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So your contention is that structural oligopolies (or markets with monopolistic competition) should not be regulated? I'd be curious to know why.

by ethbro 9y ago

root_axis 9y ago
Why should they be regulated? They provide a popular, non-essential product for free. What threat are we protecting the consumer from in the name of this regulation? Consumers are free to visit any competitor site with identical ease of accessibility and competitors have very few barriers to entry (though this trend is slowly changing, e.g. in wireless land where a lack of net-netruality has enabled cell phone providers to harm competition by offering free data-transfer for partnered services like Spotify. A start-up will never be able to compete because their potential customers will pay streaming data fees to use their service or pay nothing to stick with the established incumbent.
- ethbro 9y ago
  > Consumers are free to visit any competitor site with identical ease of accessibility and competitors have very few barriers to entry I would strongly disagree with this characterization of the market. From joe_the_user's link [1] on oligopolies, every item under Barriers to Entry: Artificial Barriers applies to large, network-effect web companies. Google Takeout is probably the guiding light on fighting this, but were Google no longer in a dominant market position I'm not confident it would remain a corporate emphasis. ... Ironically, this same debate (regulating ISP vs edge provider) just came up in Zuckerberg's Senate questioning.
jknoepfler 9y ago
the contention is that they are obviously different in kind, and the difference in kind makes it fairly obvious why we would want regulation for ISPs prima facea, but not content companies like Facebook and Netflix. The government does not protect Netflix's status as a media platform any more than they protect Blockbuster. ISPs are more akin to power companies, which provide vital infrastructure in virtue of government fiat.
- ethbro 9y ago
  You're using Netflix as a straw man for your argument. Facebook isn't a content company, Netflix is not yet vertically integrated, and it makes less than 1/7th of Facebook's profits. I've also never stated that ISPs shouldn't be regulated. In fact, I'd prefer they both be regulated in order to promote open access to the market and more disruption. So I ask again, why would we not want to regulate structural oligopolies?
  - jknoepfler 9y ago
    "good for the consumer" is sufficient reason for regulating government granted monopolies, within reason. In general it is NOT sufficient justification to regulate a company in the free market. The bar for regulation in general is substantially higher, at least in the United States. There is a bar, of course (environmental regulation preventing dumping waste or emitting carcinogenic fumes, for example) and we will likely spend millions of person hours over the next decade figuring out where it is for large content companies (which Facebook is), but saying "it's good in both cases, therefore we should regulate both types of companies" is not correct (which was your argument). Which is to say, regulation might be justified in a less free-market oriented country, like France, on equivalent grounds, but there is a substantive moral and legal distinction to be made in the minds of many who enjoy a free market economy. And no, Netflix is not a straw man. My argument applies just as well to Facebook, StackOverflow, Ebay (which is regulated as a commerce platform), Google, Amazon, etc., as it does to Home Depot, Walmart, etc. etc. We default in these cases to not regulating.
joe_the_user 9y ago
So your contention is that structural oligopolies (or markets with monopolistic competition) should not be regulated? That's nowhere in my argument. I merely pointed that government grant monopolies pretty much automatically should be regulated since they are virtually extensions of government fiat already ("we" give Comcast etc a monopoly on placement on phone poles and similar stuff, we should get something for that) and that this situation isn't comparable to monopolistic competition. If you're curious, I think actual private companies should be regulated when their actions involve negative externalities [1] in their production process - chemical companies should not be able to dump toxins into rivers, broadly greenhouse gases should be limited, etc. One might argue that Facebook selling people's data to the highest bidder is another kind of negative externality. I would argue that a better outcome is consumer education, gradually people learn whatever they post online has a significant risk of being public. Similarly, it's better for people to learn not to be manipulated by simple schemes than to imagine a firewall against the manipulations of evil people. Just consider that a firewall against manipulations of evil people would let in the manipulation of "good people", right? Perhaps that's the whole idea. [1] https://en.wikipedia.org/wiki/Externality https://en.wikipedia.org/wiki/Externality
- rayiner 9y ago
  > we" give Comcast etc a monopoly on placement on phone poles and similar stuff, we should get something for that) and that this situation isn't comparable to monopolistic competition. Comcast doesn’t have a monopoly on placing things on utility poles. Poles are mostly owned by power companies or the local phone company, and those entities are required to lease pole space to everyone at non-discriminatory rates.

So your contention is that structural oligopolies (or markets with monopolistic competition) should not be regulated? I'd be curious to know why.

by ethbro 9y ago

So your contention is that structural oligopolies (or markets with monopolistic competition) should not be regulated? I'd be curious to know why.

root_axis 9y ago

Why should they be regulated? They provide a popular, non-essential product for free. What threat are we protecting the consumer from in the name of this regulation? Consumers are free to visit any competitor site with identical ease of accessibility and competitors have very few barriers to entry (though this trend is slowly changing, e.g. in wireless land where a lack of net-netruality has enabled cell phone providers to harm competition by offering free data-transfer for partnered services like Spotify. A start-up will never be able to compete because their potential customers will pay streaming data fees to use their service or pay nothing to stick with the established incumbent.

ethbro 9y ago
> Consumers are free to visit any competitor site with identical ease of accessibility and competitors have very few barriers to entry I would strongly disagree with this characterization of the market. From joe_the_user's link [1] on oligopolies, every item under Barriers to Entry: Artificial Barriers applies to large, network-effect web companies. Google Takeout is probably the guiding light on fighting this, but were Google no longer in a dominant market position I'm not confident it would remain a corporate emphasis. ... Ironically, this same debate (regulating ISP vs edge provider) just came up in Zuckerberg's Senate questioning.

jknoepfler 9y ago

the contention is that they are obviously different in kind, and the difference in kind makes it fairly obvious why we would want regulation for ISPs prima facea, but not content companies like Facebook and Netflix. The government does not protect Netflix's status as a media platform any more than they protect Blockbuster. ISPs are more akin to power companies, which provide vital infrastructure in virtue of government fiat.

ethbro 9y ago
You're using Netflix as a straw man for your argument. Facebook isn't a content company, Netflix is not yet vertically integrated, and it makes less than 1/7th of Facebook's profits. I've also never stated that ISPs shouldn't be regulated. In fact, I'd prefer they both be regulated in order to promote open access to the market and more disruption. So I ask again, why would we not want to regulate structural oligopolies?
- jknoepfler 9y ago
  "good for the consumer" is sufficient reason for regulating government granted monopolies, within reason. In general it is NOT sufficient justification to regulate a company in the free market. The bar for regulation in general is substantially higher, at least in the United States. There is a bar, of course (environmental regulation preventing dumping waste or emitting carcinogenic fumes, for example) and we will likely spend millions of person hours over the next decade figuring out where it is for large content companies (which Facebook is), but saying "it's good in both cases, therefore we should regulate both types of companies" is not correct (which was your argument). Which is to say, regulation might be justified in a less free-market oriented country, like France, on equivalent grounds, but there is a substantive moral and legal distinction to be made in the minds of many who enjoy a free market economy. And no, Netflix is not a straw man. My argument applies just as well to Facebook, StackOverflow, Ebay (which is regulated as a commerce platform), Google, Amazon, etc., as it does to Home Depot, Walmart, etc. etc. We default in these cases to not regulating.

joe_the_user 9y ago

So your contention is that structural oligopolies (or markets with monopolistic competition) should not be regulated? That's nowhere in my argument. I merely pointed that government grant monopolies pretty much automatically should be regulated since they are virtually extensions of government fiat already ("we" give Comcast etc a monopoly on placement on phone poles and similar stuff, we should get something for that) and that this situation isn't comparable to monopolistic competition. If you're curious, I think actual private companies should be regulated when their actions involve negative externalities [1] in their production process - chemical companies should not be able to dump toxins into rivers, broadly greenhouse gases should be limited, etc. One might argue that Facebook selling people's data to the highest bidder is another kind of negative externality. I would argue that a better outcome is consumer education, gradually people learn whatever they post online has a significant risk of being public. Similarly, it's better for people to learn not to be manipulated by simple schemes than to imagine a firewall against the manipulations of evil people. Just consider that a firewall against manipulations of evil people would let in the manipulation of "good people", right? Perhaps that's the whole idea. [1] https://en.wikipedia.org/wiki/Externality https://en.wikipedia.org/wiki/Externality

rayiner 9y ago
> we" give Comcast etc a monopoly on placement on phone poles and similar stuff, we should get something for that) and that this situation isn't comparable to monopolistic competition. Comcast doesn’t have a monopoly on placing things on utility poles. Poles are mostly owned by power companies or the local phone company, and those entities are required to lease pole space to everyone at non-discriminatory rates.