Tag Archives: broadband

What the Broadband Industry Really Needs Isn’t Net Neutrality. It Needs Competition.

Mother Jones

Will strong net neutrality rules reduce the incentive for cable companies to invest in high-speed network infrastructure? Maybe, though similar rules certainly haven’t had that effect in the cell phone market. Of course, the cell phone market is intensely competitive, and that’s probably the real difference between the two. As Tim Lee notes today, Comcast’s cable division is immensely profitable—certainly profitable enough to fund plenty of new high-speed infrastructure. But why should they bother?

Comcast’s high profits are evidence of high barriers to entry in the broadband industry. Ordinarily, a company that consistently made billions of dollars in profits would attract new competitors seeking to capture a piece of the market.

But with a few exceptions — such as Google’s projects in Kansas City and elsewhere — this hasn’t really happened. In most parts of Comcast’s service territory, consumers’ only alternative for broadband service is the local phone company.

Conversely, Comcast doesn’t seem interested in trying to steal market share from rivals. Comcast could expand into the service territory of neighboring cable companies or it could spend money building a next-generation fiber optic network the way Verizon and Google have done. Instead, they’ve chosen to spend more money rewarding shareholders than investing in their networks.

Given current political realities, strong net neutrality rules are a good idea. But an even better idea would be to forget about net neutrality and open up local markets to real competition. I think we’d find out pretty quickly that broadband suppliers have plenty of money for infrastructure upgrades if the alternative is a steadily shrinking market share as competitors start eating their lunch.

Competition is good. Big companies don’t like it, and our approach to antitrust enforcement has unfortunately lost sight of competition as a sufficient raison d’être. That’s too bad. It’s the cure for a lot of ills and a way to keep the rest of the regulatory state relatively light. It’s well past time for us to rediscover this.

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What the Broadband Industry Really Needs Isn’t Net Neutrality. It Needs Competition.

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Net Neutrality Drifts Ever Closer to Oblivion

Mother Jones

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In the wake of a circuit court ruling that the FCC doesn’t have the authority to mandate net neutrality, Brian Fung reports on the likely next step from federal regulators:

FCC chairman Tom Wheeler appears to be leaning increasingly toward using the FCC’s existing legal authority to regulate broadband providers. Industry watchers say this approach would likely turn on a part of the Communications Act known as Section 706, which gives the FCC authority to promote broadband deployment.

….Over the past week, some insiders, including industry representatives and public advocates, have said that Section 706 actually gives the FCC much more power than we thought….While the agency can’t lay down a blanket rule prohibiting ISPs from abusing their power, it could go after offending companies on a case-by-case basis. This is exactly what Wheeler has in mind.

“We are not reticent to say, ‘Excuse me, that’s anti-competitive. Excuse me, that’s self dealing. Excuse me, this is consumer abuse,'” said Wheeler on Tuesday. “I’m not smart enough to know what comes next in innovation. But I do think we are capable of saying, ‘That’s not right.’ And there’s no hesitation to do that.”

So long as the FCC can argue that a company is hindering the rollout of broadband or broadband competition (a pretty vague definition), the agency may be able to regulate ISPs, content intermediaries, and possibly Web services like Google and Netflix themselves.

Hmmm. Maybe Wheeler has no hesitation to do that, but this basically puts net neutrality at the whim of the president. All it takes is a few FCC members who think net neutrality is a crock, and enforcement would end instantly. This is a pretty thin reed for supporters of net neutrality.

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Net Neutrality Drifts Ever Closer to Oblivion

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