FCC to be led by Ajit Pai, staunch opponent of consumer protection rules
arstechnica.com
arstechnica.com
I can understand how he would be opposed to the pro-consumer agenda of Wheeler's FCC. To be sure, there might be a better way of solving these problems using a free market mechanism, instead of top-down regulation which is antithetical to the libertarian/conservative ethos.
For example, previous HN discussions have surfaced how some european countries have a deregulated last mile, giving the consumer a nearly zero-friction way to switch between ISPs.
I just can't imagine Pai doing anything like this. I can only anticipate him enhancing the monopolistic powers of the big ISPs.
Well, ignoring that the whole idea just makes me suspect you live in a fantasy world, ISPs frequently have regional monopolies. They aren't going out of business because thye provide shitty service because the internet has become something people rely on. Losing it would be a big blow.
Comcast thrives despite being absolutely despised by a large percentage of their customer base.
Is it no wonder why those don't exist anymore?
I personally really enjoy Netflix. If they were launching today, they would have to pay off a lot of ISPs so that their videos aren't throttled into skipping and stuttering. Let's say that they get enough venture capital to cover these costs, and they pay the ISPs. If this happens then the ISPs are double-dipping -- they're getting paid by the users to access netflix, and then they are getting paid by netflix to access the users. Does that seem fair to you?
That is literally why every regulation gets passed. Because someone thinks someone will benefit.
Without net neutrality you would have to ask permission from the cable companies, who see you as a threat to their own cable television offerings. They'll either refuse to work with you, or cut you a terrible deal.
I'm not saying that others benefit from net neutrality -- I'm saying that you do as a customer, and you do as a business owner.
Then they can get lower speed internet and/or lower caps to lower their rates.
1. There is no competition in any given market for the most part. ISPs are defacto monopolies in most places. When the same politicians arguing against net neutrality are trying to pass laws prohibiting municipal broadband, it makes no sense.
2. ISPs have benefited from, and depend on, resources and favors granted to them by the public. They run cable on public land, have benefited from right-of-way laws, and have received financial assistance. The internet itself is fundamentally a publicly developed resource. It's ludicrous to argue that they aren't legally obligated to the public interest at some basic level. Want to get rid of net neutrality? Fine. But then I should be able to charge you unlimited amounts for running your cables over my land. So should the city.
3. Legally, it makes no sense for ISPs to argue that they can discriminate packets for one purpose but not another. So if they can discriminate between packets, they should be legally responsible for all traffic on their network. Child porn happening on your network? You're legally responsible because you didn't actively filter it, just as if child porn creation was happening in my house, I'd be responsible.
I don't really understand why all these things aren't being argued. How did we get to some idea that ISPs just invented the internet and built it completely on their own land, using their own resources, with no assistance, and are somehow simultaneously totally unresponsible for anything that occurs on their networks, and that it would be unfair for the government to offer competing services?
If ISPs want to gid rid of net neutrality, they should be held accountable for the true consequences.
http://www.nytimes.com/2010/03/21/opinion/21Benkler.html
Some of the ways to look at it is that if providers can sell a fastlane to Netflix they can reduce prices for the consumer. Other arguments that have been advanced include having a fast lane for medical devices or emergency services.
I could see an argument in favor if the rest of the marketplace was highly competitive and you could just switch to a different provider if the provider you had was behaving abusively. That's not the case in most of the US where you have a duopoly at best for fast internet.
Personally, I find this guy's proposals to be bad policy for individual consumers, but they're pretty great for ISPs. They would argue that in the end that's great for consumers too, but as far as I am concerned, that remains to be seen.
Aside from that, Netflix is already cheap.
"Well, you bought an ADT security system, and they are not a Preferred Security Service for Time Warner, so even though you pay for 40Mb internet, we can only allocate 4Kb to ADT."
[1] If you think this is hyperbole, consult the Comcast Backdoor Santa leaks.
Any free-market thinker should recognize this to be self-evident, so if they really want to give ISPs the freedom to offer paid fast-lanes, then they have to solve the competition problem first.
Historically, this is not shown to be how companies act. The implicit assumption here is that a supplier has some sort of benevolent desire. But the reality is that if a company can increase revenue, they will do so without redistributing it to the benefit of their customers or even employees.
> They would argue that in the end that's great for consumers too, but as far as I am concerned, that remains to be seen.
We have seen it, and it's not great for consumers. Trickle-down economics is a fallacy. It's also been debunked by Economists very thoroughly.
The assumption is not a bad one in general, and it doesn't depend on benevolence (if anything, most people's cartoonish view of corporations occasionally involves them hurting their bottom line to screw the consumer). It depends on a somewhat competitive market; as such, it's not a particularly valid assumption for the telecom market.
The US is so much larger than the South Korea, but this shows that it is possible to have three companies' wires going through the same space. Interestingly the same companies provide telephone and TV; there's no distinction as far as I know between a phone and a cable company. They are data network companies.
Btw you can read an interesting history of phone monopoly in Jeremy Rifkin's "Zero Marginal Cost Society," starting at page 49.
From a technical perspective, couldn't you theoretically have a network of big tubes with several company wires inside? Maybe the mother tube could be paid for by municipalities, and then individual companies could add their wires to without having to rip everything up each time? The companies then pay for the space in the tube, perhaps like licensing air waves? There are probably problems with this, but isn't there a better way to accommodate competition? The situation in the US is awful.
This is one of the issues with "freedom" based arguments, in anything but a trivial system freedoms collide and somebody has to make a call. Ajit Pai seems to lean toward the cable-layer. I lean toward the cable-user. I think he's wrong, but I'm not willing to question his motives. I think he also wants the best for all, and disagrees that putting the consumer first works out better in the long run.
So let's start with the economics.
At the heart of Capitalism is the idea of Perfect Competition[1]. There is no ethical considerations in an Economic model, only a core set of assumptions one of which is that each individual acts in their own self-interest. But just because everyone acts selfishly doesn't mean that there can't be a benefit to both parties. In fact trade rests on the idea that two parties can engage in a mutually beneficial transaction[2] (and it is trivial to come up with an example).
In a Perfectly Competitive market, a seller can't charge a high price because another seller will undercut their price. Likewise, a buyer can't demand a lower price, because no one will sell to them at a lower price. There is an implicit "equilibrium" where the seller maximizes their profit and the buyer maximizes their utility.
So in a way, you could say that the buyer and seller "freedoms collide", but that precise collision should result in an mutually beneficial transaction of sorts.
At this point you might be thinking that if competition means market equilibrium, then why does HN want regulation at all?
Well the trouble with Perfect Competition is that it is an impossible ideal:
> there is no actual perfectly competitive market in the real world [1]
This is because of all the conditions required for Perfect Competition. Some of my favorites are:
* A large number of buyers and sellers
* Perfect information
* Homogenous products
* No externalities
Some examples of real-world American failures pertaining to these examples:
* A large number of buyers and sellers -- Internet providers. There are few providers outside of Time Warner and Comcast.
* Perfect information -- Health care. When was the last time you saw hospitals post surgery prices online so you could pick most affordable option? Oh wait, an Oklahoma Surgery Center did that [3] and you know what happened? Californians flew out to have surgery because even with travel it was far cheaper than their local alternatives.
* Homogenous products -- Coke vs. Pepsi. You could argue they are homogenous (both soda pop), but most people would disagree. Moreover with recipe protections, it may very well be impossible/illegal for Pepsi to make an exact clone of Coke or vice-versa.
* No externalities -- Pollution (e.g. Global Warming). Pollution is often a cost to society as a whole and not on a corporation. If dumping your factory run-off directly into the river is cheaper than properly disposing of it, most companies would choose to do just that (e.g. the Mississippi pollution levels [4]).
Well so if Perfect Competition is impossible, then what should we do?
This is where Government regulation comes in and where there is often a debate. But from an Economic standpoint, I think it is pretty safe to say that we should do everything we can to maximize competition.
That's why most of HN is fond of Tom Wheeler. By and large his policies protected net neutrality and ensured that ISPs couldn't artificially favor one service over another thereby reducing competition. How could a Hulu compete with a Netflix if Netflix just shelled out massive amounts of capital to buy "fast lanes" with contractual non-competes with all the major ISPs in America?
But that was my point. The argument that ISPs will "reinvest" this new revenue into improving service for their customers is a fallacy. ISPs will only invest in things that increase revenue...not because they want their customers to have $10 cheaper internet service.
[1] https://en.wikipedia.org/wiki/Perfect_competition
[2] https://en.wikipedia.org/wiki/Trade
[3] http://kfor.com/2013/07/08/okc-hospital-posting-surgery-pric...
[4] http://www.stltoday.com/lifestyles/health-med-fit/health/mis...
I'm merely phrasing things a little differently. A fully free market with no regulation or intervention, as you point out, is frequently impossible. Especially with in infrastructure where natural monopolies abound. Free markets have a tendency to become monopolies or abusive without efforts to maintain competition, and as you point out we have to encourage competition. But this requires making tradeoffs.
The person who put the cable in the ground feels they are free in this (theoretical, but non-existent) free market, to charge whoever they want whatever they want to use the cable. The person using the cable has no choice but to accept those terms because there isn't effective competition. Wheeler chooses the freedom of the consumer to choose versus the freedom of the provider in order to favor competition among providers.
I agree with this balance, Wheeler was good, I don't like this new guy at all so far.
My original objective was to try to explore the other guy's point of view, to give some of the arguments they would give in favor. I find them unconvincing, but those are the arguments those opposed to net neutrality give.
nobody wins here except the people with the more creative sales team.
Well, some would argue that those who don't use Netflix pay less subsidized by Netflix. But that's only true if they are selling to Netflix as a monopoly with pricing power (otherwise, competition would drive this down to leave no excess to subsidize anything but the cost of providing the fast lane), which is unlikely unless they are also selling to consumer as such a monopoly, in which case whole they could use the surplus Netflix payment to subsidize lower prices for non-Netflix users, their ore likely to just use the monopoly rents on both sides to increase corporate profits.
I don't have a problem (with one big reservation) with that PROVIDED that the "fast lane" is faster than the service that the consumer is paying for. For example, supposed I am paying for 20 mbit/second network service from my ISP, and I subscribe to a video streaming service that offers streams at two resolutions. One takes 15 mbit/second and one takes 30 mbit/second. I wish to watch a 2 hour movie stream. Assume that my data cap is high enough that I will not be going anywhere near it.
If the video service wants to pay my ISP to give me 30 mbit/second when I view their higher definition streams, I can see that being OK from a network regulation point of view. (It may not be OK from an antitrust point of view, but that is out of scope).
The lower definition stream, though, is only 15 mbit/second. That's below the 20 mbit/second my IPS sold me, so I'd not be OK with it if the video service had to buy a "fast lane" to make the 15 mbit/second stream work.
For the "fast lane" scenario I described in the first paragraph, where it is faster than the service I'm paying for, I do have one big reservation. There needs to be something in place to ensure that the base service is reasonable. I do not want to see the ISPs advertise their base service as something ridiculously low, like 1 mbit/second, and throttle everything down to that except from sites that have paid for a "fast lane".
The above is also how I would approach "zero rating" and "sponsored data". In summary, these would be my network rules:
1. the ISP must provide the data rate and cap (if any) that the consumer has paid for.
2. The user can use that for whatever they want, with no throttling or blocking by the ISP (other than reasonable network management, such as to deal with congestion).
3. If the ISP wants to provide something beyond what the consumer paid for at no charge to the consumer that's fine, including allowing others to pay the ISP to give the consumer that extra service.
We, as a society, do not want that.
As to dynamic bandwidth offerings, there is no need for the content provider to pay for this or administer it. They are an unnecessary layer of friction. The ISP can provide a portal for the end customer to self provision whatever bandwidth they want.
Assuming that's true, then I would be okay with the government taking the last mile back from the private owners, or force them to open it up to competition while allowing them to charge a small usage fee.
I met commissioner Pai in person last year (he was meeting with groups of founders in the Boston area). IIRC, the primary point of discussion was wireless spectrum policy and ensuring access to broadband internet for the greatest number of people, so I have little insight to offer into his thinking on other issues. However, in my impression he seemed to be a thoroughly decent and knowledgable person who cared deeply about the work that he is doing. I think it is important to separate the policy issues from the person.
This is only true if you consider policy to be separate from humanity. The advocacy of anti-poor policies (he's in favor of preventing caps on the price of inmate calls in prisons, he and O'Rielly submarined the Lifeline internet program designed to help the poor connect to the internet) speaks to him as a human being as much as anything else. The notion that policy and politics are somehow separate from the measure of a human being is dangerous because it provides all sorts of cover for nasty, anti-social behavior just because it seems like he loves his wife and his dog. (This can also be called the Mike Pence strategy.)
Just like someone who believes in fantastical theories, like the Earth is flat. We obviously know the theory he believes in is irrational, but he could very well be a good person. He just happens to be a moron.
I have a limited reserve of good faith these days. "He might just be a moron!" isn't really worth expending it.
I hope that he will put forward good policies and that he will give convincing reasons for passing them. I will keep your impression in mind as I follow his leadership of the FCC.
Just to nitpick this, I think you mean regulated last mile to create competition in the second mile. A deregulated last mile is basically what we have in the US and it leads to monopolies.
Sounds like a real winner.
Everyone can make an app instead.
also you can set them as your charity on https://smile.amazon.com/
I don't know why there's this sense that in the tech community we are immune. We have a beautiful free and open technical world, where everyone has equal access to information and commerce, where large companies cannot use their power to obliterate startups so startups can thrive, where competition is healthy and the consumer wins. Don't fool yourself into thinking it doesn't depend on a favorable government to exist. Don't fool yourself into thinking Trump won't do his best to get rid of it.
And I'm sorry are you honestly claiming that those cost 20% of an internet bill? Because of so you're gonna have to cite a source for that one. Between your selective choice for what you claim is CC status, combined with a claim that a $50 monthly bill is $10 attributable to CC, makes me think you're pushing an agenda rather than sharing facts.
It ensures that common carriers can’t “make any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services.” (Title II, the second subsection 202). Classifying these ISPs as title II / common carriers gives the FCC the ability to enforce net neutrality.
Some further info, from wikipedia's entry on common carriers: A common carrier in common law countries (corresponding to a public carrier in civil law systems,[1] usually called simply a carrier) is a person or company that transports goods or people for any person or company and that is responsible for any possible loss of the goods during transport... A common carrier is distinguished from a contract carrier (also called a public carrier in UK English),[2] which is a carrier that transports goods for only a certain number of clients and that can refuse to transport goods for anyone else, and from a private carrier.
A common carrier holds itself out to provide service to the general public without discrimination (to meet the needs of the regulator's quasi judicial role of impartiality toward the public's interest) for the "public convenience and necessity