4 ms·

Break them up. There should be more competition in this industry.

CivBase 6y ago
I don't think the problem is that ISP market is a monopoly or even an oligopoly. I think the problem is that it has successfully formed a cartel[0]. Breaking up ISPs would just create more members of the same cartel. There are many ISPs who could compete with one another, but have an unwritten agreement to not compete. Competition drives lower margins, which just aren't worth it when you consider the upfront investment to start building out networks in a competitor's neighborhood - especially since the competitor is likely to retaliate by doing the same in your neighborhood. It is more cost effective for them to milk everything they can from the regions they currently dominate. Whatever the solution looks like, I think it will have to actively incentivize ISPs to compete for each other's customers instead of just adding more ISPs to the market. [0] https://en.wikipedia.org/wiki/Cartel https://en.wikipedia.org/wiki/Cartel
gpm 6y ago
I don't think competition is the primary issue here. There are numerous examples of ISPs committing outright fraud with no punishment. Lying about speeds, stealing money from customers by adding fake charges, and so on. Competition doesn't work in a market where you can't get information about the options because people are lying cheating and stealing. This strikes me as a failure of the regulators and justice department on not stopping false advertising, punishing fraud, and generally enabling access to justice.
- darkwizard42 6y ago
  I think competition is the root of the issue. With good competition you will see a lot of these issues be greatly reduced. Again, this depends on what you expect the regulator's job and your trust in its ability to do that job correctly. I think the parent commenter leans that even if you had the regulators stepping in more, they simply couldn't do it enough to make probability_of_getting_caught * fine_of_getting_caught > money_made_defrauding_customers (which based on the latest level of corporate scandals like VW emissions and privacy related tech scandals seems to be true, regulators just can't keep up or penalize harsh enough) With competition, you always have someone enforcing your behavior... the other guy, who will happily step in and take market share when you falter with customers.
  - gpm 6y ago
    The solutions to fines not being enough is really simple (provided we assume a functional justice department). Put people knowingly involved in committing fraud in jail. Edit: but frankly if the law was regularly enforced I expect fines would be enough here.
    - darkwizard42 6y ago
      Well, yes, but also its very hard (time-consuming, low conviction rate, and expensive to the wrong party - taxpayers) to get jail time for people. It creates a really weird sub-ecosystem of paying to be unaware etc. inside a corporation. I hear you on the fines, but probably the purest form is to allow deregulation for competition but regulate to protect consumer safety (a balance if you will)
ikiris 6y ago
Running wires costs a shit ton of money. How are more isps covering their own little islands of service going to make any difference here? Last mile service is a natural monopoly, no amount of pounding the table will fix that. The only reason cable and phone people even compete with each other in the space is because they didn't originally and still try not to.
- hellotomyrars 6y ago
  The federal government grants enormous subsidies to offset the cost of it costing a shit ton of money. Recently Verizon actually told them giving them more money wouldn't help speed up roll-out. They still got the money. So it's pretty clear that we're paying for it through our taxes, and being billed for it at exorbitant prices. Municipal-level ISPs make so much sense but, of course, face huge challenges by both established corporate interests and the kind of people who don't believe the government is capable of doing anything.

I don't think the problem is that ISP market is a monopoly or even an oligopoly. I think the problem is that it has successfully formed a cartel[0]. Breaking up ISPs would just create more members of the same cartel. There are many ISPs who could compete with one another, but have an unwritten agreement to not compete. Competition drives lower margins, which just aren't worth it when you consider the upfront investment to start building out networks in a competitor's neighborhood - especially since the competitor is likely to retaliate by doing the same in your neighborhood. It is more cost effective for them to milk everything they can from the regions they currently dominate. Whatever the solution looks like, I think it will have to actively incentivize ISPs to compete for each other's customers instead of just adding more ISPs to the market. [0] https://en.wikipedia.org/wiki/Cartel https://en.wikipedia.org/wiki/Cartel

gpm 6y ago

I don't think competition is the primary issue here. There are numerous examples of ISPs committing outright fraud with no punishment. Lying about speeds, stealing money from customers by adding fake charges, and so on. Competition doesn't work in a market where you can't get information about the options because people are lying cheating and stealing. This strikes me as a failure of the regulators and justice department on not stopping false advertising, punishing fraud, and generally enabling access to justice.

darkwizard42 6y ago
I think competition is the root of the issue. With good competition you will see a lot of these issues be greatly reduced. Again, this depends on what you expect the regulator's job and your trust in its ability to do that job correctly. I think the parent commenter leans that even if you had the regulators stepping in more, they simply couldn't do it enough to make probability_of_getting_caught * fine_of_getting_caught > money_made_defrauding_customers (which based on the latest level of corporate scandals like VW emissions and privacy related tech scandals seems to be true, regulators just can't keep up or penalize harsh enough) With competition, you always have someone enforcing your behavior... the other guy, who will happily step in and take market share when you falter with customers.
- gpm 6y ago
  The solutions to fines not being enough is really simple (provided we assume a functional justice department). Put people knowingly involved in committing fraud in jail. Edit: but frankly if the law was regularly enforced I expect fines would be enough here.
  - darkwizard42 6y ago
    Well, yes, but also its very hard (time-consuming, low conviction rate, and expensive to the wrong party - taxpayers) to get jail time for people. It creates a really weird sub-ecosystem of paying to be unaware etc. inside a corporation. I hear you on the fines, but probably the purest form is to allow deregulation for competition but regulate to protect consumer safety (a balance if you will)

ikiris 6y ago

Running wires costs a shit ton of money. How are more isps covering their own little islands of service going to make any difference here? Last mile service is a natural monopoly, no amount of pounding the table will fix that. The only reason cable and phone people even compete with each other in the space is because they didn't originally and still try not to.

hellotomyrars 6y ago
The federal government grants enormous subsidies to offset the cost of it costing a shit ton of money. Recently Verizon actually told them giving them more money wouldn't help speed up roll-out. They still got the money. So it's pretty clear that we're paying for it through our taxes, and being billed for it at exorbitant prices. Municipal-level ISPs make so much sense but, of course, face huge challenges by both established corporate interests and the kind of people who don't believe the government is capable of doing anything.