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Yeah - but we're talking about a high-capex industry. Basically what net-neutrality is asking is that the infrastructure tier should subsidise profits at the c

Yeah - but we're talking about a high-capex industry. Basically what net-neutrality is asking is that the infrastructure tier should subsidise profits at the content and interface tiers of internet services provision - keeping the barrier to entry low on the latter, and increasing the barrier to entry on the former. Why does it increase the barrier to entry to the former? Because expected lower profit returns increase the risk on capex. So your reply - while a necessary consideration to think through - sort of misses the whole point of the argument against net-neutrality. Net neutrality - according to this argument - will only serve to contribute to the lack of competition at the infrastructure level. The real response to this argument is not to fight it on economic grounds - but to assert that the 'public good' which transcends merely economic considerations is put under threat. The primary way infrastructure providers will seek to increase profit margins is by bundling content and service delivery options. However, content - in this context - includes the entire political information flow of all the political structures in the world. Generally speaking, we don't believe it to be in the public good for this to be under the control of corporations. Since the 'public good' is frequently the sort of thing that can't be monetized - it's the natural place for government to step in to protect it. I remain torn because it's never really clear if the actual aim of preserving the 'public_good' is best protected by intervention or otherwise. I say that ultimately we have to try both and then compare. Get empirical on the issue. A priori debate can only take us so far.

jbri 16y ago
I honestly don't see how net neutrality decreases the profits at the infrastructure level. Content providers have to pay for bandwidth or secure peering agreements - that wouldn't change under net neutrality. Consumer ISPs have to pay for bandwidth or secure peering agreements - that wouldn't change either. The only thing that net neutrality prevents infrastructure providers from doing is discriminating traffic based on content - they're still free to do things like charge StreamingMovieCDN higher prices than they charge SimpleHtmlHosting, or bill for actual traffic carried rather than a flat fee for the lines.
- grovulent 16y ago
  You're probably right - if net neutrality was enforced, the current pot of profits for infrastructure players probably wouldn't change all that much because of it - because the current status quo is effectively neutral. But the argument is that this is artificially low from what it should be because service providers have so far held off from bundling because of the regulatory uncertainty. Because it's artificially low - so the argument goes - that's what explains (at least in part) the current levels of competition. Infrastructure players claim that once regulatory certainty is provided (against net neutrality) - then, since the pot of profits for infrastructure providers will increase - this will in turn encourage more entrants to the market. Actually - one way you might argue against their economic argument is say: okay, but if the profit pot is only being increased because infrastructure players are bundling content, then infrastructure players that want to give users completely free reign to surf where they want will be priced out of the market. Bundlers will be able to subsidise network access at a lower price because of income generated through the content. Non-bundlers won't be able to do this and will quickly go out of business... Since big media content is already tightly controlled by a few large corporations, only a few infrastructure players will be able to provide such subsidies. Ergo - competition at the infrastructure level will be as bad as ever if not worse, while competition at the content and user level will disappear completely. And yeah - who doesn't believe really that corporations want to destroy the competition that the internet represents.

jbri 16y ago

I honestly don't see how net neutrality decreases the profits at the infrastructure level. Content providers have to pay for bandwidth or secure peering agreements - that wouldn't change under net neutrality. Consumer ISPs have to pay for bandwidth or secure peering agreements - that wouldn't change either. The only thing that net neutrality prevents infrastructure providers from doing is discriminating traffic based on content - they're still free to do things like charge StreamingMovieCDN higher prices than they charge SimpleHtmlHosting, or bill for actual traffic carried rather than a flat fee for the lines.

grovulent 16y ago
You're probably right - if net neutrality was enforced, the current pot of profits for infrastructure players probably wouldn't change all that much because of it - because the current status quo is effectively neutral. But the argument is that this is artificially low from what it should be because service providers have so far held off from bundling because of the regulatory uncertainty. Because it's artificially low - so the argument goes - that's what explains (at least in part) the current levels of competition. Infrastructure players claim that once regulatory certainty is provided (against net neutrality) - then, since the pot of profits for infrastructure providers will increase - this will in turn encourage more entrants to the market. Actually - one way you might argue against their economic argument is say: okay, but if the profit pot is only being increased because infrastructure players are bundling content, then infrastructure players that want to give users completely free reign to surf where they want will be priced out of the market. Bundlers will be able to subsidise network access at a lower price because of income generated through the content. Non-bundlers won't be able to do this and will quickly go out of business... Since big media content is already tightly controlled by a few large corporations, only a few infrastructure players will be able to provide such subsidies. Ergo - competition at the infrastructure level will be as bad as ever if not worse, while competition at the content and user level will disappear completely. And yeah - who doesn't believe really that corporations want to destroy the competition that the internet represents.