Net Neutrality II (2014)
igmchicago.org
igmchicago.org
Article published May 6th, 2014.
The majority actually don't agree with the question of: "Considering both distributional effects and changes in efficiency, it is a good idea to let companies that send video or other content to consumers pay more to Internet service providers for the right to send that traffic using faster or higher quality service."
The majority are found in the combined groups of Uncertain, Disagree, or Strongly Disagree.
Edit: Reading over the economists' comments it is obvious that many who support the question(are against net neutrality) have no idea how the internet works or the monopoly/duopoly position of most ISPs.
Also I don’t think there has been any significant change in the underlying economics of it all, so the positions are still relevant.
Also, Duffie: "Works for soap, wine, and haircuts; why not Internet?". If that's the level of argument needed to become Distinguished Professor at Stanford, I'm clearly in the wrong field.
Also, this survey appears to have been done in 2014.
Also - Normal people also don’t assume That firms are rational in any way other than bottom line maximization, and accept that there is regulatory capture.
I don’t know if this has been addressed in their supporting papers though.
Within their narrow definition they are not wrong. Recognizing it and engaging it makes for better arguments, and if necessary a change in positon.
The two situations are kind of similar because in both cases the economists prefer "market efficiency" (so they say) over the poor (in this case startup companies) being able to afford the services that the rich (in this case big companies) can afford.
All that matters to them is "efficiency" in the sense that the rich can get to pay say $1,000,000 per year and get a super-efficient service back for their money, while the poor could only afford to pay $1,000 a year but also get "great value for their money" (just nowhere near what those people who pay $1,000,000 get).
In their minds this is great, because "efficiency" is the same. The only difference is that the rich would be able to get the best cures for say cancer, while the poor will die, because $1,000 can't buy them the cures.
It’s tough to say; there hasn’t been anything close to a fully private healthcare system for decades, at least since employer-provided healthcare became a tax-free benefit. For some rather large populations such as the poor (Medicaid), the elderly (Medicare), and veterans (VA) systems exist that are comparable to what we call single-payer in other countries.
Without a reference I don’t believe you that most economists prefer a fully private healthcare system, but few think the current system is very well-designed or functioning.
To think that more than a handful companies will make $$$ from abolishing NN is delusional. The monopolies will just cut you out from the market and you're on the other side of the fence - with no money but a lot of angry pro-NN folks around you.
If you have a good argument to make, why resort to an ad hominem?
For better or for worse, this is a democracy and their point of view matters. Let’s try winning them over to ours.
Health insurance
Standardised testing
Sports stadiums
Robots and artificial intelligence
California's Drought
These people are not experts on these topics. They're basically mathematicians. Most of them likely made their name proving facts about their mathematical models. Remember that these are models that have a lousy track record describing the real world. And yet it sounds incredibly persuasive to run a headline stating "Economistis united on proposition X".
Here's a suggestion. Let's have a panel of experts, but we'll include one economist. We'll also include a social scientist, an engineer, a banker, a lawyer, a government policy wonk, and a social worker. The media can poll them, and might actually get a plurality of views.
Comcast or others becoming a content provider. If one of them buys Netflix, other content providers will have difficulty to compete if they have to pay a lot for the high-speed lane.
Should an efficient market have regulations against vertical integration?
The question asked was around 'Quality of Service' - this is not 'Net Neutrality'.
Providers probably should be allowed to sell differing levels of quality of service, but they should not be able to discriminate between content or customers.
> Meaning that it is unlikely that market power problems are so acute in this market as to justify regulations unheard of in other markets where price discrimination is widely practiced.
If the question were flipped.
Perhaps it not that NN is a unique regulation, and perhaps it is that many other industries also require net neutrality style provisions.
(I doubt there are many truly comparable industries. And all economic defenses underplay the last mile issue or say that WiFi/mobile is good enough.)
Can someone correct me - has there been underinvestment in American telecom infrastructure?
What is strange is all these free market people in tech who only like free markets that don't apply to them.
This is an infrastructure problem. And lot of free market people would have no problem seeing it managed by the state like roads, electricity and water infrastructure.
In the ultimate 'free market' - your healthcare would be priced based on your earnings, and it would be ~90% of your after tax take home pay. Why? Because you'll pay.
There's good reason we generally don't allow price discrimination, or things like collusion, it's not rocket science.
If the Telcos could price discriminate willy nilly over the information that goes through their pipes - then 100% of the profits of the company you work for will disappear into their bank accounts.
Imagine if some private entity owned all of the roads - and the toll was based on your income?
You can't talk about 'free markets' in such a cavalier manner.
FYI - there is one issue with 'Quality of Service' - which completely confuses the question above. Telcos must be able to discriminate based on this - i.e. lower latency, higher bandwidth = more cost. But they should be banned from looking at the contents of the traffic, or billing based on source/destination.
What's to stop a competitor offering it for 89%? And so on until the market finds its fair price.
In broadband, it would be completely stupid for carriers to compete on price because ultimately - they are competing with themselves. You reduce prices one day - the next you have to go lower - and so on.
It's better if they keep prices high and compete on other things.
It's easy to have implicit collusion if they are only 2 or 3 players.
Often, due to access rights there might not really be any competition in specific areas.
I worked at a small telecom switch company. We made a lot of gear that didn't make any sense just to get around regulations.
Example: we made a very expensive voice and dsl and t1 switch on a board. It was crazy expensive, didn't make sense. But the carrier wanted it, because if they had individual DSL cards (or something like that) - they'd have to allow CLEC (local exchange carriers) to compete. So they paid 2x for their networking gear to avoid competition.
The big money is in monopolies, oligarchies, and keeping competition away through legislation, barriers to entry etc..
In the short term, if supply is fixed, then you can always pay to exclude competitors by outbidding them.
For instance: the reason google makes so much money is that market incumbents bid above value (they lose money) on google ads to prevent new competitors from gaining market share and then they subsidize that money losing behavior with their profits from existing customers.
Should the government regulate what prices google and facebook charge for ads because that controls whether or not startups can get their products in front of customers just as much as the pipes.
Economists think that their big fat corporate overlords should get trillions in infrastructure subsidies from government money and then "let markets set prices", ie. those who got privileged by said money and monopolized the industry.