6 ms·

The internet has flourished because of a lack of regulation, not despite a lack of regulation. Let the companies duke it out and keep the government out of it.

by viggity 12y ago

The internet has flourished because of a lack of regulation, not despite a lack of regulation. Let the companies duke it out and keep the government out of it. If I were in netflix's shoes I'd just charge each comcast customer enough extra to cover the surcharge and mark it clearly on their bill. Let comcast deal with the deluge of complaints to their call centers.

crashandburn4 12y ago
I actually really like the netflix idea but I still think net neutrality is too important to not be regulated, I wish netflix or someone similar would say "this is what we are going to do, here is comcasts customer support number, here is the FCC complaints department/whatever and here is a petition" in advance of the bill and actually mobilize some more people to do things and complain.
- ArtDev 12y ago
  Where is the army of lobbyists fighting for the internet? Didn't we learn anything from SOPA?
  - jchung 12y ago
    I think the answer you're looking for is: "Money".
AnthonyMouse 12y ago
> If I were in netflix's shoes I'd just charge each comcast customer enough extra to cover the surcharge and mark it clearly on their bill. Let comcast deal with the deluge of complaints to their call centers. Nothing is more clear than the fact that Comcast cares nothing about customer service. American ISPs regularly appear at the bottom of customer satisfaction surveys. They just don't care. Putting the charge on the customer's Netflix bill might be effective if it led the customer to conclude that switching ISPs in order to remove the charge would be cost effective. But when the customer has no viable alternative ISP, all it does is make Netflix more expensive. Since presumably Netflix is already charging the profit-maximizing price for its service, adding an additional charge would do nothing for Netflix but exceed the profit-maximizing price and cause it to lose money.
- rayiner 12y ago
  The "no viable alternative ISP's" thing really isn't true as often as people on this site make it out to be. DSL is almost always available if cable is available. And some cities don't raise stupid regulatory barriers and have some real competition. In my zip code in Chicago, we had Comcast, RCN, AT&T U-Verse (with FTTN). Heck, there's a ton of FIOS households in the shadow of Comcast Center in Philadelphia. If you really just have one ISP in a substantially-sized city, go blame your municipal government because it's almost always their fault. I just have Comcast or 1.5 mbps DSL here in Wilmington, and it's 100% the government's fault. Verizon wanted to build FIOS here, but the city killed the deal with ridiculous demands: http://www.dslreports.com/shownews/Dont-Actually-Demand-Anything-Of-Verizon-Or-You-Wont-Get-FiOS-107751 http://www.dslreports.com/shownews/Dont-Actually-Demand-Anyt....
  - AnthonyMouse 12y ago
    I don't think you can put all the blame on local governments. A huge part of the problem is structural. Having two ISPs isn't actually competition. Conscious parallelism and other signaling mechanisms allow them to collude implicitly without violating antitrust laws. If you have two alternatives but both of them behave identically (e.g. both charge Netflix for peering) then it isn't really much of a choice. In order to have enough competition that the free market can behave as it does in capitalist philosophy you would need to have a dozen or more separate ISPs to choose from. But building that many competing networks is a waste of resources, and to recover their costs each ISP would then have to charge $500+/month because the cost of the network (which has significant costs that are per mile rather than per customer) would have to be amortized over far fewer customers. The way you can get the desired level of competition without building duplicative infrastructure is local loop unbundling (with a prohibition on the entity providing the local loop competing for customers against the entities leasing it). But that isn't any less of a regulatory burden than network neutrality.
    - rayiner 12y ago
      You don't need a dozen or more competitors to have a reasonable level of competition. You just need a few, targeting the right market segments. Cities are almost exclusively responsible for preventing those few competitors from arising. Here is (I believe) the current franchise agreement between Wilmington, DE and Comcast: http://www.wilmingtonde.gov/docs/1320/3716Rev1.pdf http://www.wilmingtonde.gov/docs/1320/3716Rev1.pdf. Note Section 1(F), that it's a non-exclusive franchise. Then note 2(A)-(C). 2(C) states that Comcast must offer service in any part of the city with at least 40 residences per linear mile of cable plant, without cost-sharing with residents. It also extracts almost $2 million in grants, on top of the franchise fee, which is 5% of gross. Basic cable here in Wilmington is $13.50/month (which is usually regulated by state law). This is usually a regulated rate set by state law. Serving the least dense linear mile at basic rates therefore offers a potential maximum revenue of $540/month. Out of that comes recouping your capital costs, marketing, bill collection, etc. Wilmington is a city of ~70k people, and about 2/3 of the land area is in census districts that have a poverty rate in excess of 30%, and a good part of the downtown core is in districts that have a poverty rate of around 50%. These are not people buying $150/month cable packages. Now, say you're an enterprising new VC-funded fiber internet company. You think: you know, there's a few areas in the western part of the city and downtown that have the right combination of income level and density to support premium internet service profitably. If the city let you build in just those areas, it'd be a huge boon to competition against Comcast, because it hits them among the subset of customers that actually justify their business in the city. This is true even though only a relatively small number of customers may have an alternative to Comcast. You don't get perfect competition this way, but it weeds out a lot of the obviously bad behavior. Instead, the city says: if you want to operate here at all, you have to operate in all the marginally profitable or outright unprofitable areas. So the returns aren't there, the VC's throw their money elsewhere, and Comcast gets to keep their de-facto monopoly.
mikeash 12y ago
I'd be happy to let the companies duke it out if there was any sort of meaningful competition. The problem is that, in most places, broadband is a monopoly or at best a duopoly. Currently, I have two choices: Verizon or Cox. Luckily, Verizon's FiOS is pretty good, so I'm happy, but it would be pretty easy to get screwed. Where I used to live, there was one choice for broadband: Comcast. Verizon might have been an option, but they only offered DSL, offered a max of 1.5Mbps speed, and they couldn't even tell me for sure whether or not the service was even available for me or not. There are a lot of people for whom it's Comcast or no broadband internet at all, and that gives Comcast way too much power. Instead of "duke it out" it becomes a completely one-sided fight where Comcast just holds the other guy down and dictates terms. The only thing restraining them at all is the fear of government action if they go too far.
LandoCalrissian 12y ago
The internet has flourished because of sane peering agreements. Net Neutrality just makes that the standard instead of implied. This goes way beyond just building in costs to your subscribers, what about new start ups with bandwidth heavy ideas? What if Google or Netflix get in a huge fight with Comcast when they can't reach an agreement? Do consumers just lose out on being able to view that content? It's going to turn the web into a fractured mess like cable television, where everyone has to pay to play and the only winners being giant telecoms. The way the 'unregulated web' works now will never return, and we will all lose out for it. The argument you are making is purely academic, it will have no reflection of the new bifurcated web that will exist. Where content is completely controlled by gatekeepers demanding tolls at every step of the way.

by viggity 12y ago

crashandburn4 12y ago

I actually really like the netflix idea but I still think net neutrality is too important to not be regulated, I wish netflix or someone similar would say "this is what we are going to do, here is comcasts customer support number, here is the FCC complaints department/whatever and here is a petition" in advance of the bill and actually mobilize some more people to do things and complain.

ArtDev 12y ago
Where is the army of lobbyists fighting for the internet? Didn't we learn anything from SOPA?
- jchung 12y ago
  I think the answer you're looking for is: "Money".

AnthonyMouse 12y ago

> If I were in netflix's shoes I'd just charge each comcast customer enough extra to cover the surcharge and mark it clearly on their bill. Let comcast deal with the deluge of complaints to their call centers. Nothing is more clear than the fact that Comcast cares nothing about customer service. American ISPs regularly appear at the bottom of customer satisfaction surveys. They just don't care. Putting the charge on the customer's Netflix bill might be effective if it led the customer to conclude that switching ISPs in order to remove the charge would be cost effective. But when the customer has no viable alternative ISP, all it does is make Netflix more expensive. Since presumably Netflix is already charging the profit-maximizing price for its service, adding an additional charge would do nothing for Netflix but exceed the profit-maximizing price and cause it to lose money.

rayiner 12y ago
The "no viable alternative ISP's" thing really isn't true as often as people on this site make it out to be. DSL is almost always available if cable is available. And some cities don't raise stupid regulatory barriers and have some real competition. In my zip code in Chicago, we had Comcast, RCN, AT&T U-Verse (with FTTN). Heck, there's a ton of FIOS households in the shadow of Comcast Center in Philadelphia. If you really just have one ISP in a substantially-sized city, go blame your municipal government because it's almost always their fault. I just have Comcast or 1.5 mbps DSL here in Wilmington, and it's 100% the government's fault. Verizon wanted to build FIOS here, but the city killed the deal with ridiculous demands: http://www.dslreports.com/shownews/Dont-Actually-Demand-Anything-Of-Verizon-Or-You-Wont-Get-FiOS-107751 http://www.dslreports.com/shownews/Dont-Actually-Demand-Anyt....
- AnthonyMouse 12y ago
  I don't think you can put all the blame on local governments. A huge part of the problem is structural. Having two ISPs isn't actually competition. Conscious parallelism and other signaling mechanisms allow them to collude implicitly without violating antitrust laws. If you have two alternatives but both of them behave identically (e.g. both charge Netflix for peering) then it isn't really much of a choice. In order to have enough competition that the free market can behave as it does in capitalist philosophy you would need to have a dozen or more separate ISPs to choose from. But building that many competing networks is a waste of resources, and to recover their costs each ISP would then have to charge $500+/month because the cost of the network (which has significant costs that are per mile rather than per customer) would have to be amortized over far fewer customers. The way you can get the desired level of competition without building duplicative infrastructure is local loop unbundling (with a prohibition on the entity providing the local loop competing for customers against the entities leasing it). But that isn't any less of a regulatory burden than network neutrality.
  - rayiner 12y ago
    You don't need a dozen or more competitors to have a reasonable level of competition. You just need a few, targeting the right market segments. Cities are almost exclusively responsible for preventing those few competitors from arising. Here is (I believe) the current franchise agreement between Wilmington, DE and Comcast: http://www.wilmingtonde.gov/docs/1320/3716Rev1.pdf http://www.wilmingtonde.gov/docs/1320/3716Rev1.pdf. Note Section 1(F), that it's a non-exclusive franchise. Then note 2(A)-(C). 2(C) states that Comcast must offer service in any part of the city with at least 40 residences per linear mile of cable plant, without cost-sharing with residents. It also extracts almost $2 million in grants, on top of the franchise fee, which is 5% of gross. Basic cable here in Wilmington is $13.50/month (which is usually regulated by state law). This is usually a regulated rate set by state law. Serving the least dense linear mile at basic rates therefore offers a potential maximum revenue of $540/month. Out of that comes recouping your capital costs, marketing, bill collection, etc. Wilmington is a city of ~70k people, and about 2/3 of the land area is in census districts that have a poverty rate in excess of 30%, and a good part of the downtown core is in districts that have a poverty rate of around 50%. These are not people buying $150/month cable packages. Now, say you're an enterprising new VC-funded fiber internet company. You think: you know, there's a few areas in the western part of the city and downtown that have the right combination of income level and density to support premium internet service profitably. If the city let you build in just those areas, it'd be a huge boon to competition against Comcast, because it hits them among the subset of customers that actually justify their business in the city. This is true even though only a relatively small number of customers may have an alternative to Comcast. You don't get perfect competition this way, but it weeds out a lot of the obviously bad behavior. Instead, the city says: if you want to operate here at all, you have to operate in all the marginally profitable or outright unprofitable areas. So the returns aren't there, the VC's throw their money elsewhere, and Comcast gets to keep their de-facto monopoly.

mikeash 12y ago

I'd be happy to let the companies duke it out if there was any sort of meaningful competition. The problem is that, in most places, broadband is a monopoly or at best a duopoly. Currently, I have two choices: Verizon or Cox. Luckily, Verizon's FiOS is pretty good, so I'm happy, but it would be pretty easy to get screwed. Where I used to live, there was one choice for broadband: Comcast. Verizon might have been an option, but they only offered DSL, offered a max of 1.5Mbps speed, and they couldn't even tell me for sure whether or not the service was even available for me or not. There are a lot of people for whom it's Comcast or no broadband internet at all, and that gives Comcast way too much power. Instead of "duke it out" it becomes a completely one-sided fight where Comcast just holds the other guy down and dictates terms. The only thing restraining them at all is the fear of government action if they go too far.

LandoCalrissian 12y ago

The internet has flourished because of sane peering agreements. Net Neutrality just makes that the standard instead of implied. This goes way beyond just building in costs to your subscribers, what about new start ups with bandwidth heavy ideas? What if Google or Netflix get in a huge fight with Comcast when they can't reach an agreement? Do consumers just lose out on being able to view that content? It's going to turn the web into a fractured mess like cable television, where everyone has to pay to play and the only winners being giant telecoms. The way the 'unregulated web' works now will never return, and we will all lose out for it. The argument you are making is purely academic, it will have no reflection of the new bifurcated web that will exist. Where content is completely controlled by gatekeepers demanding tolls at every step of the way.