With a large incumbent and the high barrier of entry that last-mile infrastructure deployment implies, if there is not a regulatory push to enforce competition monopoly is what you get. It is putting pressure in politicians what works and the net-neutrality claims, no matter how misguided are aim at a right goal, they just miss the right means, hence putting pressure on politicians and lobbies.
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With a large incumbent and the high barrier of entry that last-mile infrastructure deployment implies, if there is not a regulatory push to enforce competition monopoly is what you get.
There is some truth to this but not as much as you think. In cities where they are offering it, AT&T or Google will bring fiber optic connectivity (1GB service) to your home at NO charge. Granted they will typically everyone in your neighborhood signs a two year contract at about $70. Now that is an monopoly. But it is only for two years. After that, your neighborhood could cut the same deal with another company for two years. It is indentured servitude, not slavery.
A lot of people get their Internet at about 3/4 to less than 1/2 of that price. So in established neighborhoods it only those that have organized into a limited district who can vote on thisâŚbecause the money will come out of their homeowners fees. It is also usually only better heeled neighborhoods where a significant majority will agree to this added expense. But last mile service can be done if it is a priority.
The real obstacle to pulling this off is human not technical or financial. People say âEhâŚ$40 (or $20) extra dollars? My service is good enough.â (The only time you will hear this from a cable/Internet subscriber.) That is why most âlast-mileâ infrastructure projects are folded into the price of your home. The city didnât lay that road in front of your house. It was probably laid by the developer and was in the original price of the house. Same with the sewage lines and sidewalks. But it is hard for established neighborhoods so they will run-down over time until a gentryfier comes around and pays for all those things out of pocket and sells the homes to the upscale.
My point is that the last-mile expense is not insurmountable. It is just that people like things in theory more than they do when they are asked to back it up with money. That is a decent argument against a public infrastructure project, not that they are absolutely necessary.
last-mile infrastructure is a classic case for natural monopoly and that is why expecting competition across infrastructure owners is unlikely: as you mention, a newcomer faces users with high switching costs and besides has to obtain returns on his investment in the midterm, while his incumbent competitor is likely to have already amortized the deployment of his own infrastructure. As we all tend to prefer it good enough and the cheaper the better, the incumbent has an advantage.
Intra infrastructure competition is the ballgame changer. As every european country had a national player, all countries had an interest in sharing the use of its infrastructure in exchange of accessing other countries users. The US case was strictly different and hence legislation promoted competition across instead of intra infrastructures. However the result is that all the incentives collide to promote seldom competition and consequently monopolies.
I am afraid that you can either regulate to impose (artificial) competition (through infrastructure sharing) or you limit monopoly power by restricting it.
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If you read this, and also click on the link in that blog post, you will know almost everything you need to know about Netflix and Cogentâs relationship with Comcast.
You, and the writer at that link, are assuming Comcast is offering a fair price for interconnection. But you donât know that. And $1/mbps is too high. Why are you supporting Comcast as the top of the food chain that everyone must pay?
Read your terms of service with your ISP. If you download over a certain amount of data you agree to be throttled.
The issue is with network to network interconnects, not end user agreements. But mine has no amount of data over which I agree to be throttled.
Thatâs not an oligopoly. Thatâs called a middle man.
Those are not opposites. Middle men can be oligopolists.
Iâm sorry but I donât believe you know what youâre talking about.
My delay in responding was due to working on routers at a residential broadband provider. Thereâs no evidence of packets being dropped at the Netflix - Cogent interconnection, only at the Cogent - Comcast interconnection.
Thereâs no evidence Iâve seen that Comcast suddenly jacked up its prices per data usage in order to squeeze more money out of Cogent (or, by extension, Netflix).
But you donât know that. And anything over $0 is too much. You ignored the point before, but why should Cogent or Level 3 pay Comcast and not the other way around? It happens that way because Comcast has a captive customer base.
Itâs never been neutral.
Tell us, who was the top of the food chain, that everyone else had to pay, in the 90âs or 2000âs?
So youâre saying it wasnât actually as simple as you are putting on.
Of course. All the details would fill a book.
Most subscribers used dial-up.
Thatâs when it was easy to switch providers, since the last mile was a common carrier. And the Internet thrived.
It wonât. It will kill the expansion, upgrading, and speed increases that ISPs are currently making to their networks.
No, the economics of putting in more last mile connectivity is killing expansion. Since nobodyâs spending the trillions of dollars to get real competition in the last mile, enforcement of network neutrality is the obvious option.
Government is always the tool of the strong and the influential.
That happens, unless the masses demand to be heard. As in this case. But youâve got your anti-government blinders on and want the masses to shut up so the strong and the influential can have free rein.
They have to intricately define what âthrottlingâ means and when it is okay (because they will say it will be).
Thatâs an argument for why it might not work. And I agree that it might not work, depending on implementation. But the goal is sound.
I, and a lot of others, built the Internet. And weâre not going to let companies like Comcast take it over without a fight.
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Itâs a joke, right?
No. Explain to us why Comcast deserves payment from everyone else.
I donât know what sort of business you do, but think it would be awesome if I got it at no cost.
I do Internet engineering. Iâve done work for Comcast, Level 3 and other companies that comes up in these debates. What do you do?
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I do Internet engineering. Iâve done work for Comcast, Level 3 and other companies that comes up in these debates. What do you do?
Iâve spent roughly 15 years creating internal documentation that describers the data transport infrastructure of telecom and Internet data companies. Now that weâve sniffed each otherâs behinds, I want that âInternet engineeringâ (a new term for me) for free please.
Why are you supporting the fat cats at Cogent in their effort to take money from Netflix without providing the service promised? You have no idea what is the right price for Comcast to offer. Did you retire from setting the price for bread and cheese in the Soviet Union? Do you know who thinks their price was acceptable? Netflix. They voted with their feet to bypass Cogent and cut a deal with Comcast directly. Did Comcastâs confiscatory prices drive Netflix into the dumper? No? You say they are doing quite well? Then perhaps the price was reasonable. The only way for the value of anything to be determined is for two informed parties to come together and strike a deal on it. Iâm sure Netflix would like to pay $0. Iâm sure Comcast would prefer to have a controlling share of Netflix stock. But it was in the interest of both parties to strike a deal the other could live with and so they did.
The issue is with network to network interconnects, not end user agreements. But mine has no amount of data over which I agree to be throttled.
They all come down to the same thing from a networkâs point of view.
My delay in responding was due to working on routers at a residential broadband provider. Thereâs no evidence of packets being dropped at the Netflix - Cogent interconnection, only at the Cogent - Comcast interconnection.
Because Cogent had exceeded their contractual peering policy. Too late to pretend to be dense. Youâve already shown your credentials.
Tell us, who was the top of the food chain, that everyone else had to pay, in the 90âs or 2000âs?
No one. Just as there is no one like that now. AT&T has a far larger number of houses passed than Comcast. If thereâs a scary monster out there, AT&T should be that monster. But Google is about to join inâbut not because they are anxious to get into the lucrative market of ISP and cable. The fact that the industry is in a roll-up is typically a sign that it has become marginally less profitable continuously over time. And that is the case of the business of Internet and cable TV. Which is why Comcast and AT&T are ramping up their infrastructure to get into The Internet of Things.
Thatâs when it was easy to switch providers, since the last mile was a common carrier. And the Internet thrived.
It is easy to switch providers now. If you live where is is not easy, then you have opted to live in the boonies. Iâm sure itâs pretty out there.
That happens, unless the masses demand to be heard.
No. It is inevitable. The mean household assets headed by someone 65 years old is 4X that of someone 35 yrs old. Why? Because they have means and time to pay attention to the government involvement in their interests. Their votes are rewarded with public largess. Consequently, the bulk of our government is devoted to transferring wealth from the young to the old. Iâve already explained Regulatory Capture. Magic words like âpower of the peopleâ will not make a Buick take off like a flying unicorn. The People canât even stop sugar farmers to stop taking a legislated cut from their pockets. Thatâs because of Public Choice Theory economics. It is completely rational. If you donât want powerful interests controlling your choices, then weaken the power of the universal Monopoly of Force and Compulsion (ie the government).
I, and a lot of others, built the Internet. And weâre not going to let companies like Comcast take it over without a fight.
And you are going to do that by demanding it be run by bureaucrats who will sell their industry knowledge to the government with the intent of retiring to sell their knowledge of government regulations to the ISPs?
I want that âInternet engineeringâ (a new term for me) for free please.
You have to put in the work to be a network engineer.
Why are you supporting the fat cats at Cogent in their effort to take money from Netflix without providing the service promised?
Cogent cannot guarantee access to Comcastâs customers. That requires Comcastâs cooperation. Do you even draw a line for what is the right price? If Comcast said $1000 per mbps, an impossibly high price, would that be ok with you?
Netflix. They voted with their feet to bypass Cogent and cut a deal with Comcast directly.
As Iâve been saying, Comcast has market leverage from captive customers. Are you not getting that point, or are you just ok with any behavior they can get away with?
[re: dropped packets at the Cogent - Comcast interconnection] Because Cogent had exceeded their contractual peering policy.
Again, the point is that Comcast should just upgrade the interconnection instead of shaking down their peerâs customers.
No one. Just as there is no one like that now.
Ah, but youâre defending Comcastâs right to be that one network that everyone else has to pay, no? Or is it AT&T you think should be top dog and charge Comcast and all the others?
It is easy to switch providers now. If you live where is is not easy, then you have opted to live in the boonies.
I think this is the closest youâve come to stating your point of view. Laissez faire system in which the end user gets whatever the local ISP is willing to provide. And itâs not easy for half the country to simply move somewhere with better options. Even if you go somewhere with 2 broadband options, that doesnât guarantee good behavior from the provider.
If you donât want powerful interests controlling your choices, then weaken the power of the universal Monopoly of Force and Compulsion (ie the government).
Thatâs a good statement of your ideological blinders. In reality, laws can be good or bad.
And you are going to do that by demanding it be run by bureaucrats who will sell their industry knowledge to the government with the intent of retiring to sell their knowledge of government regulations to the ISPs?
It does involve bureaucrats. I also support checks on lobbying, campaign finance and the revolving door between regulators and industry. But even if the regulation fails to enforce good behavior, weâre still just left with the anything goes system you want to concede to the broadband providers already.
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@factbased and @wynn_james This is turning into a bit of a back and forth between you two, agree to disagree.
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Cogent cannot guarantee access to Comcastâs customers. That requires Comcastâs cooperation.
Which they do, like any business, for a price.
Do you even draw a line for what is the right price? If Comcast said $1000 per mbps, an impossibly high price, would that be ok with you?
Donât you think Comcast would like $1000 per mbps? Why donât they demand it? Theyâre evil enough. Whatâs stopping them? What is stopping you from offering your services at $1000/hr? What is stopping your company from offering you $1/hr? What if they were the only company in town. Would you do what you do for $1/hr?
Check out this video: âIs Price Gouging Immoral? Should it be Illegal?â Your going to want to look away pretty quick, but try to at least make it to the 3:45 mark at least.
As Iâve been saying, Comcast has market leverage from captive customers. Are you not getting that point, or are you just ok with any behavior they can get away with?
Yeah, I get the point. And I get the point that if Netflix didnât think the service was more valuable that the money, theyâd walk. Thatâs how every business transaction on the planet works. Netflix would simply go to their customers and say, âIâm sorry but we cannot offer House of Cards to Comcast customers because they are being unreasonable.â Then theyâd only cut a CDN deal with AT&T and the smaller resellers of the AT&T network. I donât mention Dish or DirectTV because I donât know what kind of trunks they have.
Ah, but youâre defending Comcastâs right to be that one network that everyone else has to pay, no? Or is it AT&T you think should be top dog and charge Comcast and all the others?
There is no one network that everyone must cater to. Maybe if there were, it might make sense to require it be broken up. The break-up of AT&T was a net positive. The break-up of Standard Oil was also a net positiveânot just for consumers (assuming it was better for them, I donât know). It was also better for the Standard Oil shareholders. Theyâre shares became very valuable over time, because the priorities of a single entity (public or private) is different and less productive that an entity that shares the market. But the solution in that case is to break up the monopoly. Not to have it nationalized or turn it into a utility. I donât think weâre there for Comcast, based on what I know.
âIt is easy to switch providers now. If you live where is is not easy, then you have opted to live in the boonies.â
I think this is the closest youâve come to stating your point of view. Laissez faire system in which the end user gets whatever the local ISP is willing to provide.
The reason you get fewer options in rural areas is because the customer base is small. Iâve lived in rural America. The city services suck, but I now I appreciate that our small town City Hall did their best to entice the service providers to come at all. Almost any reasonable sized town gives you options for ISPs.
And itâs not easy for half the country to simply move somewhere with better options.
John F. Kennedy on âfairnessâ.
Even if you go somewhere with 2 broadband options, that doesnât guarantee good behavior from the provider.
I suppose thatâs true of any service. Why do we have a private market at all when the service is so sucky. Why canât a private market give us the service we expect when we go to the DMV or the Post Office?
It does involve bureaucrats. I also support checks on lobbying, campaign finance and the revolving door between regulators and industry. But even if the regulation fails to enforce good behavior, weâre still just left with the anything goes system you want to concede to the broadband providers already.
If only that were the case. Iâm going to try to convince you of the moral and practical superiority of liberty.
Information Theory states that knowledge is not advanced until an experiment failsâŚthat is that it does not produce the expected results. What this means in the Public/Private Choice economics is this:
Market Failure is not a defect. It is a feature. Private markets fail and are discarded for better ones all the time. As peopleâs needs change, markets collapse and make room for new ones.
The problem with Public operations is not that they fail spectacularly, but that they almost never do. They just limp along providing unpleasant service for âfreeâ, forcing money from consumers in taxes to support them that would otherwise be spent on an option of their own choosing.
Public Choice Theory explains that public entities are not run for the sake of their mission. They are run for the benefit of the people running them. Police forces are run for cops. Courts are run for the comfort of the judges and their employees. Parks are run for the benefit of park employees. (I know what you are thinking: "Private companies are the same. True. Iâll get to that.) If you are a park employee and you are offered a better health insurance package for a lower cost, you will see that as reasonable expense for good employees. You will not see that as something you got instead of a more efficient payment system or more vehicles to better maintain the park. So when the park starts to degrade or cost more money, thatâs not because you are over-compensated. Thatâs because Americans arenât willing to pay for their heritage.
Yes. Private entities are also run for the benefit of the people running them. But the difference is this: It is to the benefit of the people running them to have minimally satisfied customers for the price. The only way a private company can exist without this being true is for the government to step in an provide alternate incentives as it did with GE and their appliances.
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Big corporations LOVE regulation.
Uh, huh.
Only the faulty regulations that work in their favor to create and protect oligopolies and monopolies, etc.
Meanwhile, big corporations actively attack (either directly or by proxy) regulations that meaningfully protect the general public from their costly overreaches (we all pay for) and utter lack of social self-responsibility.
Of course, in your world, Comcast isnât an oligopolist, Comcast isnât responsible in any way for any slowdowns and the FCC is out to get corporations despite the fact the corporations were able to stick one of their own inside the FCC as chairman. Oh, and government failures are failures whilst market failures are features. And black is white, and so onâŚ
You couldnât have said it any better than a libertarian think tank funded by Comcast.
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I shouldâve realized earlier that you were one of those libertarians. So since your ideological blinders seem immovable, Iâll say what I say to all your kind.
Whatâs your libertarian dream country like? Pick a few countries and rank them on how closely they follow your model (weak government, few regulations, etc) and see if those places match up with where youâd want to live. What you should see is that the closer a country gets to your model, the more youâd like to live in that environment. If that correlation doesnât work out, then you should rethink your model.
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Well said. I think Iâve run into you before.
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The more regulation, the bigger the companies and the poorer the economy will be. Itâs the lack of competition that makes companies humungous. And itâs precisely regulation that creates barriers to competition. Should Government Regulate Monopolies? Regulating Monopolies
Trusting a monopoly to prevent monopolies. Itâs a product of propaganda and lack of historic and economic knowledge.
Trusting a monopoly to prevent monopolies. Itâs a product of propaganda and lack of historic and economic knowledge.
So, Iâm brainwashed and ignorant of history and economics. Ok, dude.
The fact that you think government is nothing more than another business monopoly is rather over-simplistic and even delusional. Youâre embracing a cartoonish, infantile, neo-libertarian ârealityâ and not much more.
Also, as far as propaganda goes, thatâs a laughable projection on your part. Thereâs a vast amount of libertarian, propagandistic, deregulation drivel throughout the media, within search engine results, etc. via libertarian âthink tanksâ, industry sockpuppet organizations and the like.
Libertarian âthink tanksâ are the right wing radio of the Internet. Just like right wing radio, corporatists run those shit hole organizations at a loss because the indoctrination of the populace with corporatist half-truths and lies is profitable in the long run. Looks like they got to you.
For example, stalling on global climate change initiatives was profitable for the fossil fuel industry whoâve wanted to milk their current infrastructure down to the last drop. Therefore, theyâve funded libertarian âthink tanksâ thatâve ignored science and spewed propagandistic bullshit to clutter up discussions on the topic and derail actions. Itâs worked quite well for the scumbags.
Let me guess. You used to be climate change denier, but you came around on that topic once some of the libertarian âthink tanksâ told you to change your mind and now youâre a climate change impact denier? Or, have you not advanced that far yet?
What have the âthink tanksâ told you to think lately?
The more regulation, the bigger the companies and the poorer the economy will be.
Sounds like the drivel of the banker lobby and/or libertarians either duped by them or in cahoots with them.
Sounds great in theory, doesnât always work that way in practice. Not all regulations are the same and not all regulations have the same impact unless one is to embrace an over-simplistic, black and white, neo-libertarian, corporatist, narrowband view on reality.
Life is more complex than that. Regulations are more complex than that.
Meanwhile, I suggest you educate yourself on the âasshole effectâ:
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Of course, in your world, Comcast isnât an oligopoly, Comcast isnât responsible in any way for any slowdownsâŚ
I think I have demonstrated that with the facts.
and the FCC is out to get corporations despite the fact the corporations were able to stick one of their own inside the FCC as chairman.
No. The FCC, when it exerts any influence at all, is a tool of big corporations. Didnât the cartoon argue that as well?
Oh, and government failures are failures whilst market failures are features.
What I said was that the problem with government programs is that they are immune from failure. If at any time a government program has by some miracle perfectly served the public in every way, it will be the same in 6 months, 4 years, 20 years when the public needs have changed. What are the odds that any one service will ideally serve the public at any time? Pretty low. The feature of the private market is that the entities are constantly destroyed and created. Out of 100 created, one is what the public really wants. The defect of public choice is that the entities are created one at a time with one vision and each are immune to the problems and changes of society. Thatâs why they are INefficient at all times, and are an increasing burden over time.
For example, stalling on global climate change initiatives was profitable for the fossil fuel industry whoâve wanted to milk their current infrastructure down to the last drop.
Itâs also better for the poor and middle class who are trying to have capital left over to invest in their children and their future. Carbon dioxide alarmism tends to be a transfer of wealth from poor and middle class to the well-to-do. Even the concern over rising sea levels at beach front property over the next 100 years is a top 1% problem.
Of course, in your world, Comcast isnât an oligopoly, Comcast isnât responsible in any way for any slowdownsâŚ
I think I have demonstrated that with the facts.
No, not facts, just your wayward, delusional opinion that contradicts facts.
Actually, oligopoly (oligopolist) is being generous for Comcast, because in many parts of the country, itâs really a duopoly. Hereâs the facts:
http://online.wsj.com/news/articles/SB1008888645236530160
Itâs official: The supreme court is pro-cable oligopoly
Cable Companies: A Story of Oligopolies
http://www.moneyeconomics.com/commentaries/comcast-and-time-warner-deal-an-explanation-of-monopolies/
The broadband business: A duopoly in action
''Comcast wonât have any easy time making its case on either count. Itâs fended off antitrust concerns by claiming the two companies donât actually compete in the same markets. While this is technically true, itâs hardly comforting. As most anyone with a cable or broadband subscription knows, the two giants have been operating as a duopolyâyour area is served by one or the other, and thatâs the only option you have." â http://motherboard.vice.com/blog/if-comcasts-merger-happens-itll-be-thanks-to-a-mountain-of-lobbyist-cash
http://blogs.reuters.com/nicholas-wapshott/2014/02/18/comcast-how-to-win-at-monopoly/
When sympathetic sources like the Wall Street Journal and Forbes even have to admit that Comcast is an oligopoly, you really need to check yourself.
and the FCC is out to get corporations despite the fact the corporations were able to stick one of their own inside the FCC as chairman.
No.
Yes.
Ex-cable and wireless lobbyist confirmed as FCC chairman
Oh, and government failures are failures whilst market failures are features.
What I said was that the problem with government programs is that they are immune from failure.
So, you go from one ridiculous extreme to yet another delusional extreme in another vein. Your black and white corporatist appeasement knows no bounds.
The feature of the private market is that the entities are constantly destroyed and created.
Thatâs delusional. Only small business is inherently subject to that âconstantâ cycle and itâs often because large corporations consolidate via a lack of proper regulation and they squash competition and harm small business with their consolidated, monopolistic powers.
Then again, to you, every failure of the private market is a feature⌠even if that âfeatureâ means more harm to society at large. Then again, youâre a neo-libertarian⌠so âfree marketsâ are your Gawd or whatever. And your Gawd is infallible in your eyes.
And, pretending that government doesnât change over the years at all is, again, delusional.
The defect of public choice
Oh joy⌠yet another delusional neo-libertarian that prefers corporatist fascism to a representative democracy within our republic.
Carbon dioxide alarmism
Oh joy⌠yet another delusional neo-libertarian that thinks he knows better than the overwhelming majority of the worldâs climate scientists. I see you got the updated memo from the neo-libertarian reason.com to switch up from outright climate change denial to climate change impact denial.
One good thing to come out of this conversation is we see that youâre the kind of person that supports Comcast and is against Net Neutrality. I thank you for that.
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Itâs also better for the poor and middle class who are trying to have capital left over to invest in their children and their future.
Get your story straight. Donât go feigning concern over the poor now that youâve shown that your only goal is for unrestrained corporatism.
Carbon dioxide alarmism tends to be a transfer of wealth from poor and middle class to the well-to-do.
Are you anti-science in general, or do you just go with the worldwide conspiracy of climate science talking point?
Even the concern over rising sea levels at beach front property over the next 100 years is a top 1% problem.
Another anti-science talking point. Go visit Bangladesh and the Maldives and get back to us on how rich they are.
It seems youâre too dug in to your position in this thread to listen to reason. I do hope you privately take my challenge from earlier and figure out what your goals lead to. To make it more palatable, consider it to be looking for ways to strengthen your argument. Youâll likely find the opposite, but you donât need to admit that here.
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Hold it, are you saying there are people outside the US? Iâm not sure thatâs accurate. When you hear stories of other countries, you hear about things like successful market regulation and socialized health care, and we know those arenât possible. Better to ignore the legends and stick to libertarian axioms.
Seriously, though, we just finished arguing with wynn_james about global warming on another thread, starting from here. You can see his position and its defenses spelled out there, since itâs probably not on topic here, except for what it says about his ideology and standards for evidence.
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Libertarians by and large talk a lot, but have no real way to process logic.
They also generally suffer from arrested development.
Which is why they are libertarians in the first place.
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The sad thing is libertarians used to be far more interesting back in the dayâŚ
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