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Comment by ars | Hacker News Reader

This title is incorrect.

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

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Actually, the decision per se isn't even about that. It's about whether the FCC, being the regulatory body responsible for this stuff, is able to decide for itself whether or not a "nearby" service provider counts as "competition" in an abstract sense.

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.

Truth. Really, I have to sympathize with the court on this, they're basically saying "The FCC knows more about communications technology and the economics associated with it than a judge does", which is undoubtedly true. Deciding this sort of thing is what the FCC is for. That doesn't mean they got it right, but short of creating a communication-technology centered appeals court, that's what we've got. The FCC is the correct (currently existing) government institution to be making that kind of decision. Just because they (arguably) made the wrong decision here, doesn't mean it makes sense to have appeals court judges deciding this, as the technology and economic background required to make that decision is not part of their training, nor something they could acquire in the course of a court case.

In that case, I think the rational thing for ISP's to do is to carve out enclaves where they don't compete for customers. I suppose the new political FCC will find that competitive.

The FCC IMO is no more political than its ever been.

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.

https://en.wikipedia.org/wiki/Regulatory_capture

Regulatory capture is the engine driving contemporary politics. You buy off the party whose biases align better with your own mission, then wait for theme to have their turn at the trough.

I think this is accurate but politics swirl around it or are used as smokescreens. For example I followed Net Neutrality quite closely and it was not initially painted as partisan, until the FCC realized that by calling NN an "Obama-era regulation" they could dogwhistle some republicans over to their side and make it seem like a traditionally partisan issue. (For some reason news sites played along and used this term all over the place.) But this all happened midway through the process as they cast around for justifications for what was really regulatory capture.

They already have, look at a map of isp coverage in new jersey comparing comcast and optimum.

https://i.imgur.com/3oUUw7b.png

Oh look, it's an almost ideal market allocation scheme.

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.

I rarely see any ISP-employees discuss anything at all on hackernews.

I don't think the definition is too unreasonable. Many areas would still be non-competitive according to the FTC: in order to guarantee that most of your customers are within 1/2 mile of another ISP, you'd have to significantly gerrymander your coverage areas into <2 mile wide strips. Or you'd have to ask another ISP to build in a certain fashion such that they have a bunch of isolated nodes or strips going through your large coverage area.

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.

It's incredibly unreasonable. Economists roughly classify markets as monopoly (single seller), oligopoly (few, powerful sellers), and competitive markets. We are talking about a monopoly that's sort of close to being an oligopoly. A more accurate term would be "just barely not as far as possible from competitive".

I'm not saying the current state of affairs is reasonable (i.e. I'm saying that ISPs are currently monopolies). I'm saying that the FTC's proposed definition to determine whether there is competition in a coverage area is reasonable. One heuristic I'm using to support my claim is that the FTC's proposed definition implies there is still an ISP monopoly in the area in the picture I linked.

It might start making sense to me if they didn't use the word "competition" but that word means something else.

If I can't buy service from that other provider, then they don't count as competition. I can't threaten to leave my current ISP to get a better price, and you can be sure that they know that.

100% agree. If I can't get service from someone else, it doesn't matter if it's 1/2 mile or 100 miles away - there is no competition.

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.

It's not about you as an individual, it's about the market and if it's realistic for the competitor to enter it.

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.

For last-mile infrastructure, anything between "just out of range" and "50 miles out of range" is of similar difficulty to expand into.

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.

> If I can't buy service from that other provider, then they don't count as competition.

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.

No, not really. If that amount of money is ludicrously expensive, then no, I can't buy service from the competitor.

Right. And supposedly, you can buy for a non-ludicrous amount for up to a mile away.

It's pretty standard practice for competition regulators around the world to think about whether new competitors could enter a market. As it ought to be, since that is a real check on the behaviour of the incumbent.

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.

New business idea! Become Comcast’s or Verizon’s Sock Puppet “ISP” who does nothing but “exist 1/2 mike away from people” so they can claim there’s competition. I can do that without leaving my house and wearing only a bathrobe.

Really? 1/2 a mile is not much - you'd need wires every 3 blocks or so.

How do you plan to install those wires without leaving your house?

What wires? You just need to provide internet service to someone, i.e. yourself and maybe your direct neighbours.

Also, 1/2 mile distance covers about three quarter of a square mile.

if you pay extra to get hooked up to the other ISP, will they come the extra 1/2 mile? around here they won't if it's somebody else's territory...

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