Part A.

Summarize the article. What exactly is net neutrality?

2. What do you think of Comcast's decision with respect to Bit Torrent?

3. Do you agree or disagree with Carr's conclusion about the proliferation of free stuff on the web? Why? Back up your argument using the language of economics:

" ....we'll get more junk: dopey reality shows, cookie-cutter police dramas, inane gab fests. The vast wasteland will become even vaster."

November 15, 2009

Phenomenon

The Price of Free

By NICHOLAS CARR

When, in late September, rumors surfaced that Comcast was trying to buy NBC Universal from General Electric, Wall Street reacted with dismay. Grandiose attempts to combine media production and distribution ? programming and plumbing ? are nothing new in the entertainment business, but they almost always end in disappointment. Witness AOL Time Warner. So what in the world could be prompting the Comcast chief executive, Brian Roberts, to start down this accursed path?

I fear that I'm to blame.

A few months ago, while stalking the aisles of my local Best Buy, I gave in to techno-temptation. I bought a Blu-ray player. What I didn't realize until I unpacked the gadget was that it does a lot more than just spin high-definition discs. It is, as they say, Web-enabled. As soon as I plugged it into an outlet in my living room, its built-in WiFi antenna sniffed out my home network and logged on. The Blu-ray player became a gateway between the Internet and my television set.

Ever since, and much to my surprise, I've been using the device more to transmit Internet content than to play discs. I stream TV shows and movies from Netflix, music from Pandora and videos from YouTube. Beyond my existing $11-a-month Netflix subscription, I haven't forked out a penny for any of this programming. It comes flowing out of the Web, whenever I summon it, free.

My new viewing habits must make Brian Roberts very nervous. The more I play movies and TV shows from the Web, the less I use my cable TV service. I almost never order pay-per-view movies anymore. And I recently canceled my premium Showtime subscription. Most of Showtime's best programs, including "The Tudors," "Weeds" and "Dexter," are available to stream through Netflix, as are a lot of the movies currently playing on the network. Why pay $23 a month when I can get the stuff for almost nothing?

I have a feeling that it won't be long before I and a whole lot of other people start asking similar questions about pay-TV subscriptions in general.

Until recently, the TV business was shielded from the turmoil that the Internet has visited upon other media industries, like music and publishing. The reason was largely a matter of network capacity. Sending high-quality video through the Web requires a lot more bandwidth than sending text or music, and until 2007 most Americans lacked high-speed Internet connections at home, according to the Pew Research Center. The Net simply wasn't a viable alternative for distributing the signals traditionally sent over cables or beamed down from satellites.

That's changing, and fast. With broadband becoming the norm and connection speeds continuing to quicken, what has happened to music companies and newspapers is beginning to happen to broadcast networks and cable companies. People like me are using the Net to bypass the customary providers of television programming, along with the ads they show and the fees they collect.

My Blu-ray player is just the tip of the iceberg that the TV business is about to hit. Today you can watch snippets of shows on YouTube or entire episodes on sites like Hulu or Yahoo TV. You can view news reports at CNN.com, sports events at ESPN360.com and documentaries at PBS.org. You can download shows, sometimes without charge, from Apple's iTunes store and watch them on your iPod, iPhone or PC. Or you can stream them through your Xbox or Wii.

Television is escaping the TV set and the cable box. We no longer watch the tube. We watch, to borrow ex-Senator Ted Stevens's memorable conceit, a series of tubes.

As the technology of television changes, so, too, does the experience of watching it. In the past, TVs often served as the focal points of communal gatherings. Families or groups of friends would collect around the set to watch the prime-time shows or the weekend games. They would laugh at the sitcom slapstick, cheer for their local teams, chat through commercials and, during the duller stretches, keep one another from nodding off. TV may have been a vast wasteland, as Newton Minow, the F.C.C. chairman in the Kennedy administration, said in a speech in 1961, but at least it was a wasteland we shared.

The communal mode of TV viewing isn't gone, but it's becoming less common. As screens proliferate and shrink, and as the Web allows us to view whatever we want whenever we want, we spend more time watching video alone. That's one funny thing about the Internet: it's an extraordinarily rich communications system, but as an information and entertainment medium, it encourages private consumption. The pictures and sounds served up through our PCs, iPods and smart phones absorb us deeply but in isolation. Even when we're together today, we're often apart, peering into our own screens.

Television companies, desperate to protect their sources of revenue, are trying to figure out ways to control or at least influence the shifts in our viewing practices. If a transmission company like Comcast ? although it owns a few cable stations, Comcast's main business is providing cable TV, Internet and telephone service ? were to own more of the programs it distributes, it could, at least theoretically, wield more power over how that content reaches viewers. In buying NBC Universal, for instance, Comcast would gain a stake in Hulu, which NBC owns with ABC and Fox. It could impose limits or even fees on the shows streamed through that popular Web site.

Such opportunities reveal the conflict of interest that's built into the TV business. The companies that supply us with pay-TV subscriptions ? not just cable operators like Comcast but telephone companies like AT&T and Verizon ? also tend to be the ones that provide us with Internet service. By blocking or slowing certain Net transmissions, they could shunt us toward their own programming and prevent us from viewing alternatives, particularly free ones. If my Internet provider degraded my Netflix signal, I would almost certainly go back to watching more cable programs.

That scenario is not as far-fetched as it may sound. In 2007, Comcast was caught throttling back its customers' links to BitTorrent, a file-sharing network often used to trade bootleg copies of TV shows and movies. Comcast argues that heavy BitTorrent users were taking up too much bandwidth, to the detriment of other services. Looked at another way, Comcast was using its Web-access franchise to protect its pay-TV franchise.

But, as the company soon found out, impinging on "net neutrality" ? the principle that Internet providers should treat all data the same ? is a good way to make enemies. Internet purists went ballistic. Consumer advocates denounced the move. The government began an investigation. In 2008, the F.C.C. decided that Comcast had broken its rules, and it ordered the company not to impede access to BitTorrent and other such services. Comcast is appealing the ruling.

Under its new chairman, the Obama-appointee Julius Genachowski, the F.C.C. is becoming even more aggressive in defending the openness of the Internet. Last month, it voted to begin preparing regulations aimed at giving net neutrality the force of law. Though controversial, the commission's move will be welcomed by most Web users. I know that I don't want my Internet provider to control the sites I visit or services I can use when I'm online. Unimpeded access to the Net has come to feel like a right.

In the end, and whether they gobble up content producers or not, network operators like Comcast may be fated to be in the plumbing business. They'll turn tidy profits by maintaining the pipes through which we get Internet service, even if we use those pipes to bypass their pay-TV offerings. We'll go on gorging ourselves on free Internet video. We, the viewers, will be the winners.

Or will we?

The smartest, most creative TV shows, from "Deadwood" to "Mad Men" to NBC's own "30 Rock," tend to be the most expensive to produce. They have large, talented casts, top-notch writers and directors, elaborate sets and generally high production values. If the changes in our viewing habits stanch the flow of money back to studios, producing those kinds of programs may no longer be possible. In their place, we'll get more junk: dopey reality shows, cookie-cutter police dramas, inane gab fests. The vast wasteland will become even vaster.

Even "free" has a price.

Nicholas Carr's new book, "The Shallows: What the Internet Is Doing to Our Brains," will be published next spring.

This article has been revised to reflect the following correction:

Correction: November 29, 2009

An article on Nov. 15 about streaming TV programs directly from the Web, thereby bypassing cable service, referred incorrectly to Starz, a movie network. It is owned by Liberty Media Corporation ? not by Showtime, which is owned by CBS.

Part ii.

a) The balance of payments (BOP), also known as balance of international payments, summarizes all transactions that a country's individuals, companies, and government bodies complete with individuals, companies, and government bodies outside the country. These transactions consist of imports and exports of goods, services, and capital, as well as transfer payments, such as foreign aid and remittances. A country's balance of payments and its net international investment position together constitute its international accounts. The balance of payments divides transactions in two accounts: the current account and the capital account. Sometimes the capital account is called the financial account, with a separate, usually very small, capital account listed separately. The current account includes transactions in goods, services, investment income, and current transfers. The capital account, broadly defined, includes transactions in financial instruments and central bank reserves. Narrowly defined, it includes only transactions in financial instruments. The current account is included in calculations of national output, while the capital account is not. . Look into the data of Afghanistan from Trading Economics/UNCTAD?WITS/UNCOMTRADE/WORLD BANK) and prepare the BOP sheet of Afghanistan from 2015-2019? b) Discuss these arguments in light of political economy of trade policy, externalities and development? . Articulate arguments for free trade that go beyond the conventional gains from trade. . Explain how international negotiations and agreements have promoted world trade in Afghanistan context. Discuss the special issues raised by preferential trade agreements signed by Afghanistan in SAFTA