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Net neutrality

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Re: Net neutrality

#191

Post by AnthonyMouse »

rayiner wrote: post #67

I don't see how a normally libertarian-leaning group of people have embraced regulation rather than deregulation as to this issue. Why do local ISP markets tend towards monopoly, even though it has been illegal since 1992 to grant local cable monopolies? Two words: universal access. It's the same principle that led municipalities to grant taxicab monopolies, of the kind that stifle companies like Uber today. The idea…

> Why do local ISP markets tend towards monopoly, even though it has been illegal since 1992 to grant local cable monopolies? Two words: universal access.

It's true that universal access is what causes networks in major cities to lack competition. But getting rid of it wouldn't solve the problem anywhere else, because there are still millions of people who live in areas that couldn't economically justify more than one ISP. The only way those areas can justify the investment is if the ISP can collect revenue from a majority of the customers (and/or not compete aggressively on price), meaning that a competitor entering the market would cause both ISPs to become unprofitable and so no rational investor will be the second to service that market. Those geographical areas are natural monopolies. There is very little realistic alternative to utility regulations in those markets, short of massive government subsidies to create market conditions that can sustain multiple competitors.

> There is no free lunch. You can have: neutrality, universal access, or a mostly privately-funded telecom infrastructure, but you only get to pick two. If you think universal access is important, and net neutrality is important, you have to be willing to publicly subsidize the construction of telecom infrastructure.

That isn't necessarily true. What it means is that without public investment, the subscription fees for internet service have to be sufficient to justify private investment. It isn't at all clear that they aren't already at that level. The lack of investment in many markets is at least in significant part attributable to the fact that neither competition nor regulation currently provides a large incentive to make infrastructure improvements. But there is no reason that in markets with insufficient competition, regulations could not be made to create that incentive, e.g. allowing ISPs to charge higher rates only if they provide higher speeds and then over time increasing the required speed for a given rate. And ironically the rates required to justify a given level of investment would be lower if we had less competition, because the cost to wire a street is in large part proportional to the number of miles of road rather than the number of subscribers, so Verizon and Comcast having to build parallel networks each with half the total number of subscribers causes each to be significantly less profitable and that much less likely to make future investments. "More competition" is not a panacea.

And more than that, why is public investment in infrastructure a controversial position? We have public roads, what's wrong with public last mile networks?

Re: Net neutrality

#192

Post by zanny »

ef4 wrote: post #121
Retric wrote: post #68

Earlier quoted context omitted.

I don't see how internet is any less a natural monopoly than electricity. Picture a residential street with 100 completely separate fiber optic networks vs 10 vs 1, now which seems more efficient. It's not like everyone connects to a different Hacker News.

It's not obvious whether it's really a bad idea to have several independent fiber networks in the same geographic area. Choice is good. And it would also necessarily imply more total capacity, which is also good. So deciding the "right" number of network operators in one place is subjective, and comes down to what consumers are willing to pay for. Or at least it would, if competition weren't illegal. There's nothing…

Choice and redundant infrastructure are different things.

If you have one wide, dumb pipe, and you paid an ISP to route your traffic from some other point on said local pipe into the backbone, you would have tons of ISP choices. The only reason more ISPs do not exist is because of the infrastructure costs.

And those won't change. You will never be in a climate where it is haphazard to rip up roads or peoples lawns or add more mess to the overhead lines to run fiber channel everywhere. In terms of cost, the fiber cable itself is not even expensive - it is the manual labor installing it all.

> we're still letting analog-era regulations govern our use of wireless spectrum.

It isn't ideology, it is the current incumbent owners of spectrum like having artificial superpowers over the future of communication.

Re: Net neutrality

#193

Post by snitko »

atmosx wrote: post #168
snitko wrote: post #74

I wonder. I wonder. I live in Russia and I have 2-3 very good providers on the block constantly competing with each other and offering better connection and prices. They would show up on time and connect you very fast. They fix things quickly (in my government maintained house, the basement once became filled with water after the rain, and the wires were damaged. Even though it wasn't their fault, the ISP came and fi…

> And yet, you claim free market fails. Seriously? You have a cheaper/better internet access in Russia compared to the USA and suddenly the Russian (extremely corrupted) political and social model (a modern monarchy of sorts) became a model economy over the US? PS. I can't find the source, but I've read that in the last Russian elections more than 35% of the population wanted to return back to communism .

I never said anything about the "Russian model". I simply suggested that where government stays out of the way, you get cheaper and better services. The quality of our internet has nothing to do with our government or social model, but with how free market and free trade work. If you had free market in Telecom industry in the US, you would also enjoy the same quality and prices.

Re: Net neutrality

#195

Post by zanny »

exelius wrote: post #76
Retric wrote: post #68

Earlier quoted context omitted.

I don't see how internet is any less a natural monopoly than electricity. Picture a residential street with 100 completely separate fiber optic networks vs 10 vs 1, now which seems more efficient. It's not like everyone connects to a different Hacker News.

Because with electricity, everyone gets the same power. You're tied to the same grid; your provider just meters your usage, bills you, then pays wholesale prices for the power you used. But the system as a whole only measures inputs (from power generators) and outputs (consumers). It works for something like electric power where a volt is a volt and a kilowatt is a kilowatt. With Internet access, you're looking for S…

Your ISP does not give a shit where your packets are going to or where packets directed towards you are coming from. That is the backbones problem, and most ISPs do not manage it at all. For an ISP, it is effectively electricity - the cost to route a packet is always constant, assuming they don't have meterage deals with different backbone routers depending on the destination. To them, they just care where the packet is going, to just send it in the right direction either way. And maybe billing for data usage is a valid business model, but the real world per unit costs of packets are magnitudes lower than the per unit costs of even electricity in traditional measures like kwh. IE, the modern "pricing schema" for data, where a gigabyte costs multiple dollars, is an insanely unrealistic measure - if you are not paying for the wires in the dirt.

Re: Net neutrality

#196

Post by zanny »

aninhumer wrote: post #182
ataggart wrote: post #123

Earlier quoted context omitted.

>"free" and "free of governmental interference" are not the same thing. Since "free" in this context means absence of coercion against extant or would-be competitors, and since government regulatory efforts are a source of such anti-competitive coercion, unless one is concerned with firms sending hit squads against each other (which would more rightly be considered "crime"), the distinction isn't particularly useful.

Are you suggesting the only possible forms of anti-competitive coercion are government regulation or hit squads?

If it is voluntary it is not coercive. You can always not deal with your competition on unfair terms. In what circumstance could a 3rd party non-violent entity coerce you? The biggest one I can think of is "buying you out" but that is still either voluntary, in that the owners agree on the buyout, or it is a buyout of a publicly traded company, and I can't even get started on how non-free market the stock market is, but even then you elected to sell ownership in a public marketplace voluntarily and took that risk.

Re: Net neutrality

#197

Post by NoPiece »

tehwebguy wrote: post #159
NoPiece wrote: post #131

Earlier quoted context omitted.

Yes it seems possible that they could be overestimating, but it is the most thorough report I have seen. And if their sample set is large enough, they should have accounted for it. Do you have any actual data that shows different numbers?

No I don't think they are overestimating, the graph just doesn't say what you said it does. It does not count the residences that have access to 2+ options, it only counts the number of houses that lie within census tracts that have 2+ broadband options available anywhere in said tract. This means that even a residence with literally 0 options would be counted as a "2+ broadband options available" house if there were…

You are right, what the report says is that 97% of people live in census tract where there are two broadband providers. What percent have access to the two is unknown, but absent any evidence to the contrary, and given the relatively small size of census tracts, it is reasonable to assume a majority have access to the providers in their tract. I'm open minded here, show me some data that shows a large group of people don't have access to at least 2 broadband ISPs.

Re: Net neutrality

#198

Post by aninhumer »

snitko wrote: post #189
aninhumer wrote: post #187

Earlier quoted context omitted.

>How idiotic would that seem if government started saying things like "we need soft drinks neutrality Well yeah, that would be a pretty awkward way to encourage competition in the soft drinks market. However, they do say things like: "You can't temporarily drop your prices just to wipe out competition." and "You can't agree on prices with Pepsi to avoid price competition" which work pretty well to keep that market co…

There's no evidence predatory pricing is effective. It's fear mongering. Suppose you have company A trying to outprice company B, which is a much smaller company. If company A wants to drop its prices, it can't just drop prices on just the number of products equivalent to the market share of B, it has to drop prices on the whole line of products of its own. Even if it succeeds in defeating company B, it has to make s…

>it has to drop prices on the whole line of products of its own.

Why?

>And who's to guarantee another company C isn't going to use the situation, knowing full well company A cannot afford another round of predatory pricing?

The competitiveness of a market depends on the costs of entering it. If the amount of capital needed to enter the market is significant, new entrants willing to risk that much will be much less frequent.

Predatory pricing allows monopolies to artificially raise those costs, simply by amassing a reserve of cash. Indeed, the real problem is not company B being defeated, but company B never even trying because the returns just aren't enough to justify the inflated entry cost. Company C never gets a chance.

Re: Net neutrality

#199

Post by andrew93101 »

rayiner wrote: post #67

I don't see how a normally libertarian-leaning group of people have embraced regulation rather than deregulation as to this issue. Why do local ISP markets tend towards monopoly, even though it has been illegal since 1992 to grant local cable monopolies? Two words: universal access. It's the same principle that led municipalities to grant taxicab monopolies, of the kind that stifle companies like Uber today. The idea…

"Why do local ISP markets tend towards monopoly, even though it has been illegal since 1992 to grant local cable monopolies?"

This is because last mile internet access is a textbook Natural Monopoly: http://en.wikipedia.org/wiki/Natural_monopoly

Re: Net neutrality

#200

Post by snitko »

aninhumer wrote: post #198
snitko wrote: post #189

Earlier quoted context omitted.

There's no evidence predatory pricing is effective. It's fear mongering. Suppose you have company A trying to outprice company B, which is a much smaller company. If company A wants to drop its prices, it can't just drop prices on just the number of products equivalent to the market share of B, it has to drop prices on the whole line of products of its own. Even if it succeeds in defeating company B, it has to make s…

>it has to drop prices on the whole line of products of its own. Why? >And who's to guarantee another company C isn't going to use the situation, knowing full well company A cannot afford another round of predatory pricing? The competitiveness of a market depends on the costs of entering it. If the amount of capital needed to enter the market is significant, new entrants willing to risk that much will be much less fr…

> Why?

Suppose you produce socks and another company does the same and tries to compete. You produce 1 million socks a month and another company only 10 thousand. You obviously can't just drop prices on 10 thousands socks of yours, because that would still allow your competitor to stay in business - since there is demand for the rest of 990k of socks at your high price, your competitor would simply grab another 10k of your socks market share and then you'll only be able to sell 980k at your high price and not 990k. You actually have to drop prices on all 1 million socks of yours, which is going to be pretty damn detrimental to your profits.

> The competitiveness of a market depends on the costs of entering it.

What's there to prevent a rich investor from entering the market and competing? Google had no problem competing with Apple on the smartphone market, it seems. The goal is not to allow anyone with no money to compete. The goal is to allow to compete companies who have sufficient resources to do so. That's what the competition is about.

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