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The Internet Communications Education

Trump's FCC Votes To Allow Broadband Rate Hikes Will Deprive More Public Schools From Getting Internet Access (theoutline.com) 257

The FCC voted on Thursday to approve a controversial plan to deregulate the $45 billion market for business-to-business broadband, also known as Business Data Services (BDS), by eliminating price caps that make internet access more affordable for thousands of small businesses, schools, libraries and hospitals. The Outline adds: The price caps were designed to keep phone and, later, broadband, access cheap for community institutions like schools, hospitals, libraries, and small businesses. Now, there will be no limit. A spokesperson for the trade association Incompas, which advocates for competition among communications providers, told The Outline that the increase is expected to be at least 25 percent across the board. Low-income schools already don't have enough money; according to a report last year in The Atlantic, schools in high-poverty districts, where the property taxes are lower, spend 15.6 percent less per student than schools in low-poverty districts. If internet costs go up by 25 percent, it may make more sense to cut that budget item, or, for schools that still don't have internet, never add it at all. Add it to the list of things that well-funded schools in already-rich neighborhoods get that schools in low-income neighborhoods don't. New textbooks. Gyms. Advanced Placement classes that let students earn college credits. Computers. Internet access.
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Trump's FCC Votes To Allow Broadband Rate Hikes Will Deprive More Public Schools From Getting Internet Access

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  • by kbdd ( 823155 ) on Friday April 21, 2017 @10:46AM (#54276179) Homepage
    We already have the most expensive broadband services of most countries (and not even the best performance), now the price is going to go even higher.

    I can feel America returning to greatness at breakneck pace...

    • by Anonymous Coward on Friday April 21, 2017 @10:57AM (#54276277)

      President Trump is right to reevaluate, and clean up where necessary, regulation that has caused disruptions to economic markets.

      It's well known at this point that price caps cause market distortions, which directly lead to a non-optimal allocation of resources.

      When I hear about things like "high-poverty districts", these are usually formed because of price caps (on the price of rent) or some other market-distorting regulation that has prevented the investment that would otherwise take place from taking place in these areas.

      Let's take rent control as a simple example. Imposing these distortions removes the incentive for landlords to maintain and improve their properties. When this happens, the wealthier people eventually move away to better properties, leaving only the impoverished who can't move. They often can't, or don't, pay rent, which again hurts the landlords. The landlords who do remain will become slumlords. Others will just abandon their properties, or worse, destroy them to collect at least some insurance reimbursement. The end result is that "high-poverty districts" form, and stay like that until the economic distortion that caused them to be formed is removed.

      Another example is minimum wage floors. These make it prohibitive for businesses to start, and make it harder for existing businesses to continue remaining viable. These also help create "high-poverty districts", because there are fewer jobs than there naturally would be if labor didn't need to be paid artificially high wages.

      Given how we universally see price caps and wage floors causing severe and disruptive economic distortions everywhere else, there's no reason to expect broadband Internet to be any different. Price caps there are no doubt leading to all sorts of market inefficiencies, and these can't be cleared up overnight. The pain being felt in the short term would be thanks to imposing these caps in the first place, and causing the economic distortions that now have to be undone.

      • by parkinglot777 ( 2563877 ) on Friday April 21, 2017 @11:28AM (#54276553)

        Let's take rent control as a simple example. Imposing these distortions removes the incentive for landlords to maintain and improve their properties. When this happens, the wealthier people eventually move away to better properties, leaving only the impoverished who can't move. They often can't, or don't, pay rent, which again hurts the landlords. The landlords who do remain will become slumlords. Others will just abandon their properties, or worse, destroy them to collect at least some insurance reimbursement. The end result is that "high-poverty districts" form, and stay like that until the economic distortion that caused them to be formed is removed.

        However, your example does not apply to the issue because it is too broad with lots of competitors. Most areas in the U.S. only have ONE broad band provider in each area. Then the provider would do whatever it can to get itself to be the ONLY one in the area; thus, there is NO competition. Allowing no price cap in this case actually opens a can of worm. The no-limit cap could work if and only if there is a competition.

        • Re: (Score:2, Interesting)

          by J Story ( 30227 )

          However, your example does not apply to the issue because it is too broad with lots of competitors. Most areas in the U.S. only have ONE broad band provider in each area. Then the provider would do whatever it can to get itself to be the ONLY one in the area; thus, there is NO competition. Allowing no price cap in this case actually opens a can of worm. The no-limit cap could work if and only if there is a competition.

          It seems to me that the imposition of price caps acts as a barrier to new competitors. It's just another form of rent control. With the pricing cap gone, prices would almost certainly rise in the short term, and this would lure new providers into the marketplace. This is exactly what happened to American oil producers when world oil prices rose sharply a couple years ago.

          • New providers?! You've certainly haven't paid attention to all of those laws that ISP lobbyists have been working for in local government to stifle any new competition. They've done their best to block newcomers and have sliced up the pie enough to stay out of each others way. Now instead of growth, they just increase their current prices. This has been their plan for the past few decades. If you think more of the same will change things then you really need to educate yourself.
          • Re: (Score:2, Insightful)

            by Anonymous Coward

            Except Internet distribution is far closer to water or power distribution... it needs physical access to every home, use of public right of ways, and society is best serviced when there are not multiple sets of identical infrastructures competing. This is why we standardized train track sizes, roads sizes, etc. to force one set of universally usable infrastructure. In places where there is one set of infrastructure we either fund it with taxes or regulate the monopoly which maintains it.

            If you want competit

      • by Sarten-X ( 1102295 ) on Friday April 21, 2017 @11:34AM (#54276593) Homepage

        You know... you make a coherent enough argument that I don't actually think you're trolling. Unfortunately, it's a weak argument.

        Let's take rent control as a simple example. Imposing these distortions removes the incentive for landlords to maintain and improve their properties. When this happens, the wealthier people eventually move away to better properties, leaving only the impoverished who can't move.

        That's half of the problem, but what about the alternative? If rent prices rise, the impoverished still can't move to more affordable places (who also would be removing rent control, and thus becoming less affordable every year). Instead, they get evicted and become homeless, in the process usually losing most investments (furniture, clothes, and other personal items) they've managed to accumulate. Once homeless, they are extremely vulnerable, and crime against the homeless typically runs rampant. The end result is that your low-income community has turned into a high-rent development that looks shiny, but sits vacant because of the crime and housing problem... and in turn, the landlords still don't get paid.

        Another example is minimum wage floors. These make it prohibitive for businesses to start, and make it harder for existing businesses to continue remaining viable.

        What makes starting a business such a special event that it requires employees to live in poverty? If your business model is so bad and your business so unsuccessful that you have to underpay your workforce, perhaps you shouldn't be starting a business. I know it's the Great American Dream to own a business, but perhaps we should ensure nobody else gets screwed over in the process?

        • Re: (Score:3, Insightful)

          by es330td ( 964170 )

          What makes starting a business such a special event that it requires employees to live in poverty? If your business model is so bad and your business so unsuccessful that you have to underpay your workforce, perhaps you shouldn't be starting a business. I know it's the Great American Dream to own a business, but perhaps we should ensure nobody else gets screwed over in the process?

          Please define "underpay." A worker is worth less than the value he or she creates, period. If the work a person does only generates $5.00 an hour in value, are you making the case that the worker should be paid more anyway? How long do expect that employer to continue employing that worker when the revenue generated doesn't cover said employee's cost? Is it okay to "screw over" the employer by making that person pay more to the employee than he/she generates in profit?

          • by Jason Levine ( 196982 ) on Friday April 21, 2017 @12:21PM (#54276941) Homepage

            On the flip side, if you remove minimum wage, what's to stop an employer from paying nearly nothing for work that generates the employer more money? If an employee generates $25 an hour in value and the employer pays $0.50 an hour, what would protect the worker? Before you say "they can just change jobs", recognize that you could have an industry "race to the bottom" with salaries. The ones that pay less might make more profits and can gobble up (or force out of business) the ones that pay more.

            To give an example, my son recently went to a local museum where he learned about the NYC garment district around the early 1900's. There was no minimum wage or safety regulations so people were worked 15 hours (6am - 9pm) for $3 a week. (That's about $1 an hour in today's money.) If people didn't want to work those hours or asked for more money, they were fired and people who would accept the hours/pay were hired. Every employer in the area paid about the same, so you couldn't just go to another employer. (The lack of safety regulations caused a fire [wikipedia.org] that killed 146 workers.)

            Minimum wage laws can help to keep employers from forcing workers to work long hours for little to no pay. They can help keep employees from falling below the poverty line or from having to work three jobs just to make ends meet. They might not be perfect, but doing away with the minimum wage entirely would be disastrous.

            • Re: (Score:3, Insightful)

              That was one of the reasons that Americans hated fresh off the boat immigrants in the early 1900s (Irish need not apply and all the rest). Americans knew (unlike most people today) that fresh immigrants would work for less and drive down wages and were also creating a glut in the labor market. From your example, employers can only "race to the bottom" when there is a glut in labor force. If paying too low a wage or working too long hours causes you to lose employees that you cannot find replacements for,

          • Please define "underpay."

            Let's go with a nice capitalist version: A worker is underpaid when his or her regular expenses are higher than what they make in net income during the same average period. Note that the definition isn't a particular dollar amount, but rather depends heavily on one's expenses, which in turn are defined mostly by societal and local norms. An intended side effect of this definition is that someone with high expenses can still be underpaid if those expenses aren't covered.

            A worker is worth less than the value he or she creates, period.

            A worker is a human life whose value

            • by es330td ( 964170 )

              Let's go with a nice capitalist version: A worker is underpaid when his or her regular expenses are higher than what they make in net income during the same average period.

              This could not be farther from "capitalist." As a business owner I could not possibly care less how much your life decisions cost you. My only concern is whether the cost of employing a person is justified by the value they will provide, either now or eventually.

              A worker is a human life whose value is independent of what they are able to produce, period.

              Is it not obvious I am talking about a worker's output and not their value as a human being?

              If the worker's output is not profitable for the company, the business should raise its prices so it can be profitable while still supporting its workers for their time. If the market does not support such prices, the business model should not be considered viable.

              No. Please take note of all the restaurants in California that have closed in the last few months that found out what happened when they tried to raise price

              • As a business owner I could not possibly care less how much your life decisions cost you. My only concern is whether the cost of employing a person is justified by the value they will provide, either now or eventually.

                I'm not saying that as a business owner you should do otherwise. I am, however, suggesting that if your business model doesn't support everyone involved, it would be reasonable for such a grossly exploitative business plan to be forbidden by law. I'm a capitalist, not a libertarian.

                Is it not obvious I am talking about a worker's output and not their value as a human being?

                No, it is not obvious, and in discussions about minimum wage laws, it rarely is.

                Please take note of all the restaurants in California that have closed in the last few months that found out what happened when they tried to raise prices to accommodate the increased minimum wage.

                Perhaps, then, their business was not actually sustainable, and it's right for them to close. Why is a business closing such a horrible thing, but an

        • "The end result is that your low-income community has turned into a high-rent development that looks shiny, but sits vacant because of the crime and housing problem... and in turn, the landlords still don't get paid."

          Midtown Miami summed up perfectly. Want to see this in action, go there.

      • Your rent control metaphor is flawed - people can move.

        With ISPs, you are stuck with whoever owns the lines where you live. Removing the controls allows potential abuse of monopoly.

        • Your rent control metaphor is flawed - people can move.

          With ISPs, you are stuck with whoever owns the lines where you live.

          People can move. You sent the memo but you didn't get it?

      • by Altrag ( 195300 )

        See that's all fine and logical when you phrase it that way. But it completely forgets to ask the question: If these "high-poverty" districts didn't exist, where would the people who live in them be? These people don't just disappear because you don't happen to like thinking about them.

        You're arguing that rent should be free to jump through the roof and then in the next paragraph state that employers should be free to pay whatever wages they want -- which is pretty much always going to be far below the p

    • We already have the most expensive broadband services of most countries (and not even the best performance), now the price is going to go even higher.

      I can feel America returning to greatness at breakneck pace...

      Cheap, good stuff isn't good for business apparently.

    • Re: (Score:3, Interesting)

      by jonsmirl ( 114798 )

      Trump is not paying one bit of attention to the FCC. Pai is an out control representative of Verizon, not voters. The question is, will Pai's utter corruption have consequences at the polls causing Trump/Congress to start paying attention?

      The other part of this -- rate relief is generally provided when the vendors are unable to make a profit. Most of the B2B lines already carry profit margins exceeding 90%. This is just simple corruption - remove the price caps so that monopoly vendors can gouge until the c

    • Re: (Score:2, Interesting)

      by GLMDesigns ( 2044134 )
      So. Price caps are a "Good Thing." Wage and Price freezes have been tried many times from Roman Times, to the Soviet Union, to the US and it doesn't work.

      Can you find examples of it helping? Yes. But does it work for the economy as a whole?

      I'll let you figure that out.

      How's it working in Venezuela?
      • Re: (Score:2, Insightful)

        by Anonymous Coward

        It's true that economies become more efficient when monopoly effects are allowed to run unchecked.

      • Price caps in monopolies, even regional ones, are definitely a good thing because moving is not always easy or justified for such reasons.
  • by evolutionary ( 933064 ) on Friday April 21, 2017 @10:49AM (#54276201)
    Trump is very consistent and clear in whom he serves and it's not the working class. Once again, making money for his friends at the expense of us all. Wonder what's next in his mad run to basically allow infinite inflation of essential services. (And yes, the Internet is basically an essential service, like electricity: you can "live" without it, but getting what we consider essential services because a challenge without it)
    • Re: (Score:2, Insightful)

      by Anonymous Coward
      It never ceases to amaze me how Republicans can convince people to vote against their own best interests. At this point I'm inclined to say fuck it. The only way they'll learn is to let this run its course. Cut the internet access at schools and let the poor people experience offline life, then casually point out why it is like it is.
    • At least it will be a little entertaining to see how Trumpers justify more expensive, slower internet in a few years. Will they insist it's the greatest internet service ever?Will they say it's good because people should be getting their news from radio and cable news instead? Will they say nothing because there's only a glowing ash pile where this dumb fucking country used to be?
  • by Anonymous Coward

    In our area, the broadband providers are required to provide internet access to schools (both public and private) and libraries for FREE as part of the agreements with the municipality. Sounds like the other municipalities need to do a better job of negotiating.

    • The information I was more skeptical about was that there are still schools in the US without internet access. I could have understood that 20 years ago, but now? I know that in my state, at least, there are whole sections of state-mandated curricula that require the internet to teach. Do these school districts not do things like digitize attendance records...?
  • by __aaclcg7560 ( 824291 ) on Friday April 21, 2017 @10:54AM (#54276245)
    Most schools give lip service to spending money on reducing class sizes and getting Internet access. But when it comes to replacing the football field, the money can always be found for new football fields. When my parents retired to Sacramento in the mid-1990's, my father drove me around the county. He pointed out all the schools that didn't have money to reduce class sizes (the Internet was still "new" back then) but had the money to build a new football field. If one school was replacing their football field, all the schools had to replace their football field. Can't have schools lagging in important priorities.
    • Uhh...this is known as an INFORMATION age for a reason. The best expanding jobs are in the information technology field. Plus information sharing and collaboration are primarily done through the Internet. So Broadband is an essential part of that. Saying that people can always find money from somewhere is not a reason for making it harder to get something that is essential for people need to know how to use to be successful (or even has a basic middle class living) or even get basic services we consider ess
      • Uhh...this is known as an INFORMATION age for a reason. The best expanding jobs are in the information technology field. Plus information sharing and collaboration are primarily done through the Internet.

        I heard that sales pitch back in the early 1980's when Apple ][ came into the middle school I attended. That's when I found out I came from a "poor" family because we couldn't afford a $2,500 Apple ][ (computer, two floppy drives and monochrome monitor). The funny thing is that not owning an Apple ][ didn't prevent me from pursuing a technology career.

        Saying that people can always find money from somewhere [...]

        Football existed before the INFORMATION age. Given a choice between a new computer lab and a new football field, most communities will want a new football fie

    • by dostert ( 761476 )
      In Texas, you'll never pass a vote to issue a $2m bond to build a new school. If the bond is for a new $20m football stadium, it'll pass with 85% of the vote. Most places it isn't a school priority to build a football stadium, it's a community priority. The school isn't spending any of the money they have for educating (or educational facilities) to build a stadium. Yes, it is completely wrong, but you can't really blame the school budget.
      • My city just voted to build a $72 MILLION high school football stadium complex. Of course, I voted no, but it still passed easily.
    • Mr. Principal, we must not allow a football field gap!

    • by Ogive17 ( 691899 )
      I agree with you in principle. Try to keep in mind, though, that sometimes athletics can serve as income for the school district.

      Our school district has nice facilities and it also hosts many regional events that are additional revenue.

      Sometimes you need to spend money to make money.
      • Sometimes you need to spend money to make money.

        When schools become profit centers, the focus on education gets lost.

        • What focus on education? The word is 'indoctrination'.

          • What focus on education? The word is 'indoctrination'.

            The discussion is about public schools, not religious and/or conservative schools. :P

        • by Ogive17 ( 691899 )
          That's not the point. If you can make an investment of $1 million today that will bring in $300k of "profit" every year for the next 15 years, do you make that investment? What if that "profit" covers all the costs for every athletic program at the school and puts some money into the yearly budget?
    • by sims 2 ( 994794 )

      As far as the prices go I still want to know why the local schools are still using bonded T1 lines instead of the local fiber ISP

      Best I can figure the e-rate subsidy makes them really really cheap as you can get a 50/50 buisness class fiber connection in town here for $157 Sure that's not cheap but you can't get a single T1 line for that price anywhere.

    • by Altrag ( 195300 )

      Couple of things here:
      - If its just a field, that's (relatively) cheap. Bunch of bleachers, some flood lighting, some grass and other such odds and ends. As long as they've got the land, that's not too expensive -- even if its $100k, that's only 2-3 years worth of a single teacher's salary (no idea what Comcast charges a school for internet or whatever so can't make that comparison.)
      Now if we're talking full on stadiums, that's a whole other story. Those suckers get into the 10s or even 100s of millions

  • by Anonymous Coward

    School: We can't afford the higher prices for internet access.

    Verizon/Comcast: What if we keep the old price and Abraham Lincoln High becomes Abraham Lincoln High (sponsored by Verizon/Comcast)? And the gym is now called the Verizon/Comcast Center. And if you could include our company in your math problems, that would be great.

    School: That's a little much, isn't it?

    Verizon/Comcast: You could always go without internet.

    School: Shit.

  • The property business was getting too complex. So now it's clearer to invest in properties where the good neighborhood will mean prospective owners will care that their children have internet access on their school.

  • To the Coal Mines (Score:5, Informative)

    by Anonymous Coward on Friday April 21, 2017 @11:05AM (#54276371)

    Kids don't need internet. They will have great new jobs working in the revived coal mines.

  • by Pollux ( 102520 ) <speter&tedata,net,eg> on Friday April 21, 2017 @11:57AM (#54276751) Journal

    As a technology director for a public K-12 school, I'm very concerned about what I'm reading in the headline. But the "article" is an extremely biased report, citing just as equally biased an article [vice.com], and neither article really gives me a clue as to what's going on here.

    So, let's start at the source: Here is the actual FCC draft order specific to this change [fcc.gov]. Now, in the course of working on and completing E-Rate [wikipedia.org] filings with the USAC [usac.org] to receive reimbursement for internet and network services for our school district, I've read a few 60-70 page FCC reports before. They're not fun, but they're necessary. That being said, I'm about 20 pages in, and already I'm disturbed. Here's why:

    FCC reports that I've read in the past are boring, dry reads, but at least they're factual and unbiased. Not so with this one. Three sentences in, and we get this: "The FCC has historically subjected the provision of business data services by incumbent local exchange carriers (LECs) to price regulations." And the spin continues..."eases the regulatory burdens"; "spur entry, innovation and competition in the vibrant business data services market"; "competition is robust and vigorous in the markets." And this is still just the first page. The draft order is littered with biased political spin, something that has not been present in my reading of previous FCC draft orders. Because of this, I can't even depend on a government document to give me an unbiased report of the rationale behind the decision, nor can I depend on it to help me determine what the consequences of the decision will be. So, I'll have to create my own... here goes.

    Local Exchange Carrier (LEC) price regulations have been there historically specifically to protect subscribers from LECs that had monopoly or near-monopoly controls over their service regions. Most regions throughout the United States historically were not served by competitive broadband providers. Recently, this has begun to change, where some communities now have competitive service providers come in, giving subscribers a choice. The FCC began to look into this issue back in 2012, before Trump. According to the report, "In December 2012, the Commission released the Data Collection Order FNPRM, to collect data, analyze how competition, “whether actual or potential, affects prices, controlling for all other factors that affect prices,” and “determine what barriers inhibit investment and delay competition, including regulatory barriers." By not controlling pricing, the FCC claims in its report that LECs will no longer be limited entry into a potential market, where capped rates would not allow for a sufficient recovery of the investment necessary to build into a new market area.

    But, here's the flaw in their reasoning: trenching fiber costs a lot of money. A lot. If service provider A already has fiber, service provider B is not going to install fiber if it does not believe that it can earn back their investment in a reasonable amount of time. Even if prices are artificially inflated by provider A, just because they can, if provider B tries to compete and trenches their own fiber network, both A and B know that A can lower its rates to a competitive level to drive out provider B. So, B has no incentive to trench, leaving A with the monopoly.

    The easiest solution: make internet a utility. It's silly to think that it's a smart idea to run multiple fiber lines to a building. (I should know; our school has two of them, and both are dark.) It would be just as silly to have multiple electric taps, or multiple water pipes. But, that's not happening anytime

    • Installing fiber isn't that expensive. I live in a semi-rural area several miles outside of the nearest small town, and 25 miles from the nearest big town, ~50 miles from a city, and ~100 miles from a major metro area. And I have three fiber pedestals near my house, from two different cable companies.

      If you don't have two cable plants in your area you either have a political problem, or an opportunity.

      The city near me has a political problem. The cable company I get my fiber connection from has their pla

      • by Pollux ( 102520 ) <speter&tedata,net,eg> on Friday April 21, 2017 @01:38PM (#54277625) Journal

        Installing fiber isn't that expensive. I live in a semi-rural area several miles outside of the nearest small town, and 25 miles from the nearest big town, ~50 miles from a city, and ~100 miles from a major metro area. And I have three fiber pedestals near my house, from two different cable companies.

        Nice anecdote. By the way, have you ever trenched fiber for a local telecom? It's not cheap. Two minutes of Google searching gave me this neat data [dot.gov]. A couple installs in Florida ran about $10,000 per mile back in 2013. Let's use that as a base cost. Wikipedia then tells me that Google needed 4,000 miles of fiber to setup in San Antonio [wikipedia.org]. So, $40 million dollars, just for one city. And if there already was one or two other providers there offering services, able to price-cut their services to maintain their subscriber base, that would give me even less reason to start breaking ground.

        I've spoken with two different telecoms about their fiber install over the last five years. Both of them say that there's a substantial initial investment, just to develop a core community of subscribers, which then provides the profits necessary to branch out into neighboring territories, especially in rural areas. (Both teleco's said that rural areas don't turn a profit. The urban areas subsidize the costs.)

        No, it is expensive.

  • by King_TJ ( 85913 ) on Friday April 21, 2017 @11:59AM (#54276773) Journal

    I'm just going to point out that the public schools in poor districts who supposedly "never got Internet yet" OR are supposedly in real need of reduced cost Internet broadband because they can't afford to pay the "going rate" for it are, indeed, PUBLIC schools.

    When you hear about our failing school systems and those pushing to allow tax dollars to fund sending their kids to private alternatives via a voucher system of some sort -- this is a good example of why. Any government run public school that's so bad off, it still hasn't even obtained Internet access is a FAILURE. It doesn't need subsidized broadband to fix it. It need to be completely gutted and overhauled! Tax dollars pay for everything it does already. If that's not sufficient to pay its bills for things like its Internet connection, then it's not really viable.

  • ...then we should pay for it through publicly raised taxes and published budgets. Then at least it's visible and transparent.

    Subsidizing schools by setting price ceilings only obscures the issue and transfers the cost on the ISP's shareholders, employees, and other customers. I don't see why any of them should pay extra to support schools.

    Others have commented about shrinking school budgets. We're paying something north of 2.5x as much per student today versus 1970 (adjusted for inflation, e.g. here [cato.org]). I don

  • I don't know what the record for comma use in a short blurb is, but this must be close. Hopefully the FCC is getting a cut of that extra profit so they can hire an editor...

Someone is unenthusiastic about your work.

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