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This is a common misconception. Competition itself can't protect against net neutrality violations, because even small-marketshare ISPs can break your startup'

This is a common misconception. Competition itself can't protect against net neutrality violations, because even small-marketshare ISPs can break your startup's product for some customers. Almost none of these customers will ever even learn that the failure is the ISP's fault. And even if they do, who will switch ISPs just to use some not-yet-proven product by a new startup? Meanwhile your competitor's product will work well, either because they were too big to mess with or because they paid whatever the ISP was demanding. Maybe you should too! This is why Europe needed net neutrality rules, and actually passed stronger rules than the U.S., even though the system you describe was prevalent there. Amusingly, before the rules existed, the increased competition in Europe had actually led to more net neutrality violations there (specifically, blocking or throttling things like VOIP and BitTorrent) because ISPs in that competitive landscape were under more pressure to cut costs! My source on this is Stanford's Barbara van Schewick, who is a leading expert on net neutrality policy and whose work informed both the U.S. and E.U. rules.

holmesworcester 4y ago
For example, which video conferencing solution would you choose: the one that always works for everyone you invite, or the one that works only for 90% of the people you invite, because the other 10% are on an ISP that blocks it? You'd be under a lot of pressure to choose the solution that you know will just work for everyone. The ISP doesn't need to be anything close to a monopoly to get leverage for extortion and (in the process) mess up competition at the application layer. Yes, we need more competition, but we still need net neutrality rules. Competition improves prices and service. Net neutrality rules protect competition at the application layer, and they ensure that ISPs are really competing on how good they are at moving data, not just on how good they can get at shaking down the application layer.
- vishal0123 4y ago
  If there is competition, which ISP would you select? One that works with most of the sites or one that works with all sites? And if enough people selects the latter, and assuming blocking small percentage of site doesn't give big monetary gain to the ISP, there is no reason for ISP to behave the way you said in the example.
  - supriyo-biswas 4y ago
    Free market principles do not apply when the switching costs are non-trivial and information asymmetry makes it difficult for the consumer to know what’s really going on. Nobody is gonna complain about their ISP when the conversation is simply this: “Aw, shucks, [startup-product] doesn’t work, at least [established-product] works everywhere. The new thing is probably crap anyway.”
    - Spivak 4y ago
      I’ll be the first to talk about market failures but the mere existence of friction does mean markets stop working. There’s some amount of friction with every market interaction. There is absolutely a market failing when it comes to ISPs but it’s not really friction that’s the issue, switching ISPs in an area where you actually have options is a few phone calls and scheduling a time for someone to do your wiring. Now if every store in a 100 mile radius only had Coke, then switching to Pepsi just got a lot harder despite the two products being literal drop-in replacements for one another.
      - quickthrower2 4y ago
        Switching to pepsi is easier as it is a single dimensional change. Switching ISP will have a multitude of effects. Most unknown (how reliable is the new one? will they give me hidden extra charges? what are their TOS? are they blocking XYZ service I need down the road? do they spy on DNS traffic?) and so on. Let alone a decent amount of time on the phone organising it and potentially some early exit penalties.
        thayne 4y ago
        Also setup costs.
    - a-user-you-like 4y ago
      We need common sense regulation in this space, not what we have now. What we have now is Google fiber being told to pound sand all over the country even though they offered to pay for everything when laying down a separate, competing fiber network. Why were they rebuffed? Verizon/Att has the local gov. wrapped up. Let’s break THAT gov-enforced monopoly.
- tptacek 4y ago
  Which ISP would you pick, the one that works with every conferencing system, or the one that deliberately blocks some of those conferencing systems in the small markets where they have a monopoly? Second question: which market segment does a typical ISP care more about, the small markets where they have a monopoly, or the large markets where they compete?
  - AnthonyMouse 4y ago
    > Which ISP would you pick, the one that works with every conferencing system, or the one that deliberately blocks some of those conferencing systems in the small markets where they have a monopoly? They don't block the conferencing systems in the regions where they have an ISP monopoly, they block them for all their users because they have a monopoly on the network path to those users. The conferencing system needs to be able to reach 100% of its own customers' users or they'll be bleeding customers faster than the ISP does, so they blink first and pay, after which the ISP's customers have no reason to switch because the conferencing system is working.
    - tptacek 4y ago
      Which ISP does that? My subtext is that ISPs don't block things like this, because even though they have regional monopolies in small markets, they make a large fraction of their profits in large markets where they have to compete.
      - AnthonyMouse 4y ago
        This was a public example: https://techcrunch.com/2014/04/28/netflix-inks-peering-deal-with-verizon/ https://techcrunch.com/2014/04/28/netflix-inks-peering-deal-... But another issue is that if it isn't banned, it can happen in private. The ISP doesn't need to actually throttle the target's traffic if it can credibly threaten to and force them into a contract with an NDA, and they have the incentive to require that when their demands are unpopular, so we have no way to know how widespread it is.
        4y ago

holmesworcester 4y ago

For example, which video conferencing solution would you choose: the one that always works for everyone you invite, or the one that works only for 90% of the people you invite, because the other 10% are on an ISP that blocks it? You'd be under a lot of pressure to choose the solution that you know will just work for everyone. The ISP doesn't need to be anything close to a monopoly to get leverage for extortion and (in the process) mess up competition at the application layer. Yes, we need more competition, but we still need net neutrality rules. Competition improves prices and service. Net neutrality rules protect competition at the application layer, and they ensure that ISPs are really competing on how good they are at moving data, not just on how good they can get at shaking down the application layer.

vishal0123 4y ago
If there is competition, which ISP would you select? One that works with most of the sites or one that works with all sites? And if enough people selects the latter, and assuming blocking small percentage of site doesn't give big monetary gain to the ISP, there is no reason for ISP to behave the way you said in the example.
- supriyo-biswas 4y ago
  Free market principles do not apply when the switching costs are non-trivial and information asymmetry makes it difficult for the consumer to know what’s really going on. Nobody is gonna complain about their ISP when the conversation is simply this: “Aw, shucks, [startup-product] doesn’t work, at least [established-product] works everywhere. The new thing is probably crap anyway.”
  - Spivak 4y ago
    I’ll be the first to talk about market failures but the mere existence of friction does mean markets stop working. There’s some amount of friction with every market interaction. There is absolutely a market failing when it comes to ISPs but it’s not really friction that’s the issue, switching ISPs in an area where you actually have options is a few phone calls and scheduling a time for someone to do your wiring. Now if every store in a 100 mile radius only had Coke, then switching to Pepsi just got a lot harder despite the two products being literal drop-in replacements for one another.
    - quickthrower2 4y ago
      Switching to pepsi is easier as it is a single dimensional change. Switching ISP will have a multitude of effects. Most unknown (how reliable is the new one? will they give me hidden extra charges? what are their TOS? are they blocking XYZ service I need down the road? do they spy on DNS traffic?) and so on. Let alone a decent amount of time on the phone organising it and potentially some early exit penalties.
      - thayne 4y ago
        Also setup costs.
  - a-user-you-like 4y ago
    We need common sense regulation in this space, not what we have now. What we have now is Google fiber being told to pound sand all over the country even though they offered to pay for everything when laying down a separate, competing fiber network. Why were they rebuffed? Verizon/Att has the local gov. wrapped up. Let’s break THAT gov-enforced monopoly.
tptacek 4y ago
Which ISP would you pick, the one that works with every conferencing system, or the one that deliberately blocks some of those conferencing systems in the small markets where they have a monopoly? Second question: which market segment does a typical ISP care more about, the small markets where they have a monopoly, or the large markets where they compete?
- AnthonyMouse 4y ago
  > Which ISP would you pick, the one that works with every conferencing system, or the one that deliberately blocks some of those conferencing systems in the small markets where they have a monopoly? They don't block the conferencing systems in the regions where they have an ISP monopoly, they block them for all their users because they have a monopoly on the network path to those users. The conferencing system needs to be able to reach 100% of its own customers' users or they'll be bleeding customers faster than the ISP does, so they blink first and pay, after which the ISP's customers have no reason to switch because the conferencing system is working.
  - tptacek 4y ago
    Which ISP does that? My subtext is that ISPs don't block things like this, because even though they have regional monopolies in small markets, they make a large fraction of their profits in large markets where they have to compete.
    - AnthonyMouse 4y ago
      This was a public example: https://techcrunch.com/2014/04/28/netflix-inks-peering-deal-with-verizon/ https://techcrunch.com/2014/04/28/netflix-inks-peering-deal-... But another issue is that if it isn't banned, it can happen in private. The ISP doesn't need to actually throttle the target's traffic if it can credibly threaten to and force them into a contract with an NDA, and they have the incentive to require that when their demands are unpopular, so we have no way to know how widespread it is.
      - 4y ago