Hard to be neutral amid IT upheaval

The wider cultural movement towards social justice has hit Silicon Valley. The battle, however, is already over.

Uber, the flagbearer for ‘meritocracy’, surrendered; some high-profile venture capitalists have stepped down; and allegations of sexual harassment and impropriety abound. More heads will roll.

There is no doubt that some aspects of the Silicon Valley culture are negative. The claims of ‘meritocracy’ don’t stack up. We know that the work-hard, play-hard culture of companies like Uber leads to employee health problems. The wild west of ‘whatever works’ resulted in a relentless focus on results regardless of consequences.

It needed to change. But this has the smell of a witch-hunt, as these things often do. With the smell of blood in the air, more allegations will follow.

It will make everyone more cautious, more rule-bound, and that’s probably not a good thing for an industry that thrives on risk and rule breaking.

Net neutrality

The latest round in the ongoing fight over net neutrality in the US is happening now. This is very much an American thing. Europe and most of the rest of the world have decided that the network must be neutral.

We don’t have this problem, or a neutral network, in Australia. Internet service providers often privilege traffic here (e.g. your Netflix streaming doesn’t count towards your limits). It hasn’t been a problem yet, and there are rules available to use if it does.

However, content providers in the US own large parts of the delivery network. This means the temptation for them to privilege their own content on the network is much greater.

The problem in this situation arises if a new competitor is required to pay a fee for access to the network. At the moment, we (consumers) pay the network for our content. Network companies would love to be able to charge content providers as well. They see the huge revenues that companies such as Netflix and Spotify make, and want some.

If they manage to do this, then any new company wanting to do business on the net will have to pay them. It will create yet another barrier for startups to overcome. The worst case is that some business models won’t work at all in this environment.

Encryption

Intelligence agencies are continuing to pressure governments for privileged access to our data. The ‘war on terrorism’ is being used as a reason to force technology companies to open up their data. Experts agree, though, that this will not reveal terrorist communications. The bad guys will move to other platforms, or encrypt their messages outside the platforms. Meanwhile, the rest of us are more vulnerable.

The Australian government is making itself a laughing stock on this issue. Tech-illiterate statements by Prime Minister Malcolm Turnbull to support his government’s push for new powers to unlock encrypted messages only serve to strengthen industry pushback (Facebook and Apple have said they will resist the government in this regard.)

Australia is part of the ‘five-eyes’ community, sharing our intelligence with the US, NZ, the UK, and Canada. Agencies have already used these agreements to circumvent national restrictions on data gathering.

If, as it seems the Australian government intends, one of these governments can break the tech giants’ lock on encryption, then they can all benefit.

The US tried limiting the spread of encryption back in the 1980s and ’90s. This resulted in products released outside America shipping with weakened cryptography, or some products not being available outside the US at all.

The industry’s response to an encryption ban in Australia could be withdrawal from the market here. We’re a small market for them, and it would send a strong signal to other governments contemplating the same move.

Let’s hope that sense prevails and we don’t go down this road.

On a related note, it looks like there’s a battle for bitcoin. As I reported in a previous article, bitcoin has to make changes is going to scale.

There are two competing proposals for this change. They have finally agreed a compromise, which is shipping at the end of the month. If all goes well, the new code will be accepted and bitcoin will be more scalable. If all does not go well, bitcoin may split into two currencies, and volatility will ensue.

Meanwhile, popcorn futures are doing well as the world watches.