Silicon Valley Business Model Threatened As Wireless Carriers Start Blocking Online Ads

The Internet has moved a long way from the days when the acid head hippy's and founding beardies say "Heeeeeyyyyyy maaaaaaannnnnnnn, we gotten us this great business plan, if everybody gives stuff away for free we will all get rich." To a businessman it sounded insane, to a control freak politician or public sector bureaucrat who was aware that the thinking behind the ISO seven layer model in the 1960s, the Information Superhighway of the lates 1970s and early eighties and latterly the World Wide Web was to be able to control all the information in the world, censor what the public could know and thus control what people think, it was all a wet dream.

The plan was never to make all the information in the world available to all the people in the world, but to force all the people in the world to use one easily controlled medium so they only see the informtion the ruling elites want them to see.

And, to paraphrase every villiain in every episode of Scoobu Doo, They would have got away with it tooo, if us pesky citizen journalists had not interfered.

Now it seems businesses are waking up too.

Until recently, ad blocking, which threatens many Silicon Valley business dependent on advertising, was largely dominated by companies such as AdBlock, (recently taken over by a "mystery buyer") while ad-driven quasi-monopolies such as Google pay faux adblockers to allow their ads through.

All that is about to change because as the Wall Street Journal reports two Chinese-owned European wireless carriers are set to unleash online advertising blocking on their networks, which as the WSJ accurately summarizes, "threatens Silicon Valley’s prevailing business model."

Well come on, you must have come across those sites that have whiney little messages aboiut how the site depends on ad - revenue and cannot surive if evil bastards like you and me insist on running ad blockers. It does not seem to occur to them that if the ads they ran were not so intrusive, we might not bother blocking them and might even click on a few.

What is bothering the carriers however is that the ad companies are piggy backing on websites and using the networks to carry revenue earning ads without paying for the bandwidth they consume. Advertising using GIF and Flash animation and Video has become so pervaive now that network operaters are having to upgrade routes to cope with the traffic. And upgrading costs money.

Instead of relying on self - interestd third parties to block bandwidth-hogging ads, the networks will shortly implement technology within the pipe at the network-level (level 5): the operators, Three UK and Three Italia, are working with Shine Technologies and plan eventually to implement the technology to other wireless providers in their group.

According to the article, the two carriers are owned by CK Hutchison Holdings Ltd., which also owns wireless networks in Ireland, Austria, Sweden, Denmark, Hong Kong and Indonesia. Shine is backed by Horizons Ventures tech fund.

“We don’t believe customers should have to pay for data usage driven by mobile ads,” Tom Malleschitz, chief marketing officer of Three UK, said in a press release. “Irrelevant and excessive mobile ads annoy customers and affect their overall network experience.”

Shine’s platform prevents online-ad networks such as those operated by Alphabet Inc. from delivering display and video ads to browsers or apps. Unlike ad-blocking apps that work at level 7 and are downloaded by customers to their devices, the new approack works at the network level of the sevel layer model.

The CK Hutchison-owned carriers are not the first to take this aggressive step: last year, Jamaica-based wireless operator Digicel Group began working with Shine as the first operator to implement the technology so it could block advertising on its networks in the Caribbean and South Pacific. The carrier criticized online advertising companies, including goliaths like Alphabet and Facebook Inc., for not contributing to the costs of building the networks that deliver their ads.

These are significant players in network provision: Digicel has about 13 million subscribers across the Caribbean, Central America and the South Pacific. Hutchison had more than 30 million customers across Europe as of mid-2015.

The WSJ article is not just speculative reporting based on rumour and guesswork, Bloomberg is on the case too, and reports with far more detail the rising confrontation between carriers and ad-providers.