Tiger (er, Shark) of the Month: Digital Ocean Makes Getting to Cloud Easy

 
Digital Ocean Shark Whilst at Github Universe last month, on my way to learn more about the conference host’s new hardware two-factor security initiative for its developers, I was sidetracked by the sight of a group of developers crowded around a small kiosk, each holding a blue smiling toy shark. Curious, I stopped by to chat with the kiosk owners’, the crew of Digital Ocean, this month’s featured cloud computing “tiger.”
Why is this particular cloud provider a tiger/shark? Simply put, because they make getting onto the cloud easy for developers at a price point that won’t cause any nightmares as the customer company scales up. But it’s not as simple as calling Digital Ocean an “AWS lite” either because at the moment it’s a very different offering. And particularly for companies that were born pre-cloud, or for the largest unicorns like Uber, DO does not have all the features and support that you would need — at least not yet.
From 0 to 236 countries in Three Years
What Digital Ocean does offer to new companies and other cloud first entities is a facilitated and positive user experience. And developers love them — 700,000+ of them representing 8+ million cloud servers. From a 2012 $3.2 million seed round to a March 2014 $37.2 million Series A to its most recent Series B round in July 2015 for $83 million (Access Industries, Andreesson Horowitz, others), the company has found exponential success with a customer-first approach — delivering a streamlined UX with a straight-forward, transparent “no B.S.” or hard upsell approach.
DigitalOcean currently reaches 230 countries and territories. After their Series A the company added datacenters in Singapore, London and Frankfurt. Another facility was added in Toronto since its Series B, and the company expects to onboard India and South America in 2016.
Starter Web Services 
Digital Ocean has established itself in the web services arena primarily by capturing the entry market. If you look at the three aspects of being in the cloud — Computing, Networking and Storage — DO really only serves the first leg of the stool. Which means that the company can only handle small co or early stage company requirements — non-dynamic content web pages, etc. So a chunk of the developers currently using their services eventually outgrow them. *But* flush with cash and building momentum, the company launched its first networking service in late October — floating IPs that solve the problem of reassigning IPs to any droplet in the same datacenter — and may be able to offer a comprehensive cloud solution as early as next year.
The Hidden Barrier to Cloud is Actually HR
What set’s Digital Ocean’s products from the rest is that you don’t necessarily need a senior engineer to get your company’s web presence set up. So DO is not only cheaper and easier to use, but a platform to get you faster to launch. This provides the business with some breathing room as it develops, expanding the base of potential staff whom can handle the website. This has made DO’s Droplet a popular service for not just newcos, but also for discreet web projects and microsites like the launch of Beyonce’s secret album and Universe.com (owned by TicketMaster).
Customer Service Your Way (It’s All About the Love) 
DO’s UX goes far beyond the product UI. As strange as it sounds coming from a web infrastructure company, one of the company’s core values is “Love” and it is practiced throughout the company. I would characterize this love as a “passion for helping others” and a joie de vivre” that infuses the organization and is transferred to its customers. Duly noted that their mascot shark is a smiling happy one. 

How exactly does this Love manifest itself in the business? Zachary Bouzan-Kaloustian, Digital Ocean’s Director of Support describes its IaaS in this way: “Our entire platform is self-managed, which means that the customer is responsible for what runs on their Droplets. Our Platform Support Specialists provide free support if something’s not working with the infrastructure. One way that we demonstrate our core value of love is to ensure we reply quickly, and our 30-day average response time for 1,000+ tickets / day is under 30 minutes! Of course, our 24/7 team doesn’t stop there. We often do extensive troubleshooting with a customer to diagnose the issue, even if it involves parsing server logs. This involves extensive experience, and great relationship skills as we don’t have access to our customer’s Droplets for security reasons.”

But is this love scalable? Maybe not, but certainly the desire for love amongst developers (and us all) is strong so no doubt there is no shortage of demand for DO’s particular brand of customer relations.

Building the Next Generation Infrastructure 
By getting in with developers early, Digital Ocean has set itself up to take advantage of the tipping point of the Internet of Everything — when not only all major services but customer adoption for them reaches critical mass worldwide — likely well within the next 5 years. While newcos are signing up with Digital Ocean today, the company is fortifying and expanding its technical and services staff — growing from 150 to 200 employees in the past quarter alone.
And the big fish are taking notice: Google, Microsoft and Amazon have sliced their prices 3x since Digital Ocean launched and prices continue to drop. So increasingly the companies will begin to compete on volume — of customers and services used.
Fast forward 5 years and DO will have all the pieces of the cloud stool well established as well as worldwide presence. If DO can maintain its vision of making web services simple to consume, and successfully build out its offerings so that it can scale with its customers, the company is well positioned to become the go-to web services company for the post-millennial generation. Considering that there are some 20-30 million potential developer customers out there — it wouldn’t surprise me to see Digital Ocean as the most distributed — if not the biggest — and certainly the most beloved fish in the sea by 2020.
**This post was updated at 1:38pm on November 11, 2015 to reflect factual corrections. Access Industries, not Accel Partners, is a lead investor in Digital Ocean. 

Zuckerberg pledges to connect refugee camps to the Internet

Facebook chief executive Mark Zuckerberg has pledged his support to the “Connect the World” campaign working to make universal Internet access a reality by 2020. This initiative will push countries from around the world, with assistance from the United Nations, to expand Internet connectivity to all of their citizens. But what of the many millions of people current living without a country they can call home?
The United Nations High Commissioner of Refugees said in June that there were almost 60 million refugees or “internally displaced persons” around the world in 2014 — the highest number seen since World War II. Some risk their lives to seek asylum in other countries, only to be turned away or even attacked once they’ve arrived at their destinations. Many other refugees never even reach that point.
The camps in which these refugees often find themselves have been described as “hellish.” They are also dangerous: The United Nations warned in 2013 that hundreds of thousands of refugees were at risk as winter storms hounded the Middle East. Even more-established camps, such as the Zaatari Refugee Camp in Jordan, are defined by complaints about unreliable access to water and electricity.
Given all that, efforts to offer Internet access to these camps might seem strange. What good is Facebook in a place where electricity is only available in the night, food is farmed around ramshackle buildings, and many people struggle to survive? Well, according to Bill Frelick, the Refugee Rights Program Director at Human Rights Watch, having access to the Internet is more important than one might think.
“I think this is an important and quite worthwhile initiative. I have definitely interviewed many refugees whose main preoccupation is the need (and difficulty) in communicating with separated family members,” he says. “After taking dangerous sea voyages the first thing most refugees and migrants want to do is to tell relatives that they have survived. When communication is cut off, refugees’ anxiety becomes palpable.”
Zuckerberg preemptively responded to one of the key criticisms of this effort: That Facebook is trying to appear selfless, when really this project serves the company’s goal of having as many people as possible use its service. “It’s not all altruism,” the New York Times reported him saying. “We all benefit when we are more connected.” He knows Facebook will come out ahead; Frelick says affected refugees will, too.
Still, there were will be questions about this initiative. Will Internet connectivity be provided through Internet.org, the organization Facebook set up to provide Internet access in remote areas, or some other group? On what devices will refugees be able to access the Internet? Will the access be free, or will it be paid for by refugees or rights organizations? So far, little about the plan has been revealed to the public.
Providing the connections via Internet.org could prove to be a problem. The organization has been criticized in the past for violating the principles of net neutrality by giving preference to some websites and services over others. It was also criticized for not allowing the services it enables to encrypt user data, but it has since enabled encryption in its Android software and its primary Web portal.
The Electronic Frontier Foundation, which previously criticized Internet.org for the perception that it violates the spirit of net neutrality, declined to comment for this post. I reached out to Facebook and Internet.org to get more information about their plans (and to see if the latter group will be involved in this effort) but haven’t heard back. I will update this post if they respond to my email after publication.
Zuckerberg acknowledged the difficulty of his task in a New York Times op-ed written with his partner, Bono. “It’s one thing to say we should connect the world. The real trick is how,” they wrote. “There’s no simple solution or silicon bullet.” Given the current state of refugee camps around the world, and the problems that have plagued Internet.org since its founding, that might be an understatement.

The Internet of Things and Networks of Everything

The Internet of Things (IoT) has been a hot topic for several months now, and there are new stories about it in the business and technology press on a daily basis. While it’s easy to view these as hype at worst and vision at best, there is no denying that purveyors of hardware, software and services are dedicating and creating the resources they will use to capitalize on the IoT. Last week alone, there were three announcements that show just how quickly the IoT market is progressing and how big of a business opportunity it is.
On Monday, September 14th, IBM formally launched a distinct IoT business unit and named former Thomas Cook Group CEO Harriet Green as its leader. The new IoT unit is the first significant step by IBM toward delivering on the $3 billion commitment it made to IoT in March. IBM signaled in Monday’s press release that the unit will “soon” number about 2,000 consultants, researchers and developers, who will use IBM’s assets to help customers get up and running on the IoT. Those assets will likely include the Bluemix platform-as-a-service (PaaS), Watson and other analytics software, as well as the MQTT messaging protocol standard for machine-to-machine communication that IBM submitted to OASIS in 2013.
The next day, Salesforce.com used its annual Dreamforce conference as the grand stage on which to unveil its IoT Cloud. This offering has at its core a new “massively scalable”, real-time event processing engine named ‘Thunder’ (to complement Salesforce’s ‘Lightening’ UI framework). IoT Cloud connects IoT resources and Thunder rules-based workflow to route data between them, triggering pre-defined actions. For example, when an individual enters a retail store, a beacon can offer them discounts based on qualification criterion such as loyalty program status and in-store inventory levels. Scenarios such as this will be possible because of IoT Cloud’s integration with the Salesforce Sales, Marketing and Analytics Clouds. IoT Cloud is currently in pilot and is expected to be generally available sometime in the second half of 2016.
While these two announcements are important milestones in the respective organizations ability to help customers connect to and use the IoT, they do not enable them to do so immediately and risk being labeled as more IoT hype. The sheer magnitude of resources assembled for each of these vendors initiatives signals that they believe that the IoT will be both real and profitable in the not-so-distant future.
The final piece of related news from last week underscores that smaller, pure-play vendors are delivering tools that help their customers get on the IoT now. Build.io announced that Flow, its integration PaaS that had been beta released in March, is now generally available. Flow features a drag-and-drop interface that is used to connect IoT elements ─ sensors and other intelligent devices, backend systems, mobile applications and other software ─ into an integrated system. Connections are made at the API level. Like Salesforce’s Thunder, Flow uses rules-based event processing to trigger actions from IoT data. In essence, Build.io is delivering today a critical part of what Salesforce intends to make generally available later this year.

Current State of the Internet of Things and Networks of Everything

These announcements, taken together, mean that the IoT is poised for takeoff. The first sets of user-friendly tools that organizations need to connect IoT nodes, transmit their data and use it to drive business processes are available now, in some cases, or will be coming to market within a year. We are on the cusp of a rapid acceleration in the growth of the market for software underpinning the IoT, as well as the network itself.
This latest batch of IoT announcements from software vendors underscores another thing: the IoT will initially be built separately from enterprise social networks (ESNs). Many organizations, particularly large enterprises, have experimented with ESNs and a few have managed to build ones that are operating at scale and creating value. Those businesses will be turning their attention to IoT development now, if they haven’t already. They will pilot, then scale, their efforts there, just as they did with ESNs.
Eventually, organizations will realize that it is more efficient and effective to build Networks of Everything (NoE), in which humans and machines communicate and collaborate with one another using not only the Internet, but also cellular, Bluetooth, NFC, RFID and other types of networks. This construct is just beginning to enter reality, and it will take a few years before NoE get the market attention that ESNs did five years ago and the IoT is now.
At some future point, when NoE have become a fixture of networked business, we will look back at this month (Sept. 2015) and declare that it was a watershed moment in the development of the IoT. We’ll also laugh at how obvious it seems, in hindsight, that we should have just built NoE in the first place.

AT&T’s privacy plan may be short-lived and may not even be as bad as we think

AT&T hit a nerve with its privacy-eroding Internet Preferences Plan, which lets customers surf the web at gigabit speeds but also lets the telecom giant see what sites they visit in order to serve up relevant ads. AT&T’s plan may be short-lived, however, if the FCC takes action under its new neutrality rules and, in any case, AT&T may catch less of your web surfing than you fear.

If you’re unfamiliar, the issue arose back in December of 2013 when AT&T launched its GigaPower service in Austin with a footnote in its press release noting that in exchange for giving up their privacy, AT&T gives subscribers a $29 discount. That’s now how AT&T sells its GigaPower plan, which is currently offered in Austin, Texas; Dallas and Fort Worth, Texas; and Raleigh-Durham and Winston-Salem markets; as well as parts of Kansas City, Kansas and Missouri.

But AT&T’s sales pitch deserves a bit more scrutiny. First, the idea that gigabit service should come with a privacy clause that you must opt-into by paying an extra fee each month rubs many people the wrong way. (AT&T charges people $70 a month for its privacy eroding Internet Preferences plan, but $99 a month plus extra fees that eventually totaled $44 a month for a standard plan that lets you surf unseen by Ma Bell.)

The good news is that under Section 222 of Title II of the Communications Act that the FCC recently decided to implement as part of its net neutrality order, the agency can do something about Ma Bell’s plan. Section 222 protects the private information of a customer that carriers are privy to given their position as the providers of telecommunications services, and lays out how that information can be used or shared. It’s not clear if the FCC will choose to implement Section 222, although in the original proposal it has planned on keeping it.

The next question is whether or not the FCC would use it in the case of AT&T’s plan. When I asked the agency, it confirmed that the terms and conditions of any ISP plan would have to be fully disclosed under the FCC’s transparency rules, and Section 222 will require broadband Internet access providers to protect the privacy of their customers. Cynics suggest that the net neutrality ruling took all of the political capital that the agency had, and now it will settle back into complacency, but I suspect that Wheeler has actually shifted his mindset entirely.

And if he has gone to seeing the Internet as a consumer sees it, then my gut says his agency couldn’t ignore a plan like this, especially if a consumer or consumer group filed complaints over AT&T’s plans. Wheeler would very likely take issue with the likely use of deep packet inspection by AT&T to watch where its customers are surfing, and use of economic incentives to essentially coerce customers into accepting this plan.

But, in the meantime, let’s take a look at what AT&T says about its plan to see how bad it really is. I asked AT&T if it was using deep packet inspection, which is the same tool that NebuAd and Phorm tried to use in 2008 here in the U.S. and led to a Congressional hearing. AT&T’s response was evasive.

[blockquote person=”” attribution=””]”As we said last time, we may use various methods to collect web browsing information, with clear customer consent for Internet Preferences.”
[/blockquote]

Note that, under AT&T’s own terms and conditions of the plan, it’s unclear how much of your web surfing Ma Bell can actually track in the first place since more sites have begun using the secure https protocol.

No matter what AT&T is using, it is clear that it will not collect information from secure web sites that use https. When I asked the spokesman relied: “We are not collecting information from secure or otherwise encrypted web sites.” This is actually helpful, because today, more sites outside of the traditional banks and e-commerce shopping carts are using https including Twitter, Google, Yahoo, Bing and Facebook. One reason might be because Google last year let the world know it would use https as a factor when determining how highly a page ranks in its search algorithms.

Still, large portions of the web, from Amazon’s general shopping pages to Wikipedia, as well as many major media sites are not using https, which can cost a lot of time and effort to implement. So while you perform a a search from many of the major search engines (including Duck Duck Go for the truly privacy conscious) you might avoid AT&T’s prying eyes under the plan, but once you land on a non-https page you’ll be back under its scrutiny.

To truly solve the issue, you can pay more and hope that your packets somehow avoid AT&T’s packet sniffing (or are you just avoiding the advertising emails?) or you can write the FCC a letter complaining that AT&T’s Internet Preference Plan invades your privacy in a way you think violates Section 222 of Title II. Or maybe you can hope John Oliver picks up on this story and calls Tom Wheeler a dingo again.

Updated: This post was updated on March 4 to add more cities with GigaPower availability.

How I became my cat’s social media manager, and found a community in the process

I last made an internet friend in middle school, when so few people used AIM that my real-life friends and I traded contact lists and began chatting strangers. One time a boy asked for my number and called my house. I panicked a few seconds in and hung up. We never spoke again.

But I have always been fascinated by online communities, especially connections that begin behind anonymous handles and then morph into real world friendships. From time to time, group pictures from meetups float to the front page of Reddit — person after person who felt strongly enough about their online world to bring it into reality.

I had never felt that intense of a connection with the people I encountered online.

That general stranger-danger opinion of online contacts feels like it has started to lift in recent years with the proliferation of online dating sites. My friends talk openly about meeting people on Tinder and OK Cupid. Moving from the virtual to the real world is becoming more structured, more accepted. But I had yet to find a nook or cranny where I found myself at home.

It turned out that my nook was filled with cats. Lots and lots of cats.

Enter a cat

Eight months ago I adopted a cat — a fluffy orange tom I named Hobbes after a dear childhood favorite.

Hobbes. I still think he's cute.

Hobbes. I still think he’s cute.

A prolific photographer, I quickly had more photos of my precious fur-baby than I was willing to reveal to my Facebook friends. I started an Instagram account dedicated to Hobbes and shared it with the friends who would understand what I thought was my special brand of crazy cat lady. They tolerated me internet gushing over my cat, and even rewarded it with showers of likes.

At the time, I knew of a few Instagram-famous cats and dogs. There was @nala_cat, who has more followers on the platform than world-famous Lil Bub and Grumpy Cat combined. I also loved @marutaro the shiba inu and @hello_oskar, a handsome tuxedo who explores the California coast on a leash. I chuckled to myself as I followed them. Cats following cats.

But then something odd happened: Unfamiliar cats started following Hobbes’ account. I followed back, and followed more. Within a day, Hobbes had more followers than my personal Instagram account. And nearly all of them were cats.

Down the rabbit hole

In these early days, running the account was a small investment that brought immediate return. I could post a picture of Hobbes sitting on the bed and ask, “Which movie should we watch today?” and within minutes have dozens of likes and comments. Hobbes alternated between sassy quips directed at his “humans” and quotes from “Calvin and Hobbes.” For a while I paired photos with lines from Thomas Hobbes, the philosopher, but it turns out no one wants to hear depressing musings on life from a cat.

https://instagram.com/p/qu7IJRuqZX/?modal=true

Over time, I noticed the same people (or cats) commenting on my pictures over and over again. I started commenting back. I knew their cats’ names and “voice,” and started looking forward to seeing what certain accounts posted each day. My Instagram stream turned into a medley of cats satirizing current events, celebrating #caturday and making cutesy jokes. It felt a lot like Twitter, except everyone was a cat.

As the months wore on, my focus shifted from entertaining my friends to pleasing Instagram’s universe of cats. My content became more sophisticated. Some friends and I collaborated on a 10-panel noir piece and this weekend I am running “House of Cards” quotes on top of cat videos. I whittled the number of pictures I posted a day down to two, a number I gleaned from looking at the most successful cat accounts.

https://instagram.com/p/zI1eZCOqXM/?modal=true

As I got deeper into cat Instagram, I joined its rituals. I entered photo contests to get Hobbes featured on accounts with more followers. Messages of “adopt, don’t shop” and “ban declawing” washed over me. I mailed cats handmade bow ties, and they sent me Christmas cards. I found myself using emoji — lots and lots of emoji.

Today, Hobbes’ Instagram account hovers at around 4,500 followers. Every picture I post gets 300 to 400 likes and, depending on the caption, a dozen or so comments. Among the thousands of cat accounts on the site, it’s a modest number. But it’s enough to give me that constant drip of reward social media sites are geared to provide. I post something, and people listen and respond.

Accidental cat people

About a month ago, I did grow tired of upkeeping Hobbes’ account. Writing captions, even if they are dumb cat jokes, takes a surprising amount of energy. I handed the reins over to my boyfriend for about a week and went back to curating my personal Instagram. It was nice for a day or so, and then I missed cat Instagram. I found myself explaining running jokes to my boyfriend and feeling personally responsible for ensuring Hobbes responded. I missed my friends.

The accidental-cat social media manager story is a common one. No one is singularly a cat person, the way a gamer can be a gamer or an athlete an athlete. In the real world, everyone has other identities. Charlene Dahilig, the Sacramento, California-based human behind the beloved @omgdeedee Instagram, said her account was originally private for more than a year.

“I was mostly posting pics of Gary, even at that time,” Dahilig said. “My sister told me that he could be a star and that I should go public, so I did. I wasn’t sure if it was just me who thought he was so unique, though.”

Gary, a white cat with a beard-like black splotch on his chin and mustard-yellow eyes, is not what you would call a classically beautiful feline. Dahilig’s captions present him as a cantankerous and vain, but also lovable, house panther who bosses his “intern” Margo the cat around. It is one of the best known accounts on cat Instagram.

Ruth White, a Hollywood, California, human who has adopted three squish-face Persians from shelters over the last 10 years, said her boyfriend convinced her to start her Instagram account, @squish_n_duffy.

“I didn’t even want to do Instagram. I thought it was so dumb,” White said. “And here I am, 23,000 followers later, organizing Instagreets.”

Friends, in good times and bad

White and a group of Instagram friends get together every few months to talk life and their pets. Many bring their cats.

“I think people think cat people are supposedly introverted and the cats stay at home. There’s this idea that you can’t get a bunch of cats together or mayhem will ensue,” White said. “When you get with a group of people and you all have one thing in common, even if you’re shy or reserved, with your love of cats you can’t help but just engage.”

White recently lost Squish, her first cat. When she adopted Squish 10 years ago, the then-1-year-old cat was so sick White was afraid to name her. Her temporary name of “the squish-faced cat” became permanent.

After Squish died, my Instagram feed filled up with tributes to the tortoiseshell Persian. Everyone had messages of condolences and support.

“To have this community around me that cared so much about me, and checked in on me, and sent me notes, flowers, and just did the most thoughtful things. …” White trailed off. “I was overwhelmed by their kindness. In some ways I’m a stranger, except for that we’re almost always in each other’s daily lives.”

Dahilig said the community support is her favorite part of Instagram. If a cat needs an expensive medical procedure, other people often step in and crowdfund it.

“The response to cats in need and the response when someone loses a pet is truly overwhelming,” Dahilig said. “People know what you’re going through, and I think it helps people through their grieving.”

Hobbes and a donut.

Hobbes and a donut.

If you had asked me a year ago to comment on cat pictures 20 times a day, I would have laughed. But I get it now. Behind every cat, there is a person you follow for their humor, their photography skills, their whatever, the same way you would anywhere else on the web. It’s just that here, in my corner of the internet, everyone happens to like cats.

I haven’t yet made the leap to meeting an Instagram friend in real life. But I wouldn’t mind doing it. This time, I won’t hang up.

Spark Electron wants to make cellular connectivity easy as Wi-Fi

Spark Labs is coming back to Kickstarter with a new project and a mission to change how cellular carriers think about the internet of things. The company, which launched a popular Wi-Fi development board for the internet of things almost two years ago on Kickstarter, is back raising money for a cellular development board called the Electron.

For $39 or $59, respectively, developers can get 2G or 3G-capable board as well as the software and back end cloud service that Spark offers. Add to this $2.99 per month for the data plan and now people building connected products have a new option available that lets them take their devices outside the realm of Wi-Fi networks. Zach Supalla, the CEO of Spark, explained that after the launch of the Spark Core board and the Photon, a postage-stamp sized Wi-Fi development kit, he asked customers what they wanted. Many of them asked for Bluetooth boards, but that wasn’t technically challenging, so he pressed harder.

“We found that many of our customers were using Wi-Fi boards as kind of a hack, like trying to cover a farmer’s field in Wi-Fi to use them,” Supalla said. So he decided to try cellular reasoning that would open up the Spark ecosystem to more industrial applications. So far, the hardware hasn’t been as challenging as getting the connectivity together.

So far, Supalla said has a deal with a Tier 1 carrier for 2G and 3G GSM service in the the U.S. and Canada, and is working on signing more. He’s also working on signing European deals with the goal of offering global coverage. In some cases, it has been tough going because carriers seem more concerned with how much money each new subscription will add as opposed to embracing more flexible pricing for smaller developers to get them on board and hopefully help them grow to a larger business, he said.

While some telcos are changing their tune on this issue, it’s a slog finding the right people inside the company, although Supalla is optimistic. He pointed out that stories such as Tesla have helped make carriers see the value in helping smaller startups and innovators because when one of those hits it big, they can change an entire market in a flash. The carriers don’t want to miss out on the next Tesla.

So he’s launching the Electron, and he’s doing so on Kickstarter, despite having raised $4.9 million in venture backing. One reason for his Kickstarter campaign is to go public, not just with the product, but with the idea that carriers should open up their business models to embrace smaller developers. He’s also hoping to show developers that cellular is a viable option for them, hopefully around the world. The board won’t ship until October, so he has time ti sign up more carrier partners.

As I said last week, when covering Konekt, a Chicago startup with a similar proposition, this is an idea that needs to happen. Flexible cellular connectivity for startups is an essential element for growing the IoT market. And if carriers don’t get on board, entrepreneurs will find a way around them — much to the carriers’ chagrin.

Updated: This story was corrected at 10:40 am to note that Spark does have a carrier partner for Electron in the U.S. and Canada.

Konekt gets $1.3M to create a Twilio for cellular connectivity

The cellular industry has been plugging the internet of things for years under the “machine to machine” moniker, but it never caught on until smartphones, ubiquitous Wi-Fi, and cheaper sensors finally made the technology more accessible for makers and mainstream consumers. Yes, you can find M2M applications in industrial settings where high-dollar goods are monitored but, for the most part, the bulky expensive cellular modules and pricey data plans made the telco’s vision of the internet of things a non-starter.

That’s a shame, because there are some applications where a cellular connection is the best option. Maybe it’s for a backup connection in the home gateway if your wireline internet goes out, or for a tracking device that needs a range far beyond your Wi-Fi or Bluetooth radios. Which is why I’m interested in the news Thursday that Konekt, a Chicago-based startup founded in 2013, has raised $1.3 million. The company offers what could be an essential service for startups trying to add cellular connectivity to their devices — a universal SIM card and cloud that lets you manage those connections.

I think of it like a Twilio for the cellular world that lets anyone buy access to 2G or 3G networks for a rate that Konekt CEO Ben Forgan called “competitive.” Forgan said the company has a deal with Vodafone and a few smaller carriers that provides the SIM cards and the connectivity, which Konekt resells. But Konekt isn’t just a reseller, it has built a cloud service with a web portal and APIs that let a customer build the SIM into his or her product, and then manage the connection via the APIs and cloud.

That’s a level of service that the telcos or other M2M services providers such as Kore or Raco Wireless often would provider to smaller companies without a lot of complicated negotiations and minimum orders. Konekt will serve customers that want to build 20 devices or provision 2,000. Already Forgan said he has over 200 customers, but he can’t disclose them. Based on the contract with Voadafone, customers of Konekt would find their devices surfing the AT&T and T-Mobile networks in the United States.

I’ve seen a few startups attempt to do this in the past, and it was often the carriers and their onerous terms that held them back, so I’m hopeful that now is finally the right time for smaller companies to have agile access to cellular connectivity in a way that lets them build and prototype devices —  even if they may never grow to be huge businesses. If not, I expect that as the internet of things grows, the amount of cellular connectivity used to connect devices may not grow as quickly as it could have.

Konekt’s investors include NextView Ventures; Mucker Capital; Tyler Willis Syndicate including Maiden Lane; and several former Groupon executives.

The FCC’s net neutrality proposal is awesome, but has a loophole

FCC Chairman Tom Wheeler has taken the unprecedented and awesome step of using Title II to ensure that the internet remains open and that ISPs cannot discriminate against the type of traffic flowing across their networks. This is a big deal, as I explained earlier, and now that the Chairman has released the details of the FCC’s proposal it’s time to dive in.

If you want the TLDR version, here it is: The FCC has crafted the strongest net neutrality rules I have ever seen. They will cover both wireline and wireless broadband networks. The FCC has also decided that it will keep an eye on peering agreements between “mass market ISPs” and edge providers and has established a general conduct rule that will allow companies and consumers to complain about unreasonable behavior by ISPs on the internet. To do this, it will use both Title II of the 1996 Communication Act and the Sec. 706 authority it has under that same act.

Federal Communications Commission (FCC) headquarters

Federal Communications Commission (FCC) headquarters

Now for the details, where I’ll try to use real-life examples like zero-rating plans for cell phone operators or your Xfinity voice service from Comcast. Or what about those few months when your Netflix service was all screwy because your ISP wanted it to pay more money? The FCC’s rules address all of these services, so read on — it’s your internet, after all.

Bright lines and no blocking

The government is fond of what it calls “bright line” rules. No shades of gray for these folks. For net neutrality we get three types of “bright line” rules that wireline and broadband operators must follow:

  • No blocking
  • No throttling
  • No paid prioritization

This sounds pretty simple, but it gets a bit tricky in practice. For example, this applies to legal content only –no pirated movies — and carriers can argue that they need to block or throttle as part of a network management plan if their network is congested. If they do so, however, they had better be prepared to defend it to the FCC. For example, the FCC came after Verizon over the summer for throttling users of its unlimited plans after they hit a certain data cap. The reason: The carrier couldn’t prove that the decision was about network management as opposed to business.

That same standard applies here. However, zero-rating, where a carrier lets customers listen to a service like Spotify for free on their network (as T-Mobile does) or perhaps lets them use Facebook without it counting against data caps, is okay. Opponents of zero-rating argue that it’s a type of reverse paid prioritization and violates network neutrality, but in a press call, a senior FCC official said the agency would review those calls under the general conduct rule (more on that later).

Even more transparency

FCC Chairman Tom Wheeler

FCC Chairman Tom Wheeler

The transparency provisions of the original Open Internet Order, which was enacted in 2010 and saw most of its provisions struck down by the courts in 2013, actually stayed in place. The new net neutrality proposal adds to those provisions. One way it does that is by adding to the reasonable network management clause, requiring ISPs to justify and defend their network management decisions (as indicated above in the Verizon data throttling example).

Another example is when it comes to managed services that an ISP offers on top of broadband services. For example, your cable provider might offer a voice service or an alarm service on a dedicated network; U-Verse TV is another example of a dedicated service on top of broadband. If ISPs try to degrade regular broadband service to protect their own dedicated services, they will have to disclose that, and it won’t be allowed. This prevents ISPs from prioritizing their own services at the expense of the rest of the internet — something that was utterly left behind in the original net neutrality rules.

The interconnection rule

Level 3 peering graphic The FCC also took on an incredibly esoteric issue called peering that caused consumers a lot of pain in 2012 and 2013 as the major ISPs and Netflix basically engaged in a trade war in the middle of the internet. ISPs wanted Netflix to pay them to open more doors for Netflix traffic to flow through, while Netflix wanted to build its own doors into the ISPs’ networks the way it had done with so many other ISPs. The ISPs eventually won that fight, because without those doors Netflix couldn’t deliver the bits its customers demanded, and their experience suffered.

Netflix likened ISPs’ behavior to extortion and called for the FCC to make peering a network neutrality issue. And to everyone’s surprise, it now has. This rule will let edge providers complain to the FCC about peering and interconnection deals, and any complaint will go through the enforcement office for the FCC to determine if it is “just and reasonable.”

It’s worth noting that this rule only seeks to investigate interconnection deals between “mass market broadband providers and edge providers.” Smaller ISPs and deals between the likes of Google and Facebook or other companies don’t appear to be included here. The FCC is basing its authority to do this on Title II.

The catch-all general conduct rule

Finally we have the catch-all rule, which seems to be the agency’s way of future-proofing the open internet as much as it can. The proposal would create a general Open Internet conduct standard stating that ISPs cannot harm consumers or edge providers. It’s likely that things like zero-rating and sponsored data plans such as the one that AT&T offers will be adjudicated under the general conduct rule.

While it sounds nice, a concern is that the more things that fall under this vague general conduct rule, the more flexibility the agency will have in determining what a network neutrality violation is. Flexibility can be a good thing, but in the government, it can also change with each administration and the political climate. I am concerned that this could be a loophole, but a senior FCC official objected to that characterization. “We see this as a safety net to catch any issues that are not covered as a bright line rule and to protect against new practices that may discriminate.”

Wheeler’s proposal now will go to each of the four other commissioners, who will presumably add their comments and thoughts before it goes to a vote at the open meeting on February 26.

In an ideal world, the agency would vote on the proposal at that meeting, and if approved it will be entered into the Federal Register soon afterward and become part of the official regulations. At that point, I expect AT&T, Verizon or some other entity will sue. In the meantime, expect exhaustive coverage discussing the legalities of the FCC’s proposal, the various reactions to it and even how it may affect the looming Comcast and Time Warner Cable merger.

Nice! Wheeler steps up with real proposal for net neutrality

FCC Chairman Tom Wheeler on Wednesday unveiled his plans for mandating real network neutrality and preventing ISPs from discriminating against traffic on their pipes in an opinion piece in Wired. While much of the plan was leaked to the press earlier in the week, and the tenor of his network neutrality arguments had been shifting for months, it’s worth looking at how far Wheeler has come.

Hell, it’s important to look at how far the country has come. But first we need the main points of the plan, which were not detailed in the Wired op-ed but should be released later today and appear to be focused on making sure both wireless and wireline broadband will follow the same rules. If you are just tuning in, the regulatory oomph will come from reclassifying broadband as a transport service, not as an information service under Title II of the 1996 Telecommunication Act. This means that ISPs will have to abide by common carrier obligations. But not all of them.

In the Wired op-ed, Wheeler writes:

To preserve incentives for broadband operators to invest in their networks, my proposal will modernize Title II, tailoring it for the 21st century, in order to provide returns necessary to construct competitive networks. For example, there will be no rate regulation, no tariffs, no last-mile unbundling. Over the last 21 years, the wireless industry has invested almost $300 billion under similar rules, proving that modernized Title II regulation can encourage investment and competition.

Congress wisely gave the FCC the power to update its rules to keep pace with innovation. Under that authority my proposal includes a general conduct rule that can be used to stop new and novel threats to the internet.

Wheeler is warning Congress that he has this power (and it’s doubtful that Congress could get it together to take that away) and that all the ISP talk about how regulating broadband will harm investment is a sham. He’s also setting the FCC up to be flexible in the future, which depending on how that rule is written could be helpful or just a bunch of talk aimed at pleasing people. We shall wait and see.

But for the moment, let’s remember that this is a huge step. Back in 2005 when Chairman Michael Powell proposed the Open Internet Principles of transparency and non-discrimination, they were just that, principles — something to strive for. But after an ISP in Wisconsin was caught blocking VoIP calls that interfered with its lucrative landline business and Comcast was caught blocking legal BitTorrent streams, it became clear that ISPs viewed certain types of IP content as threats to their business models.

And when FCC Chairman Kevin Martin, who was more of a friend to the Bells than a staunch supporter of the consumer, censured Comcast for its behavior, the debate over how to ensure ISPs didn’t abuse their power bubbled up into a real debate over how to handle network neutrality. But even then, the idea of regulating ISPs under Title II was not a topic that people would bring up. It was far easier to talk about and then go through a grueling debate to try to enshrine those original Open Internet Principles into some type of new regulation, than go to Title II.

That would be insane and a political non-starter. So then-Chairman Julius Genachowski decided to make net neutrality his big fight. He began holding hearings and talking up freedom, glory and the sanctity of the internet — but he ultimately caved before the ISPs and Google and gave us a watered-down version of net neutrality that split wireline and wireless and ultimately ended up failing in court — ironically, thanks to the lawsuit that Comcast had filed against the FCC after Kevin Martin censured it for blocking BitTorrent.

But while Genachowski was backing down, talk of Title II was bubbling up. After the courts had threatened the FCC’s authority in the Comcast ruling, people began looking for bigger guns to bring to the fight, and Title II was a nuclear bomb. When Genachowski’s weak net neutrality compromise was gutted by the courts and Wheeler was left to pick up the mess, his initial play was to patch it up and move on to his real agenda. But the activist and consumer interest was so high that he couldn’t.

So Wheeler, who has proven himself a man with far more integrity than the last commissioner, has taken up the job of sifting through the history of the internet, listened to the players and recognized that if we want to continue with the internet we have and expect it to behave the same way in the future, then we really do need network neutrality — real network neutrality. And the only way to get it appears to be to pull out that nuclear bomb. So he’s doing it.

That takes a lot of guts and a keen understanding of the U.S. market. I may not agree with everything in this proposal, but after almost a decade of covering broadband, I know that this proposal will change things. It won’t be the end of the world for ISPs, although it may cause a little short-term pain for some. It should be neutral for larger tech companies, which already have plenty of other advantages thanks to network effects. Smaller companies should benefit. And most importantly, it will be good for the consumer, who is, after all, who the government is there to protect.

Six ways in which Andrew Keen is wrong about the internet

In his new book “The Internet Is Not The Answer,” author Andrew Keen continues a theme he introduced in previous books, about how the internet is a net negative for the economy and for society. But I think he is far too negative