None of the threats you make are reality here where this net neutrality by law has been reality since late half of 90′s. I know that without these laws I would have to pay more to get what I have now and I would not like that. I know which way I would vote if I were a US citizen – but luckily (for many reasons) I am a finn and don’t have to worry about this. I thank my ISP for their fine service (which also makes it possible for me to run that blog site of mine on my home system – with no extra fees).

Cable companies have a “Franchise Agreement” with local municipalities to govern a “right of way”, basically the city’s permission to give the cable company right to run it’s lines and provide service to the city. Most municipalities only have 1 cable company because of two things:

Wiring costs and franchise fees.

If you open your cable bill, in addition to the usual run of State taxes, you’ll see a “Franchise Fee”.

Lets start with wiring costs. Your standard Fiber Optic line runs about 20 cents per line foot. When you consider the number of lines necessary to wire even a small city, the costs could easily get into the 10s of millions on Fiber costs alone, including installation. That is 1 part why most cable companies won’t compete head-to-head. The upfront cost to run separate lines (they wouldn’t share), the installation of such lines, and the governance associated with getting approval to run them makes it not worthwhile to add services in areas with an existing provider.

Let’s get to those pesky franchise fees. Each cable company submits to a LGA or Local Government Authority. They have to submit to them in order to operate their lines (the lifeblood of their service). In order to maintain those lines, the city imposes a tax or fee on the service in the franchise fee. The city will collect as much as 10% in some markets (the averages are usually between 5-6%) in the form of a lop off the top of your cable bill.
Now, if you switch to some cities that have competing cable companies, you’ll find that the city is only able to collect about 0.5% to 1.5% in franchise fees. You might think that to be a drop in the bucket, but those fees add up when there are 20,000 or 200,000 or 2,000,000 customers. A lot of cities use this money to supplement their state’s local government aid. Why would your city agree to allowing another cable company, when they’re going to lose approximately $750,000/year in a 20k cable customer town, and up to $75 Million in a 2 Million customer town. Hey, LA could use that kind of dough.

One thing, I’d be willing to be that 99% of people wanting the FCC to run ISPs are Bit Torrent Users. That’s right, they’re people who are technically breaking the law themselves, but are quick to point out that their ISP is blocking them from breaking the law. I’m not trying to be high and mighty here, but I see this as the pot calling the kettle black.

The newspaper analogy is pretty close. Newspapers do not sell advertising based on their reader’s preference. There is no limit to how much advertising they will provide. They don’t care if their reader’s are happy with it any more than dairy operators worry about whether their cows are happy to be milked. The readers are a product, their customers are the advertisers.

If you apply that to this situation, it is possible that an ISP will provide a discount to content that helps attract a larger audience. But if their primary source of revenue is content providers, then your service depends on the content providers’ decisions, not yours. If you want high speed connections to content from a provider who doesn’t pay for bandwidth, it just isn’t going to be available at any price from anyone.

Just imagine a competition between Facebook and Myspace where Myspace pages load instantly, but Facebook pages load like you were still on dial up. Do you really think the upstart Facebook would take away Myspace’s market, regardless of which product is better?

Economic theory and history show price controls to have very negative effects on availability and innovation. Yet, people keep bringing them up…

There is another point which a commenter (#61) above brought up: right-of-way. It is interesting to see that, once again, prior government intervention is causing more problems and inviting even more intervention (surprise!).

There have been many interventions in the telecom space (including the government-granted monopoly of Bell, to supposedly mitigate a hypothetical “natural monopoly” situation), but the specific prior intervention I’m referring to is the government control of roads and highways.

Since cables and fiber optics are closely related to roads, and often times require digging holes in them, cable companies obviously need permission, which does act as a barrier to entry for competition.

A slight addendum: this viewpoint assumes that legal regimes for markets exist BEFORE a market for any particular good has actually organically formed in an economy. This is the historical inverse of every single product class in the history of mankind. Products and their exchange occurs FIRST, and legal regimes arise afterward to take care of problems relating to property rights infringements given those products.

This is why cable/isp service cannot possibly be considered a legitimate free market. The state set the rules for its use before it could even be sold on the market, which heavily influenced the manner in which the service would be developed in the future.

If the service were a true market like many other goods, it would be fantastically more productive than it is right now. Even if we were to totally deregulate it, it would probably take atleast a decade for it to develop to where it actually stablly acted like a free market. This is the fault of the state. It should not be given more power to make the matters worse.

When they are left alone.

Given that this is largely the case concerning such unbelievably complex items as any modern physical electronic device, it seems to me that the exact opposite is the case. Prove that a fully unfettered market is not self-regulating. You certainly will not be able to do so from a theoretical standpoint.

Or perhaps the IT folks only think that because that is what they have been told to think their entire lives. Given their lack of real historical knowledge on actual market conditions at any given time, and it seems pretty obvious that this is likely the case.

This article is more than a bit dated, but given that Franchise reform efforts have only been taking place within the past 5 years or so it is still quite pertinent when taking into account exactly what the non-reformed states have to deal with.

That would be silly.

Another reason NOT to entrust any power to the FCC is that the FCC was one of the primary INNOVATION DECORATORS during the 20th century. It held back cable television by atleast a decade during the 60s and 70s ehrn the dominant media petitioned the FCC to hold down its development.

Once you set the FCC as even a small, defined regulator of the internet it will have the natural tendency to expand its reach for numerous reasons which have been developed in the school of Public Choice economics.

Do you really want an organization with such an anti-competitive past as the FCC deciding what the kind of uses for the future of internet should be?

90% of all the arguments have to do with “but my area only has 1 provider”. Well no shit sherlock, the various state and local governments under have essentially made it that way through the use of franchise monopolies. By law, any ISP which wishes to operate in a particular region must get a big stamp of approval from whoever the franchise granting body is. In other words, for a competitor to come in and to attempt to let the market process actually work, one must bribe a bunch of politicians to even be allowed to provide the damn service.

http://ideas.4brad.com/remaining-neutral-network-neutrality-its-monopoly-stupid

Get rid of the damn franchise monopolies and the problem will essentially go away.

I love how many of the commentators believe it is appropriate to blame the “free-market” for the way things are currently structured when historically ALL telecommunications services have been one of the most regulated industries in the US. People assume that just because they are charged a price for something that they are paying a “free market price”. This is such a stupid assertion to hold that I cannot believe that any human being who has the necessary brain function to even breath can believe it.

Before mindlessly commenting that you have only one provider, or better yet justifying this absurd policy by saying that we need it to be a monopoly because it is a “public utility”, I would kindly ask that you use some semblance of logical economic theory to show me WHY these particular services ought to be monopolies. Or even that a “public utility” can even be established in some given industry in a non-arbitrary manner.

The author uses airline travel as an example, but for exactly the wrong reasons. He should have pointed out how we had a federally enforced monopoly (of various providers making it a cartel in reality) under the Civil Aeronautics Board, and once that was dissolved we had far greater levels of competition than ever before. We would have even more if airspace were privatized and we got rid of the FAA.

We have as much (or as little) control over whether the FCC regulates net neutrality as we do over what those regulations are. There is no reason to think that by opposing regulation that serves our interests we will prevent regulation that does not serve our interests.

Likewise, the companies are not opposed to regulation, just regulation that does not serve their interests. If they thought regulation would be to their advantage, they would (and will) support it. No one will need to “open the door” for them, these large companies are perfectly capable of doing that for themselves.

I think it is also important to realize that the whole purpose of charging for improved bandwidth is to sell a competitive advantage on the basis of something other than consumer/user preferences. They are paying for an advantage over their competitors.

But that is not the issue. The issue is government intrusion into things it shouldn’t be intruding into. We as a society have become way too lazy and dependent on the government to take care of stuff.

All the other “pros and cons” aside, this would be more government regulation. Which is bad and dangerous. No other argument matters.

“Those who would give up essential liberties for a little temporary security deserve neither liberty nor security” – Benjamin Franklin

Tell you what. Let’s sell access points the the interstate system. Anyone can use the purchased access points. Everybody gets to go 65mph. Well, except that since I purchased an access point, and I own a trucking company, whenever one of my trucks gets to my access point, I stop everyone until my truck is on the highway. Yes, it’s a public access point, but I’m prioritizing my traffic over yours. And when other trucking companies start paying me to use my access point, all other traffic slows down. A lot.

It isn’t a perfect analogy, but it’s a lot closer to what we face without net neutrality than the ones posted in this article.

Yeah, cause deregulation worked GREAT for this country, didn’t it? Go look at what happened after everything deregulated back in the 80s. All the businesses went apeshit and shot themselves in the foot.

Free markets don’t work. Period.

Not so. Phone, cable, electrical, etc all have to run wires. This includes not only tremendous amounts of cost, but also things like obtaining right-of-ways, dealing with injunctions brought up by the existing local monopoly (who certainly won’t let you encroach their territory without a fight) and so on.

Even if you could pull together the probably 100s of millions if not billions of dollars it would take to string a whole new set of wire, you still have enormous legal hurdles to go through, FCC or no FCC.

That sort of barrier to entry is about as close to a natural monopoly you can get without it being actually “natural” (in the sense of “if I cut down that tree, you can no longer sit under it”).

The FCC is simply trying to prevent such monopolies from taking advantage of your internet access. Will they screw it up? Maybe. But an unregulated monopoly will almost certainly be a problem as soon as the spotlight is pointed another direction.

Yes there is. Telecom operators are considered common carriers. They are not liable for the content of the traffic they carry because they accept all traffic without screening. To selectively refuse traffic, based on protocol, port, or direction, would risk losing that status and accepting liability for the content of the traffic.

Further, such a service would cease to be “Internet access” as generally understood and would have to be described differently, as “Internet access” is not considered to be access to certain approved sites, or access to certain sites at certain speeds at certain times, but is offered with a quality of service guarantee described as “best effort”. If a service provider could carry traffic between my computer and Google faster than it does, but does not do so because Google does not pay them a premium, they are no longer delivering “best effort” quality.

The newspaper and airline analogies are not particularly apt. A more apt analogy would be a telephone company that advertises a flat monthly rate for unlimited calling time, but then charges both sides of a call and offers upselles for more reliable or better quality connections.

You cite a good definition of “rent-seeking” behavior, but seem to have misapplied it in your article. If I use ISP A, and Google uses ISP B, and ISP A then approaches Google for an expediting fee to prioritize traffic between their client (me) and Google (a client of ISP B) then this is rent-seeking behavior.

One might potentially justify it if one believed that the expediting fees would be used to expand capacity to Google; however, as ISP A actually has no relationship or direct connection to Google, it cannot actually do this, not without the participation of ISP B. The only way this system works in practice is that all non-fee-paying directions have their traffic throttled– again, failing to meet even the lowest level of quality assurance, “best effort”– in addition to being false advertising.

1. People pay for the NY Times because its a printed product not a utility. The publishers are responsible for the content of the NYTimes, in case you didn’t know, ISPs, telephone cos, utilities, don’t have editorial control over the internets. Wow that one took neuroscience to figure out.

2. The “premium” analogy is dumb. First class passengers and coach passengers are going to the same destination, in the same amount of time. The first class passengers just pay a little more for extra ass padding. We are not speaking of anything to do with the free speech, free assembly, with which common carriers essentially can mediate by adding “premiums” which essentially would allow the wealthy to have free speech over the internets and the poor to have some new version of digital cable (but maybe in this post Reagan cleptocracy we live in its actually reasonable to make the rich free and the poor not). The comparison isn’t even close.

3. Your last three paragraphs must be the results of sniffing glue or pens. I can’t believe that you argue regulation is fundamentally bad, because we need to prefactor in American ambivalence to the mix that will ultimately make it a net negative.

This country is fried.

The FCC doesn’t create our ISP experience.

The FCC would be establishing *minimum requirements* for service — NOT maximums.

So there would be Lots of choices — the only ones you wouldn’t have would be ones that provided worse service than the FCC requires.

This is no way equivalent to deciding between ISP — presuming — as many people have pointed out, that you have any option of another ISP in your area — which is not the case in my area, as I gather is the case in most other areas of the country.

We are already stuck in the no-ISP choice option. We don’t like it. That isn’t the fault of the FCC — because they have, to my knowledge, only required minimums. If you are saying that having to provided “minimums” is keeping ISP’s out of the market that might provide worse service — then you are creating a false threat.

If the FCC added more regulation, say — that to enter the phone market (wireless or wired), they must also offer a minimum of 10MB/s connection, I think you’d see more internet offerings, though maybe fewer phone companies.

And what cost to the ISP’s is it you are talking about? What cost is there in forbidding something they don’t do yet anyway? Quite the opposite, doing prioritization would probably mean costs, for expensive equipment to look inside the packets.

Besides, you are confusing what is politically desirable with what is commercially desirable.

You can have freedom or non-legislation, but not both – when the freedom you want is under commercial pressure.

Finally, there is certainly a risk that FCC just ends up being owned by corps and help their anticompetitive behaviours, in the disguise of helping you. But is that a problem with the concept of legislation to protect people’s freedom? No.

If the FCC ends up as a corp tool, it is rather a problem with weak and corrupt politicians, with whom things will go wrong anyway, either way. Fight them rather than the FCC.