Internet of Things value creation requires net neutrality

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Kaivan Karimi, Atmel VP and GM of Wireless Solutions, explains how neutrality is the only way to bring next-gen service providers to the IoT table.

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While it has now become the common understanding of the technology community that the Internet of Things (IoT) will impact every aspect of our lives and create massive value by improving processes and conserving resources, no one has started pointing at specifically how this whole “value creation” will happen, and how will it get managed? When GE talks about the addition of over $17-$30T dollars to the GDP of the world because of IoT, from where does that money come? Is it just because we connect a bunch of gadgets inside our homes to talk to each other? Really?

From my perspective, true IoT value is created through managed services, where a new generation of service providers will come to the table and offer differentiated services that do not exist today. Since everyone can, in one way or another, relate to “in-house IoT,” the best home automation has become the battle ground d’jour. Here’s an old cartoon that I had used a few years back to point at new generation of service providers that soon will be servicing your connected home.

In order for this vision to take place, it requires common open systems that can be leveraged by the new generation of service providers, regardless of who initially installed those boxes and gadgets. The same goes for the “connectivity pipes” linking the home to these services providers in the cloud, which also needs to be open for access by these new service providers. In other words, broadband access “pipes” need to become open and shared between the service providers other than the current ISP sitting at the table. This isn’t any different than today one using HuluPlus services to what movies, except instead of HuluPlus pumping content to your television, it will be your new “home automation” service provider monitoring your connected home and smart gadgets to reduce your energy consumption, improve your quality of life, alert you of an appliance malfunction before it happens, in addition to a number of other useful services that’ll surely save you money and improve your quality of life (create value).

In advance of the new service providers coming to the table, current ISP providers decided that they can block and favor certain broadband traffic, over other ones. Those of you who have attended my IDTechEx classes or other conferences know, that for most part, there will be minimal traffic going to the cloud for command and control types of applications. So, it is not about the amount of traffic, but rather pipe owners (ISP providers) wanting a bigger piece of the pie by denying the new services providers equal access. In reality, an open system with the ability for new content and service providers offering new services without asking for permission from ISP gate keepers will enable the innovation that we are and will be experiencing in a bigger way in the future.

For this, we need regulatory safeguards to protect against the risk that ISP/broadband providers favoring some Internet traffic over others, and become self appointed gate keepers. At the same time, heavy-handed regulations can stifle innovation in other ways and actually interfere with legitimate network management. Subsequently, there must be a balance and both sides need to come to the table to establish that equilibrium. This requires the U.S. government to force ISP/Broadband providers to play ball. From an IoT perspective, that’s what net neutrality debate is all about.

On November 10, 2014, President Barack Obama called on the Federal Communications Commission (FCC) to reclassify broadband Internet access service under Title II of the Communications Act. To decode the language, it means to reclassify broadband as a utility (note that nowadays, in most markets you have choices on whom your electricity service provider can be and are not stuck with just one provider like the old days). When I was at CES a few weeks ago I heard that FCC Chairman Tom Wheeler had announced that his office will vote on an official proposal for net neutrality on February 26th.

“We’re going to circulate it to the commissioners on February 5th and vote on it February 26th,” Wheeler told CEA President Gary Shapiro in a public interview. When Shapiro asked him about Title II, Wheeler talked about the need to find a balance between the allowances for innovation, while incentivizing the ISPs’ continued investment in broadband. In the past, the FCC has also addressed hybrid approaches to this problem.

“We’re going to propose rules that say that no blocking, no throttling, paid prioritization, all that list of issues, and that there is a yardstick against which behavior should be measured,” Wheeler added at CES. “And that yardstick is ‘just and reasonable.’”

Let’s go back to early 2000 and that generation of smartphones on closed platforms, as well as the few apps that were supported. When Apple opened iOS for apps developers, a whole new world of applications were created. After Google opened Android further in 2008, we’ve ended up with over 130,000 applications, with lots of folks hooked on them. In fact, just a few years ago, if you would have asked them about those apps, they would have no idea that they would be hooked on them upon using them. I am not asking that we need over 130,000 service providers at your home, but we definitely need more than the single broadband provider we currently have.

The bottom line is that net neutrality is the only way to open up the existing “closed system,” and to bring a new generation of IoT service providers to the table. This will lead to more choices, which will spur more innovations, which in turn will bring in more service providers. As a result, the cycle of IoT innovation will progress and create tangible value through new service provisions.

Interested in reading more insightful pieces from Kaivan Karimi? You can do so here.