Supporters of Net Neutrality will tell you that lack of regulation is what allowed Comcast and Time Warner to become the powerhouse that they are. That is just not the case.
How did this happen?
The Cable Communications Act of 1984 established the first set of regulations around cable companies. Local municipalities were given the power to act as a franchisee to license cable operations in their areas. The cable companies were subject to a franchise fee, facility and equipment requirements, as well as some broad requirements to provide access to local content/programming.This resulted in very few instances of cable companies overlapping their coverage area. Do you remember when you would travel to your relatives' house in the next town over and all their channels were different? That's because your cable providers differed from town to town. It just wasn't cost effective to negotiate for franchise rights with the local municipality, duplicate an existing network of physical cables, and be forced to compete with another company.
So cable companies did the most logical thing to expand business -- they merged. The Wall Street Journal posted a great chart that shows the consolidation of cable companies over the past two decades (image below). Twenty years later, Time Warner Cable and Comcast are consistently the most hated companies in America.
Government Regulation
So how do we fix this problem? Some people argue that government regulation is the answer. In almost every case, when the government attempts to regulate a private industry it results in higher prices for the consumer. Another proposed solution is to make the cable lines a public utility and regulate it similar to phone lines. How much have phone lines evolved over the past 50 years? When a company's profits are regulated by the government, it removes incentives to reinvest or reinvent the technology. With something as powerful as the internet, the last thing we want to do is hinder its growth.
The Solution
The solution is to break up the monopolies horizontally. The physical cable network should not be owned and operated by the same company that provides the internet service. That is the root cause of all the problems. Allow ISP's to purchase non-discriminatory usage of the cable lines and do not allow ISP's to write language into their contracts that restrict their competition from using those same lines. This promotes actual competition and removes a huge barrier to entry for the ISP market.
"Net Neutrality" would be a positive by-product as well! The companies that own the physical infrastructure don't care what data is moving through their lines because they have no interest in the content as long as the ISP's are paying for the usage. The ISP's, on the other hand, would still be able to favor one source of content over another if the free market supports them. With the introduction of more competition, the free market would be able to decide which ISP's win and lose based on quality of service instead of government bureaucrats and lobbyists.
If you look at Comcast right now, they are a content provider (e.g. Hulu) and a data mover (ISP), not to mention they are heavily invested in the physical infrastructure of the internet. So naturally, Comcast will take advantage of opportunities to limit/hinder the growth of its competition. That is a huge conflict of interest for the consumer who wants cheap, high quality internet content in a variety of options.
Saw this posted to the Liberty on Rocks Facebook page. Hope you dont mind a comment; I'll assume you're open to comment with having posted it on there.
ReplyDeleteYour opening sentences seem as though you don't really grasp what you're meaning to say. I think what you meant to say at the beginning was that your opinion is that making the Internet a public utility, classifying it as a Title II common carrier "is a joke", and not Net Neutrality. You even say later that "Net Neutrality would be a positive by-product" to your "solution". So what is it? A joke or positive by-product?
Continuing through, you seem to think that a policy hearkening back to the days of telephone lines would automatically be a bad thing. Just because a policy is old, does not mean it's bad. You word it that the policy could hinder innovation, when in fact, changing the internet to a public utility would simply be broad-stroked in its intent. If anything, the FCC has helped to DRIVE innovation; the most recent example being their re-classification of the term "Broadband" to a minimum of 25Mpbs download, compared to the minimum 4Mbps that ISP's were more than happy with (http://www.theverge.com/2015/1/29/7932653/fcc-changed-definition-broadband-25mbps).
Next, it would be very easy for me to say "The problem is, there are too many hungry in the world. The solution is that everyone should get food" without paying any mind to the logistics/feasibility. So I challenge you - How exactly would your solution work in implementation? Would you force ISP’s to just hand over or sell their physical infrastructure? Would you require they break themselves into a separate company? Would it be turned over to the city? One thing to remember is that in many cities and municipalities, these companies receive MASSIVE tax breaks/incentives to build these networks out as part of their agreements, so in essence, these networks are ALREADY not completely owned by the ISP's, and partly owned by the citizens themselves. A great example is the mess that happened in Pennsylvania with Verizon (http://www.dslreports.com/shownews/30544). Part of the reason this event pushed its way through the cracks without any real repercussions is that there was no federal regulation involved; leaving the average citizen in that area on the hook for a service and network that was never rendered.
Next, who would say that Comcast wouldn’t just partner with the private business that services the physical infrastructure to provide priority access to the Comcast provides? They have a huge checkbook! You essentially run into the same problem that's trying to be solved with making the Internet a public utility, with even ANOTHER middle man in the mix. You say wouldn’t care about the data, when in fact, they would care, because they’d be paid to by ISP’s.
Have you ever heard of a company called Level 3? You wouldn't be remiss if you havent, as they're not a company that deals with individuals. However, what they are, is essentially what you describe in your "solution". They're a company that owns part of the major physical backbone infrastructure of the internet's traffic. The ISP is simply part of what's known as "the last mile", which is the connection between the major backbone from a company like Level 3, to your house.
Your solution seems rash, without giving any thought to the implementation/feasibility of it. You use government regulation as a negative aspect, when I don't see how your solution could even come close to being implemented without MORE regulation and law than what's proposed under the Title II Common Carrier ruling made by the FCC.
Maybe it's best when to know you're stepping out of your zone of knowledge and expertise, and leave the solutions to those who know more about it than either of us...