Cliffs On Net Neutrality?

[RUScrew85]

Here's a recent link that explains one person's thoughts on how Net Neut will work out - Pay-per-byte.

http://market-ticker.org/akcs-www?post=229902

 

[BeKnighted]

Originally posted by i'vegotwinners:


cross subsidization doesn't necessarily require the receiving side to otherwise not be self sustaining.

and my case that cross subsidization was taking place, was restricted in my statement to pertaining only in cases where someone takes only internet, not cable, from a certain provider..

thus imo, your example using standalone vs bundled pricing, reinforces rather than counters my assertion.


your points regarding the bandwidth needs of cable vs data, and the fairly substantial incremental costs for programming that cable has but internet doesn't, when compared against the standalone prices of each, is the basis for my assertion that standalone internet subs subsidize the cable side. (one could argue much greater in home equipment and incremental equipment costs, as well for cable).

Honestly, I have no idea why you think there's cross-subsidization between Internet and cable when someone buys standalone Internet. The only relevant question from an economics perspective is whether each service covers its incremental cost plus some share of the fixed cost. (This isn't quite microeconomics 101, but close.) If you're saying that Internet uses less bandwidth than cable and therefore should cost less, that's not how cross-subsidy analysis works, and in any event is becoming less likely to be the case as Internet speeds ramp up. (And, in any event, the incremental cost of additional bandwidth on the network when you build the network is pretty low compared to the cost of installing the wire or fiber, which is more or less the same for a regular phone line as it is for a 1 GHz coaxial cable or a 40 Gb high-capacity fiber line.)

 

[RP78]

Originally posted by RUScrew85:

Here's a recent link that explains one person's thoughts on how Net Neut will work out - Pay-per-byte.

http://market-ticker.org/akcs-www?post=229902

I've always been amazed that ISP's haven't put meters on the lines like other utilities do.

 

[BeKnighted]

Originally posted by RP78:

Originally posted by RUScrew85:

Here's a recent link that explains one person's thoughts on how Net Neut will work out - Pay-per-byte.

http://market-ticker.org/akcs-www?post=229902

I've always been amazed that ISP's haven't put meters on the lines like other utilities do.

Telephone service traditionally has had unlimited use, particularly for local service (not everywhere, but in most places - New York City was an exception for a long time), and in recent years has added unlimited (although if you read the fine print, it's not completely totally unlimited) domestic long distance. Internet service grew out of that tradition. And, of course, the cost of actually providing Internet service (like phone service) is largely fixed, unlike gas, electricity (sort of) or water, where there is variable cost based on usage.

 

[RuRoman]

Robertg, more often than not, you continue to link to sites that are essentially a mouthpiece to net neutrality opponents, and worst most of these sites fall far short of a convincing argument against treating last mile ISP as a utility (for instance, the link that states that Netflix is about to receive a 11 BILLION windfall from this ruling; or that Silicon Valley is dictating policy in Obama's administration) or that there is competition at the 25 MBPS household environment (where there is hardly any competition at 75% of all US household, and even this number is questionable).

To be sincere, I am not thrilled about the new rules associated with Net Neutrality- I am more of a David Farber fan (let's wait and see stand) but I do not subscribe to Gary Becker's analysis because he simply missed the mark when identifying the market at stake (household access). Net neutrality is simply a small patch to resolution to a more controversial issue and in my opinion an even more harmful situation. The problem is that certain ISPs providers (mainly Comcast) have a monopoly when it comes to 25 MBPS bandwidth at household level in the US.

And let me tell you that I am not against monopolies that have been created by sheer innovation and/or shrew market competition. However, Comcast has gained a monopoly by exploiting legal and regulatory loopholes at the State, County and Township level disguised as a return for the cost of investing in last mile ISP delivery infrastructure when in fact such exclusive rights generate returns that are multiple times the cost of investment, and on top of this preclude others from entering the same market. In other words, when it comes to ISP connectivity at household level, US taxpayers and constituents have not only financed cost thereof, but have created a single supplier market that continues to inflate the cost of receiving such services and stifle innovation.

I would immediately exchange net neutrality in favor of a fair, transparent and highly scrutinized ISP last mile bidding and deployment rules with tax favorable treatments to companies interested in entering this market. The treatment of ISPs as Title II companies is in my opinion a poor attempt at trying to level out such market-but frankly the only other option (the one about opening up the ISP market is neither politically or even legally viable because it would require the government to pursue a claim that Comcast has a monopoly, and this my friend was never going to happen-at least not yet).

A couple of tidbits on this:

I love how Verizon plays the game....it considers himself a Title II provider whenever it is convenient for them, and oppose the same rule on a general basis. (This shows you how impractical this new Net Neutrality rule may become).

Beckers and others opposing NN claim that it will stifle innovation and underwriting of new project....and yet Verizon itself has shown its willingness to invest heavily in markets even where there is a perceived "competitive environment"- there is a lot of money to be made at household transit. Furthermore, there is no evidence that net neutrality will in fact discourage investment-just speculation.

Comcast: is Comcast not only pursuing to maintain its monopoly in the ISP last mile household environment, but also to make it difficult for competing content to make it to the household?

Comcast

 

[RobertG]

Robertg, more often than not, you continue to link to sites that are essentially a mouthpiece to net neutrality opponents

Roman,

It's kind of hard to find articles arguing against net neutrality on sites written by Net Neutrality PROPONENTS, they usually don't like to post anything that doesn't support their position. :)

I would immediately exchange net neutrality in favor of a fair, transparent and highly scrutinized ISP last mile bidding and deployment rules with tax favorable treatments to companies interested in entering this market.

One interesting new development in all of this is the development of G-Fast DSL which is reported to support speeds of up to 1GBpS (this depends on how far you are away from the distribution point) over regular copper lines. This means that most houses who already have copper phone connections, probably 99.9% of the homes in the US have the ability to receive this (of course rural areas would still have issues.) I'm sure that there is a still a major investment, and regulatory hurdles, but couple this with the 1996 telecom act (which forced the baby bells to allow anybody access to the last mile connections) and you could have the makings of some serious competition to cable and fiber with speeds rivaling or surpassing what they are offering.

Now where this fails, is where it failed the last time which led to the telecom bubble bursting; the baby bells used all sorts of tricks and obstruction to protect their local lines (I worked for a company which wrote provisioning line software for CLECs and DLECs so I saw some of this in action.) The FCC should enforce the 1996 act and come down on this obstruction, then, as you said, adding some tax favorable treatments to mix you could have some serious competition in the market.





http://www.zdnet.com/article/g-fast-1-gigabit-per-second-dsl/