Net Neutrality – USA’s Version of the GFW – Death of Freedom and Information

If you can understand the title you can probably guess where this article is going.  This is both my personal and professional opinion on a blindingly, obvious and simple issue that only benefits extremely large and powerful organizations and individuals.

What is really happening in a one-liner is the US is implementing it’s own Great Firewall Policy to rival and surpass China’s by far in terms of surveillance and censorship.

This is really a no-argument, argument the latest move in the US to get rid of Net Neutrality legally gives the ISPs the right to block, filter, throttle and censor content for any reason.  Obviously the primary and initial reasons will be for business and competitive reasons, this means if your ISP has an issue with Google you could have issues reaching Google services.  It could be if your healthcare provider is suing your ISP or vice versa that you’ll have trouble accessing their website.  It could be that your less than mainstream news sources are competing or disliked by management at your local ISP and you won’t be able to visit anymore.

Some of the first to be impacted may be services like Netflix, Hulu etc which most local cable or telco companies have lost a lot of revenue to.

But it can become so much more than this, access to certain banking portals, including cryptocurrency could be restricted.  In fact another huge implication is that if a US government agency orders an ISP to block access to content, both the government and ISP would be legally absolved.

Since the majority of internet traffic still transits the US and a huge number of services are hosted there, the impact is really the whole internet.

However, we can already see legal challenges on the way.  If they are successful then things will continue as normal but if they are not successful, the internet could enter a dark age.

In fact this should be interpreted more as the USA’s version of the Great Firewall masked as a good thing with ill-intentions that will harm virtually all people and businesses.

I don’t believe we will see massive changes overnight, the system will be implemented gradually to reduce the blowback.

With this insecurity there is also the chance that this could backfire and could create an alternative internet or secondary network that operates independently out of Asia, Europe, the Middle East and Latin America.  There is simply too much at stake to risk the USA Great Firewall from impacting business and freedom of access and information.  There is also the unintended risk that the USA could be isolating itself if other countries develop countermeasures.

Can VPN’s help get around this throttling?  Yes, and no as now the ISPs could legally block or throttle access to VPN providers’ websites, service or even the protocols themselves.  There is very little that can be done against these measures, it depends how the USA’s firewall is implemented though.  It may be possible to use a variety of protocols and proxy your traffic through hundreds of thousands of IPs collectively to try to avoid blockages and throttling, but it all depends on how aggressive their policies are.  Only the stakeholders who have unleashed this policy know what they really intend to achieve but it certainly isn’t of any benefit to us.

From my standpoint there is no benefit from me as an internet user or business person in having a censored, throttled and firewalled internet.

All speculation aside, it would be wise for both users and businesses to hedge and place their business IT assets overseas at least in backup or secondary mode.  this is the best way to insure against the risk that your business could be severely impacted or inaccessible due to the USA GFW 5.0 as I dub it.  Certainly Asia and Europe are locations that look attractive.  One of the top destinations in Asia to me would be Hong Kong’s internet, in fact I predict Hong Kong and other areas will see a surge in demand as a result of the current firewall policy in the US.

Is China Still A Hot Economy?

In the past 10 years I’ve spent a lot of time in China doing business. It depends how you quantify things but I can speak anecdotally and from experience.

China’s GDP growth is no longer double digit

China’s GDP has dropped from the double digit miracle of 10.1% in 2010 to 6.1% in 2016. In terms of numbers there is no doubt China is slowing down but still 6% growth is nothing to complain about. Why so? Because the miracle that is between 10-15 years behind China in Southeast Asia for example is showing similar growth.
Malaysia in 2016 was 4.2% which is a fair drop compared to 2010’s 7.5%. Indonesia follows a similar trend with 2016 being 5.0% and 2010 being 6.4%. We can see a general trend in Asia especially that China is following with moderating GDP but the hype would have you believe otherwise. Don’t get me wrong Southeast is undoubtedly poised for huge growth, it’s just that the hype would have you believe there is double digit growth that hasn’t arrived just yet.

Changes Have Happened
Of course this is no surprise, the Chinese government itself planned for this and stated that double digit GDP is not sustainable into the future. China’s stated goal has essentially been to transform themselves from a labor based economy to a knowledge based economy with internal consumption largely sustaining this. To the credit of China I think they’ve largely achieved this. The evidence is everywhere with constantly rising wages, Chinese citizens are becoming more affluent, buying more expensive items and high end goods have flooded the Mainland and they are intended for the locals. This presents a huge opportunity for companies who have such items on offer.

Missing from the above picture are things I’ve heard from friends and colleagues. A lot of manufacturing companies have packed up shop due to rising costs including labor and moved to Southeast Asian locations. In turn there are less jobs for expatriates than in previous times and with rising living costs in China it has been less attractive to some business sectors and expatriates alike. With less production from the labor force in China, it’s only inevitable that the GDP has moderated.

It’s not all bad
A lot of people have said that some companies entered the Chinese market because it was so lucrative and with less competition. Today that’s no longer true as China’s economy has matured and the country itself has been modernizing and changing at break-neck pace. The one unintended impact is that this also created an environment of uncertainty for some businesses and sectors.

However, it’s not all bad depending on who you ask. China’s ecommerce market is thriving, in fact part of the reason why some companies are no longer there is because just like the West (but even moreso in China) the digital economy and internet have literally transformed and revolutionized the country. What worked yesterday is no longer valid or effective today and this is a general statement for how things are done in China (things move fast!).

Stats in China showed the ecommerce grew by 26.2% in 2016 for a whopping 5.16Trillion RMB/CNY! In fact ecommerce in China is said to represent 15% of ALL retail sales in China and of course these numbers are only expected to increase.

So is China still hot?
It depends from who’s perspective, internal consumption is rising, so are wages, GDP is still fairly high and eCommerce continues to be a huge factor in China. If someone wanted to get into eCommerce in China or offer goods to the growing middle and affluent class in China I would say it’s still hot. As always it is best to diversify and not rely on a single economy.