Does anyone here actually oppose Network Neutrality?

[Francesca R]

Would carriers be required to share their lines or not?

Would they be required to structure their products and pricing to meet some public policy objective, or not?

For NN nobody would be required to share (re-sell) line capacity. That is a shortcoming of NN and why it does not deal with monopolistic markets. It would be better if it did.

ISPs would not be allowed to treat the market between content makers and customers as two-sided.

 

[LorenzoValla]

For NN nobody would be required to share (re-sell) line capacity. That is a shortcoming of NN and why it does not deal with monopolistic markets. It would be better if it did.

ISPs would not be allowed to treat the market between content makers and customers as two-sided.

Please elaborate on what you mind a two sided market.

 

[stevea]

If the business has monopoly power due to its situation, many would think that the unfairness of that supercedes the unfairness of making such a demand.

I don't understand asset seizure or even regulatory taking as a valid objection to anti-trust actions. When AT&T was cracked, the stockholders received proportional shares of the "Baby Bells" too. Government didn't seize assets. It should be possible to structure this to avoid claims of "regulatory taking" too.

LLU concept applied to the internet addresses the fundamental problem, lack of market competition, but doesn't completely eliminate the monopoly. NN gives additional control of the existing monopoly to the central government, prevents further competition, and should lead to poor outcomes.

Seizing property, duplication of infrastructure are both red herrings in the case of both network neutrality regulation and local-loop unbundling regulation. Neither is required for either of those. They are wheeled out by people that simply do not understand what one or both of these things are (and there is plenty of this lack of understanding), or that wish to obfuscate.

Mostly so, however LLU does not eliminate the monopoly aspect of the distribution system. It would be interesting to understand how this is handled in the UK.

Here, wrt utility deregulation, a former natural gas or electric monopoly would be split into distribution vs production entities and the production entity must complete while the distribution entity remains tightly regulated monopoly.

Monopoly power is a situation that leads to market failure. This is separate from considerations of fairness. Correction of market failures generally requires intervention in the market.

Certainly it results in market failure, but to be clear, for others here, this means inefficiency. Microsoft's or Standard Oil's monopoly power harms consumers &| competitors, but doesn't cause a "crash".

I agree that intervention is required for persistent monopolies; however the existence of a monopoly attracts added competition. So Sodastream, or Keurig had/have a monopolies on the overpriced home soda systems or cr*py coffee machine markets, but no one should be concerned enough to act - there are low barriers to entry.

And let's also make a distinction - some monopolies develop from competitive markets while others are created by government edict - patents, union recognition and franchise agreements. Microsoft or Keurig need to worry about competition, Comcast does not (wrt the distribution system) they have a perfect monopoly.

Un-bundling is intervention to create competition and therefore remove the monopolistic arrangements which give rise to market abuse in the first place.

But it only removes part of the monopoly. The distribution network's "last mile" still has no competition. LLU is a brilliant approach, not a perfect one.

Actually those who object to LLU (but support NN) tend to do so via an argument that the former requires asset seizure and that is the reason why America can't do it. However this is uninformed objection coming from cognitive bias and is contradicted by other countries having implemented LLU without any asset seizure

That "seizure" argument is nonsense of course, the US has broken up monopolies in various ways before. I think it has a lot more to do with political demagoguery+gullibility and the current American zeitgeist that favors more government control and regulation, coupled with fundamental ignorance of the Sherman act.

 

[Francesca R]

Please elaborate on what you mind a two sided market.

Like ebay, credit cards and video game consoles, where the seller and the buyer both pay part of the cost of the network infrastructure.

 

[Francesca R]

Mostly so, however LLU does not eliminate the monopoly aspect of the distribution system. It would be interesting to understand how this is handled in the UK.

If you mean the wire itself, correct. And you can't eliminate the monopoly aspect of that without inefficient duplication. So that is handled by imposing utility-like service requirements on the network owner, and perhaps preventing that owner from also selling data capacity direct to customers.

People who want NN seem to believe that internet service providers themselves should be utilities, or common carriers. Presumably this is a reaction to the observation that they are monopolies or duopolies in the US. It's just not a particularly sensible reaction--compared to addressing the issue that ISPs are mono / duopolies in the first place. ISPs should no more be thought of as utilities than should airlines, burger joints or credit cards.

Certainly it results in market failure, but to be clear, for others here, this means inefficiency.

In particular, economic rents, which are unjust in the sense that they derive from excessive differentials of bargaining/pricing power. Often monopolies themselves owe their position to regulatory capture, rather than arising naturally.

I agree that intervention is required for persistent monopolies; however the existence of a monopoly attracts added competition. So Sodastream, or Keurig had/have a monopolies on the overpriced home soda systems or cr*py coffee machine markets, but no one should be concerned enough to act - there are low barriers to entry.

As has been pointed out--there are inefficiently high barriers to entry if a competitor has to build cables. Monopolies would have to be extracting exorbitant rents by the time it became profitable to actually do that. And it would be, formally, waste.

But it only removes part of the monopoly. The distribution network's "last mile" still has no competition. LLU is a brilliant approach, not a perfect one.

See above, the network owner remains dominant and requires regulation like a utility--in particular impartial allocation of capacity to re-sellers (ISPs)

 

[LorenzoValla]

Like ebay, credit cards and video game consoles, where the seller and the buyer both pay part of the cost of the network infrastructure.

OK, try again. Put it into English about how all this works in your estimation.

 

[Francesca R]

What?

If you don't know, educate yourself. That isn't my problem.

 

[LorenzoValla]

What?

If you don't know, educate yourself. That isn't my problem.

How very persuasive.

 

[Francesca R]

Apologies. The faux scandal about "double dipping" by ISPs springs from ignorance about what a two sided market is. "The internet" (the relationship between consumers, content makers and ISPs is such a two sided market.

If you want to know what these are then googling it will get you a better explanation than I would write.

http://lexicon.ft.com/Term?term=two_sided-markets

http://en.m.wikipedia.org/wiki/Two-sided_market

 

[blutoski]

However, what you say about newer subdivisions in more rural settings right outside of large cities (condos, developments, etc,) isn't true for the inner city. Or even for older towns and small cities.

I guess I should have qualified what I meant by 'most new' - this is probably more a Canadian thing. Buried vs overhead cable is up to the municipalities, and buried is really relatively new. So, the older subdivisions would have started overhead a century ago, and there has been a gradual trend toward buried drops over time.

In Vancouver, for example, there is 100% buried drop in the commerical district downtown, but the residential districts outside the downtown core are a mix of old single family blocks with overhead drops, and rezoned higher density, where the single family houses were torn down and replaced with buried drop condos.

Just as an example, my house is 110 years old and we have overhead drop from poles in the lane, but across the street, identical houses were torn down and fiveplexes were built, and they all have buried cable as of a few years ago.

 

[blutoski]

That's malarky. Modern subdivisions generally have conduits through which newer/different cabling can be pulled without digging up the streets.

So: three things... first and most important is that this is still an additional tech visit, a cost that has to be passed on to the customer. If the goal is to find efficiencies through competition, this has a significant cost impact. Unused facilities have to be maintained, and the additional cost is passed onto the consumer. This is why there are economic models that indicate there might be limits to the number of 'natural' local networks. Fewer participants leads to high costs due to cartels but more participants leads to high costs from unused network and switching.

Second: yes, that's the design for buried drops - pullable conduit. The reality on the ground is that dirt raceways collapse over time and techs can't blow new cabling through, so increasing capacity often involves retrenching. Cement raceways are more rugged, but they're really typical of downtowns, which means condos.

Condos have historically built their interior wiring with two pair baked in to frustrate home occupations. Adding additional service paths to units would usually have to go outside, which stratas generally hate for aesthetic and maintenance cost reasons. It is also quite insecure for unencrypted services.

And, even if it did involve digging up the streets, so what. It's a tough market and if you can't compete, do something else where you can compete.

What's next, are you going to argue that the NFL should accommodate weaker athletes because it's unfair for them that only the better athletes are successful?

I don't think you've been following my argument, feels like a strawperson.

Consumers generally just say they want better value.

The 'solution debates' about how to achieve this are largely orchestrated as business lobbyist vs business lobbyist.

The incumbents want new entrants to build their own networks, but the potential new entrants lobby the government that it's 'a better business environment' to have lower barriers to competitive entry via wholesaling and are demanding legislated access. Canada has implemented the wholesaling approach, and I was outlining that there is a mix of benefits and impacts.

 

[lomiller]

Like ebay, credit cards and video game consoles, where the seller and the buyer both pay part of the cost of the network infrastructure.

This makes no sense. How does net Neutrality prevent ISP from billing certain subscriber? All it does is specify that you can’t bill someone for a certain connection speed and then turn around and selectively limit their packages from achieving those performance levels unless they go to some preferred service.

If you mean the wire itself, correct. And you can't eliminate the monopoly aspect of that without inefficient duplication. So that is handled by imposing utility-like service requirements on the network owner, and perhaps preventing that owner from also selling data capacity direct to customers.

People who want NN seem to believe that internet service providers themselves should be utilities, or common carriers. Presumably this is a reaction to the observation that they are monopolies or duopolies in the US. It's just not a particularly sensible reaction--compared to addressing the issue that ISPs are mono / duopolies in the first place. ISPs should no more be thought of as utilities than should airlines, burger joints or credit cards.

In particular, economic rents, which are unjust in the sense that they derive from excessive differentials of bargaining/pricing power. Often monopolies themselves owe their position to regulatory capture, rather than arising naturally.

As has been pointed out--there are inefficiently high barriers to entry if a competitor has to build cables. Monopolies would have to be extracting exorbitant rents by the time it became profitable to actually do that. And it would be, formally, waste.

See above, the network owner remains dominant and requires regulation like a utility--in particular impartial allocation of capacity to re-sellers (ISPs)

You seem to be confusing network routing with last mile infrastructure. NN has nothing to do with how access the network is provided or sold. It addresses packet handling on these networks not how the packets get there.

 

[Francesca R]

How does net Neutrality prevent ISP from billing certain subscriber?

NN prevents ISPs from charging content providers for any of the ISPs costs.

You seem to be confusing network routing with last mile infrastructure. NN has nothing to do with how access the network is provided or sold.

That is exactly the point being made, so it is not me who is confused. Hence NN does not incentivise any competiton (of ISPs).

 

[lomiller]

Apologies. The faux scandal about "double dipping" by ISPs springs from ignorance about what a two sided market is. "The internet" (the relationship between consumers, content makers and ISPs is such a two sided market.

No it isn’t. In fact the Internet isn’t a “market” at all. The internet is a network of peers. Any node can be a provider, a consumer or both.

You can certainly run such a two sided service over the internet or any IP based network but these are higher up in the networking model. The internet itself works specifically because it doesn’t distinguish between who is providing content and who is consuming it. There were older private networks where that did exactly this but these were swept aside as they are comparatively useless, static and un-innovative compared to a network where anyone can set up their own service for anyone else to consume.

 

[lomiller]

NN prevents ISPs from charging content providers for any of the ISPs costs.

No it doesn’t. They can sell a connection of any speed they want and charge based on either speed or bandwidth consumed just like they can any other subscriber.

That is exactly the point being made, so it is not me who is confused. Hence NN does not incentivise any competiton (of ISPs).

Strawman, since Net Neutrality doesn’t have anything to do with how ISP provide or sell internet access.

 

[Francesca R]

No it isn’t. In fact the Internet isn’t a “market” at all.

Incorrect. The informed world disagrees with you.

Any node can be a provider, a consumer or both.

Irrelevant. The same is true with voice telephony. Any "node" can be a caller or a receiver. That is still a two sided market. Usually callers are charged but sometimes the receiver is charged. And that flexibility increases total welfare.

The internet itself works specifically because it doesn’t distinguish between who is providing content and who is consuming it.

ISPs can, and do.

 

[Francesca R]

No it doesn’t. They can sell a connection of any speed they want and charge based on either speed or bandwidth consumed just like they can any other subscriber.

None of which refutes what I said. Under most network neutrality ideas, only the consumer of content are charged and ISPs would not be allowed to charge content providers.

Net Neutrality doesn’t have anything to do with how ISP provide or sell internet access.

Yes it does. ISPs would be allowed to discriminate (by differential charging) the level of service they offer to content consumers, but would not be allowed to discriminate (by differential charging) the level of service they offer to content makers

Strawman

And it isn't a strawman either. Net Neutrality would not incentivise competition between ISPs. That is exactly why it is inferior to local loop un-bundling.

 

[lomiller]

Incorrect. The informed world disagrees with you.

I see nothing in your link discussing IP based networks...

The same is true with voice telephony. Any "node" can be a caller or a receiver. That is still a two sided market. Usually callers are charged but sometimes the receiver is charged. And that flexibility increases total welfare.

Content providers and content consumers BOTH pay for their connections. If the ISP wants to forgo payment to one or the other there is nothing to stop them.

ISPs can, and do.

ISP pay backbone providers (transit ISP’s) to connect their local networks and then re-sell slices of this (with over-commit) to their local subscribers. Why should it matter to them, how the bandwidth they are selling is used?

None of which refutes what I said. Under most network neutrality ideas, only the consumer of content are charged and ISPs would not be allowed to charge content providers.

False. Content providers still need to buy a connection to the internet

Yes it does. ISPs would be allowed to discriminate (by differential charging) the level of service they offer to content consumers, but would not be allowed to discriminate (by differential charging) the level of service they offer to content makers

ISP’s are free to sell connections of any speed, it doesn’t matter what the subscriber wants to use it for. What Net Neutrality does is prevent them from selling a connection of one speed and then preferentially throttling some traffic to a lower speed inside their network

And it isn't a strawman either. Net Neutrality would not incentivise competition between ISPs. That is exactly why it is inferior to local loop un-bundling.

You are still conflating net neutrality with last mile infrastructure. Net Neutrality has nothing to do with how subscribers establish a connection with an ISP.

 

[blutoski]

You are still conflating net neutrality with last mile infrastructure. Net Neutrality has nothing to do with how subscribers establish a connection with an ISP.

I think you may have missed Francesca R 's thesis that she introduced in previous posts: she's submitting the hypothesis that NN would not be at risk in the first place if there was more competition between ISPs, which would make them more consumer-responsive.

She's not conflating the two so much as saying solving competition would make NN regulation unnecessary because sufficiently competitive ISPs would act that way voluntarily.

 

[lomiller]

I think you may have missed Francesca R 's thesis that she introduced in previous posts: she's submitting the hypothesis that NN would not be at risk in the first place if there was more competition between ISPs, which would make them more consumer-responsive.

I didn't miss it, I'm saying it's a strawman to debate Net Neutrality vs other measures effectiveness in addressing last mile competition when no one has argued Net Neutrality addressees this at all.

Before you can discuss it there first thing needs to be an understanding how the internet is structured and what role Net Neutrality is supposed to play in that. With claims like "content providers don't pay for bandwidth" it's becoming clear there are significant issues to be addressed in understanding what Net Neutrality is that need to get cleared up before you can even have the discussion on whether last mile competition could accomplish the same thing.