AMA: NY AG Schneiderman on net neutrality and protecting our voice in government

Business prioritizes profit over people. Regulations exist to rule out profit-seeking behavior that is ultimately detrimental to society

> Please explain how is the very same government who allows the communication monopolies to exist, supposed to also ensure that they are "neutral"? It seems awfully convenient that the solutions to problems that government creates is to have more government.

AG Schneiderman didn't address this point, but my take on it is this:

We allow these monopolies to exist because the infrastructure they require to operate by necessity must make use of public land and resources. In the case of wireless companies, radio spectrum is limited, so not just anyone can set up a wireless company. In the case of land-line/cable companies, we really do not want to allow just anyone to dig up our land or set up utility poles in order to run cable and fiber.

So we compromise: we only allow a select few to operate on the airwaves and to lay cable, but we regulate them in order to try to disallow them from engaging in the anti-consumer activity that you can only engage in when you have little or no competition.

There are perhaps other options, such as disallowing the people who build the infrastructure to also operate it as an ISP, and instead lease access to ISP companies at non-discriminatory rates. That brings other problems, too, though it might overall be better. At the end of the day, we have the system we have, and we need to make the best of it. If we could come up with a better system where net neutrality regulation wouldn't be necessary, that would be great, but we still need that sort of protection in place while we work to change our current system into something else.

I think ultimately all attempts at analogy end up failing, so I'd try to avoid them when talking to your dad.

First off, the government already has "business with the internet". Cable, DSL, wireless, etc. companies are all already regulated in general, and always have been. We don't just allow anyone to come along and dig up our streets or put up utility poles so they can run cable or fiber. We also don't allow any random company to start broadcasting on whatever radio frequency band they want. These are all scarce public resources, and restricting access to them makes sense. So the number of companies that can become ISPs in any given area is limited (by the government), and IMO that's actually the right thing to do.

If you can get your dad to agree with that, or at least understand where that sort of thinking comes from, then move on to:

The best way to ensure that companies in a particular industry don't engage in anti-consumer behavior is to ensure that there's a good competitive landscape. If you can do that, there will eventually be a natural equilibrium between a company's profit motives and the quality of service it provides to customers, because customers will be able to vote with their wallets and only patronize companies that give them what they want, for a price they think is fair.

Hopefully that's not controversial. In fact, it's very "free market" and "no gov't interference", so I think it's something your dad would agree with. But:

If we don't and can't have a competitive landscape, the next best thing is to regulate what these monopolies can do. Net neutrality regulation ensures that ISPs won't try to charge you more if you want to stream high quality video rather than just crappy video, for example. It keeps them from "bundling" websites in differently-priced plans to cause you to have to pay more to see more of the internet. And on the other side of the equation, it keeps ISPs from charging certain content providers a premium to send their bits over the ISP's network.

You might also want to add, but isn't strictly necessary:

These things may sound theoretical, but they're not. ISPs have constantly been in a tug of war with the FCC to determine what they're allowed to do. The FCC, for its part, had tacitly agreed not to regulate them under Title II as long as they maintained the neutrality of the internet. In 2014-15, Verizon decided they didn't want to play ball anymore, and thought they had the political clout to avoid Title II classification, so they sued the FCC, claiming the FCC didn't have the right to enforce net neutrality under Title I rules. The court ruled that Verizon was correct, but Verizon overplayed its hand: the FCC ended up classifying them under Title II anyway. So we've always had some form of net neutrality, even though up until 2015 it was more of a "gentlemen's agreement" between the FCC and the ISPs than actual regulation. Once the ISPs got too big for their britches, the FCC smacked them down, and hard.

1. Is Reddit the only online newsboard you can access locally? If the answer is "no", I don't see how it's a monopoly. Aren't you...here? Posting?

I wouldn't be so quick to conflate market share with a monopoly. We're one a message board other than reddit, and I could name hundreds with 10K+ users. Is reddit popular? No doubt. But it's far from a monopoly. A monopoly is generally defined as having a high barrier to entry, combined with price discrimination.

You can certainly argue that the userbase/content of reddit/facebook/youtube constitutes a high barrier to entry. However, the userbase/content of facebook/reddit/yt is a feature, and not fundamental to the service itself (you can have a video sharing site with just a few videos). This is why these three are not natural monopolies. In contrast, serving packets is all an ISP can do. It either serves them (at some speed), or it doesn't. I would emphasize the barrier to entry is the real capital costs that are integral to the (sole) function of the service. It's simply not possible for every New Yorker to dig up the sidewalk to lay fiber. That is what constitutes a natural monopoly.

As to the price discrimination point, Facebook/YT/reddit do not, as far as I'm aware, solid control of ad pricing, although I'm sure they would love to. Your ISP, however, exercises significant pricing controls, especially if they are the only game in town.