Net neutrality: What it is, and why you should care

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 this…because 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 “Eh…$40 (or $20) extra dollars? My service is good enough.” (The only time you will hear this from a cable/Internet subscriber.) That is why most “last-mile” infrastructure projects are folded into the price of your home. The city didn’t 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 Cogent’s relationship with Comcast.

You, and the writer at that link, are assuming Comcast is offering a fair price for interconnection. But you don’t 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.

That’s not an oligopoly. That’s called a middle man.

Those are not opposites. Middle men can be oligopolists.

I’m sorry but I don’t believe you know what you’re talking about.

My delay in responding was due to working on routers at a residential broadband provider. There’s no evidence of packets being dropped at the Netflix - Cogent interconnection, only at the Cogent - Comcast interconnection.

There’s no evidence I’ve 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 don’t 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.

It’s never been neutral.

Tell us, who was the top of the food chain, that everyone else had to pay, in the 90’s or 2000’s?

So you’re saying it wasn’t actually as simple as you are putting on.

Of course. All the details would fill a book.

Most subscribers used dial-up.

That’s when it was easy to switch providers, since the last mile was a common carrier. And the Internet thrived.

It won’t. 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 nobody’s 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 you’ve 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 “throttling” means and when it is okay (because they will say it will be).

That’s 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 we’re not going to let companies like Comcast take it over without a fight.

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It’s a joke, right?

No. Explain to us why Comcast deserves payment from everyone else.

I don’t know what sort of business you do, but think it would be awesome if I got it at no cost.

I do Internet engineering. I’ve 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. I’ve done work for Comcast, Level 3 and other companies that comes up in these debates. What do you do?

I’ve spent roughly 15 years creating internal documentation that describers the data transport infrastructure of telecom and Internet data companies. Now that we’ve sniffed each other’s behinds, I want that “Internet engineering” (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 Comcast’s 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. I’m sure Netflix would like to pay $0. I’m 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 network’s point of view.

My delay in responding was due to working on routers at a residential broadband provider. There’s 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. You’ve already shown your credentials.

Tell us, who was the top of the food chain, that everyone else had to pay, in the 90’s or 2000’s?

No one. Just as there is no one like that now. AT&T has a far larger number of houses passed than Comcast. If there’s a scary monster out there, AT&T should be that monster. But Google is about to join in–but 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.

That’s 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. I’m sure it’s 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. I’ve already explained Regulatory Capture. Magic words like “power of the people” will not make a Buick take off like a flying unicorn. The People can’t even stop sugar farmers to stop taking a legislated cut from their pockets. That’s because of Public Choice Theory economics. It is completely rational. If you don’t 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 we’re 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 “Internet engineering” (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 Comcast’s customers. That requires Comcast’s 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 I’ve 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 peer’s customers.

No one. Just as there is no one like that now.

Ah, but you’re defending Comcast’s 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 you’ve 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 it’s not easy for half the country to simply move somewhere with better options. Even if you go somewhere with 2 broadband options, that doesn’t guarantee good behavior from the provider.

If you don’t want powerful interests controlling your choices, then weaken the power of the universal Monopoly of Force and Compulsion (ie the government).

That’s 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, we’re 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 Comcast’s customers. That requires Comcast’s 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?

Don’t you think Comcast would like $1000 per mbps? Why don’t they demand it? They’re evil enough. What’s 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: “Is Price Gouging Immoral? Should it be Illegal?” Your going to want to look away pretty quick, but try to at least make it to the 3:45 mark at least.

As I’ve 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 didn’t think the service was more valuable that the money, they’d walk. That’s how every business transaction on the planet works. Netflix would simply go to their customers and say, “I’m sorry but we cannot offer House of Cards to Comcast customers because they are being unreasonable.” Then they’d only cut a CDN deal with AT&T and the smaller resellers of the AT&T network. I don’t mention Dish or DirectTV because I don’t know what kind of trunks they have.

Ah, but you’re defending Comcast’s 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 positive–not just for consumers (assuming it was better for them, I don’t know). It was also better for the Standard Oil shareholders. They’re 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 don’t think we’re there for Comcast, based on what I know.

“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 you’ve 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. I’ve 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 it’s not easy for half the country to simply move somewhere with better options.

John F. Kennedy on “fairness”.

Even if you go somewhere with 2 broadband options, that doesn’t guarantee good behavior from the provider.

I suppose that’s true of any service. Why do we have a private market at all when the service is so sucky. Why can’t 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, we’re still just left with the anything goes system you want to concede to the broadband providers already.

If only that were the case. I’m 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 fails…that 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 people’s 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 “free”, 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. I’ll 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, that’s not because you are over-compensated. That’s because Americans aren’t 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 isn’t an oligopolist, Comcast isn’t 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 on…

You couldn’t have said it any better than a libertarian think tank funded by Comcast.

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I should’ve realized earlier that you were one of those libertarians. So since your ideological blinders seem immovable, I’ll say what I say to all your kind.

What’s 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 you’d want to live. What you should see is that the closer a country gets to your model, the more you’d like to live in that environment. If that correlation doesn’t work out, then you should rethink your model.

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Well said. I think I’ve run into you before.

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The more regulation, the bigger the companies and the poorer the economy will be. It’s the lack of competition that makes companies humungous. And it’s precisely regulation that creates barriers to competition. Should Government Regulate Monopolies? Regulating Monopolies

Trusting a monopoly to prevent monopolies. It’s a product of propaganda and lack of historic and economic knowledge.

Trusting a monopoly to prevent monopolies. It’s a product of propaganda and lack of historic and economic knowledge.

So, I’m 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. You’re embracing a cartoonish, infantile, neo-libertarian “reality” and not much more.

Also, as far as propaganda goes, that’s a laughable projection on your part. There’s a vast amount of libertarian, propagandistic, deregulation drivel throughout the media, within search engine results, etc. via libertarian “think tanks”, industry sockpuppet organizations and the like.

Libertarian “think tanks” 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 who’ve wanted to milk their current infrastructure down to the last drop. Therefore, they’ve funded libertarian “think tanks” that’ve ignored science and spewed propagandistic bullshit to clutter up discussions on the topic and derail actions. It’s 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 “think tanks” told you to change your mind and now you’re a climate change impact denier? Or, have you not advanced that far yet?

What have the “think tanks” 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, doesn’t 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 “asshole effect”:

http://www.theguardian.com/commentisfree/2014/jul/08/the-age-of-entitlement-how-wealth-breeds-narcissism

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Of course, in your world, Comcast isn’t an oligopoly, Comcast isn’t responsible in any way for any slowdowns…

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. Didn’t 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. That’s 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 who’ve wanted to milk their current infrastructure down to the last drop.

It’s 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 isn’t an oligopoly, Comcast isn’t responsible in any way for any slowdowns…

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, it’s really a duopoly. Here’s the facts:

http://online.wsj.com/news/articles/SB1008888645236530160

It’s 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

http://knowmore.washingtonpost.com/2014/04/25/this-hilarious-graph-of-netflix-speeds-shows-the-importance-of-net-neutrality/

''Comcast won’t have any easy time making its case on either count. It’s fended off antitrust concerns by claiming the two companies don’t actually compete in the same markets. While this is technically true, it’s hardly comforting. As most anyone with a cable or broadband subscription knows, the two giants have been operating as a duopoly—your area is served by one or the other, and that’s the only option you have." – http://motherboard.vice.com/blog/if-comcasts-merger-happens-itll-be-thanks-to-a-mountain-of-lobbyist-cash


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.

That’s delusional. Only small business is inherently subject to that “constant” cycle and it’s 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 “feature” means more harm to society at large. Then again, you’re a neo-libertarian… so “free markets” are your Gawd or whatever. And your Gawd is infallible in your eyes.

And, pretending that government doesn’t 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 world’s 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 you’re the kind of person that supports Comcast and is against Net Neutrality. I thank you for that.

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It’s 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. Don’t go feigning concern over the poor now that you’ve 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 you’re 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. You’ll likely find the opposite, but you don’t need to admit that here.

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Hold it, are you saying there are people outside the US? I’m not sure that’s accurate. When you hear stories of other countries, you hear about things like successful market regulation and socialized health care, and we know those aren’t 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 it’s 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 day…

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