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Comment by cs702 | Hacker News Reader

There's a big difference between the ISP and payment processing markets in the US.

Most consumers and small businesses in the US can buy ISP services only from a duopoly, the cable company or the phone company, who therefore are in a position to dictate terms to customers. In other words, there's no functioning "free market" for consumer and small-business ISP services.

On the other hand, there are many payment processors in the US.[1] Say what you will about their service quality (most suck -- Stripe is an exception), but at least customers have multiple choices. No payment processor is in a position to dictate terms. In other words, there's a functioning market for payment processing services.

[1] http://www.quora.com/How-many-payment-card-merchants-are-in-...

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Then why not promote competition and choice, via antitrust enforcement and franchising/last-mile-infrastructure reforms?

Federal "net neutrality" regulations freeze into national law a particular formula for access, based on an idealized model that's never quite existed before. (To the extent the net has often been 'neutral', it's not because the FCC demanded it, but customers and businesses. And the legions of de facto exceptions have been practical, and evolving quickly, not waiting for telecom-lawyer mandarins in DC to design us a better internet.)

Even if new utility-style regulation prevents certain abuses, it equally prevents valuable experiments from incumbents or new entrants. The history of regulated utilities – electric, water, classic phones – is one of stagnation, and plenty of subtle abuses from those incumbents whose margins get effectively written into law.

> Federal "net neutrality" regulations freeze into national law a particular formula for access

Er, no it doesn't "freeze" anything. FCC regulations of other regulated industries are very frequently updated. And regulations, while given force of law by the laws authorizing regulation, are not the same as law particularly with regard to being "frozen", as they can be changed by either changing the law on which they are based, or by change through regulatory process. They are, therefore, strictly less "frozen" than law.

Maybe the old saying "give them an inch, they'll take a mile" is apropos here?

Apropos how, besides describing what the ISPs have already demonstrated?

While no, "as an access provider, you can filter and rate limit content in combination with charging content providers as well as consumers for the transfer of that content" will not be constitutionalized or truly frozen... Moving in that direction with FCC regulations is pretty close to the same thing. It sets a precedent for this practice in the future. In nearly any system, it's harder to remove or change regulations than it is to add them.

In fact, it will make it easier to add similar regulations, as has been shown throughout the history of our country's particular style of governance.

> Even if new utility-style regulation prevents certain abuses, it equally prevents valuable experiments from incumbents or new entrants.

Without opening up infrastructure to competing ISP services, the current system guarantees there will be no new entrants (and, via mergers, an ever decreasing number of competitors). Infrastructure is a natural monopoly, but the services provided over that infrastructure are not. Locking infrastructure customers to a single ISP is effectively giving the monopolies a gift-wrapped invitation to abuse their market power.

There are new wireless technologies. And Google blimps or Google fiber. And other companies or cities can run new wires, or put ever-improving wireless repeaters on old polls. None of the cable infrastructure is that old, the world is awash in capital looking for projects, and even the tech for running wires has improved massively recently via robotics, compared to the 70s/80s cable build-outs. Smarter caching, or peer-to-peer delivery, can also thwart many ISP bottlenecks.

So I'm not sure this is a 'natural monopoly' at all. There's been too little time to observe, and things are still changing fast.

Let abusive incumbents try to collect monopoly rents. That would attract lots of new solutions from very savvy and deep-pocketed challengers, like Google, Apple, and other strategic investors.

That would attract lots of new solutions from very savvy and deep-pocketed challengers, like Google, Apple, and other strategic investors.

And if it doesn't? How long do we wait?

Wait until measurable abuses actually exist, and persist for year or two – enough time to understand – rather than acting on paranoid fantasies (like the "cable tiers" mockup) that might never materialize.

For example, what if ISPs roll out traffic-preferences-for-pay... but the base bandwidth available to customers, and sites that don't opt to pay for preference, also keeps improving, on a price/performance basis? Would that still be an emergency requiring novel nationwide regulation?

And wouldn't we learn something if some local markets showed abuse or lagging price/performance, while others thrived? Couldn't we, and especially the lagging jurisdictions, then do the minimal targeted reforms to improve results based on actual history, rather than a theoretical "neutral net" ideal?

Note that unlike the shared broadcast airwaves, the economic case for wires being a 'commons' needing public management is weak. There's already at least 3 sets of wires running to most structures – electricity, phones, and cable – and more could be added if those aren't satisfying the customers. And even electricity – far more foundational than internet – is regulated in a diverse manner locally, not nationally.

Wait and see and let localities and businesses experiment is just fine - it's what got us to this point, after all, and the internet is doing just fine – albeit prone to occasional panic attacks: "Death of the Internet Predicted, Film At 11".

> Wait until measurable abuses actually exist

Specific measurable abuses and the court rulings in the specific attempt to deal with them in the Comcast FCC action and subsequent litigation in 2007-2010 was one of the things which spurred the FCC to move network neutrality from a set of generalized objectives that it was seeking to preserve in it its other actions to a specific focus of dedicated, generally-applicable regulation.

So been there, done that.

> So I'm not sure this is a 'natural monopoly' at all.

To be clear, by 'infrastructure' I mean physical lines going to the premises. There's still hope for wireless, but competition in the physical connection space is effectively dead, and getting deader with every merger.

Then break them up. Or run new lines: it'll be easier than the cable buildout of a couple decades ago, we're richer and smarter today.

But also: why are the physical lines a separate market from wireless? They are very, very close substitutes – bits are bits. And advancing tech or clever to-the-curb (but not to-the-premises) buildouts could make wireless broadband fully competitive with the wired networks.

If the wired incumbents get fat and happy on a position of temporary advantage – for example for bulk video delivery – then those potential wireless advances will see more investment.

> Then break them up.

That's effectively what I'm advocating--by removing their monopoly power to be the only ISP available to the customer on the other end of their lines. Breaking them up into regionalized monopolies doesn't give consumers a choice, but opening the lines to competition does.

Physical line can be way faster, especially with fibre. The bandwidth difference will only widen over time.

These are different market. You may think the buck stops somewhere, but after 720p video streaming, you get 1080. Then you get gaming, at sixty FPS, not 30. Then you get VR streaming, up to 10 times the pixel rate, and nearly twice the frame rate to have perfect presence. And never mind the latency requirements. Then you can get more sci-fi, with direct neural interfaces, and, eventually whole brain emulation over the network —though at that point, the economy would have changed so much that the fibre vs wireless debate will be quite moot.

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