FCC can define markets with only one ISP as “competitive,” court rules
arstechnica.com
arstechnica.com
They are arguing over whether the presence of a competitor within 1/2 mile counts as competition even though the competitor has not actually started service to the customer.
i.e. does the customer actually need two services? Or is the presence of another one very close by, enough to be considered as competition? (The assumption being that they would/could expand to the customer.)
Better title:
FCC can define markets with only one ISP as “competitive,”, if there is another ISP within 1/2 mile, court rules
The court held, basically, that the FCC's decision is reasonable enough to fit within its congressionally-mandaded charter, so making the decision is none of the legal system's business. If you don't like it vote in an administration which will staff the FCC with people who agree with you.
What we're ascribing to politics (which it may very well be) is in my opinion better ascribed to regulatory capture - which is a problem many regulatory agencies have had over time.
For reference, most of the coverage area in the map in another comment (https://imgur.com/3oUUw7b) would probably be considered non-competitive.
I think 1/2 might be a bit too far, though. 1/4 seems maybe more reasonable.
https://en.wikipedia.org/wiki/Market_allocation_scheme
Edit: I always find it interesting how when a FANG company is called out, an employee will provide a guarded defense, but when an ISP is called out regarding competition issues, the result is dead silence.
Even if there is "someone else" that may not be enough. It the "alternative" cannot support video (such as YouTube and Netflix), or can't upload my data at a reasonable speed, it isn't really a competitor.
Now this might apply poorly to ISPs where there are all kinds of frictions and potential barriers to entry, so maybe the regulator is getting this one wrong. But the court decided not to wade into an argument that is more about economics than law.
We could have laws where there was less regulatory discretion. But they would need to be written differently, and as a society we would have to just accept that they will sometimes throw up absurd results in corner-cases.
If it is, the incumbent will be more restrained in their prices, to avoid inducing the competitor to enter that market.
That's basically the crux of the matter, and the judge rules both ways of looking at things are reasonable since no one knows the future.
It's realistic to imagine a competitor could expand, but it's a far cry from actual competition.
These half-mile ranges shouldn't be lumped in with locations that have choices.
Right. Businesses are often currently wired for only one ISP. And the question is: "Can I buy future service from the other guy?"
It's a fuzzy question, because you can essentially always buy service...for some amount of money.
The evidence presented (and deemed credible by the court) is that ISPs will frequently build connections for businesses up to one mile away. And most of the businesses in question were less than half a mile away. And so the court ruled that the FCC could choose to call the market competitive, based on that evidence.
It's an unsatisfyingly fuzzy question, with perhaps an equally unsatisfying answer.
How do you plan to install those wires without leaving your house?
Also, 1/2 mile distance covers about three quarter of a square mile.
I don’t think we should be able to redefine things that would be outside any reasonable expectation. No reasonable person would call a monopoly market a competitive one, but here we are. If they were going to change something then get rid of the competition requirement instead of changing the definition to absurdity.
Like... 'Unlimited Internet' but with limits. Lots of limits actually. If you really want to get crazy.. dive into the rabbit hole of U.S. Legislation/Bill naming.
1/2 a mile is pretty close - I don't see how you can call that a monopoly.
This leads to the odd result that a city could be highly ‘competitive’, in which there are always many choices within 1/2 mile... but no individual home has any choice at all.
A perfectly competitive monopolistic oligopoly.
It's just a matter of "not yet cheap enough". Well, if you let the price mechanism work, the juicy profits will attract other providers.
Almost no place in the world had "retail broadband" just 30 years ago. By the current ever-changing escalation of what "broadband" is, almost no place had it 20 years ago, either.
But profits in bringing it places where it didn't already exist has brought it almost everywhere. And with 2+ providers in most places.
Let prices float, and it'll keep expanding. Replace profit-seeking with price-caps and regulatory judgements, and it'll slow down, and be at the mercy of dumb sloganeering politics.
Business districts often have other, higher-priced choices... and for businesses where high-speed is high-value, they can always pay more for a custom set-up.
The "majority of the country" (by area) is only 20% of the population. 80% of the population lives in urban areas.
At the 10Mbps downlink threshold – enough for 2-3 separate Netflix streams – over 90% of the country has at least 2 wired choices, and wireless also keeps improving.
There's always other options for internet access - probably 2 or more wireless providers, satellite downlink with slower uplinks, and, for businesses where high-bandwidth is a necessity, investing in their own wires/point-to-point links.
These are all "simply a matter of cost" – and businesses can make these cost-decisions in their own expenditures and even choices of where to locate operations.
Further, if uncontrolled prices lead to excess profits in these areas, that's exactly the mechanism to draw in competitors. Regulatory price caps mean to potential competitors, "why bother?" Excess profits instead create a juicy target for upstarts, creating the desired competition.
Yes, it's not logical, and it's nonsensical, but it's not exactly as dire as the headline makes it sound, and it doesn't relate to residential broadband.
Yes it does. The precedent set by this applies to every case within the 8th Circuit, which was:
> But the FCC may rationally choose which evidence to believe among conflicting evidence in its proceedings, especially when predicting what will happen in the markets under its jurisdiction.
The FCC being able to pick which evidence to consider and which to ignore absolutely impacts residential broadband.
Not that I agree with what was chosen here, but if multiple pieces of evidence are reviewed and they conflict in their findings, they have to choose one in their ruling, right? Technically no matter the decision, they would technically be "ignoring" evidence because the outcome didn't agree with it, correct? It's not ignored, just not believed as much as other evidence from what I gather.
Given conflicting evidence, you have to choose which is right. That is not "ignoring" anything (hence why I put it in quotes), but sadly people use these incorrect/loaded words because they disagree with the decision.
The FCC presented evidence that ISPS will often build up to a mile of wire reach new customers of these high-value service contracts.
> not exactly as dire as the headline makes it sound,
ArsTechnica. I can't recall the last time one of their political articles (which are the vast majority of ArsTechinca articles that ones that reach HN and Reddit frontpage) was an honest explanation of the situation covered in the article.
That is an extremely bold statement, and obviously both technically accurate and utterly misleading on its face.
Sure providers will build out a half mile of fiber to you. For $50k. Exceedingly few are doing a build out for a single corporate customer for free. I've been involved in build-outs where the customer simply moved offices to a lit building because the build-out costs were more expensive than eating an early termination fee on a lease.
Not sure how that is remotely competitive. It's about as close to outright lying to the court as you can get without actually doing so, in my estimation.