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The FCC plan to undo its net neutrality rules

washingtonpost.com

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Re: The FCC plan to undo its net neutrality rules

#41

Post by outsidetheparty »

spott wrote: post #32
outsidetheparty wrote: post #30

Earlier quoted context omitted.

Eliminating net neutrality incentivizes ISPs to build auxiliary services that they can artificially support by throttling the bandwidth of competing products. It incentivizes them to seek profit by favoring some net traffic over other net traffic. It does not in any way incentivize them to build larger or better networks. It does not incentivize them to invest in their infrastructure. All it does is let them make mor…

To play devil's advocate: If they don't have overhead in their networks, they cannot offer faster service to some net traffic over other net traffic. The ability to sell faster connections to some services incentivises them to have overhead in their networks to sell, which means investment into their infrastructure.

Ah, but that only works if we keep net neutrality as is! With Pai's changes, why would they spend money improving their pipes to handle more traffic, when instead they can just throttle their competitors' traffic down to the point where their existing pipes are sufficient?

Re: The FCC plan to undo its net neutrality rules

#42

Post by outsidetheparty »

splintercell wrote: post #37
outsidetheparty wrote: post #30

Earlier quoted context omitted.

Eliminating net neutrality incentivizes ISPs to build auxiliary services that they can artificially support by throttling the bandwidth of competing products. It incentivizes them to seek profit by favoring some net traffic over other net traffic. It does not in any way incentivize them to build larger or better networks. It does not incentivize them to invest in their infrastructure. All it does is let them make mor…

Business Model 1: Build your own services and throttle everyone else's services unless they pay a premium (in which case your own services would be cheaper, but the profit they get from their own services must be higher than the profit they get from NOT selling the bandwidth their premium service uses, to third parties). Let's put it this way, if a hotel builds a Jacuzzi, you're argument is that the hotel owner will…

Because it's obvious. Business model 2 involves significant capital expenditure. Business model 1 involves the same profit without the risk; all they have to do is cut deals and act as rent-seekers on their existing infrastructure. They'd have to be fools to go for model 2.

Re: The FCC plan to undo its net neutrality rules

#43

Post by edejong »

cakeface wrote: post #21

The sneakiest thing just happened to me on that Washington Post site. There was an overlay ad, no big deal, with an X to close it in the upper right of the screen. I moved my mouse up there to click the X and the site shifted slightly so what I actually clicked was "Subscribe"!

During careful A/B testing, this site-modification has proven to increase the 'subscribe'-click ratio from 0.002% to 80% Which self-conscious mid-manager would say no to that?

Re: The FCC plan to undo its net neutrality rules

#44

Post by dv_dt »

IAmGarrett wrote: post #4
hplust wrote: post #2

Here is the EFF link [0] that provides additional information and also provides methods of contacting your local government officials to take action. Please send this along! [0] https://www.eff.org/deeplinks/2017/04/fcc-wants-eliminate-ne...

This whole battle has felt like the consumers versus the ISP's. Is there economic advantages to consumers if Net Neutrality is eliminated?

They get submarined costs from both their ISP and any services that come over the network with no market visibility or competitiveness to allow customers to switch away from bad product mixes.

Re: The FCC plan to undo its net neutrality rules

#45

Post by ComradeTaco »

splintercell wrote: post #28
outsidetheparty wrote: post #8

> Pai argued that rolling back the rules will encourage ISPs to spend more on their broadband networks How? How on earth does letting ISPs milk more money out of their existing network incentivize those ISPs to expand that network? It's just so frustrating that these guys no longer even bother to pretend that their arguments make any logical sense at all. "We'll protect user privacy by eliminating these rules that pr…

> How on earth does letting ISPs milk more money out of their existing network incentivize those ISPs to expand that network? The fundamental idea is that the amount of investment done in a venture is directly proportional to the profitability of that venture. If govt makes a regulation saying that Google can provide Hangouts service, but it cannot charge more for Enterprise Hangouts features, then Google has no addi…

The comparison between shipping services and Uber/Lyft with broadband connections is absolutely absurd.

Hangouts has the infrastructure cost of a server and UPS warehouses and vehicles. An ISP has the infrastructure and maintenance costs of a buried or hung line to every single home it serves. Unlike an App or shipping company, it takes literal years to take a hard wired ISP to any sort of fruition. Building an ISP also means serving a concentrated market, where the bigger ISP can lower their prices until your new ISP goes bankrupt.

If you really wanted to break up the regional monopolies, you would force competitive bidding for all last mile connections and let companies do their own backbone infrastructure. It would introduce actually competition to a market where most consumers literally have no choice.

Re: The FCC plan to undo its net neutrality rules

#46

Post by prklmn »

splintercell wrote: post #28
outsidetheparty wrote: post #8

> Pai argued that rolling back the rules will encourage ISPs to spend more on their broadband networks How? How on earth does letting ISPs milk more money out of their existing network incentivize those ISPs to expand that network? It's just so frustrating that these guys no longer even bother to pretend that their arguments make any logical sense at all. "We'll protect user privacy by eliminating these rules that pr…

> How on earth does letting ISPs milk more money out of their existing network incentivize those ISPs to expand that network? The fundamental idea is that the amount of investment done in a venture is directly proportional to the profitability of that venture. If govt makes a regulation saying that Google can provide Hangouts service, but it cannot charge more for Enterprise Hangouts features, then Google has no addi…

Not having adequate competition plays a major role in this. If the market was actually competitive, they would have to invest more to stay alive, regardless of the regulations. It's the lack of competition that's driving the industry.

Re: The FCC plan to undo its net neutrality rules

#48

Post by metaobject »

JustSomeNobody wrote: post #31
twoodfin wrote: post #24

Earlier quoted context omitted.

Why is that confusing? During the Title II debate many on HN thought broadband should be regulated as a utility, or at least forced to be sold only as a "dumb pipe". Utilities and dumb pipes have terrible profit margins. Businesses want to invest capital in things that have larger profit margins (today, for example, wireless). Verizon's vision for Fios was to sell a bunch of value-add services like video calling and…

> Verizon's vision for Fios was to sell a bunch of value-add services like video calling and on-demand movies. When plain-old-internet services started providing those capabilities without having to pay Verizon directly, Fios deployments slowed to a crawl. Let's say this succeeded and people jumped to Verizon for their internet and their media. What would happen to Amazon Video and Netflix?

Verizon might want to ensure that their products work better than NetFlix and Amazon by throttling network traffic going to those domains? Perhaps even stall the pipe every now and then to frustrate users into seeking more stable alternatives? Oh, look! Verizon's service is so much faster than those other two!! I wonder why?!?!

Re: The FCC plan to undo its net neutrality rules

#49

Post by ficho »

"“Two years ago, I warned that we were making a serious mistake,” Pai said. “It’s basic economics: The more heavily you regulate something, the less of it you’re likely to get.”

Just reading this makes me angry. Has he ever heard of monopolies / oligopolies, or simply the place of government in regulating public utilities.

Apply his quote to water supplies and see what happens.

Re: The FCC plan to undo its net neutrality rules

#50

Post by splintercell »

outsidetheparty wrote: post #42
splintercell wrote: post #37

Earlier quoted context omitted.

Business Model 1: Build your own services and throttle everyone else's services unless they pay a premium (in which case your own services would be cheaper, but the profit they get from their own services must be higher than the profit they get from NOT selling the bandwidth their premium service uses, to third parties). Let's put it this way, if a hotel builds a Jacuzzi, you're argument is that the hotel owner will…

Because it's obvious. Business model 2 involves significant capital expenditure. Business model 1 involves the same profit without the risk; all they have to do is cut deals and act as rent-seekers on their existing infrastructure. They'd have to be fools to go for model 2.

You're not thinking it clearly. As long as you assume them to be profit seeking individuals and not some inconsistent model, then their choice leans far too heavily towards investing in their own infrastructure (even if you assume a bully who is ripping people's lunch money to invest some of that lunch money into a gym membership).

If they launch Verizon Music, then they'll have to build a service as good as Spotify (if not better) in order compete with Spotify. The capital expenditure is still there. On the top of that, they will have to gain expertise in a new field.

On the other hand, investing in their own infrastructure makes sense because this is their own domain and this is how they got into this position at the first place.

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