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I took "The commission will not seek to immediately reclassify Internet service as a utility. Mr. Wheeler said that the commission will retain the right to do s

I took "The commission will not seek to immediately reclassify Internet service as a utility. Mr. Wheeler said that the commission will retain the right to do so, however, if its new rules are approved and appear not to be working adequately." to mean that they'll be using the utility-classification as a lingering threat if the ISPs don't follow along.

rhizome 13y ago
It's odd to see utility status classified as a punishment for industry. Shouldn't it refer to the technology (water delivery, electricity, possibly internet) and its role in the customers' lives?
- rayiner 13y ago
  It is in a way a punishment. What makes a company profitable? Creating things people want and need. What makes them really profitable? Creating things people really want and need. But if you build something people really need, you get classified as a utility, which limits your ability to profit from what you're building and also drives out most of the spark from the industry. Our water pipes are mostly 100+ years old, our electric grid is ancient, most of our power is provided by plants that are decades old, etc. Chicago decommissioned a 110 year old coal plant in 2012. Our utilities are not exactly places bustling with innovation, new ideas, new technologies. Regulation has effectively killed the once promising nuclear industry, for example.
  - lukeschlather 13y ago
    Yeah, there are many things that killed the nuclear industry, but I've never heard anyone claim it was too little regulation. ( I mean, yes, the regulations outlawing new nuclear plants obviously, but those regulations came about because most people judge the previous regulations to be inadequate. I don't agree with them, but I don't think deregulating the nuclear industry would help anyone. )
    - rayiner 13y ago
      Too much regulation. The process made it inordinately expensive to bring new nuclear technology to market. I'm not knee jerk opposed to regulation. But the best regulation identifies a market failure and addresses it in targeted way. Net neutrality regulation doesn't do that. It just implements some group's ideal of what the industry should look like.
      - jbooth 13y ago
        Hang on a second, in what way is "last-mile connectivity providers cannot selectively extort content providers based on business considerations" NOT identifying and addressing a market failure? I pay for the pipes on my end, I want the same data-rate regardless of whether the data originally came from a netflix server or a NBC-affiliated company's server. If netflix needs to beef up their peering arrangements in order to get the data to comcast's network, that's one thing, but they absolutely should not have to pay an additional fee to comcast to protect themselves from being penalized.
        rayiner 13y ago
        That's not a market failure, but that's rather using a market failure as a hook impose a particular ideology about what the internet should look like. Hypothetical: say there was no last mile monopoly. The coax into your house was owned by the municipality, which allowed competing providers to plug in and provide the rest of the network. Would that eliminate the need for net neutrality regulation? No: companies could still pay ISP's to prioritize their packets all the way up to the municipally-owned coax into the customer's house. In other words, the regulation has nothing to do with the market failure ostensibly justifying it. Being able to pay other companies to give you better service is an intrinsic advantage to being big, and is not the product of a market failure. For example, Amazon works out a special deal with the USPS for Sunday deliveries. That still gives a huge benefit to Amazon versus smaller competitors who can't afford to pay up. Being small comes with penalties, and the FCC shouldn't impose an ideological view of the internet that artificially removes these disadvantages.
  - rhizome 13y ago
    When was the last time a water or power company went out of business? I'm not sure "punishment" is an appropriate term for guaranteed incumbency.
    - rayiner 13y ago
      How many talented people dream of going to work at the water company?
      - Dylan16807 13y ago
        How many talented people dream of working at a household internet service provider?
        rayiner 13y ago
        I work in the shadow of Comcast Center, and here in Phila plenty of talented people would love to go work for them.
      - chc 13y ago
        How many talented people dream of going to work at Comcast today?
      - mr_luc 13y ago
        Honestly? Probably the same number that dream of going to work at the intensely-hated digital utilities, aka cable companies. Who in the world has ever said "My dream is to work at Time Warner Cable"? I wouldn't tell people I worked for them. My house might get egged. Hell, I wouldn't be surprised if companies that design and operate water treatment plants aren't often more innovative than a company like TWC that has no competition on many of its markets.
        rayiner 13y ago
        That's a very software bubble view of things. Since 2002, the internet speed at my parents' house in Virginia has increased from about 256 kbps (SDSL) to 50 mbps (fiber). That increase of 100x isn't quite in keeping with Moore's law, but it's pretty damn impressive and talented people at those "intensely-hated digital utilities" are the ones behind it, backed up by the tens of billions of dollars those companies are throwing at the problem.
  - AnIrishDuck 13y ago
    I'm not sure this is a fair assessment. There's been tons of research into nuclear power, for example. Look at the generation IV reactor designs [1]. And there's been tons of interest and investment in cleaner electric power alternatives [2]. The examples you cite (coal plants staying open forever, water pipes, etc) are massive capital investments. That's the primary reason they've stayed open / haven't changed for so long, once you spend that much money you want to milk it for every penny it's worth. Utility regulation is burdensome and costly, but I don't think it necessarily kills innovation in industry like you intimate. 1. http://en.wikipedia.org/wiki/Generation_IV_reactor http://en.wikipedia.org/wiki/Generation_IV_reactor 2. https://www.americaspower.org/our-commitment-clean-energy-future https://www.americaspower.org/our-commitment-clean-energy-fu...
    - chc 13y ago
      > I'm not sure this is a fair assessment. There's been tons of research into nuclear power, for example. Look at the generation IV reactor designs [1]. Research isn't industry. The regulations don't prevent people from designing reactors; just from building nuclear power plants.
      - tbrownaw 13y ago
        I think that's more due to the NRC and the NIMBYs, than it is due to being a utility.
        chc 13y ago
        I don't think the statement "The Nuclear Regulatory Commission is the reason nuclear power hasn't taken off" is incompatible with the statement "Regulation has effectively killed the once promising nuclear industry."
        tbrownaw 13y ago
        Right. But the relevant regulations are because people are scared of the word "nuclear", rather than because electricity is a utility.
  - king_jester 13y ago
    > Our water pipes are mostly 100+ years old, our electric grid is ancient, most of our power is provided by plants that are decades old, etc. Chicago decommissioned a 110 year old coal plant in 2012. Our utilities are not exactly places bustling with innovation, new ideas, new technologies. Regulation has effectively killed the once promising nuclear industry, for example. In a privatized scheme, it is unlikely that infrastructure would be upgraded unless those upgrades paid for themselves in some way or were compelled by law. We are already seeing that telcos don't seek to improve the quality of infrastructure in many cases and instead seek a way to increase margins without having to make significantly expenditures on infrastructure.
  - Iftheshoefits 13y ago
    You should probably back up your extraordinary claims with evidence, if you want to be believed (by anybody who isn't already anti-regulation/government).
  - 001sky 13y ago
    But if you build something people really need, you get classified as a utility This is misleading oversimpliication. The issue is the viability of competition, not really the "need" of the consumer. In the case of cable/telcos, competition is precluded by a variety of non-market barriers. These barriers create problems for functioning markets to capitalize competing entities, regardless of availability of capital, technology, or managemnet skill. So, in a sense the government is responsible for the "mess" of limited cable and telco competition. And they are (as a result) on the hook to limit the damage of their anti-competitive public policy. The logic of limiting competition is some variation on the theme of "natural monopolies"; this is the origin of "utility status". In other words, it is almost strictly speaking a supply side issue and a government policy issue. The levele of demand is really only a second-order part of the equation; although internect acesss is being blurred in a sense of becoming a <perceived> public good (like infrastructre). But in a certain sense, it is not really a public good. The latter are typical removed from the market altogether. ie, Roads are for the most part free. Telephone and cable service, have not really been treated this way. What is sort of different is that the Internet has been priced more like a road thank like cable service. The cable companies are of the view they are "entitled" to price it like a cable service because their strategy is to monopolize access and to extract rents from their "entitlements". The public interest, from a cultural and economic perspective, therefore of what goes over the pipes can be sepertated from the pipes themselves. The pipes should and could be treated like "servicies" for which people pay. But the cable companies could and most likely should be denied and access to the data and the economics that flow down the pipes. The government could legislate the cable companies asset value to zero, if they need to. They could pass legislation to destroy copyright's perpetuity value {etc}. There is plenty of leverage to bring the cable companies to bear to a public interest position. At least technically. In reality, we know who is already in the pocket of the cable companies though +D.

rhizome 13y ago

It's odd to see utility status classified as a punishment for industry. Shouldn't it refer to the technology (water delivery, electricity, possibly internet) and its role in the customers' lives?

rayiner 13y ago
It is in a way a punishment. What makes a company profitable? Creating things people want and need. What makes them really profitable? Creating things people really want and need. But if you build something people really need, you get classified as a utility, which limits your ability to profit from what you're building and also drives out most of the spark from the industry. Our water pipes are mostly 100+ years old, our electric grid is ancient, most of our power is provided by plants that are decades old, etc. Chicago decommissioned a 110 year old coal plant in 2012. Our utilities are not exactly places bustling with innovation, new ideas, new technologies. Regulation has effectively killed the once promising nuclear industry, for example.
- lukeschlather 13y ago
  Yeah, there are many things that killed the nuclear industry, but I've never heard anyone claim it was too little regulation. ( I mean, yes, the regulations outlawing new nuclear plants obviously, but those regulations came about because most people judge the previous regulations to be inadequate. I don't agree with them, but I don't think deregulating the nuclear industry would help anyone. )
  - rayiner 13y ago
    Too much regulation. The process made it inordinately expensive to bring new nuclear technology to market. I'm not knee jerk opposed to regulation. But the best regulation identifies a market failure and addresses it in targeted way. Net neutrality regulation doesn't do that. It just implements some group's ideal of what the industry should look like.
    - jbooth 13y ago
      Hang on a second, in what way is "last-mile connectivity providers cannot selectively extort content providers based on business considerations" NOT identifying and addressing a market failure? I pay for the pipes on my end, I want the same data-rate regardless of whether the data originally came from a netflix server or a NBC-affiliated company's server. If netflix needs to beef up their peering arrangements in order to get the data to comcast's network, that's one thing, but they absolutely should not have to pay an additional fee to comcast to protect themselves from being penalized.
      - rayiner 13y ago
        That's not a market failure, but that's rather using a market failure as a hook impose a particular ideology about what the internet should look like. Hypothetical: say there was no last mile monopoly. The coax into your house was owned by the municipality, which allowed competing providers to plug in and provide the rest of the network. Would that eliminate the need for net neutrality regulation? No: companies could still pay ISP's to prioritize their packets all the way up to the municipally-owned coax into the customer's house. In other words, the regulation has nothing to do with the market failure ostensibly justifying it. Being able to pay other companies to give you better service is an intrinsic advantage to being big, and is not the product of a market failure. For example, Amazon works out a special deal with the USPS for Sunday deliveries. That still gives a huge benefit to Amazon versus smaller competitors who can't afford to pay up. Being small comes with penalties, and the FCC shouldn't impose an ideological view of the internet that artificially removes these disadvantages.
- rhizome 13y ago
  When was the last time a water or power company went out of business? I'm not sure "punishment" is an appropriate term for guaranteed incumbency.
  - rayiner 13y ago
    How many talented people dream of going to work at the water company?
    - Dylan16807 13y ago
      How many talented people dream of working at a household internet service provider?
      - rayiner 13y ago
        I work in the shadow of Comcast Center, and here in Phila plenty of talented people would love to go work for them.
    - chc 13y ago
      How many talented people dream of going to work at Comcast today?
    - mr_luc 13y ago
      Honestly? Probably the same number that dream of going to work at the intensely-hated digital utilities, aka cable companies. Who in the world has ever said "My dream is to work at Time Warner Cable"? I wouldn't tell people I worked for them. My house might get egged. Hell, I wouldn't be surprised if companies that design and operate water treatment plants aren't often more innovative than a company like TWC that has no competition on many of its markets.
      - rayiner 13y ago
        That's a very software bubble view of things. Since 2002, the internet speed at my parents' house in Virginia has increased from about 256 kbps (SDSL) to 50 mbps (fiber). That increase of 100x isn't quite in keeping with Moore's law, but it's pretty damn impressive and talented people at those "intensely-hated digital utilities" are the ones behind it, backed up by the tens of billions of dollars those companies are throwing at the problem.
- AnIrishDuck 13y ago
  I'm not sure this is a fair assessment. There's been tons of research into nuclear power, for example. Look at the generation IV reactor designs [1]. And there's been tons of interest and investment in cleaner electric power alternatives [2]. The examples you cite (coal plants staying open forever, water pipes, etc) are massive capital investments. That's the primary reason they've stayed open / haven't changed for so long, once you spend that much money you want to milk it for every penny it's worth. Utility regulation is burdensome and costly, but I don't think it necessarily kills innovation in industry like you intimate. 1. http://en.wikipedia.org/wiki/Generation_IV_reactor http://en.wikipedia.org/wiki/Generation_IV_reactor 2. https://www.americaspower.org/our-commitment-clean-energy-future https://www.americaspower.org/our-commitment-clean-energy-fu...
  - chc 13y ago
    > I'm not sure this is a fair assessment. There's been tons of research into nuclear power, for example. Look at the generation IV reactor designs [1]. Research isn't industry. The regulations don't prevent people from designing reactors; just from building nuclear power plants.
    - tbrownaw 13y ago
      I think that's more due to the NRC and the NIMBYs, than it is due to being a utility.
      - chc 13y ago
        I don't think the statement "The Nuclear Regulatory Commission is the reason nuclear power hasn't taken off" is incompatible with the statement "Regulation has effectively killed the once promising nuclear industry."
        tbrownaw 13y ago
        Right. But the relevant regulations are because people are scared of the word "nuclear", rather than because electricity is a utility.
- king_jester 13y ago
  > Our water pipes are mostly 100+ years old, our electric grid is ancient, most of our power is provided by plants that are decades old, etc. Chicago decommissioned a 110 year old coal plant in 2012. Our utilities are not exactly places bustling with innovation, new ideas, new technologies. Regulation has effectively killed the once promising nuclear industry, for example. In a privatized scheme, it is unlikely that infrastructure would be upgraded unless those upgrades paid for themselves in some way or were compelled by law. We are already seeing that telcos don't seek to improve the quality of infrastructure in many cases and instead seek a way to increase margins without having to make significantly expenditures on infrastructure.
- Iftheshoefits 13y ago
  You should probably back up your extraordinary claims with evidence, if you want to be believed (by anybody who isn't already anti-regulation/government).
- 001sky 13y ago
  But if you build something people really need, you get classified as a utility This is misleading oversimpliication. The issue is the viability of competition, not really the "need" of the consumer. In the case of cable/telcos, competition is precluded by a variety of non-market barriers. These barriers create problems for functioning markets to capitalize competing entities, regardless of availability of capital, technology, or managemnet skill. So, in a sense the government is responsible for the "mess" of limited cable and telco competition. And they are (as a result) on the hook to limit the damage of their anti-competitive public policy. The logic of limiting competition is some variation on the theme of "natural monopolies"; this is the origin of "utility status". In other words, it is almost strictly speaking a supply side issue and a government policy issue. The levele of demand is really only a second-order part of the equation; although internect acesss is being blurred in a sense of becoming a <perceived> public good (like infrastructre). But in a certain sense, it is not really a public good. The latter are typical removed from the market altogether. ie, Roads are for the most part free. Telephone and cable service, have not really been treated this way. What is sort of different is that the Internet has been priced more like a road thank like cable service. The cable companies are of the view they are "entitled" to price it like a cable service because their strategy is to monopolize access and to extract rents from their "entitlements". The public interest, from a cultural and economic perspective, therefore of what goes over the pipes can be sepertated from the pipes themselves. The pipes should and could be treated like "servicies" for which people pay. But the cable companies could and most likely should be denied and access to the data and the economics that flow down the pipes. The government could legislate the cable companies asset value to zero, if they need to. They could pass legislation to destroy copyright's perpetuity value {etc}. There is plenty of leverage to bring the cable companies to bear to a public interest position. At least technically. In reality, we know who is already in the pocket of the cable companies though +D.