"Your video is buffering because Comcast is slowing your connection down. Click here to contact Comcast customer support. Click here to find Netflix Certified providers in your area."
Netflix and Google and Amazon and Apple all have great brands with high customer satisfaction. They should utilize all those eyeballs to funnel even more hate toward Comcast.
Followed by:
"I'm sorry, there are no Netflix Certified providers in your area."
When Comcast is rated as one of the worst companies for customer satisfaction, customers aren't staying with them because they are ignorant when it comes to the alternatives. They are staying with them because there are no alternatives.
[1] 30% of Americans can't choose their ISP http://www.extremetech.com/internet/178465-woe-is-isp-30-of-...
And it should be treated as such.
Humor me for a second and get past the fact that such a law would benefit cable companies. Is it a bad idea on its own merits? I don't think so. Municipal broadband would crowd out private investment in broadband. Given the state of other municipal infrastructure, there's a high probability it would be underfunded and low quality. Would that be a better state of affairs? Being stuck with an overloaded municipal system that never received enough funding because voters don't really care enough allocate a lot of money maintaining and upgrading it, that at the same time makes it impractical for private systems to operate?
I don't think the solution is to allow municipalities to do more things that undermine competition. The solution is to deregulate at the state level. Force municipalities to make the kind of "hands off" deal Google demands in return for rolling out Google Fiber to any company willing to make the investment.
This is really foolish. A company that wants to be a monopoly will provide fantastic service, but a company that has succeeded in establishing a monopoly no longer has any motivation to treat you as anything other than property. Why would any rational citizen let their municipality make such a deal?
(Q1) Regulators should encourage competition? True/False
(Q2) All government services are monopolies? True/False.
(Q3) All municipal services are either (utilities, monopolies)? True/False.
These are all absurd formulations.
Public Services are a thing. Some examples:
Ex 1> My public library is an ISP.
Ex 2> My public library is Tax Filing Center.
Ex 3> My public library is a copyright depository.
Ex 4> My public libary is a copy/fax location.
Competitors:
Ex1'> Comcast
Ex2'> TurboTax
Ex3'> Netflix
Ex4'> Staples
I don't think the solution is to allow municipalities to do more things that undermine competition.
Again, this is absurd. Public services do not undermine competition by implication. This formulation is akin to saying: "a good competitor undermines competition by being good." Or, "a new competitor undermines the competition, by entering the competition."... Um, no.
This is not to say single payer healthcare would not change the business/policy landscape in the USA.
But to even suggest that any municipal provisioning of communications services (public radio, public TV, public internet access) would be aking to "single payer healthcare" in scale/scope/completeness etc is simpley a rhetorical exaggeration.
I think its interesting to debate the pitfalls here, butnot with such extreme poles as a starting point.
Limited scope incremental services are fine, IMHO. Feasible, cost-effective, and market & competition extending.
And the existence of national parks does not make the government a "land monopolist" or what not. =D
The rest of the stuff about "fair" x or y is not really relevant. Markets are supposed to be "free" and not "rigged", but neither of these two concepts imply "fair" in the sense you are using it. Every company on the NYSE hasi its own cost of capital--is that 'fair'? no. its not fair to the owners. But that does not imply that the market is not free for capiral or that the market for capital is 'rigged'.
There are plenty of ways that government services can be provided to extend markets geographic reach, variety, and product depth without getting into some nasty discussion of socialism/totalitarianism etc. There are some services that are more-efficiently organized through the government. In that respect, a government entity is just like a non-profit that competes with a for-profit or private foundation entity (eg universities). And more ...
And "fair" absolutely is relevant, from a market-wide POV. Of COURSE some companies have natural advantages over others. That's great. They should win. When the better competitors DON'T win, you have a market fairness problem. If government is providing a service at higher cost to the taxpayer than if a private company was providing it, then there is a problem. And this happens all the time, because the sticker price of government services is always low, or zero, even though the real cost can be very high.
Furthermore, I don't think it's controversial to say that municipal services tend to be least common denominator affairs. Again, look at schools. I might personally be willing to pay twice as much property taxes to get well-funded schools that hire well-paid teachers, but good luck getting 51% of voters to agree to such tax increases.
Look also at power, water, and sewer utilities. Why are they so badly underfunded, and in a continual state of life support? As a yuppie, I'd be happy if my sewer bill went up by 500% (from $10/month to $50/month) if that meant a high-quality sewer system that didn't dump raw sewage into the river when it rained. I'd be happy to pay a lot more for water that wasn't flowing through old leaded pipes. But good luck getting any of that through a rate setting board!
Public utilities are under political control. Depending on the industry, this can be a good thing or a bad thing. I think for telecom, it's not a good thing, in that it won't lead to an equilibrium that I think techies would be happy with. Say you wanted to build municipal fiber in San Francisco. What's the body politic that will control that system? Do you think it'll be techies? Of course not. It'll be the folks that are out there picketing Google. The discussion will shift from provisioning high speed service to figuring out how to subsidize low-income and high-cost people. Or, take Seattle, which is not very dense and is quite sprawling. Do you think the political consensus will lead to installing fiber in the high-density, high-income, low-cost areas first?
It's also interesting you use public libraries as an example. Municipalities all over the country are cutting library budgets to the bone. Why? Because people don't care about them. I think what you'll find is that municipal broadband will be in the same bucket. People won't care enough about it to appropriate the substantial funds that will be necessary to maintain and continually upgrade the network.
If you want to treat broadband as a utility, you have to pay for it as such. Which means metered billing, which I don't think anyone wants.
Seems like a natural place to put "click here to contact your state/federal representative"
While I grant that cynisim is definitely warranted, at the end of the day, these companies have monopoly jurisdiction because we the people allow them to.
"Sorry but we need to tear up this highway and disrupt traffic for the next couple of weeks to lay some fibre. I know someone else did the same thing last week but they were another company and it's illegal for the local government body to stop any of us laying stuff on public land when we want"
Obviously that extreme is untenable. You may be after something a bit more useful like unbundling, but in the US you have to explain how forcing a private company to let competitors use it's cable is not outright stalinistic communism.
Obviously if they wanted to run wire through a house they'd have to get the owner's permission, or the local government's permission to dig up a road. The thing is, as the law currently stands they're forbidden from doing so; even if every household in they city signed a contract saying "sure, let company X run cable through our yard", company X still wouldn't be allowed to sell them internet over that cable.
Maybe a company could innovate and develop some form of fast wireless mesh network. But even if they had the technology and finances to do so, local laws stating "the only company allowed to sell fast internet here is Comcast" or equivalent prevent them from doing so.
The first is that a legislature can't easily bind its future self - laws passed by a majority can be repealed by a majority or circumvented by a majority in the future. So even if we pass Law 2014-003 saying what you said, there's nothing stopping a 2015 (or 2020 or whenever) law from saying "Law 2014-003 is hereby repealed" or more narrowly "Law 2014-003 doesn't apply to this law". There are some edge cases where you can pull it off but by and large it'd take a state/federal constitutional amendment.
The second issue is that the federal government can only regulate "interstate commerce". While you'd think that anything involving the Internet would automatically apply there, you couldn't stop a state law that covered only a local business dealing with in-state customers. So such a law could be used as a shield for Verizon/Comcast/etc while state laws restricting ISPs would only apply to smaller in-state competitors. My parents and a number of my friends are served by a local Wireless ISP because that's the only alternative in their neck of the (literal) woods. Under your system, their ISP could be subject to innumerable regulations that Verizon/Comcast would be immune to.
Why not require something similar?
What it boils down to in most places is that internet access is not (legally) a public utility and therefore skirts public utility regulation.
How does that solve anything, though?
Judging by the lack of competition, it seems it's not profitable to compete.
Now, you could force Comcast to lease out its network capacity to competing companies, but this is really a shortsighted solution: the consequence is that potential competitors, who are contemplating establishing competing last-mile connectivity, cannot make a solid calculation to see if it would be profitable, because it might risk being forced to lease out the network capacity it establishes, thus it avoids doing so.
The problem here is simple: digging down cables is expensive. No amount of legislation is going to change that. The real solution is reducing the cost of the last mile connection. This might be possible through opening up legislation (removing barriers to entry), though. Like opening up more wireless frequencies, to carrier last mile traffic to consumers.
Nobody is allowed to compete. No company will be afforded the same benefits given to the first cable company that actually layed the physical infrastructure. Local governments give all kinds of benefits to the first company to bring in cable. They won't for the second. They will see it as wasteful duplication of infrastructure.
Companies should not be granted monopolies on the last mile lines that they were granted all kinds of exceptions for. Telephone companies seem to get by without it, why are we tolerating it for cable companies, especially when they are competing with services offered online?
The two networks are directly connected now, which eliminates that bottleneck. That's why performance spiked. There wasn't a capacity issue on either side of that Cogent link; Netflix is willing to pay for its bits, and Comcast's network has adequate capacity to deliver them. This routing change actually occurred two days before the deal was announced; you could see through a traceroute already that the route between Netflix and Comcast had shortened and no longer went through Cogent.
Courtesy Ars Technica on February 21, two days before WSJ reported the deal: http://i.imgur.com/pZPVTeR.png
Why would they want to pay Comcast instead of Cogent? Because Comcast's fight with Cogent was resulting in poor performance for Netflix customers. They had the option of waiting for it to get bad enough that one side or the other gave in on the negotiations and increased capacity, meanwhile losing customers frustrated with buffering at peak hours, or choosing an alternate route to get their bits to those customers.
It also nicely sets up barriers for entry to new video streaming services, which is something maturing companies tend to do. Netflix has grown big enough to buy transit directly from ISPs instead of through middle-men like Cogent, while startups don't have the capital for that.
Netflix was paying Cogent to link it to the internet. Now Netflix's servers are directly linked to Comcast, so Comcast is connecting it to the internet, and that's who they're paying instead.
Comcast is able to fight with Cogent while their own customer's connectivity suffers precisely because the customers often don't have an alternative ISP. Netflix argues that if the TWC merger proceeds the situation will get even worse.
Cogent's thing is selling massively cut-rate transit. They've been involved in constant peering disputes over their method of doing so since at least 2002. This isn't new for them - Netflix is just big enough that people really took notice this time.
That doesn't make sense to me. Comcast's customer isn't Cogent; Comcast's customer is the end user who sends them a check every month for access to the internet, regardless of where it comes from. If Cogent is being paid by Netflix on the other side, then Cogent and Comcast are exactly aligned (each wanting to deliver the Netflix packets because their respective customers are paying them to) and should peer without any money changing hands. If Comcast wants Cogent to pay it so that Comcast's own subscribers can get access to Cogent's customers' content, then they're being shady.
Should Comcast cache my personal website for free so that it's super fast half way across the country? Or am I responsible for making my website faster (by using CDNs and such)? If it's the latter, why should Netflix not have the same experience I have?
[1] http://www.forbes.com/sites/ericsavitz/2012/06/05/netflix-sh...
It's not transit. They're not delivering your traffic to some other ISP. They're delivering it to their own customers, which is what those customers have already paid them to do.
Netflix wants to distribute it's costs back onto everyone else (everyone but themselves). Even though this new arrangement reduces their costs vs. using Cogent.
That's messy and Comcast should fix how it distributes the cost of its customers using the internet, but what does it have to do with Netflix paying for anything? Similarly, you don't pay Comcast to route the packets from your website to your visitors, even though only a subset of them use your site, thus asking everyone else to take on those costs. How is this different?
Any plan where I don't directly pay per byte I download seems destined to run into problems like these - Comcast doesn't want to deal with the increased traffic Netflix is pulling into their network, but really what are there customers paying for but that traffic?
A better solution to what? There isn't a problem to be solved here. There is no danger of Comcast becoming insolvent as a result of Netflix traffic going to Comcast customers. The threat to Comcast of people using too much Netflix has nothing to do with Netflix using too much bandwidth and everything to do with Netflix taking too many customers away from Cable TV. Comcast doesn't seem to have any trouble with bandwidth consumption from people watching their on-demand video services.
The idea that there exists some large collection of people who would prefer metered billing is nothing but a talking point in favor of a policy that damages the ISPs' video service competitors. AT&T did studies in the 1970s that showed that people prefer unmetered plans over usage-based billing even when usage-based billing would save them money.[1] Because it's not worth $10/month to have to incur the mental cost of having to constantly measure your usage.
[1] http://arstechnica.com/tech-policy/2012/04/why-we-should-wor...
This new arrangement improves performance vs. using Cogent. And not because Cogent has a slow network.
Comcast is holding all the cards.