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As a fiscally conservative technology person who got my first modem in 1985, I could simultaneously not be happier with how things turned out with the FCC and h

by 300bps 12y ago

As a fiscally conservative technology person who got my first modem in 1985, I could simultaneously not be happier with how things turned out with the FCC and horrified how fellow conservatives seem to interpret it. It is disheartening how much FUD is being spread by conservatives on the anti-NN side.

madman86 12y ago
FUD seems to be their selling point for just about every policy...
rayiner 12y ago
Why do you dismiss the anti-NN concerns as FUD? Conservatives are worried about what impact NN will have on infrastructure investment, and the fact that reclassification gets us one step closer to rate setting, etc, and other powers under Title II. Both concerns are more "real," more rooted in actual observable practice, than the specter raised by the pro-NN people of a tiered, pay-for-pay internet. The incentive concern is real. What incentive will telecom companies have to build the wireline networks that enable next-generation of web services if they can't make enough money to justify the investment? The liberal response to this point is either myth or fantasy. Myth, in that they assume that wireline is insanely profitable, and that fat Verizon shareholders will just have to squeeze their belts a bit. In reality, the operating margin of Verizon's wireline division is 2-3%.[1] Fantasy, because they alternatively posit that municipal systems will take up the slack. How states and cities that are broke, crushed under liberal public union pension obligations, will pay for these municipal networks is up in the air. The worry of further regulation is also real. Telecom is already a morass of regulation, largely to fulfill liberal concerns. For example, there is already rate-setting. Municipal governments require cable companies to offer basic cable at low regulated rates. Since it doesn't cost appreciably less to offer basic cable than more expensive packages, this sets an important constraint on the economics of the network. Huge amounts of wealth transfer from urban to rural areas are already baked into the system at the federal and state levels. And build-out restrictions, preventing upstart competitors from stealing away lucrative tracts of incumbants' service areas, are already stifling competition. The HN crowd acts like NN is being added on top of an otherwise pristine regulatory regime, but in reality it's just one more straw on a giant pile of hay. None of this is FUD. The fact that these points are also raised by the telecom companies, who have a monetary interest in avoiding NN, does not make them FUD any more than the pro-NN points are FUD because they're raised by web-tech companies. I'm not an ideologue. I'd be fine with, for example, the U.K. approach. But what that would mean, which most people on HN don't know, would be putting AT&T back together and letting them enjoy monopoly profits. Take a look at BT Openreach's financials sometime: http://www.digitallook.com/news/news-and-announcements/retail-and-openreach-stand-out-at-bt-margins-rise--update--dl20468319.html http://www.digitallook.com/news/news-and-announcements/retai.... Their EBITDA margin is a staggering 45%, double that of Verizon wireline, significantly higher than Comcast's whole operation, and higher than AT&T and Verizon's wireless divisions. [1] http://www.verizonwireless.com/news/article/2012/01/pr2012-01-24.html http://www.verizonwireless.com/news/article/2012/01/pr2012-0....
- dublinben 12y ago
  >What incentive will telecom companies have to build the wireline networks that enable next-generation of web services if they can't make enough money to justify the investment? A 97% profit margin[0] on those very same services ought to be enough of an incentive for any business. [0]http://www.huffingtonpost.com/bruce-kushnick/time-warner-cables-97-pro_b_6591916.html http://www.huffingtonpost.com/bruce-kushnick/time-warner-cab...
  - rayiner 12y ago
    That article takes the $5,822 million in "high speed data" revenue on page 39, and subtracts the $175 million in cost of "high speed data" on page 42, and concludes that TWC's profit margin is 97%. The author ignores the other cost components in that chart. But read footnote (a): "Employee and other direct operating costs include costs directly associated with the delivery of the Company’s video, high-speed data, voice and other services to subscribers and the maintenance of the Company’s delivery systems." The "delivery system" is the wires that carry the video, data, and voice services, and the operating costs for that total $4.3 billion. Even leaving aside that egregious error, that calculation excludes interest, depreciation, taxes, and all the other numbers that must be taken out to get to "profit margin."
  - danielweber 12y ago
    "97% profit margin" is said by people who don't understand how money works. If I spend $8 billion building an OS and sell it for $80 on an 80 cent CD, those same people would say I had a 99% profit margin.
    - edc117 12y ago
      I'll agree with you that the above is a (possibly gross) simplification, but these companies aren't struggling, and maybe they should be.
      - rayiner 12y ago
        See my comment above: the number isn't just a gross simplification, it's journalistic malpractice. And the issue isn't whether the companies are struggling. Nobody feels bad for Comcast's CEO's kids. The issue is the incentives to build telecom infrastructure relative to other opportunities in the economy for the billions of dollars needed. There's no free lunch. If the writing is on the wall for wireline profitability, companies like Comcast will take their capital and buy companies like NBC instead of investing in their network. If you make it illegal for them to do so, their shareholders will force them to do stock buybacks with their capital, then take that money and invest in whoever does buy NBC.
coldpie 12y ago
Conservatives in the US gov't manage to be incorrect about many objective things (AGW, evolution), so it's not too surprising that they manage to fuck up on subjective things, too (net neutrality, role of religion in gov't).
mikeash 12y ago
Your fellow "conservatives" are mostly such in name only. They've been convinced that the Republican Party is the conservative party despite the fact that they're anything but, and they mold their positions to match. It's sad.

by 300bps 12y ago

madman86 12y ago

FUD seems to be their selling point for just about every policy...

rayiner 12y ago

Why do you dismiss the anti-NN concerns as FUD? Conservatives are worried about what impact NN will have on infrastructure investment, and the fact that reclassification gets us one step closer to rate setting, etc, and other powers under Title II. Both concerns are more "real," more rooted in actual observable practice, than the specter raised by the pro-NN people of a tiered, pay-for-pay internet. The incentive concern is real. What incentive will telecom companies have to build the wireline networks that enable next-generation of web services if they can't make enough money to justify the investment? The liberal response to this point is either myth or fantasy. Myth, in that they assume that wireline is insanely profitable, and that fat Verizon shareholders will just have to squeeze their belts a bit. In reality, the operating margin of Verizon's wireline division is 2-3%.[1] Fantasy, because they alternatively posit that municipal systems will take up the slack. How states and cities that are broke, crushed under liberal public union pension obligations, will pay for these municipal networks is up in the air. The worry of further regulation is also real. Telecom is already a morass of regulation, largely to fulfill liberal concerns. For example, there is already rate-setting. Municipal governments require cable companies to offer basic cable at low regulated rates. Since it doesn't cost appreciably less to offer basic cable than more expensive packages, this sets an important constraint on the economics of the network. Huge amounts of wealth transfer from urban to rural areas are already baked into the system at the federal and state levels. And build-out restrictions, preventing upstart competitors from stealing away lucrative tracts of incumbants' service areas, are already stifling competition. The HN crowd acts like NN is being added on top of an otherwise pristine regulatory regime, but in reality it's just one more straw on a giant pile of hay. None of this is FUD. The fact that these points are also raised by the telecom companies, who have a monetary interest in avoiding NN, does not make them FUD any more than the pro-NN points are FUD because they're raised by web-tech companies. I'm not an ideologue. I'd be fine with, for example, the U.K. approach. But what that would mean, which most people on HN don't know, would be putting AT&T back together and letting them enjoy monopoly profits. Take a look at BT Openreach's financials sometime: http://www.digitallook.com/news/news-and-announcements/retail-and-openreach-stand-out-at-bt-margins-rise--update--dl20468319.html http://www.digitallook.com/news/news-and-announcements/retai.... Their EBITDA margin is a staggering 45%, double that of Verizon wireline, significantly higher than Comcast's whole operation, and higher than AT&T and Verizon's wireless divisions. [1] http://www.verizonwireless.com/news/article/2012/01/pr2012-01-24.html http://www.verizonwireless.com/news/article/2012/01/pr2012-0....

dublinben 12y ago
>What incentive will telecom companies have to build the wireline networks that enable next-generation of web services if they can't make enough money to justify the investment? A 97% profit margin[0] on those very same services ought to be enough of an incentive for any business. [0]http://www.huffingtonpost.com/bruce-kushnick/time-warner-cables-97-pro_b_6591916.html http://www.huffingtonpost.com/bruce-kushnick/time-warner-cab...
- rayiner 12y ago
  That article takes the $5,822 million in "high speed data" revenue on page 39, and subtracts the $175 million in cost of "high speed data" on page 42, and concludes that TWC's profit margin is 97%. The author ignores the other cost components in that chart. But read footnote (a): "Employee and other direct operating costs include costs directly associated with the delivery of the Company’s video, high-speed data, voice and other services to subscribers and the maintenance of the Company’s delivery systems." The "delivery system" is the wires that carry the video, data, and voice services, and the operating costs for that total $4.3 billion. Even leaving aside that egregious error, that calculation excludes interest, depreciation, taxes, and all the other numbers that must be taken out to get to "profit margin."
- danielweber 12y ago
  "97% profit margin" is said by people who don't understand how money works. If I spend $8 billion building an OS and sell it for $80 on an 80 cent CD, those same people would say I had a 99% profit margin.
  - edc117 12y ago
    I'll agree with you that the above is a (possibly gross) simplification, but these companies aren't struggling, and maybe they should be.
    - rayiner 12y ago
      See my comment above: the number isn't just a gross simplification, it's journalistic malpractice. And the issue isn't whether the companies are struggling. Nobody feels bad for Comcast's CEO's kids. The issue is the incentives to build telecom infrastructure relative to other opportunities in the economy for the billions of dollars needed. There's no free lunch. If the writing is on the wall for wireline profitability, companies like Comcast will take their capital and buy companies like NBC instead of investing in their network. If you make it illegal for them to do so, their shareholders will force them to do stock buybacks with their capital, then take that money and invest in whoever does buy NBC.

coldpie 12y ago

Conservatives in the US gov't manage to be incorrect about many objective things (AGW, evolution), so it's not too surprising that they manage to fuck up on subjective things, too (net neutrality, role of religion in gov't).

mikeash 12y ago

Your fellow "conservatives" are mostly such in name only. They've been convinced that the Republican Party is the conservative party despite the fact that they're anything but, and they mold their positions to match. It's sad.