Chief cable lobbyist: data caps were never about network congestion, always about profit

boing
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Because you’re the only one who believes your sources make a difference or are in some way definitive, or “better” than no sources because throwing links at other people to comb through is somehow a better argument than combing through it yourself and simply relaying the pertinent information.

Technically, I don’t think there’s a market failure in Europe with broadband, because I don’t believe the government assistance is driving prices down artificially, this is an assumption on your part (and everyone else who is arguing that this must be the reason prices are lower, because that what our telecos are claiming). Here in the states, we’ve had plenty of government assistance which was included with laws that allowed HIGHER prices (the 1996 law removed price caps) to go along with said subsidies. And prices indeed went up. And since have never gone down, no matter what the state or federal assistance. While economics suggests that subsidies and tax breaks CAN artificially affect price, we haven’t seen any affect at all in over a decade.

Nothing is a loss leader for the government, because the government isn’t looking for a direct profit from its subsidies (except in the sense of increased economic output). The money it gives away toward infrastructure or other assistance is not part of any corporate loss leading. If government build roads, this is not a loss leader for shipping companies. It’s arbitrary to draw the line at any particular government expenditure and say “Now this is a corporate investment the government is picking up” whereas all the other gov’t expenditures corporations take advantage of aren’t.

If government DIDN’T build roads, yes, shipping would likely be more costly. But the price does not become artificially high if government isn’t building the roads, or artificially low if government isn’t. The natural price will properly reflect what the actual costs are. If there’s a difference between two countries due to this, neither is “artificial”.

So the question remains: what are the actual costs? Everything is dependent on this.

There’s plenty of data if you look for it, I’m not the linkbait believer that you are. Here’s a few however:
State-by-state initiatives on broadband investments and corporate welfare.

Study from the New Jersey state about how they invested to cover the whole state and how Bell Atlantic didn’t spend any of the money on the infrastructure they claimed (this was back in the 90’s).

There’s also the many, many reports by Bruce Kushnik. Google him, once a part of the FCC Consumer Advisory Community and since has been a consumer activist. He’s obviously biased as sin but he documents his accusations very meticulously. He’s been the biggest flag waver for the $200 billion in corporate welfare the telecos received after the 1996 Telecommunications Act, most of which was not spent on infrastructure though it was supposed to. There’s an ebook he put all his evidence together in, haven’t read it, but read about it in an NYT review. Supposedly well documented.

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OK. I’ll just make allegations without any attempt to support them, because that’s just as persuasive.[quote=“Dave_Baxter, post:43, topic:17112”]
Technically, I don’t think there’s a market failure in Europe with broadband, because I don’t believe the government assistance is driving prices down artificially, this is an assumption on your part (and everyone else who is arguing that this must be the reason prices are lower, because that what our telecos are claiming).
[/quote]
Is the government assistance driving down the price at all? What is your definition of whether the price drops would be artificial? And just because you believe government incentives affect industry and prices doesn’t mean you are in the pockets of a lobbyist or something.

In terms of $/bandwidth there most certainly has been a huge decrease in price.

Only contains specific dollar figures for a few programs in a few states, and does not say how much is spent by telcos on infrastructure: it’s impossible to tell how much they offset each other.

An adversarial legal brief concerning a 20-year-old dispute about one specific telecom isn’t the most persuasive thing I’ve ever seen.

It’s interesting how most academic publishing, from wikipedia to science journals, strongly believes in supporting their claims. Those damn linkbaiters!

Government investment is part of the cost. Are roads free because it’s the government that builds them? Is school free because the government provides it?

I still have no idea why you think that gravitation towards natural prices is inevitable under actual market conditions.

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If you want. No one was giving you grief for offering links. YOU were giving US grief for not.

I already said that it CAN drive down the price, or rather I said price could be higher within a country/state where government assistance is absent. But to simply say government elements at play = artificial is an oversimplification of culture wherein you can’t even have a corporation without a state.

Not sure why you wrote that last line, that’s not a point that I personally have made.

Not in relation to government subsidies, when they are given or not given, or even WHERE (which states) they are given or not given.

Also, bandwidth itself does not effect price unless infrastructure (including machinery outside the cables/fiber) is in need of an upgrade to process faster speeds. But the actual use of faster speeds effects price extremely minimally. Prices for monthly internet have risen, even if the speeds involved have also risen. But these speeds do not have an easy $/bandwidth relation costs-wise. Or rather, they do, but it’s not publicly revealed, though this write up is a decent (if flawed) attempt. But this is a much longer debate to have - the fact that the “price” of bandwidth speed is similar to the “cost” of piracy - it exists, but hell if anybody can actually calculate it.

Agreed, but the point is that a very large swath of such programs and subsidies and direct payments exist, and yet when the anyone reports of the telecos P&L…not one word. So something is obviously missing from those calculations.

It’s nevertheless an example, and a cited one, something you claim is important, but good job on dismissing it because of age (not sure why that matters, especially since it was during a period where all these “infrastructure costs” were supposedly being accrued, that seems awfully spot on topic) and for the fact that it’s specific to a single case, which if you ask me helps in its precision - a specific damning example rather than a broad meaningless “look, the books say they’re not making as much profit as we think”. Why? Look at Europe! Uhm…that’s not a convincing answer either.

If you would like to whip up a full on report for us, I’ll happily follow every link. If you want me to do all the work to see if and how your argument posted in a forum may or may not be supported, I’m not going to do it. If you want to put it all together for me since it’s your argument, go for it. Otherwise, linkbait.

Now you’re just being disingenuous, or willfully obtuse. The point I made was that one (roads) is NOT calculated as artificial while another (broadband infrastructure) is. And that’s arbitrary. If you want to treat all government involvement equally, that would work, but it’s mostly impossible to cover anything on that scale, so we don’t. And if we don’t, then to claim only specific acts create “artificiality” is unsupportable.

Because consumers. More specifically consumer ability based on consumer income, which is something gravely under-acknowledged by many. I’ve already covered this, albeit only roughly. And with that, I’m off for the holidays. If you post anything else I’ll probably read it, but likely no more ripostes from me from hereon out.

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Everyone asks for citations. I’m not being hypocritical for asking for them. And you are giving me grief for supplying “linkbait.”

Why did I say people can have the same opinion as telcos without being in their pocket? Because you said “everyone else who is arguing that this must be the reason prices are lower, because that what our telecos are claiming,” which suggests people have those positions because telecoms tell them to.

So what? All regulation affects the market. But this isn’t going to change the fact that economic theory would dictate that government subsidies that lower input costs will result in lower prices being offered to consumers in a market with any competition. Whether the price reduction fully reflects the subsidy is another question, but there’s no oversimplification in saying that prices will decrease to reflect the reduction in cost to the provider.

[quote=“Dave_Baxter, post:45, topic:17112”]
Also, bandwidth itself does not effect price unless infrastructure (including machinery outside the cables/fiber) is in need of an upgrade to process faster speeds.
[/quote]I’m pretty sure I couldn’t stream HD porn 20 years ago, and I’m pretty sure that actual infrastructure investments were needed to get me to the point where I can today. My monthly internet bills since then have gone up almost as much as the price of a Big Mac, but so has the speed of my connection and the amount of bandwidth I consume. The relationship of bandwidth/speed to cost is obviously not linear, but that’s not my claim.

A specific damning example written in an adversarial context by an openly biased party about unscrupulous practices by the only player in a non-competetive market. That might be a great example if we didn’t have a wealth of telecoms operating today and pretty clear 10-K reporting requirements for public companies, which are regularly pored over by analysts.

So I make arguments and support them with links which you can follow or not. And it’s OK when you claim to follow the links and claim that they don’t provide information, when in fact they do. On the other hand, when you make an argument, you don’t need to include links or citations or anything else. Because linkbait.

Where did I claim that only specific acts create artificiality? Public roads (and free parking) are hugely subsidized by the government. And why do you think that just because lots of things are subsidized by the government that we can’t call out anything specific as being subsidized?

[quote=“Dave_Baxter, post:45, topic:17112”]
Because consumers. More specifically consumer ability based on consumer income, which is something gravely under-acknowledged by many.
[/quote]I guess that explains why the price of gold fell, and fell especially during the recessions: consumers couldn’t afford to buy much gold so it fell towards its natural price. And iPhones. And why the profit margin at grocery stores is the same as at Apple stores. Because consumer ability and consumer income, especially since consumers should be more price sensitive to high-ticket luxury purchases than they are to necessities.

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Ah well, you responded quick enough so maybe one more time:

No one has said you’re hypocritical for asking for them, try to stay on point with these things. But you were giving grief to others because they weren’t citing anything.

I pointed out why others don’t think citing in forums like these is necessary, and why throwing citations around in many cases either 1) doesn’t strengthen arguments and 2) if done too casually only put the onus of work and proof on the person you’re giving the citations to. You aren’t the only one who asks for citations but I’d give these answers to anyone who belittled others’ comments because they weren’t doing it your way. It’s fine to ask if anyone knows of citations for certain arguments, but providing links does not make any argument by default stronger, it depends on the links and the argument.

You’ve only responded to these points with snarkiness and a lot of false equivalency with my shoving back being equal to your initial shoving. But no: the fact that citing in these forums can be the equivalent of linkbait was an argument against it in response to your declaration that citations should be necessary (or at least that everyone should be doing it). No one has given you grief for anything, though we have argued against your declarations. But you have given grief to others about lack of citations when it wasn’t a topic of contention yet. It isn’t factual to call the response to giving grief as also “giving grief”, I’m simply responding.

It suggests that people believe what the telecos have publicly stated as their beliefs. No one has to “be in the pocket” of anyone to believe anything or accept certain talking points as evidence. I’m not in the pocket of consumer activist groups, but I’m generally convinced by many things they’ve reported. The point here is that what the telecos have reported leaves out a central and critial element - it says subsidies in the US for broadband don’t exist.

Yes, but we’re talking about calling them artificially low prices. It IS an oversimplification to call them artificially low just because there’s a government element at play, because certain economic theories claim something is artificially low with certain government assists, but not with others, and that is arbitrary, and poorly defined, and so unsupportable. Virtually every government action on earth lowers input costs for some businesses somewhere. Why is one create an “artificial” price and another not?

This sounds like we’re in agreement here, but the tone is one of contesting, so I can’t really tell if you think we’re not. I already acknowledged the infrastructure part, and that price and bandwidth is not linear. So…?

I’m not sure why you think the telecom market is competitive today - competition has gone DOWN since the 90’s as telecoms has consolidated heavily after the deregulation of the market. This you can just Google plainly.

Lol, no. they. don’t. I’ve already covered this, and you keep saying “yes they do”. They give what they give, and it’s obviously incomplete and useless for the purpose of this argument. Any source that pretends the telecoms in the US have had zero government support and doesn’t research what support has been done via the state initiatives, the stimulus bill (which we know for an absolute fact) and the possible subsidies from the late 90’s is a useless report, because it’s wildly untrue.

Uh…I don’t think you’re following this. What’s being talked about here is whether subsidies = artificially low prices. No one has argued whether they can be called subsidies. You claimed that subsidies in Europe could cause “artificially” low prices on broadband. But this would require that all government assistance that covered costs that may or may not exist in another country could “artificially” lower prices. But no one does claim that roads being build creates artificially low prices for any business that would have to build the roads themselves otherwise. So in that way, one kind of government assist is decried as lowering prices artificially whereas many, many more do not.

Whoever is buying any commodity are the consumers of that commodity, so yes. The reason Apple doesn’t return jobs to the states is because they know they can’t raise the price to adjust for the increased costs while retaining profit margin.

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It’s pretty clear we disagree about the value of citations. While including citations may appear to place the onus on the opponent for actually looking at them, including no citations certainly does something very similar but with the additional burden of finding citations. Bad citations may not strengthen arguments, but at it least it gives others an idea of where one gets one’s information and their biases.

I’m not sure how citations become an item of contention without one bringing the issue up. If this is “giving grief,” then I’m sorry.

If you’re simply saying that confirmation bias exists, then I don’t think anyone will disagree. But I’m not sure why that is specific to telcos—as your comment suggested—or why you seem to think that people who share some beliefs with the telcos also believe that there were no subsidies. Agreeing with some points doesn’t mean you have the exact same opinion on everything.

As I said in the unquoted portion of my reply, all government regulations and laws affect the market. The subsidies that exist in many markets (from cars to broadband) create artificial prices where the price being charged by retailers do not fully encapsulate the actual cost of the good or service. In your terms, the actual price does not reflect the natural price. One doesn’t need to completely describe the affect of government incentives on every good and service in the market in order to identify one product as being artificially priced.

This arose from your claim that telcos have done nothing but raise prices since the '90s, with the implication that service quality has not also increased in that time.

During the time period concerned with that amicus brief, Verizon (nee New Jersey Bell) had something in excess of a 90% share of the NJ phone market and it appears the bill in question was written specifically for Verizon. This is not a competitive market.

Sure they do. Why have Americans preferred large cars that consume a lot of gas while other nations prefer small, efficient cars? Government policy, and not the “natural price” of petrol, road costs, parking, etc., is a large determinant of where the market ends up.

You said earlier that when there are fewer consumers who can afford a product that the price of that product will fall. Has this happened with gold? Or with iPhones?

Also, Apple could probably return assembly of phones to the US, but doing so would mean reduced labour flexibility, extended supply chains and inventory, and less market responsiveness. Hate to include this linkbait, but look here.

Yeah, they give what they give, and that’s what I cite them for (in the exchange above, the report did cite sources for the quoted claim that European telcos make four times more profit than US ones). They may not provide the information you would like to cite them for, but that’s not why I cited them.

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So, it seems you have little understanding of tu quoque arguments.

The problem here is that I never engaged in an ad hominem attack. My observation was that many people here are defending the telco line of reasoning even while discussing it in the comments to an article showing that the telco line about why rates are so high is a lie admitted to by a telco lobbyist. Do you see the irony there? Telco lobbyist says data caps are not about network congestion and commenters arguing why it IS about network congestion… I think that’s really really funny.
Thus the kool-aid comment.

You, for some reason, think that is an ad hominum attack. However, I never presented an argument based on an irrelevant fact about anyone. My argument was that people are still arguing for a point that was originally a lie presented by the telcos which they have now admitted was a lie.

So, for you to come and state an irrelevant argument i.e the intimation that I was engaging in ad-hominem argument is, in and of itself, an actual ad-hominem attack since your point had no relevance to the discussion at hand and was only an attack. Thus, I say to you

Tu quoque.

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I don’t see anyone talking about congestion before you made your comment. I do see people defending telcos in terms of profitability and fairness, though.

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Then look at the title of the article to which these comments are attached.

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Huh? So what?
If none of the commentators were talking about congestion, how do their comments show they were drinking the telco’s kool-aid?

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Just because they didn’t use the word congestion does not mean they aren’t repeating the same arguments the telcos have used for years. They simply are using different wording.

It seems like you have no actual argument only argumentative tactics. What that tells me is that your knife is too dull for anyone to make a good point. You’re too dull for anyone to make a point with you which would stick. You’ll only continue to use your argumentative tactics and never say anything of worth. So, any further discussion about this with you would be a waste of my time.

Now that is an ad-hominem argument. See the difference?

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