Net Neutrality’s Impact on American Anime Streamers, 2017 Edition

Reading softcore political propaganda in the morning is a good chuckle I suppose. I think with a lot of internet stuff, either the FCC recent moves or even the copyright issues detailed here are really difficult, nuanced policy discussions that have no good or right answers, and whatever decision that becomes law have ramifications that can be hard to fathom down the road, if we even assume the future play by the same rules we play by today. But as they say on Capitol Hill, if you’re explaining, you’re losing. It’s also pretty hard to work that internet mob mentality if you want to be careful and nuanced. It’s not like the issues of punching a Nazi, let’s just say.

The reality of the situation is, with a privatization of the internet, net neutrality is more a practical reality than an ideal that needs to be enshrined. Ultimately packets will go from A to B to C, because someone requested it and someone else made it available. The question is more of, what is a fair allocation of packets and bandwidth. In my mind, too often, the net neutrality debate is wrapped up by “free beer” kind of things than “free speech” as a result, to co-op a common analogy when it comes to these things. People’s desires conflate with what is actually fair, creating incentives to promote certain results that are actually not “net neutral.” FCC’s deregulation, as a result, may not be as bad as the worst case scenario as some people paint it as, and we might end up going there anyway with or without regulation.

The best example I can give is zero-rating. This is the now-popular practice where an ISP can provide a pay-per-bucket plan to an end user, but discount certain types of traffic from the bucket. This is technically not net-neutral; certain traffic are privileged because of business or whatever reasons–namely just so the consumer get a better value from the ISP since often these privileged services are very popular or are incumbent market leaders. In some cases this is a way to beat their path into a new market, the most ambitious example is Facebook serving free internet to India, which was blocked by the country because it would destroy net neutrality in that country. But isn’t free internet (and free smartphones to go with) good for consumers? Especially for a developing country like India, where people just don’t have money for that kind of thing. Anyways, that’s not important for American anime viewers, who are generally not poor by global standards.

The real way to look at this is to understand what internet is for. If you spend all day consuming media using your internet, well, you are definitely not alone. But this is not the real cause or case for Net Neutrality. The scare tactics about graphics of paying for each service from your network to have them enabled is already something adult Americans have to deal with in the past decades: that’s how cable and cable packages are sold. So what is cable/satellite TV anyway? It’s basically data pipes with services on top, where the services can be phone, television (on demand, linear, PPV, porn, whatever), or internet service. When someone “cuts the cord” you’re basically getting television services from 3rd parties that are not your cable or satellite provider, and it uses your internet instead of the dedicated pipe between your cable box and the cable company hosting and serving the content.

Which is just to say, the $10 or whatever one pays Netflix is just another way of paying the $30 or so one pays to, say, Comcast or whatever Time Warner is called today. It’s decoupling the platform and the services that lives on it. It’s stuff anime fans already have to do if the shows they want to watch is on Hi-Dive, Amazon Prime, Netflix, and CR. You’re gonna have to pay for all 4 to get all the available streaming anime this season (ok maybe not Netflix but you know what I mean).

What net neutrality’s worse case scenario is that some ISP X, for example, will offer you free Netflix and pay for its annual subscription fees, over all the other ISPs. If that sounds good to you, it’s already happening. It’s actually a net good for anime industry in this case. An anime fan might now be able to afford to pay for an additional streaming service she couldn’t before, or watch some anime on Netflix because it wasn’t streaming the season before KEK. Anyways, this is a good outcome at the expense of net neutrality. And in some ways, this is not what the fight against Pai and the FCC is about, that’s about Title II regulation of internet service providers.

The real problem with American internet service providers is outlined here. Cable companies are how most Americans get internet today, and they are regional monopolies. There is no effective competition, and if there are, it’s very token and often it’s shut down by law (RIP municipal internets). These ISPs often are money grabbing POS with bad customer service and terrible pricing. They have survived as some of the most hated entities in America because of the monopolies they have over us. We have no real choice for broadband internet that is affordable.

The break away for cord cutters is one way to cut into regional cable providers’ gravy train. Instead of $100 or whatever a month one pays for CATV, we can get a suitable alternative via Amazon or Netflix or a new crop of service providers, with only half as much of the money (or less) going to the CATV companies. There’s even internet-based linear TV via DirecTV (which, while terrible on its own, has been an eternal competitor to CATV) and a growing list of services. Even Google is in this game. This is the real posture between cord cutters and their cable TV overlords. It’s a fight to regulate a terrible situation made worse by unstoppable incumbents, and millions of lobby bucks and rotating door policies for people getting plush jobs once they exit from politics.

Net neutrality comes into play because the media market has been consolidating between content providers and service providers. With Comcast-NBC in the rear view mirror and ATT-TW in the distance, I’m not sure what there is to do for poor sods in America who will be paying more than ever for internet services and content services. The principles of net neutrality can help the people fight this fight, by pushing internet services companies into legal utilities. That said, the FCC, even before Pai and the Trump administration, is weak and ineffective at doing this. I think deregulation from the FCC is not going to make a huge difference in the long run, although it does deprive us one set of tools in fighting these terrible monopolies.

On the flip side, a strong FCC with enough legislative backing can really help us in this fight. I just don’t think it’s going to happen under this administration.

Let me continue the same topic with a very different take: Bottom line bucks. This is the slate at the start of 2017 from PC Mag, which I kind of agree with. We’re looking at one service and the boradband to use it, so that’ll run anywhere between $7-16 with Anime Strike in the mix. It’s on top of the average broadband price in the US, which is something like $80 according to this article. If you can live with Netflix and forego the rest, that’s a sizable saving, so you can see how zero rating can make a huge difference, even if it’s for a different kind of network service.

With the Net Neutrality scare scenario, the ISP overlords of America wants to provide a similar level of service at a lower price, with the caveat that some services are not available unless we pay extra, that is essentially “cable-fying” the internet. But if the services can compete with each other, that is generally going to be a good deal for anime fans because we would have the option to have more extreme a al carte options and shed additional costs mainstream customers can’t. Of course, that will depend on your own preferences. But we at least have competition of a perverse sort between the various streaming services, which is more competition than the old days.

It’s easy to see why Amazon decided to make Anime Strike an addon subscription–it’s like old on-demand anime for CATV customers, where you can pay a monthly added fee and get some anime on your one-stop-shop that is Amazon Prime. Too bad it alienates everybody else not in their ecosystem, albeit that is a shrinking number by the minute. If the scare scenario is that we have to pay extra for content we care about because it’s niche or an upstart, it’s already happening with Amazon video, or any other addons in which they want to extract that extra tax, may it be from the platform or service level.

So, then, we need to ask: what does net neutrality add to this? Is there any guarantee that we will get better services at a lower price if we regulate the ISPs like utilities? I actually don’t know. But I do know zero rating as a competitive means can lower prices, as pioneered from bucketed cellular service (which, compared to cable/broadband, is quite competitive in the US). I know that nerfing net neutrality brings the platforms and service providers together, giving ISPs more leverage to extract that tax. This is generally not a good thing for today’s service providers, because it opens the door for more hijinks with the dumb pipes trying to extract some value from the transaction stream. However, it’s far from clear how that will play out, and who would be the losers (well, all of us probably, unless you own the right stocks) in that game.

To sum, the irony is that net neutrality is not the best deal for anime fans. For people who use the internet for things most people don’t use the internet for, net neutrality is definitely way more important…and even so, something 99%+ of us can live without. Because the moment it stops working, well, it stops working. Until then, it’s a matter of how much money we are paying and what services we are getting out of our monopolistic dumb pipes. Just look at what Netflix did in their 180. It’s not even a matter of money making for incumbent services, it’s a matter of regulating an industry sector in a way that is fair to the public and cost effective to the consumers.

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