9 ms·

The problem is the proposed solutions really just entrench existing providers, specifically net neutrality policies: They legalize monopolies as long as they're

The problem is the proposed solutions really just entrench existing providers, specifically net neutrality policies: They legalize monopolies as long as they're "following the rules!" _You_ _cannot_ _legislate_ _good_ _behavior_ _into_ _monopolies_. So while I appreciate the spirit of Net Neutrality rules, the solution is fundamentally flawed. Let's say you want to open an ISP in your neighborhood. Based on their history (When Google Fiber moved into my area), Comcast will call their existing customer base and offer them services below cost but at the price of a 3year contract. This delays profitability for you as a new player into the space. Comcast can take money from one market (another state) and move the profits into subsidizing a loss to prevent players from entering the space in another market. By breaking this cash flow, you end the stagnation of consumer choice, driving innovation forward.

bosswipe 6y ago
> _You_ _cannot_ _legislate_ _good_ _behavior_ _into_ _monopolies_ Why not? Yes, breaking up monopolies is good but that doesn't mean we can't regulate industries before the point where things get so bad that there is enough political will to break them up.
- exabrial 6y ago
  I mean, feel free to provide an example where we successfully regulated a monopoly to encourage competition and consumer choice...
  - jmm5 6y ago
    Obviously you can't have a competition with a monopoly in place. Regulation could help to keep prices down and to expand access in areas covered by only a single broadband provider.
  - mortehu 6y ago
    Cellular carriers and electric power providers, and the success has been repeated in many countries.
  - edgyquant 6y ago
    The Microsoft case seemed to work out well
  - jasonwatkinspdx 6y ago
    Basically anything that historically falls under common carrier regs. None of this debate is new. We saw it with railroads. Natural monopolies need counterbalancing regulation. This isn't even remotely a controversial statement in economics.
    - dragonwriter 6y ago
      > Natural monopolies need counterbalancing regulation. This isn't even remotely a controversial statement in economics. Unless your argument is that the Austrian and Chicago schools of economics doesn't actually exist, this is quite wrong, since the Austrian school denies the existence of natural monopoly and argues that harmful monopoly can only exist as a product of government regulation, and the Chicago school likewise holds that absent regulation, monopoly is a transient condition, not a stable one; both favor removing regulations that they see as stabilizing harmful monopolies, rather than regulating to manage naturally-formed-and-self-stabilizing monopolies, which they don't acknowledge the existence of. Now, I think the Chicago/Austrian positions on monopolies are wrong, but you really can't reasonably deny that this is a fundamental area of controversy.
      - jasonwatkinspdx 6y ago
        Yes. I am entirely comfortable in saying that the economic consensus is strongly against the Austrian and Chicago perspectives. Both of these schools value prior ideology over empirical data. It's a "debate" on forums like this, but not even remotely so amongst the economists I talk to.
        dragonwriter 6y ago
        > Both of these schools value prior ideology over empirical data. Austrian overtly so, Chicago less so, but, yes, its another issue that "is economics an empirical science" is also a controversial position in economics. > but not even remotely so amongst the economists I talk to. That's a very different claim than your original one. That last qualifier does quite a bit of work.
  - hardtke 6y ago
    Before the 1980s long distance calls from AT&T landlines were very expensive. The FCC forced AT&T to allow competitors to use their infrastructure at a reasonable price. MCI and Sprint entered and the cost of long distance calls fell pretty quickly. Sadly, this may partially explain our terrible and expensive cell phone service. In many countries, the first competition to the national phone carrier were mobile services so the early mobile entrants were competing against massively inflated prices for long distance calling and quickly built high quality alternatives.
  - wtallis 6y ago
    It seems odd that you assume the goal of regulating a monopoly must be to encourage competition and consumer choice, ie. breaking up the monopoly, directly or indirectly. Why is enforcing reasonable prices and business practices not an allowable goal?
  - jen20 6y ago
    BT Openreach and Local Loop Unbundling comes to mind.
- zbrozek 6y ago
  Because companies are really good at optimizing and the outcomes are usually bad behavior that is not-yet legislated. It's a cat and mouse game. Much better to have a plethora of competition so that the competitive market provides the tight feedback loop. With wireless carriers the MVNO rules mean that I can shop around and jump ship pretty easily. I just switched providers a couple of months ago. Look at PG&E. They're badly behaved but also highly regulated.
dredmorbius 6y ago
> If you want to emphasize a word or phrase, put asterisks around it and it will get italicized. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- exabrial 6y ago
  Sorry :( I come from planet markdown
  - dredmorbius 6y ago
    Oh I ~~kinda~~ _totally_ get that. But Markdown doesn't work here.
jandrese 6y ago
My water company is pretty well behaved. Sewer too. Trash pickup is without headaches although I don't know the cost. Even my power company is ok now. They had a bad part in the early 2000s when they were trying to semi-privatize and Enron was trying to horn in on the management, but once they went back to being an ordinary utility the bad behavior stopped.
- zdragnar 6y ago
  I have had horrendous experienced with Waste Management on three occasions. Moving out of the neighborhood they had a city-enforced monopoly on was the only solution (granted, i moved for other reasons, but getting someone else was a delight all its own).
  - willcipriano 6y ago
    Similarly my previous trash company raised rates several times the year before last nearly doubling the cost, then a competitor came in at the original price and virtually everyone switched. They offered to lower us back down when we canceled the service but they were a day late and a dollar short. They still send us letters begging us to come back.
  - mox1 6y ago
    But in this case the remedy is head to your local town hall and start complaining. The "monopoly" is usually a 5ish year contract that the city sends out for bids. I'd love the ability to head to city hall and convince local leaders to switch from Comcast to X.
    - zdragnar 6y ago
      This was back when I was living in a large suburb. The whole place was divided among a half-dozen or so trash companies. I might have complained, but moving was a whole lot easier than waiting 5 years to maybe get a change. Before the monopolies were granted, people could pick their own haulers. The monopolies were granted to cut down on truck traffic- the fact that WM took iver my street was evidence enough that one complaint would not dislodge them. You might actually have more luck with complaining about your internet service. The rural area I moved to only had DSL, and the quality was so bad the town threatened to kick the carrier out if they didnt improve. Instead, they agreed to lay fiber to the entire service area, and it was only about a year after I moved in that we got it. (Way overpriced for full gigabit, of course, but thats rural internet).
kanox 6y ago
I don't think this is a monopoly problem as much as a collusion problem: multiple providers exist but many regions each have a single provider. If this is a deliberate agreement then it's extremely illegal. Where I live there are multiple high-quality ISPs at my building, the US should find a way to encourage multiple ISPs to be present in every single neighborhood. People who complain about "too many ugly wires" should be ignored: it's much better to have ugly cables on poles than slow internet.
- nimish 6y ago
  Most good theories of monopoly power encompass the abuse of natural monopolies via collusion
- omegabravo 6y ago
  Wouldn't it make sense to share the pipes the dumb light pipes and compete on service?
  - somnic 6y ago
    That's more or less how it works here in New Zealand. A private company, Chorus, has a monopoly on the network itself, and can only provide the network to other ISPs and not direct to the consumer. I kind of presume there are other regulations in place, or conditions for the $1B subsidy they got for rolling out the fibre network. As it is, for a household to get a plan that offers download speeds of 700Mbps-900Mbps and no data caps, we're paying NZ$109, or about US$72/mo.
    - elithrar 6y ago
      > As it is, for a household to get a plan that offers download speeds of 700Mbps-900Mbps and no data caps, we're paying NZ$109, or about US$72/mo. Which is pretty good, relatively speaking. 330Mbps HFC Comcast is USD$74.99/month here in SF.
    - deadlyllama 6y ago
      And there's good competition, I'm paying NZ$90 for the same speed (900/400) with no data cap. Static IP. And all the NZ prices quoted include sales tax (NZ law requires this) so the equivalent US price without sales tax would be about US$52/mo.
cabalamat 6y ago
Banning states from banning municipal broadband would help (by making broadband providers less monopolisitic).
s_dev 6y ago
All incumbents have some advantage over a new player -- that doesn't mean monopoly. A good example of how Comcast will be disrupted is Starlink. Though I'll concede that US Internet infrastructure seems outdated compared to the EU. So perhaps this aging infrastructure suggest monopolistic practices as does any phenomena characterized by stagnation.

bosswipe 6y ago

> _You_ _cannot_ _legislate_ _good_ _behavior_ _into_ _monopolies_ Why not? Yes, breaking up monopolies is good but that doesn't mean we can't regulate industries before the point where things get so bad that there is enough political will to break them up.

exabrial 6y ago
I mean, feel free to provide an example where we successfully regulated a monopoly to encourage competition and consumer choice...
- jmm5 6y ago
  Obviously you can't have a competition with a monopoly in place. Regulation could help to keep prices down and to expand access in areas covered by only a single broadband provider.
- mortehu 6y ago
  Cellular carriers and electric power providers, and the success has been repeated in many countries.
- edgyquant 6y ago
  The Microsoft case seemed to work out well
- jasonwatkinspdx 6y ago
  Basically anything that historically falls under common carrier regs. None of this debate is new. We saw it with railroads. Natural monopolies need counterbalancing regulation. This isn't even remotely a controversial statement in economics.
  - dragonwriter 6y ago
    > Natural monopolies need counterbalancing regulation. This isn't even remotely a controversial statement in economics. Unless your argument is that the Austrian and Chicago schools of economics doesn't actually exist, this is quite wrong, since the Austrian school denies the existence of natural monopoly and argues that harmful monopoly can only exist as a product of government regulation, and the Chicago school likewise holds that absent regulation, monopoly is a transient condition, not a stable one; both favor removing regulations that they see as stabilizing harmful monopolies, rather than regulating to manage naturally-formed-and-self-stabilizing monopolies, which they don't acknowledge the existence of. Now, I think the Chicago/Austrian positions on monopolies are wrong, but you really can't reasonably deny that this is a fundamental area of controversy.
    - jasonwatkinspdx 6y ago
      Yes. I am entirely comfortable in saying that the economic consensus is strongly against the Austrian and Chicago perspectives. Both of these schools value prior ideology over empirical data. It's a "debate" on forums like this, but not even remotely so amongst the economists I talk to.
      - dragonwriter 6y ago
        > Both of these schools value prior ideology over empirical data. Austrian overtly so, Chicago less so, but, yes, its another issue that "is economics an empirical science" is also a controversial position in economics. > but not even remotely so amongst the economists I talk to. That's a very different claim than your original one. That last qualifier does quite a bit of work.
- hardtke 6y ago
  Before the 1980s long distance calls from AT&T landlines were very expensive. The FCC forced AT&T to allow competitors to use their infrastructure at a reasonable price. MCI and Sprint entered and the cost of long distance calls fell pretty quickly. Sadly, this may partially explain our terrible and expensive cell phone service. In many countries, the first competition to the national phone carrier were mobile services so the early mobile entrants were competing against massively inflated prices for long distance calling and quickly built high quality alternatives.
- wtallis 6y ago
  It seems odd that you assume the goal of regulating a monopoly must be to encourage competition and consumer choice, ie. breaking up the monopoly, directly or indirectly. Why is enforcing reasonable prices and business practices not an allowable goal?
- jen20 6y ago
  BT Openreach and Local Loop Unbundling comes to mind.
zbrozek 6y ago
Because companies are really good at optimizing and the outcomes are usually bad behavior that is not-yet legislated. It's a cat and mouse game. Much better to have a plethora of competition so that the competitive market provides the tight feedback loop. With wireless carriers the MVNO rules mean that I can shop around and jump ship pretty easily. I just switched providers a couple of months ago. Look at PG&E. They're badly behaved but also highly regulated.

dredmorbius 6y ago

> If you want to emphasize a word or phrase, put asterisks around it and it will get italicized. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

exabrial 6y ago
Sorry :( I come from planet markdown
- dredmorbius 6y ago
  Oh I ~~kinda~~ _totally_ get that. But Markdown doesn't work here.

jandrese 6y ago

My water company is pretty well behaved. Sewer too. Trash pickup is without headaches although I don't know the cost. Even my power company is ok now. They had a bad part in the early 2000s when they were trying to semi-privatize and Enron was trying to horn in on the management, but once they went back to being an ordinary utility the bad behavior stopped.

zdragnar 6y ago
I have had horrendous experienced with Waste Management on three occasions. Moving out of the neighborhood they had a city-enforced monopoly on was the only solution (granted, i moved for other reasons, but getting someone else was a delight all its own).
- willcipriano 6y ago
  Similarly my previous trash company raised rates several times the year before last nearly doubling the cost, then a competitor came in at the original price and virtually everyone switched. They offered to lower us back down when we canceled the service but they were a day late and a dollar short. They still send us letters begging us to come back.
- mox1 6y ago
  But in this case the remedy is head to your local town hall and start complaining. The "monopoly" is usually a 5ish year contract that the city sends out for bids. I'd love the ability to head to city hall and convince local leaders to switch from Comcast to X.
  - zdragnar 6y ago
    This was back when I was living in a large suburb. The whole place was divided among a half-dozen or so trash companies. I might have complained, but moving was a whole lot easier than waiting 5 years to maybe get a change. Before the monopolies were granted, people could pick their own haulers. The monopolies were granted to cut down on truck traffic- the fact that WM took iver my street was evidence enough that one complaint would not dislodge them. You might actually have more luck with complaining about your internet service. The rural area I moved to only had DSL, and the quality was so bad the town threatened to kick the carrier out if they didnt improve. Instead, they agreed to lay fiber to the entire service area, and it was only about a year after I moved in that we got it. (Way overpriced for full gigabit, of course, but thats rural internet).

kanox 6y ago

I don't think this is a monopoly problem as much as a collusion problem: multiple providers exist but many regions each have a single provider. If this is a deliberate agreement then it's extremely illegal. Where I live there are multiple high-quality ISPs at my building, the US should find a way to encourage multiple ISPs to be present in every single neighborhood. People who complain about "too many ugly wires" should be ignored: it's much better to have ugly cables on poles than slow internet.

nimish 6y ago
Most good theories of monopoly power encompass the abuse of natural monopolies via collusion
omegabravo 6y ago
Wouldn't it make sense to share the pipes the dumb light pipes and compete on service?
- somnic 6y ago
  That's more or less how it works here in New Zealand. A private company, Chorus, has a monopoly on the network itself, and can only provide the network to other ISPs and not direct to the consumer. I kind of presume there are other regulations in place, or conditions for the $1B subsidy they got for rolling out the fibre network. As it is, for a household to get a plan that offers download speeds of 700Mbps-900Mbps and no data caps, we're paying NZ$109, or about US$72/mo.
  - elithrar 6y ago
    > As it is, for a household to get a plan that offers download speeds of 700Mbps-900Mbps and no data caps, we're paying NZ$109, or about US$72/mo. Which is pretty good, relatively speaking. 330Mbps HFC Comcast is USD$74.99/month here in SF.
  - deadlyllama 6y ago
    And there's good competition, I'm paying NZ$90 for the same speed (900/400) with no data cap. Static IP. And all the NZ prices quoted include sales tax (NZ law requires this) so the equivalent US price without sales tax would be about US$52/mo.

cabalamat 6y ago

Banning states from banning municipal broadband would help (by making broadband providers less monopolisitic).

s_dev 6y ago

All incumbents have some advantage over a new player -- that doesn't mean monopoly. A good example of how Comcast will be disrupted is Starlink. Though I'll concede that US Internet infrastructure seems outdated compared to the EU. So perhaps this aging infrastructure suggest monopolistic practices as does any phenomena characterized by stagnation.