The FCC is planning new net neutrality rules. And they could enshrine pay-for-play. - The Washington Post

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21

The fact there are "regulated monopolies" does not mean regulation cannot be used to keep a monopoly from forming. And using a turn of phrase to prove a point of logic and/or history is a pretty sad argument. Yeah, the phrase "regulated monopoly" exists, therefore monopolies can't exist without regulation! Q.E.D. Oh, wait, got my abbreviation wrong, I meant: W.T.F.?

Larry is confused. He can claim he is not, but posting to NANOG does not change the facts. Then again, just because I posted to NANOG doesn't prove I'm right either. Worst of all, this thread is pretty non-operational now.

So believe as you please. I'm going to believe that the FCC allowing monopolies (regulated or not) to charge content providers as they please will be bad for me and about 300 million other Americans.

Besides, what has this to do with my original questions?

23

I just posted a completely empty message for which I apologize.

Larry is confused. He can claim he is not, but posting to NANOG does
not change the facts. Then again, just because I posted to NANOG
doesn't prove I'm right either. Worst of all, this thread is pretty
non-operational now.

In a private message I asked if he could name a single monopoly that existed without regulation to protect its monopoly power.

So believe as you please. I'm going to believe that the FCC allowing

monopolies (regulated or not) to charge content providers as they
please will be bad for me and about 300 million other Americans.

"FCC allowing monopolies" -- suppose the FCC and other regulators and aiders and abettors got out of the the monopoly business?

Besides, what has this to do with my original questions?

Which were "Anyone afraid what will happen when companies which have monopolies can charge content providers or guarantee packet loss?" and "How is this good for the consumer?" and "How is this good for the market?"

My answer was an attempt to say that if you don't have any government entities allowing and protecting (two pretty much interchangeable terms, I prefer the latter) monopolies the answer to the first question is "Huh? What?" and to the second and third "Best service for the best price is pretty good for everybody. Except the losers that can't rip you off without the FCC protection."

24

I agree with you, Patrick. Double digit/meg pricing needs to die.

Hell, I remember back in '98 when it was triple digit, and not small values
at that. We've come a long way.

25

I just posted a completely empty message for which I apologize.

Larry is confused. He can claim he is not, but posting to NANOG does
not change the facts. Then again, just because I posted to NANOG
doesn't prove I'm right either. Worst of all, this thread is pretty
non-operational now.

In a private message I asked if he could name a single monopoly that existed without regulation to protect its monopoly power.

I answered in a private message: Microsoft.

Kinda obvious if you think about it for, oh, say, 12 microseconds.

Which were "Anyone afraid what will happen when companies which have monopolies can charge content providers or guarantee packet loss?" and "How is this good for the consumer?" and "How is this good for the market?"

My answer was an attempt to say that if you don't have any government entities allowing and protecting (two pretty much interchangeable terms, I prefer the latter) monopolies the answer to the first question is "Huh? What?" and to the second and third "Best service for the best price is pretty good for everybody. Except the losers that can't rip you off without the FCC protection."

While it is probably true that the gov't had a hand in the fact I have exactly one BB provider at my home, I am not even closed to convinced that a purely open market would not have resulted in the same problem. But thanx for pointing out an answer I probably missed.

26

[..]

While it is probably true that the gov't had a hand in the fact I
have exactly one BB provider at my home, I am not even closed to
convinced that a purely open market would not have resulted in the
same problem. But thanx for pointing out an answer I probably
missed.

In the Netherlands almost all bigger ISPs (the ones that cover quite a
large amount of the effective customer base) are now owned again by the
former government-started-then-turned-private ISP who has been buying up
various ISPs over the years.

Oh, and yes, the Dutch Regulatory organization did not see any problem
with this monopoly growing....

All sounds like http://www.youtube.com/watch?v=0ilMx7k7mso right? :slight_smile:

Greets,
Jeroen

27

DeBeers Diamond cartel, which operated internationally and held an effective monopoly on the diamond market for *decades* was apparently beyond the reach of regulation to either assist or hinder them, and has only recently faded somewhat in the face of competition that they can't reach with their traditional protective tactics.

The Standard Oil monopoly was obtained without the special assistance of government as well, though they were broken up by the government. The methods they used should be mandatory study for everyone.

The AT&T monopoly position *was* granted (and later revoked) by the government.

Net neutrality is an intervention of the government to prevent monopoly forming tactics on the part of major players, so I think it is something worth having. It is not (unfortunately) something that is a natural state for the Internet.

28

gulation to protect its monopoly power.
I answered in a private message: Microsoft.

Kinda obvious if you think about it for, oh, say, 12 microseconds.

The government actually had to step in to hinder them, as I recall, though I believe it was pointless. Relatively speaking, Microsoft had a short run monopoly if you want to call it that. They definitely had the market share. With the introduction of the smartphone and the tablet, people have required more versatile applications which tend to work across multiple devices. In this regard, I believe Apple won. Internet growth and consumer education have also altered market share. The money filtering into open source has fueled a lot of growth in software development and allowed a lot more flexibility. The change to OSX and x86 on Apple's part along with google and redhat's efforts have altered the playing field permanently.

Which were "Anyone afraid what will happen when companies which have monopolies can charge content providers or guarantee packet loss?" and "How is this good for the consumer?" and "How is this good for the market?"

My answer was an attempt to say that if you don't have any government entities allowing and protecting (two pretty much interchangeable terms, I prefer the latter) monopolies the answer to the first question is "Huh? What?" and to the second and third "Best service for the best price is pretty good for everybody. Except the losers that can't rip you off without the FCC protection."

While it is probably true that the gov't had a hand in the fact I have exactly one BB provider at my home, I am not even closed to convinced that a purely open market would not have resulted in the same problem. But thanx for pointing out an answer I probably missed.

In Oklahoma, I've watched WISPs take money from the various grants for under-served areas. They love to move into small cities and those cities are happy to have them. Their plan is well thought out. They know exactly how fast the telco will move to increase speeds and drop the requirement that you must also pay for a phone line (which the telco was just using to pull in extra money on the backside until the FCC finally changes that funding). The prices suddenly drop in the town. It's not the best service for either party, but it is at least more affordable.

The one that pisses me off is when ILECs use grant money strictly to try and wipe out their competition. It creates a very bad environment, where one company must use grants for the same area as another company just to stay competitive. I don't mind all these funds and all, but there needs to be much more oversight on how the funding is used. "underserved" is too broad, and the grants get used in anti-competitive practices against companies that don't pull money from the government. In addition, I too often see companies that have used grants not lower their prices, provide more jobs, or increase their bandwidth offerings. I hear corporate jet fuel is costly, though.

We still have huge areas of land that have little or no affordable broadband capability. These are areas that it isn't profitable to buy the equipment to serve and where grant money would do the most good to allow sustainable growth. What I've been pondering is the creation of non-profit ISPs, where the purpose is to actually serve the people who won't make you millions at cost.

Jack

29

I beg your indulgence..

...On 4/24/2014 11:01 PM, Everton Marques wrote:

Regulating monopolies protects monopolies from competition.

Monopolies can not persist without regulation.

You are confused.

I think Mr. Sheldon is pointing out this:

Thank you.
...
[more comment below]

--xx--

...
I don't know what got me to thinking about it earlier today but I recalled when I started at the telephone company in Los Angeles there was a pitch made early on that in earlier days a business in Los Angeles had to have several telephones on desks to be able to talk to all of their customers.

Which was true ONLY because regulation required that each telephone line terminate in an instrument owned by the providing company.

The above statement contains an error that obscures the issue. As someone who also recalls this state of affairs, I must point out that it was the respective telcos' "regulation" - not government regulation in any sense - that prohibited any equipment but their own from being attached to their lines. In other words, those telcos were behaving anti-competitively with all the power they could muster to do so (surprise!) and also doing whatever they could to obscure that fact.

Regulation was demanded by consumers - in order to protect them from the ridiculous results of this assertion of privilege on the telcos' part. To Mr Sheldon, this resulted in regulation (by government) creating a monopoly. I believe Mr Gilmore might argue that well-crafted regulation requiring interconnectivity as a public good would have prevented both the "need" for monopoly-creating regulation and also would have protected the public from the inherent tendency toward monopoly as vendors do battle to protect their turf rather than provide the best possible outcome for their customers.

Absent that one regulation, businesses would have invented multi-line instruments a lot earlier than was the case.

So THIS argument is completely off the mark. In fact, one could say a regulation was needed which would have forbade the telcos' anti-competitive behavior, and then the competitive marketplace could have played out further. Instead, what we got - partly to address some of the other concerns like interconnection - was a set of regulations that favored one (well-connected) vendor, leading to a monopoly.

So in some respects, each Mr Sheldon and Mr Gilmore are both right. No surprise there, either, as I have immense respect for both. I tend to lean towards Mr Gilmore's position, though, in that I personally hold that powerful vendors have a natural positive feedback tendency towards monopoly if they can attain it, and regulation that is wisely and truly customer-centered can prevent much damage; I side with Mr Sheldon only insofar as I observe that one tactic of a determined monopolist is to engage compliant regulators to more firmly ensconce them, and I believe that's a Bad Thing.

Blessings..

..Allen Kitchen, Old Guy

30

Allen McKinley Kitchen (gmail) wrote:

...
I don't know what got me to thinking about it earlier today but I recalled when I started at the telephone company in Los Angeles there was a pitch made early on that in earlier days a business in Los Angeles had to have several telephones on desks to be able to talk to all of their customers.

Which was true ONLY because regulation required that each telephone line terminate in an instrument owned by the providing company.

The above statement contains an error that obscures the issue. As someone who also recalls this state of affairs, I must point out that it was the respective telcos' "regulation" - not government regulation in any sense - that prohibited any equipment but their own from being attached to their lines. In other words, those telcos were behaving anti-competitively with all the power they could muster to do so (surprise!) and also doing whatever they could to obscure that fact.

Regulation was demanded by consumers - in order to protect them from the ridiculous results of this assertion of privilege on the telcos' part. To Mr Sheldon, this resulted in regulation (by government) creating a monopoly. I believe Mr Gilmore might argue that well-crafted regulation requiring interconnectivity as a public good would have prevented both the "need" for monopoly-creating regulation and also would have protected the public from the inherent tendency toward monopoly as vendors do battle to protect their turf rather than provide the best possible outcome for their customers.

Actually, it goes back further than that. In the really early days, in NY, there were lots of phone companies, and a business would have to have one of each to serve all its customers. And long distance was just beginning - expensive, requiring operator intervention - and AT&T long lines wouldn't necessarily connect to non-Bell system players. It was basically a mess.

Bell kept buying up lots of other telcos, and integrating them into a more uniform network (remember "The Bell System") - and eventually ran afoul of antitrust issues. Bell went to Congress and proposed a deal - let us buy up everyone, we'll build an integrated system, including interconnection to the independents, and you get to regulate us to balance out our monopoly power.

Email provides an interesting contrast. In the early days, the early timesharing vendors sold email as a feature, and the size of their user bases as a competitive advantage. Along came Barry Shein, and the World - pretty much forcing open some limited public access to the early Internet, followed by Compuserve connecting to Internet email, and suddenly market pressure pretty much forced everybody to connect their private mail systems to the Internet.

Miles Fidelman

31

"OK, so you are a troll.

Microsoft is among the most heavily protected-by-regulation companies I
can think of.

Have you ever seen their patent collection? Can you guess at the size
of their infringement-enforcement staff? Do you have any idea how many
court-room hours are spent each day protecting their monopoly?"

32

DeBeers Diamond cartel, which operated internationally and held an
effective monopoly on the diamond market for *decades* was apparently
beyond the reach of regulation to either assist or hinder them, and has
only recently faded somewhat in the face of competition that they can't
reach with their traditional protective tactics.

It was governments that aided and abetted their enforcements in what would have been felonies for anybody else.

The Standard Oil monopoly was obtained without the special assistance of
government as well, though they were broken up by the government. The
methods they used should be mandatory study for everyone.

Standard Oil was not a monopoly in every economist's mind. They were guilty of providing good products and services at reasonable prices.

The AT&T monopoly position *was* granted (and later revoked) by the
government.

Net neutrality is an intervention of the government to prevent monopoly
forming tactics on the part of major players, so I think it is something
worth having. It is not (unfortunately) something that is a natural
state for the Internet.

Net neutrality is an intervention of the government to protect the monopoly tactics on the part of major players.

With this, on the assumption that I will again be tossed off for "Off Topic discussions", I am out.

33

Net neutrality is an intervention of the government to protect the
monopoly tactics on the part of major players.

I'm confused. Can you elaborate on how net neutrality would protect major players? Do you mean major content providers? Major broadband providers?

34

I'm afraid we will have to agree to disagree. If you think things like "patent enforcement" == "government protected monopoly", we are at an impasse.

I guess having the police keep people from breaking into their offices and stealing their computers is another form of government medaling we would all be better off without?

35

Patrick W. Gilmore wrote:

I'm afraid we will have to agree to disagree. If you think things like "patent enforcement" == "government protected monopoly", we are at an impasse.

Well, leaving aside what one thinks of patents and copyrights - a "government protected monopoly" is EXACTLY what a patent is, by definition:

"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;"

Or do you have some different definition of "exclusive Right?"

But we digress.

Miles Fidelman

36

The invisible hand of the market cannot fix problems when there is a monopoly.

Put in economic terms, a player with Market Power is extracting Rents. (Capitalization is intentional.)

Regulating monopolies allows a market to work, not the opposite.

Regulating monopolies protects monopolies from competition.

Monopolies can not persist without regulation.

This is absolutely false. Regulating monopolies CAN protect monopolies, but that’s not always the outcome.

Monopolies absolutely can persist without regulation. Except in the most highly dense population areas, there is not a sufficient market to support the deployment of more than one copy of a given media type to that population. As a result, there is, in most places, a natural monopoly in each media type, whether that’s electrical, water, cable, twisted pair, fiber, etc.

A regulated monopoly is a monopoly, with all of the powers granted to monopolies by regulation.

Yes, but an unregulated monopoly is a monopoly without constraints imposed by regulation.

Owen

37

I just posted a completely empty message for which I apologize.

Larry is confused. He can claim he is not, but posting to NANOG does
not change the facts. Then again, just because I posted to NANOG
doesn't prove I'm right either. Worst of all, this thread is pretty
non-operational now.

In a private message I asked if he could name a single monopoly that existed without regulation to protect its monopoly power.

In my neighborhood, Comcast has a monopoly on coax cable tv and HFC internet services. There are no regulations that support that monopoly. Another company could, theoretically, apply, receive permits, and build out a second cable system if they wanted to. However, the population density is such that even if that company captured 50% of the market, it would merely make the market economically unviable for both companies.

In such instances, you do indeed have “natural monopolies” which are an economic construct, not a regulatory artifact.

Besides, what has this to do with my original questions?

Which were "Anyone afraid what will happen when companies which have monopolies can charge content providers or guarantee packet loss?" and "How is this good for the consumer?" and "How is this good for the market?"

My answer was an attempt to say that if you don't have any government entities allowing and protecting (two pretty much interchangeable terms, I prefer the latter) monopolies the answer to the first question is "Huh? What?" and to the second and third "Best service for the best price is pretty good for everybody. Except the losers that can't rip you off without the FCC protection.”

How, exactly, are the governments protecting the monopolies of ILECs and Cable companies? It seems to me that it’s more a case of those monopolies persisting because the non-regulatory (largely economic) barriers to competition are large enough that they prevent viable competitors from forming. Allowing those unregulated monopolies to subsequently leverage that into a “content protection racket” is the internet equivalent of turning a regulatory blind eye to more traditional forms of extortion.

So, no, eliminating the government’s protection of monopolies (wherever you think that is occurring) will not solve the more general problem of monopolies that are a problem without government protection.

Owen

38

Sounds like the market at work, not monopoly power......I've never heard the term "monopoly" used where the market contains all the players that want to play.

39

Wait! What?

Like if I want to build a pipeline to compete with your friends railroad?

40

h/t Suresh Ramasubramanian

FCC throws in the towel on net neutrality

http://www.zdnet.com/fcc-throws-in-the-towel-on-net-neutrality-7000028770/

Forward! On to the next windmill, Sancho!