have to make when we get a new internet connection. This has absolutely nothing to do with net neutrality – definitely not the Open Internet Order 2015 that Burger King is claiming to be talking about. Passing that order doesn’t have any direct effect on this type of pricing at all.

If we wanted to use an actual Burger King analogy for what the world could be if we had real Net Neutrality, here’s what it could entail:

“BK is now a utility that can’t discriminate between the services it provides”

[Price list at your local Burger King]

– Whopper $3.49

– Whopper Combo $3.49

– Just a side of fries $3.49

– Want to use the bathroom $3.49

– A soda $3.49

And if we wanted to use an actual Burger King analogy for what the Open Internet Order 2015 achieves, here’s what it would entail:

“BK is now a utility that can’t limit access to any other food services”

[Price list at your local Burger King]

– BK Whopper $3.49

– McDonald Big Mac $3.49

– Wendy’s Hot ‘n Juicy $3.49

– Soylent $3.49

The pros and cons of each are a separate, almost philosophical, discussion but the BK video doesn’t get there.

Here are a couple of related things to consider:

When I’m on a flight, there’s an ‘N’ MBPS connection being split between 200 passengers. My airline blocks all streaming and media-heavy applications so that everyone can have unlimited access to their webmail, documents etc without any risk of running out of bandwidth. They don’t do this for anti-competitive reasons, they do this to help me, the consumer.

I used to have a radio when I was younger. As long as my radio had power, I could hear music 24×7. Now I use Spotify for all my music. And instead of FM radio signals from the terrestrial towers in my city, I use data streaming over cellular networks that are hooked up to the internet. I want the same 24×7 music that I was used to with FM. But I keep running out of data. I don’t want to have to think about my bandwidth limits. I just want a guarantee that when I turn it on, I hear a sound, just like my FM radio. My ISP tells me, if I pay $X/mo, I will get unlimited music streaming on Spotify, Apple Music, Pandora, and many other similar services and I never have to run out of data for those services. My regular internet, however, like browsing, hot-spotting etc is still subject to bandwidth limits. This is called “zero-rating”. They are not offering me this plan for anti-competitive reasons. They are doing this to help me, the customer.

Does the Open Internet Order 2015 keep zero-rating or does it prohibit it? Can you guess how many people with strong views on Net Neutrality seem to know the correct answer to this question? Most people can’t even agree on whether it’s a good thing or a bad thing.

Net Neutrality and the Open Internet Order of 2015 are not as simple as I first thought they were. Until recently I donated a lot to fight *for* net neutrality. I have signed countless petitions and called my representatives several times to help ensure net neutrality. Then 3 months ago I started to actually look beyond the marketing name and all the hypothetical arguments that I had used to convince myself. And that led me to change my mind. I realized that bias is actually in the very fabric of the internet. TCP packets are treated differently from UDP. QoS is a thing. We all laughed when someone revealed their ignorance and called the internet a “bunch of connected tubes” and yet the Title II classification we all seem to be now arguing for is literally starting with that assumption. Not all bias in the internet is anti-competitive. Some bias is pro-consumer. The only way to distinguish between them is to review them on a case-by-case basis.

I think neutrality should definitely be our intent, but the true way to enforce it right now seems to be on such a case-by-case basis – with our rules and principles guiding us to make sure no anti-competitive practices are allowed and innovation is protected. This is for Problem 2.

The Open Internet Order of 2015 does nothing to address problem 1. We should do whatever is necessary to increase the competitiveness of the ISP marketplace. The same system and market forces that actually keep Whopper pricing neutral are what we need for our ISPs. This would further our goals more efficiently and more effectively than a misinformed order that achieves little and creates new risks.

19th Amendment: Women’s Right to Vote Scarf

Feature, General

Jenna designed these bandannas/scarves that have the 19th Amendment to the US Constitution printed on them. It’s important to remember that it was only 99yrs ago that women earned the right to vote in the US!You can order one here on Amazon.

10% of all profits are donated to the League of Women Voters.

When Teachers in Ohio gentrified my neighborhood in Seattle

General

When I lived in Seattle, there was a neighborhood grocery store that I liked. One fine day I found it closed. And it stayed closed for many days. Then word came out that the landlord had jacked up their rent to something they felt was unreasonable. For months the store stayed closed, as they tried to negotiate or find someone else. The grocery store never re-opened, it was eventually replaced by a new business.

This displacement of local businesses is quite a common phenomenon. But the thing that was quite interesting about this case to me was who the landlord was. It was a Teacher’s Pension Fund! Teachers in the Midwest, working hard to educate their students with the limited resources and support they get, with the assurance that they will have a pension to draw from when they retire. So from each paycheck, a small amount went into this fund, and fund managers were investing on behalf of the teachers, buying up stocks, mutual funds, real estate etc.

The goal of the pension fund was to maximize its return for their teachers to guarantee they have enough for their retirement. In a weird, ugly way, these teachers in the Midwest were gentrifying my neighborhood in Seattle, probably without even realizing it 🙂

This is when I first came to understand how closely we are *all* tied to the “market”. The largest investors in businesses, stocks are often pension funds. At some point in the last 5yrs, the largest 300 pension funds held $3trillion in assets (I don’t have more recent numbers). When the stock market rallies – pension funds and other retirement accounts grow. When companies chose to forgo increasing wages and instead give out dividends to their investors, they still end up helping pension funds and retirement accounts grow and helping retirees have larger safety nets. Public marketplaces are the ultimate tool to align incentives across people of all income levels, as long as all income levels are enabled to have a seat at the table, can make the same bets and are treated fairly.

Lemonade: innovative insurance done right

General

I recently started using Lemonade as my insurance company for renter’s insurance. It seemed quite interesting and innovative and I was impressed by the whole process of signing up. It’s a hassle-free insurance company with a very transparent business model.

They have an innovative way of structuring the pool. They cap their upside by charging a flat overhead rate on each policy. And any money left behind in the risk pool gets 100% donated. They have no incentive to deny claims as leftover funds in the pool is not a source of income for them. You also get to pick your pool’s cause. My pool is Code to Inspire. If the amount claimed by insured folks in my risk pool is less than the total premiums we all paid into the pool, then the difference will get donated and will be used to teach Afghan girls how to code.

But you never really know how good an insurance company is until you have a claim. Of course, I was never hoping to have to find this out. But some misfortune struck and I had to go through a claim.

The claim process was painless. It’s all done through a chatbot interface, but it was nuanced and human enough that I didn’t mind it at all. It really felt like having a conversation with a friend, as one by one I added the items I was claiming, taking pictures of receipts etc. I didn’t speak to anyone. Instead of a phone call, I was asked to record myself on video describing what happened. Now, I am not sure if a human just saw that video, or if they did a neural network based analysis of my micro-expressions to decide if I was speaking the truth.

Whatever they did, it took a total of 17 absolute hrs from the time I submitted the claim to the time it was approved. I woke up this morning with an email in my inbox that my claim was approved and the funds were already on their way. Here’s the approval email I got, with animated gifs and everything!

I doubt insurance could be made any better!

 

Random finance-focused suggestions

General

These are random finance-focused suggestions that summarize what I often discuss with friends one-on-one. This is not a comprehensive list. And this is definitely not real financial advice. Different things for different people and different situations. Just sharing these in case they inspire some thoughts and ideas.

1. If you have student loans, don’t obsess about paying them off any sooner. It’s the cheapest credit you can get. Usually they fall well below 7%. There’s very little financial incentive to pay off student loans sooner and those funds are better used investing in other things and in yourself. Make the minimum possible payment you are required to make. Consolidate, extend, etc to bring your interest rate and monthly total to be as low as possible.

2. Instead use your additional savings to buy into Index Funds. On 10yr+ timelines they are one of the safest investments you can make. And will return a CAGR of 5%-9% with the potential of a lot more upside on longer time horizons.

3. Set and forget. Make good decisions and then put them on auto-pilot. Checking your portfolio daily, weekly, monthly doesn’t increase your return – in most cases it reduces it because it tempts you to try and time the market or to second guess yourself and you end up being worse off. Patience pays.

4. Savings accounts return interests lower than inflation. Any money you put in a savings account is actually shrinking. Use savings accounts. But just be aware that it’s the least productive place for your savings.

5. Understand the difference between assets and liabilities. Liabilities leave you worse off. A car is usually not an asset. If you need a car, buy the cheapest car you can get. The first home you buy is usually not an asset. Renting is sometimes better than owning, if you are disciplined enough to live within your means and can save on your own. If not, buying a house will force you to commit to saving up and to make some sacrifices – and you might be better off. But you will sometimes be trading off opportunity costs, time overhead and other intangibles that will be hard to quantify. Buy a house for the lifestyle and to force yourself to save. Any net financial gains should be considered welcome surprises, but don’t count on them.

6. Save, save save. But also invest in yourself. The world is changing at an accelerating clip. Everything you know can potentially become quite irrelevant in 5yrs. Upgrade yourself. Grow yourself. Learn to enjoy being uncomfortable and keep challenging yourself.

7. It’s never all or nothing. It’s all between the lines. There’s no one right thing to do. Do different things and do them in moderation.

A remote surgery use case for “fast lanes” over Internet

General

Let’s say a skilled surgeon is physically based in Boston. She needs to perform a surgery in Dallas.

The technology already exists today for some surgeries to be performed over the Internet. But for this to be reliable, she needs to guarantee that her internet connection has very low latency. She already pays for a very fast connection but that simply guarantees bandwidth, not latency. She is willing to pay extra to make sure she gets the latency she needs. In fact, it’s a legal and compliance requirement for her to make sure she has a high bandwidth and low latency internet connection when she performs surgeries.

Her neighbor doesn’t care about latency as much, and doesn’t want to pay for low latency when all he wants to do is stream large amounts of video that mainly requires high bandwidth.

Their ISP uses the same connection between them. But depending on their Internet plan, and/or the services being used, the surgeon’s Internet packets are prioritized over the tv watchers’ internet packets to guarantee she can do her work.

Should this be allowed?

Train to Toruń

Travel

On the train from Poznań to Toruń, random fellow passengers helped me put my bags away, offered me food and a drink which is definitely something spiked with something. And now we are using Google translate to communicate with each other.

I think they are Ukrainian. And we are mixing some Russian with Polish now.

They work in construction. Build bridges. They came from Ukraine to work in Poland.

I gave them chocolates from the U.K. One of them has a girlfriend called Marislova. The chocolates are now a gift for her.

And yes it was Vodka. We are best buds now 😜