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> They are already extracting near maximum value from monopolistic pricing Not true. When you remove net neutrality, you open up new possibilities for price-di
by bo1024 9y ago
> They are already extracting near maximum value from monopolistic pricing
Not true. When you remove net neutrality, you open up new possibilities for price-discrimination for the monopolist and they can extract more revenue for providing the same service.
Simple illustrative example: Suppose for the sake of argument that almost all VPN users are willing to pay an extra $1 / month for VPN access. Then Comcast can make strictly more money by charging everyone exactly the same as before except VPN access costs an additional $1/month.
(Also, I know you didn't bring it up, but there are lots of important free speech NN issues as well as economic ones, for example, Comcast might easily decide to completely block sites like Wikileaks.)
- legitster 9y agoIf they truly have monopoly pricing, and almost all users were willing to pay an extra $1 for VPN, they are already charging you for it. In fact, it would be worse for them, because if everyone is paying as much as they can bear for internet, and they have given some the option to opt out of an unneeded service, then they will lose money. Assuming they have total monopoly power.
- cannonedhamster 9y agoThey are literally the only provider for a large number of Americans. Many Americans only have 1 provider. It's been proven numerous times that they raise rates if competition doesn't exist and lower them when it does. You'd literally have to be willfully ignorant of the facts to say that Comcast won't just add fees because they can. They've done it numerous times already.
- legitster 9y agoThat's my whole point. Comcast is already charging you for whatever they want. If they think everyone in their area will pay an extra $15 for Netflix, they will just raise everyone's price by $15. Bundling and tiering not required.
- bo1024 9y agoAh, but what if only half the people want to pay an extra $15 for Netflix? If they raise everyone's price by $15, the other half will cancel service or go to a lower tier. So this won't work. However, without net neutrality, they can charge the Netflix-watchers $15 more and not charge the other people any more.
- bo1024 9y agoSorry, my example was not clear enough. Only a small fraction of people use VPN, so the monopoly price in a world with net neutrality basically ignores those people and charges the optimal price for everyone who does not use VPN. However, in a world without net neutrality, the company is able to charge a different price to those who want VPNs and those who don't (this is price discrimination). So it keeps charging the old price to everyone else, but adds on a surcharge only to those users who want a VPN. In this simple example, it makes an extra dollar per month per VPN-user.
- apple4ever 9y agoSo the solution is removing the monopolist power, not implementing more government regulations of the internet.
- deleted 9y ago[deleted]
- bo1024 9y ago1. I don't see that this follows. Would you suggest the same for water companies, electric companies, roads? 2. Unfortunately that isn't the choice we have before us. It doesn't make sense to make awful decisions on the premise that, in some fantasy ideal world, the decisions wouldn't be awful.