Many people that use the Internet think that their wireless routers communicate and send data to and from a cloud in the sky, but the internet is in fact a physical entity.
Think of thousands of boxes with blinking lights, storing the information of the world. This land is a warehouse, with many identical warehouses of its kind, located all around the world. Most of these warehouses full of servers are found in economically strong areas of the globe, and they are all connected, to some extent, to fiber-optic cables that run along the base of the Atlantic Ocean.
According to The Economist, the term “internet” is also a “collective noun for thousands of smaller networks, run by corporations, governments, universities, and private business, all stitched together to form one (mostly) seamless, global, “Internetworked” whole”. That means that you and I have a small section of the Internet attached to our computer monitors.
It’s really a beautiful thing, and equally scary. We have the ability to connect with someone across the globe with the click of a button. It’s also scary because there’s an infinite amount of information, some of it your own, that is available to billions of people. This is where privacy issues come into play, and are continuing to be debated through bills and acts in different governments around the world.
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Because of these privacy issues, internet service providers are being pressured to give up information for piracy lawsuits. Comcast (CMCSA) has been subpoenaed for IP lookups for piracy allegations of bittorrent downloaders, though they have started refusing to provide information on subscribers.
They are one of several service providers to have been in support of the anti-piracy cases, but now they see the cases as an attempt to “shake down” subscribers for out of court settlements by copyright holders. Other providers might follow suit to provide complications in the cases.
We use Kapitall’s tools below to analyze some of the larger internet service providers with exposure to these trends. How do you think the increasing need for physical storage space and piracy cases will affect their business models?
Interactive Chart: Press Play to compare changes in market cap for VZ, CMCSA, GIGM, INAP, IGLD, and CLWR:
Interactive Chart: Use the Turbo Chart to compare the stock performance of VZ and CMCSA against the performance of the S&P 500 Index (SPX):
(Written by Danny Guttridge)