Thursday, December 28, 2006

Shaping P2P Traffic

Techdirt recently posted about how Internet Service Providers are shooting themselves in the foot. Not that this is surprising coming from Techdirt (and it's certainly justified to an extent), but the issue they raise does give some reasonable food for thought about ISP's traffic shaping P2P traffic.

The funny thing, though, is that whether or not it really is a burden,
the idea of using traffic shaping is absolutely going to backfire. As
we've already discussed, the more ISPs try to snoop on or "shape" your
internet usage, the more that's going to be a great selling point for encryption.
People are going to increasingly encrypt all of their internet usage,
from regular surfing, to file sharing to VoIP -- as it makes it that
much more difficult to figure out what kind of traffic is what and to
do anything with it.

A few things that they didn't explicitly point out I find to be particularly important.

  1. The power of the individual is sticky

    It's tough when you're offering a platform like an internet connection. While users constantly search for new applications and uses of their connection and bandwidth, the telcos want things things to stay the same as much as possible in order to provide only what is needed from a willingness to pay perspective, thus earning a predictable, reasonable rate of return on their investments. However when the internet gets involved, that dichotomy is thrown out of balance, because the technology evolves at a breakneck pace, keeping the space virtually unpredictable.

  2. A rising level of human capital will be less likely to tolerate this activity in the future

    As reported by Ars Technica, A new poll by Zogby International and 463 Communications showed that most (83%) of the respondents believed that the average 12-year-old knows more about the Internet than do members of Congress. I believe this is more than a matter of perception, and it will spell trouble for the profits of telcos down the line unless they can learn to adapt more quickly to their market. More educated consumers will begin to demand more from their internet connections and will either switch providers, or find ways to make it retain their previous level of functionality via encryption or some other method. This isn't necessarily bad, but it does mean that the present tension from bandwidth hungry consumers is only likely to increase in the future.

In conclusion, I have neither a silver bullet. nor even a particular side in this case. I wish competition were more prevalent in the current broadband space, because as it stands I couldn't switch my provider today if I wanted to. If I could, I think I would get more worked up about the issue of traffic shaping, but at present I'm content to sit on the sidelines and watch the debate unfold for a while longer.

Thursday, December 14, 2006

Leave it to the Government

Via Boing Boing, USA Today has written an article about how the metal used in nickels and pennies has become more valuable than the coins' face values.

Soaring metals prices mean that the value of the
metal in pennies and nickels exceeds the face value of the coins. Based
on current metals prices, the value of the metal in a nickel is now
6.99 cents, while the penny's metal is worth 1.12 cents, according to
the U.S. Mint.

That has piqued concern among government
officials that people will melt the coins to sell the metal, leading to
potential shortages of pennies and nickels.

I don't see this as a sign of a failing economy, but I do see this as an interesting quirk when it comes to money. Because (historically at least) is tangible, it has to be made out of one type of material or another. As inflation rises steadily through growth of the money supply, eventually those materials could become more valuable in raw form than as they money they're coined into.

However, I fully support the government's move here for a very simple reason. Melting down currency of any kind directly changes an the money supply in an economy. Quite frankly, I'm not willing to let individuals, foreign or domestic, be in charge of the money supply of my primary currency.

On a personal level, the value of the money I hold may increase due to falling money supply, but depreciation often is indicative of more harm than good. Additionally, increased volatility in the value of our currency would scare investors away, weakening the economy as a whole.

To briefly hit on a subject too large for one post, this activity serves to bring the currency back to the gold standard, or in this case the copper standard. After a while, the prices of pennies and nickels would re-establish themselves at a penny and a nickel, restoring "convertibility" from the penny to its metal. This would only work in one direction though, because individuals couldn't convert metal back into currency.

It's an interesting topic, with many far reaching ramifications. However, since most of them only serve to destabilize the economy the only suitable option is to leave the money supply in the government's hands. It's better for everyone that way.

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Sorry for the Absence

I'm sorry for not keeping up with my blog recently. This year I've taken on more a good deal more responsibility at school and I haven't had the kind of time I was previously taking to write my posts. I think I previously set the standard a little high for myself, expecting each post to be more like an essay than a standard blog post. From now on, I'll likely be publishing more often but with slightly less depth. Again, sorry for the absence.