re: Group Questions Comcast's Net NeutralityMost cable cos get exclusive rights to serve in a county, effectively keeping others out. Only in a a few places in NJ I have been able to see two cable cos cos serving the same building.
Hey RJS; I don't think this is accurate, i.e. most cable franchises are nonexclusive. The regulators of the day predicted there would be multiple providers saying all that we had to do was put in place policy that didn't prevent competition.
The reality is that cable has been a natural monopoly and the regulators were wrong. The economics drove the outcome towards a single provider. And then toward consolidation.
The same thing is happening today for broadband, same arguments, same regulators, or at least the same regulatory thinking.
Previous generations who built out water, electricity, etc. recognized monopolies and took a different approach. That's part of the reason why we've inherited a better infrastructure than most of the world.
Quoting someone who has a made up market like you have makes as much sense as the Flying Spaghetti Monster.
You can write all you want, but you have not quoted any statistics or data. You have quoted your OPINION.
For Stats from Q2:
The countryGÇÖs nineteen largest cable and telephone providers added more than 1.7 million net high-speed Internet subscribers in the most recent quarter, according to Leichtman Research Group (LRG). These companies cover about 94% of the market. LRG estimates that there are now 58 million U.S. broadband subscribers; 31.5 million for cable and 26.4 million subscribers for the phone companies.
58 Million Households with Broadband Access compared to less than 80 Million PC Households. So, a pretty good take rate.
Your claim of "real broadband" is BS. Until we have Gigabit connectivity dedicated to every Internet connection point and that bandwidth is not oversubscribed, I claim that "real broadband" does not exist. Prove me wrong. You can't because it is all BS. As is your claim of no "real broadband". If you posted the rest of that little snippet, you would have seen the person claim that FTTH costs in 02 were the same as DSL. Given that this is not true today, why would you take into any consideration any single word the person typed.
Again, your OPINION is that real broadband has never existed. You claim you need this for applications. Well DSL and Cable are running 3d games that are connected to millions of folks worldwide. That 3d, global interactive gaming has no problem leads me to believe there is no need for your real broadband. You have come up with no activities that require it. None.
re: Group Questions Comcast's Net NeutralityRJM's post 56, though a bit long, puts things in clear light.
Once we stop living in denial that broadband access is not a monopoly we can start with possible solutions. RJM's suggestion to use pulic/private bonds to get the requisite ROI for public infrastructure is one clear way to skin this cat. Bear in mind that major bridges and highway infrastructure in NYC were built with that model. Unfortunately, the politicians changed the rules after the bridges and the bonds were paid off and still squeezed the public for the cash flow ... but what the heck, we can still use the triboro bridge.
For the above to happen, the Telecos and Cable Cos need to be stripped of their "entitlement attitude towards unlimited ROI." This will be very difficult.
The problem is not that you want bad things; its that you're getting little details wrong. I am a stickler for good information because bad information begets, or at least justifies, bad decisions.
One detail is that you confuse piracy with legit uses of P2P. This thread was consumed with the usual copyright rants. But that's irrelevant, since BitTorrent is often used for legal things. Like Linux.
Now there's a debate caused by clashing semantics of the word "monopoly". The etymological ur-meaning is that there is exactly one seller. And the ILEC enablers use that to say that there's no monopoly, which by that definition is true. But economists prefer a looser definition, what's often called "monopoly power", which means that there is not a Smithian free market, but there is literally more than one vendor. The EU prefers the term "Significant Market Power" (SMP), which is generally seen as the default when a vendor has over a 25% market share.
Another loaded term is "natural monopoly", which you mis-defined. Natural monopolies are NOT created by government in order to protect or foster investment. Natural monopolies happen, uh, "naturally" when the incremental cost to an incumbent to take on an additional customer is substantially lower than the cost to a new entrant. So an overbuilder would have to put up a whole new plant in order to reach anyone, while the incumbent just has to put in a drop. This makes competition unlikely. The normal answer to this is regulation, since natural monopolies beget monopoly power, and concomitant high prices or other loss of consumer welfare.
Now it's fashionable to pretend that ILECs and cable MSOs are identical here. Both have incumbency. But that's not really the case, especially in areas with good over-the-air TV. CATV had to face competition from OTA, and later satellite. It never had rate of return protection; it never had a vital commodity that every home and business needed; it never had a "universal service" system to subsidize it. Cable was built with risk capital, and only turned nominally profitable in recent years. And cable was built during an era when the ILEC was a common carrier; cable never was. It is widely echoed but blatantly false to say that the Brand X decision ended cable's or the ILECs' obligations to other ISPs. The Brand X case left the status quo intact: Cable was not a common carrier, ILEC was. The FCC just didn't like that, because frankly they are shills of the ILECs and hate the MSOs!
So yes I think that ILEC common carrier obligations should be restored, along with rate-of-return regulation of their basic transport services and total unbundling of their plant. Then there could be many ISPs. And if it turns out that Torrent is too costly, they'll all block it, and we'll have a market answer. But a duopoly simply means that monopoly SMP is shared. And everyone is open to claims of abuse, even if they feel justified. I see it as a free press issue. The government gave all of the paper mills to two publishers and doesn't require them to supply paper to competing publishers, so freedom of the press is at stake. I suppose if you have enough spare capital you could build a new paper mill, but that's a costly way to start a small magazine or newspaper.
re: Group Questions Comcast's Net NeutralityBollocks, RE: POST 47
1) In the US there are only four major providers, ATT, Verizon, Time Warner and Comcast. The rest are marginal.
2) In any given location, these four do not compete, effectively resulting in regional/local monopolies. Most cable cos get exclusive rights to serve in a county, effectively keeping others out. Only in a a few places in NJ I have been able to see two cable cos cos serving the same building.
3) As a technologist (not a lobbyist or a politician) I believe in Shannon's Law and with the exception of Verizon's FTTH, and Cable (coax) I do not see a 100Mbps (toggle rate) access line to the home from ATT or other regional LECs on twisted pair.
Based on the above facts, that leaves cable cos as the only purveyors of broadband which I define as 100Mbps toggle rate on a pt-2-pt access line at home.
Unless there are multiple cable vendors supplying most neighborhoods, broadband access IS a MONOPOLY and needs to be treated as one. As a comparision, Microsoft only has 85% of the OS market and is still labeled a monopolist by every one except themselves (another characteristic of a monopoly).
You can spin this in any which way you want --- but the facts speak for themselves and the actions of most MSOs are plain and simple monopolistic.
What I am trying to get at is that policy makers should stop the denial and accept the fact that we have a broadband monopoly and try to come up with a solution.
re: Group Questions Comcast's Net NeutralityPoint 1: If you want to protect content, protect it. Same as putting a lock on your door, money in a safe, etc. Leaving your door unlocked and demanding life sentences for breaking and entering is not efficient for the society. Same goes for drunk girls walking down dark alleys in halter tops and miniskirts. Darwin rules.
Point 2: The rationale of IP protection is the society gains by encouraging new IP to be created, and not by having a few people get richer on piles of old IP. Therefore a reasonable time period of exclusivity aka protection, then it's open to the public. No Mickey Mouse-forever laws.
re: Group Questions Comcast's Net Neutrality I stand corrected RJM. I was just making an observation from a consumer level. I do not know the exact detail and the verbiage of the contracts. The observed end result is what I wanted to mention.
-RJS
" .... Hey RJS; I don't think this is accurate, i.e. most cable franchises are nonexclusive. The regulators of the day predicted there would be multiple providers saying all that we had to do was put in place policy that didn't prevent competition. ...."
I tend not pay attention to detail when I post on these boards so thanks for calling me out on it.
I agree with that natural monopoly is an economic condition and not a government created one. I think I agree on most everything else as well, except:
One detail is that you confuse piracy with legit uses of P2P. This thread was consumed with the usual copyright rants. But that's irrelevant, since BitTorrent is often used for legal things. Like Linux.
I see P2P as band aid to real networks and can live without them. I don't think I'm throwing out the baby with the bathwater.
In corporate America we are attached to file servers at high speeds and there is no need for these P2P gimmicks. I posted earlier using two older PCs on a commodity switch I get 455Mbs TCP throughput. On my internet servers I can get the distros from at a mere 40Mbs, a 10x decrease. (Of course most colos already have it preloaded so I don't have to download it in the first place.) I'd like to see more people using colo servers so that the internet providers, the ones that remain, will upgrade to even faster links and get paid to do it.
I've made a political call that the legit uses of P2P networks can be sacrificed in the name getting broadband built and the internet backbones upgraded. There is two components to this. First, increasing the use of the internet for legals purposes. Second, letting people know they are being conned about access networks being broadband. The more pissed off people get about P2P not working over their access networks, the better it is for what I believe to be the next steps in building out the internet.
The natural monopoly aspects of telecom have been well studied. The economics have been laid out in many regulatory filings. Silly FUD questions, which look like final exam questions for EC318 more than like real-world ones, don't change the facts.
Natural monopolies do change with time. The point of the 1984 Divestiture, for instance, was to bound the RBOCs to natural monopoly activities as of that time. So local switching was seen as a natural monopoly, which it was, under the circumstances. But nowadays maybe it isn't. Still, pulling wire still is, and remains so for the foreseeable future. If you don't believe me, as a stockholder of the original RCN.
Yes, there are narrow opportunities for wireless systems to compete with wireline, but they're far from a general case, not a perfect substitute, and to some extent self-limiting. Certainly the FCC doesn't think they're a good substitute when it comes to funneling USF cash to the subsidy whores, who get to spend $20k+ of it on Fiber To The Ranch projects, for which wireless substitution need not be considered. And they're thinking of changing the rules so diruptive rural wireless providers like Alltel lose their eligibility to compete for USF.
Hell, I did write a book about this stuff. I know what makes you go broke.
re: Group Questions Comcast's Net Neutralityi understand the argument about long run average costs / high fixed costs and how that leads to "natural" monopoly, but i do find it interesting that people who so readily assert other view points as faith-based theoretical models so completely sign up for what is an economic dogma and itself only a theory. is it not possible to admit that the future by definition is unknowable and that all we are left with is opinions and theories?
from the perspective that has not been presented on this thread there are any number of thorny questions left unanswered:
1) what causes price elasticity and what is its relationship, if any, to competitive conditions? 2) how to reconcile the conundrum that the reason market entry become so hard is because of the efficiency of the "natural" monopoly - and if so what is the complaint (other explanations for market entry would lead to the conclusion of an "unnatural" monopoly)? 3) what is the theory of a process of continuous competition and what are its implications? 4) what is the role of innovation, technology, and entrepreneuship in any market? 5) why the need to achieve a radical new level of efficiency may lead to the creation of radically new structures of production? 6) the difference between static modeling and dynamic modeling / view points 7) whether a regulated monopoly that by definition prevents or discourages competition is more efficient than a monopoly that is so efficient it is naturally preventing entry to the market 8) the implications and potential for rivalry in any market where unnatural barriers to entry are removed 9) why some cost curves are U shaped and the implications?
so not trying to make the point that monopolies can not occur. i am trying to make the point that just because they do occur it does not mean they are "naturally" permanent, and that there is another side to the "natural" monopoly debate that has not been presented in this thread. as always, you are entitled to have and express your personal opinion.
Hey RJS; I don't think this is accurate, i.e. most cable franchises are nonexclusive. The regulators of the day predicted there would be multiple providers saying all that we had to do was put in place policy that didn't prevent competition.
The reality is that cable has been a natural monopoly and the regulators were wrong. The economics drove the outcome towards a single provider. And then toward consolidation.
The same thing is happening today for broadband, same arguments, same regulators, or at least the same regulatory thinking.
Previous generations who built out water, electricity, etc. recognized monopolies and took a different approach. That's part of the reason why we've inherited a better infrastructure than most of the world.