June 23, 2018

Where Should Accountants Stand on Net Neutrality?

Who doesn’t love getting preferential treatment — even if you have to pay for it? Priority boarding on an airplane? TSA pre-check? Yes, sign me up! Really, any type of express lane is downright delicious.

Who doesn’t love getting preferential treatment — even if you have to pay for it? Priority boarding on an airplane? TSA pre-check? Yes, sign me up! Really, any type of express lane is downright delicious. And, when it comes to the congested internet infrastructure, companies think so too. What company wouldn’t want to pay for their content to reach their customers at faster speeds than competitors?

That’s where net neutrality comes in. Unfamiliar with the term? Harvard Business Review gives a good frame of reference:

The term “network neutrality” was introduced in a widely cited law article by Tim Wu. He proposed that an internet service provider should be required to treat all data from all content providers in the same way, much as other communications carriers cannot offer one deal to a potential customer without offering it to all.

Basically, Tim Wu had a dream that all data would be created equal — no throttling (read: slowing down delivery) of certain content to give other data “priority” treatment or access to a “fast lane” to reach customers more quickly.

Surprisingly, it’s been a busy week in the world of net neutrality.

Here’s a recap:

EU goes all in…
The final European Union net neutrality regulations dropped Tuesday and per Fortune it’s a “big win” for net neutrality advocates. According to the Body of European Regulators of Electronic Communications (BEREC):

The provisions… enshrine in EU law a user’s right to be “free to access and distribute information and content, run applications and use services of their choice”

It’s a mammoth step, even with a few caveats here and there to soften the stance.

… well, almost all in
What accountant doesn’t love an exception to the general rule? Don’t worry, BEREC delivered. The main carve-out of the final net neutrality rules is for “specialized services” such as remote surgery and other real-time health services.

I don’t mind if someone brave enough to undergo remote surgery gets some special privileges when it comes to the internet’s strength and speed. My Facebook scroll can wait.

Pushing the envelope
Meanwhile, in the U.S. it is safe to say that most tech companies are supportive of net neutrality legislation. Too bad a handful of companies don’t want to play the game by the rules. It’s mainly large internet service providers (e.g., Verizon, AT&T, Comcast) — the same players who actively lobby against neutrality.

It is almost as if T-Mobile is playing chicken with federal regulators even after the U.S. Appeal Court upheld net neutrality rules in full. Fortune contributor Tony Bradley said earlier this week:

T-Mobile ONE “unlimited” plan that offers degraded service and spells out that certain services and types of data will require an additional fee. In other words, some data and services will receive preferential treatment on the T-Mobile network as long as the extortion is paid.

Most accountants I know, including myself, can’t do their job without a strong internet connection. I pay a small fortune for high speeds and don’t bat an eye. But, I assume all content is loading at the speed I pay to enjoy. What if Intuit started bribing Comcast to ramp up the delivery speed of their online platforms using some type of priority lane? Xero wouldn’t like that very much…

Hypothetically, T-Mobile or another wireless carrier may be willing to work out a deal with Intuit to let you use QuickBooks unrestricted and with no overage fee after you hit your data cap for the month if Intuit paid the company enough (a practice known as zero-rating). This practice is legally frowned upon under current regulations, but permutations like the T-Mobile ONE plan continue to pop up and companies continue to repackage zero-rating to see if it will slip by regulators.

Not everyone is a fan
Internet service providers (ISPs) are not very happy about net neutrality regulation and it’s not without reason. HBR poses an ominous question of:

When do these rules become too burdensome for carriers, reducing investment in infrastructure, which hurts everyone?

Anti-regulation lobbyists are also grumbling. For example, analyst Doug Brake tells Fortune “it was good that zero-rating, traffic prioritization, and specialized services weren’t being banned outright [by BEREC], but the restrictions on these practices were overly proscriptive.”

It’s good point to bring up at this stage in the game. Accountants are very familiar with what happens when regulations include too many prescriptive bright-line rules and companies have the tendency to get into ethical trouble trying to push the rules to their limit.

At the end of the day, however, accountants ought to see the value of net neutrality regulations.

Digital rights activist and legal guru Corynne McSherry, as quoted by Gizmodo, warned consumers that:

Zero-rating helps transform the internet from a permission-less environment… into one in which developers effectively need to seek approval from ISPs before deploying their latest groundbreaking technology.

That’s bad — obviously.

What do you think? Should accountants care about defending net neutrality?

Image: iStockPhoto/aa_amie

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KPMG Arrives at the Paperless Audit Party

office-space-402a-061907.jpgWe’ve received several reports about Klynveldians attending “eAudit” training this summer which marks the firm’s attempt to get break into the “paperless” audit world. Reports have been mixed with some saying that it’s best technology KPMG has invested in but others claiming that it will only run on Vista which may be problematic when Windows 7 rolls out.
Forgetting the technology mumbo-jumbo, it’s been long rumored that KPMG was the last major firm to make the move to a paperless audit. This could have been due to a number of things:
More, after the jump

• Partners that have been around since WWII that can’t even use email put the kibosh on the whole idea
• M-O-N-E-Y
• Accountants, in general, resist the idea of trying a new restaurant so don’t even think about messing with their audit methods
What’s more surprising is that some Radio Station clients have said that they prefer the old school audit. Not exactly sure what is so appealing about young auditors schleping around boxes of binders that weigh a few metric asstons but whatevs.
Our point, dude, is that KPMG has finally caved on this whole “paperless” idea. Since audits aren’t truly paperless we’re not sure what all the fuss is about but KPMGers got an extra week in Florida in the dead of summer out of it. Discuss the firm breaking into the new century in the comments or let us know how terrible your lives will be because of it.

(UPDATE) Big 4 Technology: Open Thread

Thumbnail image for Apple-II.jpgEditor’s Note: Francine McKenna is a regular contributor to Going Concern
We recently received a tip about KPMG implementing a new risk management system for vetting potential clients and engagements. The new system was put in place around the time of the second round of layoffs and according to our tip, things did not go smoothly.
Simply put, it didn’t work. Since the whole risk management thing is a big deal for any accounting firm, people were working day and night to try and get it fixed. Did we mention the layoffs? Right. They occurred right when this whole SNAFU was occurring.
Our source described the risk management process as a “total nightmare” for basically two weeks. Good news, is that things seem to be back to normal but it sounds like it was pre-tay, pre-tay hairy for a while there.
Most accounting firms, especially the Big 4, are heavily dependent on the efficient functioning of their technology. But, aside from reading this fine publication, you probably spend a good chunk of your time dealing with tech related headaches.
Firms trying to go paperless, firms still using Lotus Notes, and we’ve heard that KPMG is currently upgrading its basic operating system to run on…Windows Vista.
On the positive side, Deloitte is issuing iPhones and that’s basically all we got…
We asked our contributor, Francine McKenna for her thoughts on the Big 4’s investment in technology:

The Big 4 operate under the “shoemaker’s children” doctrine when it comes to their own technology infrastructure. Every once and a while you’ll see a big splashy investment but partners loathe spending their potential payout on common goods, and investments for the future: “If I don’t understand it or perceive a need for it, I don’t want to spend any of my money on it.” Very few of the rank and file partners understand or appreciate the firm’s technology infrastructure needs.

Discuss your firm’s technology (or lack thereof). The good, the bad, the stuff that makes you want to drop kick your laptop out the window.