FCC's Martin: No Net Neutrality Laws NeededBut is bad press and a wrist-slap enough to keep ISPs honest? 04:51PM Tuesday Apr 22 2008 by Karl Bodetags: competition · fcc · business · Op/Ed · net-neutrality · ComcastFCC boss Kevin Martin spoke before Congress today in a hearing on network neutrality, with the primary topic of conversation being Comcast's throttling of BitTorrent traffic. Martin repeated his belief that new laws weren't necessary to maintain neutral networks. However, with Comcast all but promising a lawsuit should the FCC punish them, Democratic Senators continue to wonder if tougher standards are necessary.  Consumers must be fully informed about the exact nature of the service they are purchasing and any potential limitations associated with that service. -FCC Boss Kevin Martin |
For now, Martin insists he has it all under control. A lot depends on how Comcast follows through on their promise to employ "protocol agnostic" traffic management by the end of the year. Martin's statement (pdf) before Congress showed his primary focus remains on carriers being transparent with their customers about traffic management: Consumers must be fully informed about the exact nature of the service they are purchasing and any potential limitations associated with that service. For example, has the consumer been informed that certain applications used to watch video will not work properly when there is high congestion? If the FCC acts against Comcast, it will likely be in the form of a small fine for the cable giant's failure to come clean about their network limitations. Since coming under investigation by the FCC, Comcast is doing everything in its power to derail any serious new laws, in the last few weeks promising to stop targeting BitTorent (which they're still doing), promoting their embrace of P4P technology (which accelerates non-pirated P2P), and proposing a " P2P bill of rights" (a generally empty gesture aimed at protecting their right to at least block pirated P2P transfers). Thus far, most of this is empty posturing aimed at dodging regulation and countering bad press. Comcast technically is doing nothing different than they were when this debate began -- but you'll notice a general theme developing: they are trying to get approval to throttle P2P traffic if it's pirated (the not so secret growth engine of this industry). Martin even made the distinction in today's statement before Congress: The Commission should consider whether the network management practices are intended to distinguish between legal and illegal activity. The Commission’s network principles only recognize and protect user’s access to legal content. The sharing of illegal content, such as child pornography or content that does not have the appropriate copyright, is not protected by our principles. Similarly, applications that are intended to harm the network are not protected. While piracy filters don't work well yet and can often be bested by encryption -- it's not hard to envision a future where ISPs throttle only the transfer of unauthorized copyrighted content. As for throttling legitimate competing content, whether bad press and small FCC fines are enough to keep ISPs on their best behavior remains to be seen.
Related:- Kevin Martin Doesn't Hate Cable, He Just Loves Ma Bell
- FCC Moves To Block Comcast Growth
- Get Your Network Neutrality Popcorn Ready
- NY Attorney General Investigating Comcast
- So Much For The Talk of Open Wireless Networks
- Time Warner Cable To Start Per-Gigabyte Fee Trial On Thursday
- Was The FCC Comcast Investigation A Farce?
- FCC Finally Issues Comcast Throttling Order
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en102
Canadian, eh?
join:2001-01-26
Valencia, CA | But is bad press and a wrist-slap enough to keep ISPs honest Hell no. Money and power vs. a little 'bad press' (which spin doctors can fix) and the slap on the wrist is nothing compared to savings.
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Canada = Hollywood North | |
| SilverSurfer
join:2007-08-19 | That Settles it Then Kevie says no NN laws are needed, therefore it must be true!  | |
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gaforces
United We Stand, Divided We Fall
join:2002-04-07
Santa Cruz, CA
 ·Cruzio Internet
| I triple guarantee you, US forces are not in Baghdad! And the wolves promised not to eat the sheep, honest! | |
| wtansill
Ncc1701
join:2000-10-10
Falls Church, VA | Pay no attention to the man behind the curtain...
Nothing to see here -- move along like good little sheep. | |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
 ·Cox HSI
·AT&T Southwest
| Martin sez "Feel free to pillage, loot and burn. Have fun."
Expect the tollbooths on the Internet to go up fast.
"It's OUR network, and we'll enslave ensure our consumers are exploited protected how we see fit!" (Protected from competition and 3rd Party Content services, that is...)
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"Regulatory capitalism is when companies invest in lawyers, lobbyists, and politicians, instead of plant, people, and customer service." - former FCC Chairman William Kennard (A real FCC Chairman, unlike the current Corporate Spokesperson in the job!) | |
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jhboricua
ExMod 2000-01
join:2000-06-06
Minneapolis, MN
clubs:
| ahhh, the good old tired child pornography scare The sharing of illegal content, such as child pornography or content that does not have the appropriate copyright, is not protected by our principles. I can see it soon, if you support net neutrality, you are a pedophile.
Would someone please think of the children!!! | |
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GKC
join:2008-03-07
Toronto, ON
| Re: ahhh, the good old tired child pornography scare The FCC must fully regulate Comcast, as our Canadian counter-part, CRTC, must fully regulate Bell Canada. Without full regulation, ISPs will dictate what subscriber's can and cannot do on the net. Net Neutrality allows everyone's voice to be hear. Without NN we are held prisoners by our ISPs. Our ISPs have absolutely no right to dictate what their subscriber's can and cannot do on the internet. The internet is free and open to everyone and we must all work to ensure it stays that way.
ISPs charge their subscriber's outrageous fees, set severe bandwidth limitations, and then have the nerve to tell their subscriber's what they can and cannot do on the internet!! ISP have become nothing more than money-grabber's.
The time is now, people, to fight the good fight to ensure that the internet remains a free and open source for everyone and we must not accept nothing less. | |
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Jason Levine
Premium
join:2001-07-13
Albany, NY
| We need a corollary to Godwin's Law concerning child pornography:
The more negatively that a company or government backed law/rule impacts customers, the more likely it will be framed as an effort to fight child pornography and/or terrorism.
You can call that Levine's Corollary to Godwin's Law. 
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-Jason Levine
Support a children's charity. Buy a calendar. Shooting For A Cause
Jason's Toolbox | PCQandA.com | |
| bicker
join:2007-05-10
Burlington, MA
|  Build your own network if you're unhappy...
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
·Cox HSI
·AT&T Southwest
| Re: Build your own network if you're unhappy... Entitlement my ass. I pay them good money for internet service.... Just because they are a monopoly or duopoly and know we can't readily escape their clutches I don't like being told that we will obey and be mindless little slavesumers and will only be allowed to access and pay for their services because they will block the rest (Oh, I mean 'Manage the network'.)
Screw that. Manage their stock options is more like it.
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"Regulatory capitalism is when companies invest in lawyers, lobbyists, and politicians, instead of plant, people, and customer service." - former FCC Chairman William Kennard (A real FCC Chairman, unlike the current Corporate Spokesperson in the job!) | |
| | | bicker
join:2007-05-10
Burlington, MA | Re: Build your own network if you're unhappy... You pay them good money for what they promise you, not for what you want. There is no monopoly -- that's just entitlement mentality talking about. You can escape anytime you want: Do without. | |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
·Cox HSI
·AT&T Southwest
| Re: Build your own network if you're unhappy... said by bicker  :You pay them good money for what they promise you, They keep changing the rules. The put in a clause saying "We can do whatever we want."
Than later on, they add in throttling, shaping, blocking, filtering, Caps, overage charges, etc etc. Oh they know you'll be pissed, but they know as long as the other choice (be it DSL or cable) does it too that you are screwed.
Personally, consumers should not just take this crap. They *need* to raise holy hell about it, because the companies sure aren't going to act in their best interests just out of the goodness of their hearts. It's quite simple, either we have real competition, and many choices, OR WE NEED HEAVY REGULATION. Period. Right now we get the WORST of both worlds: Almost total deregulation, hands-off attitude, AND a lack of competition. This is the perfect recipe for abuse, and that's what's happening.... Abuse.
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"Regulatory capitalism is when companies invest in lawyers, lobbyists, and politicians, instead of plant, people, and customer service." - former FCC Chairman William Kennard (A real FCC Chairman, unlike the current Corporate Spokesperson in the job!) | |
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join:2007-05-10
Burlington, MA
| Re: Build your own network if you're unhappy... If you don't like the terms and conditions, then don't patronize them. Find a better supplier. If there aren't any, than ACCEPT what they're offering is the best any supplier is willing to provide you.
Consumers have the ultimate control: Don't purchase the service. That'll communicate your dissatisfaction better than anything else you can possibly do or say. It is THE manner in which consumers affect the market.
More competition will come from there being a GREATER profit motive, not a LESSER profit motive.
Heavy regulation is the liberals solution to everything. | |
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asdfdfdfdfdf
@Level3.net
 from:
wtansill
| Re: Build your own network if you're unhappy... "what they're offering is the best any supplier is willing to provide you."
You completely ignore the effects of market power and the way that such conditions can lock out competitors. There can be enormous barriers to entry for new businesses. This has nothing to do with what a supplier is willing to do and everything to do with whether one has any chance of overcoming the advantages that previous entrants have in the market. | |
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join:2007-05-10
Burlington, MA
| Re: Build your own network if you're unhappy... Barriers to entry don't constitute any obligation owed to you. There are multiple suppliers in areas where sufficient profit motive is offered. So the blame for a lack of suppliers of the specific type of Internet service you want, high-speed Internet, rests squarely on CONSUMERS resisting those offerings at the price they're being offered at. | |
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RainWind
join:2000-10-20
Van Wert, OH
| Re: Build your own network if you're unhappy... People have no alternative options because competition is blocked. You argument really holds no water, you just seem to like telling people they have a childish "give me now" mentality when that isn't even the case.
We either need more regulation or the government needs to piss off and let other companies move in to compete when and how they please. No more slapping Verizon's hand for offering special deals to customer's who have initiated a port out request. No blocking of new competition. No more regulating what a company can charge. Telco's can't just drop their pricing at will to compete with cable.
All people are asking for is a little pro-consumer regulation because one company is given a monopoly in an specific area and there is no alternate provider because of it.
The blame is not on the consumers. The problem is regulation and the local government pushing away competition. Your argument might have a point, if it wasn't for the fact that the reason competition doesn't move in has to do with government and regulation. Verizon can't just waltz into a town and start laying fiber.
Either competition needs to stop getting cock blocked, or the government needs to go one step further with regulation. | |
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join:2007-05-10
Burlington, MA
| Re: Build your own network if you're unhappy... Competition is not blocked. That's a cop-out business-haters use to distort the issue. Competition is what it is, and it is what it is because that's how much profit there is in offering competing services.
You call it "pro-consumer regulation" but what it really is is Big Brother interfering with business. And look at the REALITY... thirty years and counting of a pro-business perspective in this country and there are still people like you who refuse to acknowledge it. Even the Democrats are pro-business now. | |
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asdfdfdfdfdfdf
@Level3.net
| "Barriers to entry don't constitute any obligation owed to you."
I don't know why you are accusing me of making such an argument. That isn't my argument.
"There are multiple suppliers in areas where sufficient profit motive is offered"
Again you ignore the way things like network effects and first mover advantage drastically alters the economic calculations for those wishing to enter the market after the first mover is established and impose a quite different set of costs on those trying to compete with the dominant player.
Is "sufficient profit" something that is probable or even possible or is it something absurd?
Of course any barriers can be overcome by an extreme enough set of circumstances(such as if everyone was willing to pay a million dollars a month for an internet connection) but that doesn't mean such things will happen with any set of probable real world parameters. | |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
·Cox HSI
·AT&T Southwest
| said by bicker :Heavy regulation is the liberals solution to everything. Riding roughshod over the public good and consumers and granted unregulated monopolies all in the interests of GREED and MONEY seem to be the conservatives answer to everything... and what does it get us... crashing economy, out of control energy prices, wars, pollution, corruption, scandal, and the downfall of our nation. Yeah yeah, I know, I should just fork over my money and shut up.... but I'm not going to. Screw that. You can't have it both ways... Either allow open competition, or face regulation....
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"Regulatory capitalism is when companies invest in lawyers, lobbyists, and politicians, instead of plant, people, and customer service." - former FCC Chairman William Kennard (A real FCC Chairman, unlike the current Corporate Spokesperson in the job!) | |
| | | | | | | bicker
join:2007-05-10
Burlington, MA | Re: Build your own network if you're unhappy... Blah blah blah. Another "I want give me" perspective. Yet you probably have no qualms about exploiting whatever benefits a healthy economy affords YOU, like JOBS. | |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
·Cox HSI
·AT&T Southwest
| Re: Build your own network if you're unhappy... said by bicker :Blah blah blah. Another "I want give me" perspective. Yet you probably have no qualms about exploiting whatever benefits a healthy economy affords YOU, like JOBS. Ya, we should be so lucky to have have a JOB. I know, we should work for free in thanks to the mighty company for employing us, and providing us the benefits of the "healthy economy."
Do you really believe the stuff you shovel?
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"Regulatory capitalism is when companies invest in lawyers, lobbyists, and politicians, instead of plant, people, and customer service." - former FCC Chairman William Kennard (A real FCC Chairman, unlike the current Corporate Spokesperson in the job!) | |
| | | | | | clickie
join:2005-05-22
Monroe, MI
| And Laisez-Faire capitalism is the staunch conservative's answer to everything. One look at the unrestrained nonsense caused by the repeal of Glass-Steagall showed how well that works out. We've been given the rewards of the *exact* same crap that caused the Great Depression.
You can't create wealth by selling bags of risk that are comprised of a mixture of mortgage securities written to people who are not likely to pay it back and damned certain not to pay it back. Yet that's exactly what happened and the economy takes another shot in the back because of unrestrained highly leveraged speculation -- things that were hard to do before 2000 because of the risks to everyone else who has to swim in the same pool.
Of course, the solution to this problem is to just let the market sort it out. But the government stepped in and has been guaranteeing these securities -- a decidedly LIBERAL thing to do for a bunch of people who should lose their investments just the same way that people are losing their homes. But you don't talk much about that, do you -- since socialistic assistance is fine as long as it benefits the wealthy.
Back on topic, these services are less and less discretionary and more utility. "Doing without" is, in many cases, becoming harder and harder just as "doing without" was harder and harder as electricity, telephone and natural gas lines made their way into consumer homes. If Comcast can't provide unfettered access, they need to be regulated. Period. And that goes for every other ISP.
Would you tolerate AT&T knocking the volume down on a call you placed through a third-party long distance carrier? I doubt "Well sir, it's our wires, we can do what we want" would be an acceptable answer if you complained. Yet that's exactly the power you're granting to Comcast. It's their pipes, don't like it, don't use them. That's not an acceptable situation because it's no longer just a "service". It's a utility used for online banking, education, communication and entertainment. | |
| | | | | | | bicker
join:2007-05-10
Burlington, MA
| Re: Build your own network if you're unhappy... You are the first person in this thread to make any valid points, but even then, you're just raising matters for which reasonable people disagree, and both sides can claim that they're "right" and the other side is "wrong".
I don't talk about government guaranteeing securities because I believe it is WRONG.
If you really believe that this should be a utility, consider how much you'll pay in taxes to have the government acquire the assets via eminent domain. If you're not willing to pay that amount, then any kind of mid-range solution to the issue, such as regulation, is just a selfish grab for someone else's assets.
Let it happen to your assets and see how much YOU like it.
Your third-party long distance carriers example is irrelevant. That's not what is happening here. There aren't competing HSI services running on the cable. | |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
·Cox HSI
·AT&T Southwest
| Re: Build your own network if you're unhappy... said by TK Junk Mail :Then take your business elsewhere. Ok I had DSL. I took my business elsewhere, to Cable. Next? Wireless? Not available? Satellite? Not feasible or economical. Other option, "Do without?" Yeah, ok. Nope. Bring on the Government. Real competition, or regulation. Enough of this non-competition unregulated BS.
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"Regulatory capitalism is when companies invest in lawyers, lobbyists, and politicians, instead of plant, people, and customer service." - former FCC Chairman William Kennard (A real FCC Chairman, unlike the current Corporate Spokesperson in the job!) | |
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ThoughT2010
@sonotechnique.ca
| Re: Build your own network if you're unhappy... cable and dsl companies normally sublease their network to other companies..
Bell Canada here subleases to several other companies, I'm currently using Acanac, which is bell sympatico but without bell's restrictions (port 25 being blocked, and whatever else)
Apparently rogers canada does the same (cable) | |
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TScheisskopf
World News Trust
join:2005-02-13
Belvidere, NJ
 ·Sprint Broadband D..
| Even Adam Smith said that Capitalism requires regulation to mitigate the baser instinct of men and their greed. Adam Smith. You know, The Big Kahuna of Capitalism? Surely, you have heard of him?
Besides, look around, like at the mortgage market and petroleum prices and their effects on the economy at large: deregulation really worked out swimmingly there, didn't it? Deregulation like the repeal of The Glass-Steagall Act, wherein the taxpayers are picking up the tab for the "unintended effects" and the complete lack of regulation on the hedge funds and credit markets..
Man, always lots of doctrine and a paucity of factual information from the dereg crowd.
Now, where do you get those neat "epic fail" pictures? | |
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LegoPower77
Abecedarian
Premium
join:2002-08-03
Arlington, VA
| said by TScheisskopf :Man, always lots of doctrine and a paucity of factual information from the dereg crowd. Man, there's always a lot of cherry-picking from the government-cures-all crowd.
The 1700s concept of regulation was where the state acts as a traffic cop making sure the rules are enforced. 21st Century regulation is government dictating the shape of the market.
Adam Smith's view of regulation was in the negative sense, i.e., we have only the obligation not to encumber people in their pursuits.
It's quite a twist of logic to pick out his use of the term and say it means that governments need to direct every last aspect of the marketplace (and if you say you're not advocating that, then we agree: there is a point where there is too much government action).
The other logical fallacy of yours is the Post hoc ergo propter hoc. You have said that if we hadn't repealed Glass-Stegal then there would be no recession. Of course we can't prove a negative.
It's simply not fair to lay every perceived bad occurrence at the feet of deregulation. As with most economic problems, we find the hand of government. The Community Reinvestment Act of 1977, whose provisions were strengthened during the Clinton administration, is a federal law that mandates lenders to offer credit throughout their entire market and discourages them from restricting their credit services to high-income markets, a practice known as redlining. In other words, the Community Reinvestment Act encourages banks and thrifts to make loans to riskier customers. But of course they were not allowed to charge a higher rate to offset the risk.
The apostles of big government and those who argue for freedom have an impasse. While the pro-regulators say we need to prevent any and all economic downturns, the free market person recognizes that markets correct and that risky/bad decisions have negative consequences and through the reward and punishment machinations of the marketplace, the best outcome is reached over time.
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"It is a melancholy reflection that liberty should be equally exposed to danger whether the government have too much or too little power."—James Madison
It's right, it's free. | |
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TScheisskopf
World News Trust
join:2005-02-13
Belvidere, NJ
·Sprint Broadband D..
| Re: Build your own network if you're unhappy... I would love to point out that I have been following this very closely. Thoughts for you to remember about Smith:
"When the regulation is in support of the workman, it is always just and equitable — but it is sometimes otherwise when in favour of the masters." - Adam Smith
The distinguished American economist John Kenneth Galbraith said about "The Wealth of Nations:" “It is much celebrated by the ministry of the righteous right, few of whom have read it." (Source: Sherrod Brown, The Globalist)
And as far as putting forward the trope that the bad loans that were written were somehow the fault of the people in potentially redlined districts, that is risable. The sins of the very-less-than-optimally-regulated(and even criminal) mortgage industry, in league with a credit derivatives market run amok and crazed caused the collection of situations we now face and there is a direct cause and effect relationship to the repeal of Glass-Steagall. Hell, even that noted barotone in the Red Army Chorus, Hank Paulson, admits that much more regulation is needed. I would add that I don't know where you got this idea that the victims are in fact at fault, because that is what the redlining argument intimates, but I would cast a very baleful eye at such transparent sophistry, were I you. It's one thing to redline, another to invest in inner cities and minority communities and what we are now reaping the fruits of has nothing at all to do with either.
And yes, markets correct. Depressions and recessions are market corrections writ all too large. Andrew Mellon, when asked what a depression is, stated "It is when money returns to its rightful owners". Surely, the same can be said of recessions. If we are really lucky, that is all we are in the early days of experiencing, a recession. But I find it hard to believe that anyone other than a doctrinaire corporate lickspittle could look at the lay of the land and say "Hey! I know EXACTLY what will fix things! Less regulation and more Laffer Curve!".
I mean, even Laffer admits he might have gotten things a bit wrong. I hope such honesty is the start of a trend. | |
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LegoPower77
Abecedarian
Premium
join:2002-08-03
Arlington, VA
| Were an a lose-lose situation here. I just don't see how some regulatory board is a panacea. After all, don't you command-and-control people hate the FCC right about now? It's not as if some group of government planners are not susceptible to corruption and greed just the same as corporate profiteers.
While I don't like Comcast throttling content, it's worse to have a government agent with the power of the police dictating the marketplace.
Friedrich Hayek points out in his essay The Meaning of Competition , “Enthusiasm for perfect competition in theory and the support of monopoly in practice are indeed surprisingly often found to live together.” (emphasis added). The reason for this is that people get so caught-up in trying to make everything “competitive” that they end up distorting the market by excessive regulation, which drives high-cost producers out and discourages would-be competitors from entering (not to mention discouraging innovation because of limiting profits).
Regulation makes people beholden to a politically connected commission (evil lobbying), favors large corporations because they can handle the increased compliance costs, and leads us down the road to serfdom. Whatever good the aims of regulation are, it always ends up maintaining the power of the planners themselves. A society that cedes its development to an organized commission will always be limited by what the minds of the planners can grasp.
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"It is a melancholy reflection that liberty should be equally exposed to danger whether the government have too much or too little power."—James Madison
It's right, it's free. | |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
·Cox HSI
·AT&T Southwest
| Re: Build your own network if you're unhappy... Actually, I'm not a big fan of heavy handed regulation either.
Personally, I'm a fan of open competition and consumer choice.... However, in industries such as these, with such high barriers to entry, there needs to be government leadership to either 1) Allow competition to break into the market (Such as the 1996 Communication Act was doing before it was attacked, rolled back, and finally killed) or 2) Keeping a watchful eye on the incumbents to make sure they don't get out of hand.
We've got neither ATM.
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"Regulatory capitalism is when companies invest in lawyers, lobbyists, and politicians, instead of plant, people, and customer service." - former FCC Chairman William Kennard (A real FCC Chairman, unlike the current Corporate Spokesperson in the job!) | |
| | | | | | bicker
join:2007-05-10
Burlington, MA
| said by LegoPower77 :While I don't like Comcast throttling content, it's worse to have a government agent with the power of the police dictating the marketplace. 100% correct. People here seem to want everything their way and so are pushing for things that will make THEIR OWN options WORSE. Too many simply don't understand the negative impact such regulation has on business, and how THEY will lose as a result. | |
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asdfdfdfdfdfdf
@Level3.net
| "Were an a lose-lose situation here. I just don't see how some regulatory board is a panacea."
I agree.
It isn't meant to be a panacea. It's meant to provide some counterbalancing force to try to slow the process of things getting worse.
Where I disagree is in the belief that regulation is always worse than the problem it tries to cure.
It's important for anyone who wants to understand the net neutrality issue to understand that no one started out wanting net neutrality regulation. It has never been anyone's ideal solution to anything. Net neutrality is a rear guard action to mitigate against the results of trends that some have been warning against for years, namely that as competition diminished, we abandoned the TA96 framework, and the old regulatory regime(such as common carriage) was dismantled, that the de facto neutrality of the net would be under assault as power was consolidated(over 95% of small business and residential broadband access is controlled by two companies in any given location, the area's telco and cableco).
As a result we now have essentially oligopoly with neither the restraints that would be imposed by a competitive market nor the restraints that were previously imposed by government. This is indeed a mess that it will be very difficult for us to extract ourselves from.
I think we have to weigh the risks of unintended consequences from regulation against the fact that if we impose no boundaries the behavior of these companies is likely to get worse. Frankly companies are much like children testing the boundaries to see how much they will be allowed to get by with. They try something and look up to see if society is going to do anything about it. If society doesn't do anything about it they try something more. If there is no robust competition to reign them in and the society shows no interest in setting limits then what is the likely result going to be?
Net neutrality isn't a fix for anything. I do think, however, it will slow down the ill intentioned and may allow us to avoid the worst consequences of the problems we have brought on ourselves. Hopefully in the meanwhile we will develop other effective longer term solutions. | |
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LegoPower77
Abecedarian
Premium
join:2002-08-03
Arlington, VA
| Re: Build your own network if you're unhappy... Fair enough, with qualifications, of course.
The history of regulation shows that firms lobbied for it when competition reduced their profits. In 1897 the National Electric Light Assn. began lobbying for regulation and for "fair profit" price controls by the various states only after upstart firms had started taking some of their market share.
The same scenario for the telephone industry. Actually, the first states to adopt regulation were the ones that had low profits and high output. The effects of these regulations were to increase price and reduce output.
Another effect of regulation, in every case it seems, is that a company seeking to enter a market has to first get a license from the state. And therein could be the reason for our monopolies/duopolies—in my area, Comcast has exclusive rights. Why?
In a market with no artificial barriers to entry, the "monopoly" firm always always has to guard against upstart competitors seeking a part of the monopoly profit (which is why you'd never see $200/month broadband at this time).
And the natural barriers—the high start-up costs—can be mitigated by the speculative/futures markets. (Perhaps not a panacea, but something to consider.)
Again, it should be stated that the incumbents benefit from heavy regulation because they have the economies of scale to overcome the increased compliance costs.
The problem with price controls is that they create the wrong incentives for the firm. Government pricing is based on historical prices, not the current technology.
If an industry is unregulated, when there are rapid technological advances, the old facilities become obsolete before their historical cost is fully depreciated. Firms abandon obsolete facilities sooner than if there had been no advancement.
But under a planned regime, the older facilities are protected by the averaging of their cost with the cheaper newer facilities into the rate structure. This has two effects that are exactly the opposite of what advocates of regulation say they want.
First, since the older facilities are not abandoned and their cost is averaged with the newer ones, the price does not go down as quickly as it would if the old facility were abandoned altogether (assuming the new technology makes the product cheaper).
Second, because the bargain for the licensee is they're given a government-secured market, firms are more willing to try risky new technologies because they are less sensitive to cost overruns; and since the consumer is made to pay for it anyway. . .
Firms operating under regulation are less motivated to control costs than they would be in a competitive market and they do not abandon their older, inefficient facilities as readily.
The point of all of this is that it's better to live with a temporary monopoly, subject to free entry, then to have Leviathan with threat of force limiting our choices and stifling innovation.
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"It is a melancholy reflection that liberty should be equally exposed to danger whether the government have too much or too little power."—James Madison
It's right, it's free. | |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
·Cox HSI
·AT&T Southwest
| said by bicker :You pay them good money for what they promise you, not for what you want. There is no monopoly -- that's just entitlement mentality talking about. You can escape anytime you want: Do without. Yeah, do without.
There's your choice for the economic future of the USA. Go back to the Stone-age and do without modern technology. Better idea: Regulate the industry. If it won't accept regulation, seize it and nationalize it.
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"Regulatory capitalism is when companies invest in lawyers, lobbyists, and politicians, instead of plant, people, and customer service." - former FCC Chairman William Kennard (A real FCC Chairman, unlike the current Corporate Spokesperson in the job!) | |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
·Cox HSI
·AT&T Southwest
| Re: Build your own network if you're unhappy... said by qworster :In other words, You're being screwed! How come that doesn't upset you? How come you even DEFEND it? Are you a masochist? I suspect he's more on the side of the SCREWER then the side of the SCREWEE if you get my drift.
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"Regulatory capitalism is when companies invest in lawyers, lobbyists, and politicians, instead of plant, people, and customer service." - former FCC Chairman William Kennard (A real FCC Chairman, unlike the current Corporate Spokesperson in the job!) | |
| | | | | bicker
join:2007-05-10
Burlington, MA
| There are dozens of ways to get "the Internet". We're talking about high-speed Internet, and there are even several ways to get that these days too... IF YOU'RE WILLING TO PAY FOR THEM. Your unwillingness to pay does not constitute anything other than what it is.
I defend it because I'm an American. How come you ATTACK it? | |
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