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One reason cable companies won’t willingly compete against each other

washingtonpost.com

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Re: One reason cable companies won’t willingly compete against each other

#21

Post by harryh »

noobermin wrote: post #14
harryh wrote: post #11

Earlier quoted context omitted.

My internet speeds today are an order of magnitude faster than they were even a few years ago. Does that not count as innovation? It certainly required a fairly massive capital investment.

...and 200x slower than those in Korea.

Actually, my speeds are about the same as those in Korea as I live in NYC. Which makes sense because South Korea is almost entirely urban much like NYC. It's not really fair to make cross country comparisons between countries with vastly different geographies.

Re: One reason cable companies won’t willingly compete against each other

#22

Post by mrep »

noobermin wrote: post #14
harryh wrote: post #11

Earlier quoted context omitted.

My internet speeds today are an order of magnitude faster than they were even a few years ago. Does that not count as innovation? It certainly required a fairly massive capital investment.

...and 200x slower than those in Korea.

They also have 1/6 the population density as the United States.

Re: One reason cable companies won’t willingly compete against each other

#23

Post by argonaut »

en4bz wrote: post #15

Cable companies don't compete because the market has reached a Nash equilibrium. This is Game Theory 101. If one company lowers their prices or increase their services then as soon as others start seeing attrition they simply lower their prices in response until attrition stops. At the end of the day no one gains any customers and they've all lowered their prices. No one wins. Similar things happen with turf wars. If…

Your first description isn't a Nash equilibrium because you're considering second-order effects (you're considering the reaction of other players to your changes), when Nash equilibrium only concerns itself with first-order effects - you assume other players do not change and if under that assumption every player is at the best action already, then you're in a Nash equilibrium.

I don't think cable companies are at a Nash equilibrium, but they may be at other forms of equilibrium that I'm not familiar with. Also this game is iterated so there are other (crucial) dynamics at play that I am not familiar with.

Re: One reason cable companies won’t willingly compete against each other

#24

Post by ikeboy »

imgabe wrote: post #19
Afforess wrote: post #5

At this point, Cable companies are all members of a single large shadow monopoly not unlike Standard Oil was in the early 20th century. The rational the justice system used to break up Standard Oil is shockingly similar to the situation we now face with cable: Rates have been made low to let the Standard into markets, or they have been made high to keep its competitors out of markets. Trifling differences in distance…

It really is shockingly similar and a lot of the arguments against net neutrality try to dismiss it as applying "laws made for railroads" to the Internet. Back when oil was getting to be useful, lots of people discovered it. Usually, it was in a remote area. The only way to make money off it was to get it to a refinery and then the market. Standard Oil bullied and bribed the railroads into giving them preferential ra…

(My own views align closely with http://arstechnica.com/tech-policy/2014/06/we-dont-need-net-... and http://www.bloomberg.com/news/articles/2015-04-13/forget-net...)

Do you have any evidence that cable companies wanted to charge for preferential treatment for traffic? I've seen that claim repeated a lot but never with evidence.

Re: One reason cable companies won’t willingly compete against each other

#25

Post by ianlevesque »

0xcde4c3db wrote: post #6
Animats wrote: post #2

There's a nice analysis in this week's Economist on cellular competition in Europe. There's been a conclusion by some European antitrust regulators that it takes at least four competing cellular carriers before prices come down. Three isn't enough. The US acts as if one unregulated carrier is enough in cable.

I think we still have some cultural inertia such that things like high-speed internet and cell service are seen as luxuries and not basic infrastructure (plus some who believe that the poor ought to be excluded from using basic infrastructure anyway). I'm also not convinced that Capitol Hill has fully realized that Comcast isn't competing with rabbit ears anymore.

Oh they know, they're just all on the take:

https://www.opensecrets.org/orgs/recips.php?cycle=2014&id=D0...

Relatedly, it's depressing just how cheaply you can buy the house/senate.

Re: One reason cable companies won’t willingly compete against each other

#26

Post by 0xcde4c3db »

dogma1138 wrote: post #8
Animats wrote: post #2

There's a nice analysis in this week's Economist on cellular competition in Europe. There's been a conclusion by some European antitrust regulators that it takes at least four competing cellular carriers before prices come down. Three isn't enough. The US acts as if one unregulated carrier is enough in cable.

The EU telecom market is just as horrible, most countries have only 1-2 "true" ISP's with actual infrastructure to their subscribers and 2-3 cell providers the rest are ISP's that rent fibers/coax access and MVNOs. Setting up infrastructure is extremely expensive especially in cities where allot of the European population lives. The US has a different problem where only 4% of the population lives in a major cities so…

> The US has a different problem where only 4% of the population lives in a major cities

That requires a rather narrow definition of "major cities".

Re: One reason cable companies won’t willingly compete against each other

#27

Post by zekevermillion »

Afforess wrote: post #5

At this point, Cable companies are all members of a single large shadow monopoly not unlike Standard Oil was in the early 20th century. The rational the justice system used to break up Standard Oil is shockingly similar to the situation we now face with cable: Rates have been made low to let the Standard into markets, or they have been made high to keep its competitors out of markets. Trifling differences in distance…

Yes! If there was ever a case for trust-busting. Just noticed last night that Comcast is blocking some streaming apps that I use on my home PC. Certainly not the worst thing they do, but does remind me of how Standard Oil used to tie up rail capacity to keep it out of the hands of competitors.

Re: One reason cable companies won’t willingly compete against each other

#28

Post by dogma1138 »

0xcde4c3db wrote: post #26
dogma1138 wrote: post #8

Earlier quoted context omitted.

The EU telecom market is just as horrible, most countries have only 1-2 "true" ISP's with actual infrastructure to their subscribers and 2-3 cell providers the rest are ISP's that rent fibers/coax access and MVNOs. Setting up infrastructure is extremely expensive especially in cities where allot of the European population lives. The US has a different problem where only 4% of the population lives in a major cities so…

> The US has a different problem where only 4% of the population lives in a major cities That requires a rather narrow definition of "major cities".

The largest 10 cities are home to 16M Americans, the 10 largest cities in the UK are host to 12M Brits. The 100 largest cities in the US are home to 59M Americans, the 100 largest cities in the UK are home to 34M Brits. The US is 5 times as populous but there is only 30% difference between the top 10 cities in the US vs UK and 50% in top 100. Most people in the US live in cities under The rest of Europe isn't that much different. WW2 caused a major shift of population to major cities while in the US it didn't while the US population is still very urban they size of cities/towns is smaller in general.

Also i really hate when people compare the US to a specific EU country the US is bigger than Europe go out of major cities in Europe and you'll have shitty internet, there are towns and cities in Germany where the best you can get is a 10mbit DSL and it's not a unique case in Europe.

Re: One reason cable companies won’t willingly compete against each other

#29

Post by throwaway_exer »

ikeboy wrote: post #24
imgabe wrote: post #19

Earlier quoted context omitted.

It really is shockingly similar and a lot of the arguments against net neutrality try to dismiss it as applying "laws made for railroads" to the Internet. Back when oil was getting to be useful, lots of people discovered it. Usually, it was in a remote area. The only way to make money off it was to get it to a refinery and then the market. Standard Oil bullied and bribed the railroads into giving them preferential ra…

(My own views align closely with http://arstechnica.com/tech-policy/2014/06/we-dont-need-net-... and http://www.bloomberg.com/news/articles/2015-04-13/forget-net... ) Do you have any evidence that cable companies wanted to charge for preferential treatment for traffic? I've seen that claim repeated a lot but never with evidence.

> Do you have any evidence that cable companies wanted to charge for preferential treatment

Did you read your own links? Netflix is being charged to pass bandwidth to residential customers because of a structural lack of competition.

Re: One reason cable companies won’t willingly compete against each other

#30

Post by en4bz »

argonaut wrote: post #23
en4bz wrote: post #15

Cable companies don't compete because the market has reached a Nash equilibrium. This is Game Theory 101. If one company lowers their prices or increase their services then as soon as others start seeing attrition they simply lower their prices in response until attrition stops. At the end of the day no one gains any customers and they've all lowered their prices. No one wins. Similar things happen with turf wars. If…

Your first description isn't a Nash equilibrium because you're considering second-order effects (you're considering the reaction of other players to your changes), when Nash equilibrium only concerns itself with first-order effects - you assume other players do not change and if under that assumption every player is at the best action already, then you're in a Nash equilibrium. I don't think cable companies are at a…

Good point. Subgame perfect Nash equilibrium [1] would be more accurate since it applies to dynamic games.

[1] https://en.wikipedia.org/wiki/Subgame_perfect_equilibrium

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