1 Obama backs net neutrality (Joe Garofoli in San
Francisco Chronicle) Six years ago, then-candidate Barack Obama promised that
“I will take a backseat to no one in my commitment to network neutrality” — the
principle that Internet service providers must treat all online traffic
equality. Since then activists say Obama has done little to stop proposed FCC
rules that would allow companies to pay for their Internet content to travel on
a “fast lane,” also known as paid prioritization.
That changed Monday when Obama took his strongest
stand yet in favor of net neutrality. “I am asking for an explicit ban on paid
prioritization,” Obama said. He also called for broadband companies to be
regulated similarly to how land-based telephone service is regulated. The president’s
position puts him squarely against powerful Internet service providers like
Comcast and Time-Warner, as well as opposite those of Federal Communications
Commission Chairman Tom Wheeler, who Obama appointed to the board.
Obama drew criticism for tapping the former
telecommunications industry lobbyist, who crafted the proposed rules that would
essentially ruin net neutrality by creating a system that is friendlier to the
big telecommunications companies. Net neutrality supporters were thrilled Monday
at Obama’s bold stand, particularly on reclassifying the broadband companies.
Obama outlined four principles Monday for how an
open Internet should operate: No blocking. If a consumer requests access to a
website or service, and the content is legal, your ISP should not be permitted
to block it. No throttling. Nor should ISPs be able to intentionally slow down
some content or speed up others based on the type of service or your ISP’s
preferences. Increased transparency, and lastly, no paid prioritization. Simply
put: No service should be stuck in a “slow lane” because it does not pay a fee.
Wall Street took the news hard with shares of
telecoms like Comcast and Time Warner Cable falling. On Capitol Hill, opponents
of net neutrality, like GOP Sen. Ted Cruz, were dubious of Obama’s position.
Cruz tweeted: "Net Neutrality" is Obamacare for the Internet; the
Internet should not operate at the speed of government.
2 Return of the US dollar (Mohamed El-Erian in The
Guardian) The US dollar is on the move. In the last four months alone, it has
soared by more than 7% compared with a basket of more than a dozen global
currencies, and by even more against the euro and the Japanese yen. This dollar
rally, the result of genuine economic progress and divergent policy
developments, could contribute to the “rebalancing” that has long eluded the
world economy. But that outcome is far from guaranteed, especially given the
related risks of financial instability.
Two major factors are currently working in the
dollar’s favour, particularly compared to the euro and the yen. First, the US
is consistently outperforming Europe and Japan in terms of economic growth and
dynamism – and will likely continue to do so – owing not only to its economic
flexibility and entrepreneurial energy, but also to its more decisive policy
action since the start of the global financial crisis.
Second, after a period of alignment, the monetary
policies of these three large and systemically important economies are
diverging, taking the world economy from a multi-speed trajectory to a
multi-track one. Indeed, whereas the US Federal Reserve terminated its quantitative
easing (QE), last month, the Bank of Japan and the European Central Bank
recently announced the expansion of their monetary-stimulus programs. In fact,
ECB President Mario Draghi signalled a willingness to expand his institution’s
balance sheet by a massive €1 trillion ($1.25 trillion).
The dollar’s revaluation would appear to be just
what the doctor ordered when it comes to catalysing a long-awaited global
rebalancing – one that promotes stronger growth and mitigates deflation risk in
Europe and Japan. Specifically, an appreciating dollar improves the price
competitiveness of European and Japanese companies in the US and other markets,
while moderating some of the structural deflationary pressure in the lagging
economies by causing import prices to rise.
The US dollar’s resurgence, while promising, is only
a first step. It is up to governments to ensure that the ongoing currency
re-alignment supports a balanced, stable, and sustainable economic recovery.
Otherwise, they may find themselves again in the unpleasant business of
mitigating financial instability.
3 Indians ace Americans at GMAT (Lindsay Gellman in
The Wall Street Journal) New waves of Indians and Chinese are taking America’s
business-school entrance exam, and that’s causing a big problem for America’s
prospective MBAs. Why? The foreign students are much better at the test.
Asia-Pacific students have shown a mastery of the
quantitative portion of the four-part Graduate Management Admission Test. That
has skewed mean test scores upward, and vexed US students, whose results are
looking increasingly poor in comparison. In response, admissions officers at US
schools are seeking new ways of measurement, to make US students look better.
Domestic candidates are “banging their heads against
the wall,” said Jeremy Shinewald, founder and president of mbaMission, a New
York-based MBA admissions-consulting company. While US scores have remained
consistent over the past several years, the falling percentiles are “causing a
ton of student anxiety,” he said.
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