12 ms·

NCTA Agrees Title II Virtuous Cycle Is Working

62 points by dsr_ 9y ago

mcguire 9y ago
One of the things Richard Thaler points out in Misbehaving (on behavioral economics) is that traditional economics cannot decide whether out is descriptive or normative. Descriptive economics would be the science of how people actually engage in economic activity. Normative economics describes how formally defined rational actors should behave to maximize their formally defined utility. Unfortunately, what economists do is create a normative model and then retroactively assert that real people follow the model. As a result, their conclusions don't necessarily relate to the real world. https://www.bls.gov/opub/mlr/2016/book-review/behavioral-economics.htm https://www.bls.gov/opub/mlr/2016/book-review/behavioral-eco...
- dragonwriter 9y ago
  > One of the things Richard Thaler points out in Misbehaving (on behavioral economics) is that traditional economics cannot decide whether out is descriptive or normative. That's because "traditional economics" doesn't actually exist as an entity, it's a strawman. It can't "decide" because it includes different people amd groups who can decide, and who have decided differently.
  - mcguire 9y ago
    "Suppose the government its economy plunge into a deep recession and decides to give everyone a one-time tax cut of $1,000 per person. The consumption function tells us how much of the money will be spent and how much will be saved. Economic thinking about the consumption function changed quite dramatically between the mid-1930s and the mid-1950s. "[Keynes] assumed that if a household received some incremental income, it would consume a fixed proportion of that extra income.... If we take the case of a middle-class family that saves 5% of any additional income earned, Keynes predicts that the MPC from a $1000 windfall would be 95%, or $950. "[Milton Friedman] proposed that households would use a three year horizon to determine what their permanent income is, so would divide the extra spending evenly over the next three years. That means that in the first year, the family would spend about $317. "[Franco Modigliani] predicts that the windfall will be consumed evenly over [the remainder of the individual's lifetime, say 40 years] meaning that the MPC to consume from the windfall will be just $25 per year. "[Robert Barro] assumes that their time horizon is effectively forever. In this world, the predictions about how much money will be spent depend on from where the money comes. If the windfall had come from a lucky night at the casino, Barro would make the same prediction as Modigliani about consumption. But if the windfall is a temporary tax cut, the beneficiary realizes that his heir's taxes will eventually have to go up to pay for the cut he is receiving, so he won't spend any of it. "I gave a talk in the Cornell psychology department. I began my talk by sketching Modigliani's life-cycle hypothesis. My description was straight-forward, but to judge from the audience reaction, you would have thought this theory of savings was hilarious. Fortunately, the economist Bob Frank was there. When the bedlam subsided, he assured everyone that I had not made anything up. The psychologists remained stunned in disbelief, wondering how their economics department colleagues could have such wacky views of human behavior. p. 94-97
    - dragonwriter 9y ago
      None of that is relevant to the ability of “traditional economics” to decide between being a descriptive and a normative field, as all are examples of hypothesized predictive models, not normative ones. They may seem naive from the perspective of a field focussed on behavior at a more micro level (even microeconomics aims at predicting higher-level aggregate behavior than psychology), and, heck, they may even be hopelessly naive, but that's not even German e to the question. (And whether or not an economist was there to put an imprimatur on it, all of those descriptions are mischaracterizations, but again that's neither here nor there.)
apeace 9y ago
I've always felt the real problem is the monopolies. Net Neutrality doesn't fix that--it's up to local governments to fix it. In the early 2000's when my home town still had dial-up only, Comcast came into the town and offered to build out cable broadband. They would even throw in a $300k grant to the school district for new laptops. The only catch? They needed to be granted a monopoly on all the telephone poles in the town. The town agreed. As circulated on HN recently, the town of Chattanooga, TN is another interesting example[0]. Chattanooga made the smart decision many years ago not to grant a monopoly in exchange for a fiber build-out. Instead they built their own fiber network. Years later they offered to expand their ISP to the surrounding towns, which only had dial-up and satellite. It would cost zero taxpayer dollars. Instead the state decided to give $45 million to Comcast/AT&T to build out--get this--DSL! As the parent article points out: despite cost-per-bit plummeting over the years, the cost to consumers isn't going down. The problem is monopolies naively being granted by local governments. In a world where that didn't happen, Pai would be right: ISPs would be forced to compete on features and quality, and so nobody would be talking about bundling websites like they do with cable channels, or whatever other nonsense Net Neutrality is designed to prevent. [0] https://motherboard.vice.com/en_us/article/tennessee-could-give-taxpayers-americas-fastest-internet-for-free-but-it-will-give-comcast-and-atandt-dollar45-million-instead https://motherboard.vice.com/en_us/article/tennessee-could-g...
- croon 9y ago
  I agree that local monopolies is the major problem, but I could still see the value of net neutrality if that problem was fixed. At least I as a consumer want companies to compete in efficiency of service, economies of scale, technology, etc, and not compete in whoever can sell me out the most or force services I don't want down my ISP subscription.
  - juliangoldsmith 9y ago
    With adequate choice in ISPs, you would be able to force them to compete in those areas by rewarding those that do with your business.
deleted 9y ago
[deleted]
pdimitar 9y ago
Bulgaria is a good example why net neutrality works. The capital city of Sofia is brimming with ISPs -- last time I checked, at least 15 companies with good coverage, fiber, and very affordable ($7 to $20 for 100Mbps ingress and egress) connection services. And probably 50 or so more which are smaller and with less coverage, but still with strong connections. No prioritized traffic. No metered traffic. No endless Facebook and Whatsapp traffic. Shielded and reinforced fiber-optic cables, laid underground. Rain pours down as if it's the Apocalypse, both of my connections never flinch. It's different in the USA. It's vast, it's costly to make a big fiber-optic network, and the company lobbies and legal monopolies are rampant. I don't think you guys will manage to push back anytime soon. You need somebody like Elon Musk coming over and saying "I don't care about being in a VIP oligopoly club, I'll do my own thing". Then you'll find Comcast suddenly improving service and dropping prices. People like Pai aren't stopped by words. There has to be a way for the market to do its magic, otherwise it'll only get worse for the USA.
- otoburb 9y ago
  >>The capital city of Sofia is brimming with ISPs -- last time I checked, at least 15 companies with good coverage, fiber, and very affordable ($7 to $20 for 100Mbps ingress and egress) connection services. Sounds like a domestic sector ripe for consolidation. I hope that doesn't happen for the sake of the consumers, but that seems like an overwhelmingly large number of players for a total market size of only 1.7M subscribers[1], which is even smaller from the census figures of roughly 500K households. [1] https://en.wikipedia.org/wiki/Sofia#Demographics https://en.wikipedia.org/wiki/Sofia#Demographics
  - pdimitar 9y ago
    Some of the bigger players have been buying smaller ones but in general the sector almost hasn't changed because the consumers switch away if somebody slacks a lot -- the tricks of "we're in a merge and you may experience some disruptions in the process" and a lot of other corporate lingo absolutely don't fly around here. People just smile and switch away. The mobile operators also pushed a lot for consolidation several years ago but it seems they didn't have the leverage (and the money) to make it happen. Thank the gods for that. So far it's all good, we're enjoying healthy competition and extremely good ISPs.

62 points by dsr_ 9y ago

One of the things Richard Thaler points out in Misbehaving (on behavioral economics) is that traditional economics cannot decide whether out is descriptive or normative. Descriptive economics would be the science of how people actually engage in economic activity. Normative economics describes how formally defined rational actors should behave to maximize their formally defined utility. Unfortunately, what economists do is create a normative model and then retroactively assert that real people follow the model. As a result, their conclusions don't necessarily relate to the real world. https://www.bls.gov/opub/mlr/2016/book-review/behavioral-economics.htm https://www.bls.gov/opub/mlr/2016/book-review/behavioral-eco...

dragonwriter 9y ago
> One of the things Richard Thaler points out in Misbehaving (on behavioral economics) is that traditional economics cannot decide whether out is descriptive or normative. That's because "traditional economics" doesn't actually exist as an entity, it's a strawman. It can't "decide" because it includes different people amd groups who can decide, and who have decided differently.
- mcguire 9y ago
  "Suppose the government its economy plunge into a deep recession and decides to give everyone a one-time tax cut of $1,000 per person. The consumption function tells us how much of the money will be spent and how much will be saved. Economic thinking about the consumption function changed quite dramatically between the mid-1930s and the mid-1950s. "[Keynes] assumed that if a household received some incremental income, it would consume a fixed proportion of that extra income.... If we take the case of a middle-class family that saves 5% of any additional income earned, Keynes predicts that the MPC from a $1000 windfall would be 95%, or $950. "[Milton Friedman] proposed that households would use a three year horizon to determine what their permanent income is, so would divide the extra spending evenly over the next three years. That means that in the first year, the family would spend about $317. "[Franco Modigliani] predicts that the windfall will be consumed evenly over [the remainder of the individual's lifetime, say 40 years] meaning that the MPC to consume from the windfall will be just $25 per year. "[Robert Barro] assumes that their time horizon is effectively forever. In this world, the predictions about how much money will be spent depend on from where the money comes. If the windfall had come from a lucky night at the casino, Barro would make the same prediction as Modigliani about consumption. But if the windfall is a temporary tax cut, the beneficiary realizes that his heir's taxes will eventually have to go up to pay for the cut he is receiving, so he won't spend any of it. "I gave a talk in the Cornell psychology department. I began my talk by sketching Modigliani's life-cycle hypothesis. My description was straight-forward, but to judge from the audience reaction, you would have thought this theory of savings was hilarious. Fortunately, the economist Bob Frank was there. When the bedlam subsided, he assured everyone that I had not made anything up. The psychologists remained stunned in disbelief, wondering how their economics department colleagues could have such wacky views of human behavior. p. 94-97
  - dragonwriter 9y ago
    None of that is relevant to the ability of “traditional economics” to decide between being a descriptive and a normative field, as all are examples of hypothesized predictive models, not normative ones. They may seem naive from the perspective of a field focussed on behavior at a more micro level (even microeconomics aims at predicting higher-level aggregate behavior than psychology), and, heck, they may even be hopelessly naive, but that's not even German e to the question. (And whether or not an economist was there to put an imprimatur on it, all of those descriptions are mischaracterizations, but again that's neither here nor there.)

apeace 9y ago

I've always felt the real problem is the monopolies. Net Neutrality doesn't fix that--it's up to local governments to fix it. In the early 2000's when my home town still had dial-up only, Comcast came into the town and offered to build out cable broadband. They would even throw in a $300k grant to the school district for new laptops. The only catch? They needed to be granted a monopoly on all the telephone poles in the town. The town agreed. As circulated on HN recently, the town of Chattanooga, TN is another interesting example[0]. Chattanooga made the smart decision many years ago not to grant a monopoly in exchange for a fiber build-out. Instead they built their own fiber network. Years later they offered to expand their ISP to the surrounding towns, which only had dial-up and satellite. It would cost zero taxpayer dollars. Instead the state decided to give $45 million to Comcast/AT&T to build out--get this--DSL! As the parent article points out: despite cost-per-bit plummeting over the years, the cost to consumers isn't going down. The problem is monopolies naively being granted by local governments. In a world where that didn't happen, Pai would be right: ISPs would be forced to compete on features and quality, and so nobody would be talking about bundling websites like they do with cable channels, or whatever other nonsense Net Neutrality is designed to prevent. [0] https://motherboard.vice.com/en_us/article/tennessee-could-give-taxpayers-americas-fastest-internet-for-free-but-it-will-give-comcast-and-atandt-dollar45-million-instead https://motherboard.vice.com/en_us/article/tennessee-could-g...

croon 9y ago
I agree that local monopolies is the major problem, but I could still see the value of net neutrality if that problem was fixed. At least I as a consumer want companies to compete in efficiency of service, economies of scale, technology, etc, and not compete in whoever can sell me out the most or force services I don't want down my ISP subscription.
- juliangoldsmith 9y ago
  With adequate choice in ISPs, you would be able to force them to compete in those areas by rewarding those that do with your business.

deleted 9y ago

[deleted]

pdimitar 9y ago

Bulgaria is a good example why net neutrality works. The capital city of Sofia is brimming with ISPs -- last time I checked, at least 15 companies with good coverage, fiber, and very affordable ($7 to $20 for 100Mbps ingress and egress) connection services. And probably 50 or so more which are smaller and with less coverage, but still with strong connections. No prioritized traffic. No metered traffic. No endless Facebook and Whatsapp traffic. Shielded and reinforced fiber-optic cables, laid underground. Rain pours down as if it's the Apocalypse, both of my connections never flinch. It's different in the USA. It's vast, it's costly to make a big fiber-optic network, and the company lobbies and legal monopolies are rampant. I don't think you guys will manage to push back anytime soon. You need somebody like Elon Musk coming over and saying "I don't care about being in a VIP oligopoly club, I'll do my own thing". Then you'll find Comcast suddenly improving service and dropping prices. People like Pai aren't stopped by words. There has to be a way for the market to do its magic, otherwise it'll only get worse for the USA.

otoburb 9y ago
>>The capital city of Sofia is brimming with ISPs -- last time I checked, at least 15 companies with good coverage, fiber, and very affordable ($7 to $20 for 100Mbps ingress and egress) connection services. Sounds like a domestic sector ripe for consolidation. I hope that doesn't happen for the sake of the consumers, but that seems like an overwhelmingly large number of players for a total market size of only 1.7M subscribers[1], which is even smaller from the census figures of roughly 500K households. [1] https://en.wikipedia.org/wiki/Sofia#Demographics https://en.wikipedia.org/wiki/Sofia#Demographics
- pdimitar 9y ago
  Some of the bigger players have been buying smaller ones but in general the sector almost hasn't changed because the consumers switch away if somebody slacks a lot -- the tricks of "we're in a merge and you may experience some disruptions in the process" and a lot of other corporate lingo absolutely don't fly around here. People just smile and switch away. The mobile operators also pushed a lot for consolidation several years ago but it seems they didn't have the leverage (and the money) to make it happen. Thank the gods for that. So far it's all good, we're enjoying healthy competition and extremely good ISPs.