Net neutrality isn’t as big a deal as you might think

by on May 29, 2017 at 2:43 am in Economics, Law, Web/Tech | Permalink

That is an unpopular point — with both sides — but it might just well be true.  Here is a newly published study by Robert W. Crandall:

More than a year after a court invalidated its “net neutrality” rules on broadband Internet service providers (ISPs), the Federal Communications Commission (FCC) decided to extend public-utility (Title II) regulation on broadband services. This paper uses traditional event analysis of the movements in the values of major communications and media companies’ equities at key moments in the FCC’s path to this decision to estimate the financial market’s assessment of the likely effects of regulation on ISPs, traditional media companies, and new digital media companies. The results are surprising: the markets penalized only three large cable companies to any extent, and even these effects appear to have been short-lived. The media companies, arguably the intended beneficiaries of the regulations, were unaffected.

That is via the excellent Kevin Lewis.

1 Ricardo May 29, 2017 at 3:19 am

It isn’t clear that stock prices are the most important metric here and requires assumptions of high levels of rationality among both market participants and management committees of broadband providers. In anti-trust cases, isn’t the relevant question whether consumers benefit from anti-competitive actions or not? Comcast may never decide to impose a surcharge on data streamed from Netflix that would earn it enough additional profit to show up in stock prices but it certainly wouldn’t be in the interests of consumers. Same with, say, Verizon and Skype. “Net neutrality isn’t a big deal” is a good argument for keeping it if we still take anti-trust principles seriously.

2 Believe it! May 29, 2017 at 3:36 am

We don’t and shouldn’t take anti-trust seriously

3 rayward May 29, 2017 at 6:40 am

This reminds me of the lawyers’ parable: if the facts favor your client, argue the facts; if the facts don’t favor your client, argue the law; and if the facts and the law don’t favor your client, argue public policy. Here, the media companies opposed to net neutrality give it their best Sergeant Schultz imitation: I hear nothing, I see nothing, I know nothing. Move along folks, there’s nothing here to see.

4 TMC May 30, 2017 at 10:00 am

So the default position, with no advantages, is more regulation. Typical.

5 RustySynapses May 30, 2017 at 11:32 am

I think you meant aphorism, not parable. And you didn’t really give the better (funnier) more typical wording. There are a lot of versions, but basically: If the facts are on your side, hammer the facts, if the law is on your side, hammer the law, and if neither is on your side, hammer the table. (Sometimes “pound on”)

6 prior_test2 May 29, 2017 at 8:29 am

Why should stocks move? Net neutrality is how the Internet has essentially worked, till now.

7 TMC May 30, 2017 at 10:02 am

No, it hasn’t. ‘Net neutrality’ is a bogus concept that was recently introduced. Networks need different types of traffic to be prioritized differently. Basic networking that politicians ignore.

8 Neuter May 30, 2017 at 11:19 am

Citation needed.

9 Adam Bowers May 30, 2017 at 1:44 pm

You don’t appear to have any idea what you talking about. Networks do not “need” prioritization anymore than they “need” a ham sandwich. Prioritization defines the order in which packets should be processed in cases where connections are saturated. This prioritization is optional. The current crux of the Net neutrality debate isn’t about router level packet prioritization, it is about 1.) ISPs using their monopoly status as edge providers to extort payments from transit providers. 2) ISPs arbitrarily shaping/throttling specific data types or services where they have competing services that are not affected.

10 Hunter Pritchett May 29, 2017 at 9:16 am

It’s certainly possible investors just didn’t expect the long-run outcome of net neutrality regulation to be affected much by an outgoing administrations FCC rules and this certainly seems like an area where only the long-run matters given ISPs haven’t as yet really used their ability to restrict certain types of internet traffic. I’m not saying I disagree that it isn’t that important, I’m just saying that given the high uncertainty that still surrounds Net Neutrality it’s possible that we’ve only seen small changes to stock prices because we’ve only seen small changes to expected long-run outcomes.

11 Anonymous May 29, 2017 at 9:21 am

The great danger here is that Net Neutrality is a highly technical thing, argued on both sides, by people who don’t understand it.

One note though, inventors of the Internet are for it. Pretty much unanimously, though Metcalfe once described himself as neutral on neutrality.

https://www.savetheinternet.com/blog/09/10/19/top-tech-ceos-and-pioneers-net-neutrality-essential-innovation

12 Tom T. May 29, 2017 at 12:03 pm

The big companies profiting from net neutrality (e.g., Netflix) are strong supporters as well.

13 Willitts May 30, 2017 at 9:43 am

Here, fixed it for you:

“The great danger here is that Every Meaningful Issue is a highly technical thing, argued on both sides, by people who don’t understand it.”

14 TMC May 30, 2017 at 10:06 am

More honestly, the article says “A coalition of top tech company…”

As Hunter says above, those who will profit from it. Oddly it those who often cry about corporate control of government that also support it.

15 Troll Me May 30, 2017 at 10:53 pm

The technical aspects of net neutrality are not relevant to understanding its relevance.

16 Jim May 29, 2017 at 9:28 am

There’s ample evidence that all public information is immediately ‘priced’ into stocks, preventing anyone from earning excess profits by trading stocks based on public information. However, there isn’t clear evidence suggesting that the stock market prices that public information accurately.

In other words, the stock market prices information as best it can. Sometimes it gets it right and sometimes not. There’s no way to know which price movements are accurate predictions of future consequences and which movements are ‘wrong’ guesses by the market.

17 reed e hundt May 29, 2017 at 9:42 am

the underlying question is whether the scale and scope of the FCC’s jurisdiction is important.

18 prior_test2 May 29, 2017 at 9:51 am

We sure wouldn’t want the FCC regulating ISPs as common carriers, would we?

19 Anonymous May 29, 2017 at 10:03 am

Ideally the government, owning the original internet, should have written neutrality into initial commercial access contracts.

They probably didn’t because it didn’t occur then that the architecture could be anything else. A peer-to-peer packet switching network is neutral. Inherently. Artificial restrictions on flowing packets is a corruption of the design.

We are just sadly at a place where WSJ editorials, etc., come out for corruption without educating on the design itself. They don’t explain why neutrality was built into ARPANET in the first place.

Kind of like Tyler’s post? If markets like it, it must be good?

20 Reid May 29, 2017 at 10:56 am

::: “…underlying question is whether the scale and scope of the FCC’s jurisdiction is important.”

Yes, FCC power is precisely the key issue here. “Net Neutrality” is a minor side issue.

The Obama Administration made a HUGE power grab of the internet via FCC classification of ISP’s as “Common Carriers”, under the pretense of sacred “Net Neutrality”.

The FCC now has vast “legal” (but unconstitutional) power to control/censor internet content and internet access. That power has not yet been used — but will be, if not repealed. The FCC has a long, horrible record of censorship/control of Radio/TV/Telecommunications.

Net-Neutrality is neither a technical nor important issue in itself; leftists are unable to see the larger political picture.

21 Anonymous May 29, 2017 at 11:05 am

That is a response “to form.” You don’t really want to understand what a peer-to-peer packet switched network is, or why the “peer” part makes it neutral.

You have just been taught that this is about “leftists” and not technology.

22 thomas May 29, 2017 at 2:23 pm

Moronic. IP has nothing to do with this. Can you make a compelling argument that the government will not censor/abuse the Internet? I wonder what little fascists like anon would do with their redistributionist social justice we worldview and compete control of the Internet?

23 prior_test2 May 29, 2017 at 3:06 pm

‘Can you make a compelling argument that the government will not censor/abuse the Internet?’

That it hasn’t till now? And won’t be able to if the infrastructure to allow data packets to be treated differently depending on source is never built?

24 Thomas May 29, 2017 at 8:24 pm

The internet hasn’t been a utility with total regulatory control before now either. What is to stop the banning of “hate speech” by some lefty administrator in the future? A ‘dear colleague’ letter for ISPs?

25 Ricardo May 29, 2017 at 11:50 am

“The FCC now has vast “legal” (but unconstitutional) power to control/censor internet content and internet access.”

No, the Supreme Court considered and rejected content-based censorship of the internet 20 years ago.

26 Denny May 29, 2017 at 1:15 pm

SCOTUS did no such thing and did not restrict current FCC powers.

FCC now directly censors Radio/TV content — and there’s currently no statutory reason FCC could not start imposing content rules on “Common Carrier” internet ISP’s.

27 Anonymous May 29, 2017 at 1:32 pm

Note that in the “history” link below the Internet pioneers saw FCC involvement as a natural consequence of ARPANET growing into a common carrier.

In 1971.

28 Ricardo May 29, 2017 at 2:25 pm

ISPs have statutory immunity under Section 230 of the Communications Decency Act for content that passes through their systems. See the Supreme Court decision that invalidated most of the rest of that law.

29 thomas May 29, 2017 at 2:33 pm

Anon in response to “the FCC will censor speech: this is about packets and switching! !!!!

Anon next post: of course the FCC can censor the Internet, see this intro to computers factoid.

30 thomas May 29, 2017 at 2:36 pm

Dishonest Ricardo: carriers have immunity therefore my political party can’t ban “hate speech” on the new regulated Internet.

31 Ricardo May 29, 2017 at 2:55 pm

Thomas, you are a fucking idiot. There, go ahead and prove me wrong by having the FCC track me down and fine me.

32 emilypostetiquitte May 29, 2017 at 5:42 pm

tsk, tsk ricardo; he who loses his cool first … loses the argument

33 Thomas May 29, 2017 at 8:26 pm

Ricky, you made a dishonest argument. I apologize for triggering you. Don’t you have some burrito trucks to shut down now that you can’t content police the internet?

34 MichaelG May 29, 2017 at 9:50 am

It seems to me that this is all about television. It would have been nice if the internet were a completely separate industry that ate into TV and cable network revenue, but it’s not. Because only cable companies had a high speed line into your home already, they have come to dominate internet access. So their internet business is in competition with their TV business.

I assume they look at the future, where they are in the commodity data-delivery business, and they don’t like it. In that world, they have no brand, get no fees from content providers, and have no advertising minutes to sell. Instead, they just deliver bits and have no customer loyalty at all.

So they are doing what they can to slow the arrival of that world, and preserve what they have. Which means making content providers pay them, and making customers pay for various levels of service. And if they can’t actually deliver advertising, they can at least track everything you do and sell that information to advertisers.

I’d prefer their business model just died and they turned into commodity bit movers. But I doubt they are going to go down without a fight.

35 The Engineer May 29, 2017 at 1:03 pm

+1 I wish more people would come to this realization and we could have a rational discussion, but I think ultimately the cable companies are so hated by their customers that the destruction of their business model is seen as a feature, not a bug, of net neutrality.

36 Adam Bowers May 30, 2017 at 1:52 pm

Another +1. This is the crux of the problem. Until the last mile or edge networks are publicly owned (or forcibly required to be shared) and ISPs have to really compete with each to deliver my requested data packets as fast as possible as the lowest cost we will always be at the mercy of the large conglomerates.

37 Ryan May 29, 2017 at 10:23 am

I suspect that prices did not move because investors did not feel that the probability of net neutrality remaining intact was materially altered.

Net neutrality is protected by the public backlash that would arise should it be removed. Whether or not its legally enforced plays a comparably small role.

38 Bob May 29, 2017 at 11:16 am

I think that even talking about net neutrality at all means that we have lost, because it means we are not really tackling the earl problems of the space. You don’t hear a lot of talk about this in places where consumers have real choices when it comes to network access, as market forces would move us to a sensible direction. Instead, local regulations and combining wiring and content lead to situations where we have, on average, low quality internet. Whether we think that the internet is a key piece for productivity increases that hasn’t gone on full gear just yet, or we see it as a big social good, it’s hard not to argue that it’s one of the top technological innnovations in the last three decades, and that it would be great to maximize its utility.

The counterpoint is that one of the centers of the internet economy is Silicon Valley, who holds a large majority of successful internet companies in the US, and yet, mostly thanks to spectacularly bad local government, is unable to generate an environment with cheap, high quality options for its own residents. Nothing like hearing tech tycoons that the only way they can get a fast internet connection to their condo is to spend a small fortune to bypass consumer offerings, because all their sensibly priced alternatives are two orders of magnitude slower than what you can get in Kansas City for $100 a month.

39 rayward May 29, 2017 at 11:34 am

I have mixed feelings about net neutrality. Marc Andreessen has explained how he and other visionaries like himself were able to hijack the internet and turn it into tv, a medium designed to prosper by appealing to the lowest common denominator in order to sell the maximum amount of advertising. I suppose it’s possible that by splitting the internet the version envisioned by the creators of the internet might emerge and, indeed, become dominant. And I suppose it’s possible pigs might fly. But there’s hope. Here’s a story from the NYT how in Europe they envision autonomous vehicles as transit, miniature versions of buses that would transport people at low speeds from here to there. https://www.nytimes.com/2017/05/28/technology/the-future-of-european-transit-driverless-and-utilitarian.html Americans, on the other hand, envision millions of autonomous cars racing through the streets at 70 mph while sharing the road with teenagers and angry white males racing around those same streets. “Get out of my way!” People, American people anyway, will believe just about anything.

40 Anonymous May 29, 2017 at 11:46 am

Andeessen is a funny guy. He got his start and his freedom at the NCSA because early net neutrality allowed some kid to define new protocols. He did not face a gatekeeper. Again at Netscape he relied on the open network. Neither Comcast nor IBM nor Apple nor Microsoft could block him, nor demand extortionary payments.

He certainly did not tamper with the underlying neutrality of the net, he rode it.

Now though, as a VC and billionaire he seems ok with extortion. He says that Comcast should be able to charge Netflix, even though you are the customer, already paying Comcast for your full bandwidth.

A nineteen year old Andreessen would be shut out by that kind of system.

41 The Other Jim May 29, 2017 at 11:47 am

Yeah, you sound sane.

42 rayward May 29, 2017 at 12:17 pm

The model, the business model, that Andreessen and others were able to establish is an internet that is “free” (except for what one pays the ISP); thus, all those iconic websites, from Google to Facebook, that are “free”. Netflix, the popular music sites, some media websites (such as newspapers and magazines) and a few others have diverged from the “free” model by charging subscribers a fee. It’s okay to have advertising and charge the advertisers but not the customer for a service that’s supposed to be “free”. Of course, it’s a fiction that anything on the internet is “free” but it’s accepted wisdom that Google is free, Facebook is free, et al. What would happen if the “free” model were to be disrupted? Disruption is just another word for opportunity, and Andreessen would be more than happy to take advantage of it. He is a very smart guy with a very good sense of smell. And he can smell money. Which isn’t a bad thing. But disruption for a lot of folks isn’t so much an opportunity as an expense.

43 Anonymous May 29, 2017 at 12:26 pm
44 Axa May 29, 2017 at 12:27 pm

Ha! Troll Tyler. The headline was is quite ambiguous.

ISPs could not charge Netflix et al. for bandwidth, but they did put data caps on residential consumers. Thus, ISPs income is fine and thus equity price is also fine.

Data caps may influence consumers, very few people would like to pay more. Strongers data caps are generating new issues:

a) Ads consume bandwidth. This is critical today specially for mobile internet (4G) where ads can consume half of data limit. Who should pay for this? Ads are less critical for cable internet because caps are 1000x higher, but anyway the user is paying for ad delivery.

b) Blockchains: Bitcoin is not limited by bandwidth in developed economies, in China yes. If the blockchain becomes larger, the cost of bandwidth will become evident.

45 Hazel Meade May 29, 2017 at 12:39 pm

You point out some of the reasons why strict net neutrality is impractical. When someone’s got an embedded video ad in their website, net neutrality would treat that content neutrally with the content desired by the consumer.
It literally means that spam has to be treated equally with desired content.

The real fear is that cable companies will deliver their own spam/content for free while charge for everyone else for it, which would (hypothetically) drive all other content providers out of business. But it’s totally hypothetical that that would actually happen in reality. If consumers don’t want to live in a walled garden, they will go to other ISPs. There is a real lack of competition between ISPs, but there’s little evidence that any of them are conspiring to favor their own content over others.

46 Neuter May 29, 2017 at 4:58 pm

It must be nice living in your bubble.

There are multiple documented cases of ISPs zero rating and/or favoring their own content over others.

Lots of places only have one broadband provider. So even if they want to, they can’t switch providers.

Furthermore I do NOT want the Comcasts of this world to decide what content I desire and prioritize those bits over others. The very last thing I want, is the ISP slowing down the embedded video ads on a site. That would just be idiotic. Not only would those bits and bytes be consumed, but they would ALSO slow down my browsing experience! That’s adding insult to injury. If I requested some bytes they should all be delivered post haste, no questions asked. If I don’t want ads, I won’t request them, I’ll use an ad blocker.

ISPs should do but one thing: deliver the bits and bytes I requested. They should NOT be messing with any of them and they should NOT try to decide for me what I desire and what I do not. They are by bits and bytes, stay the hell away from them!

47 TMC May 30, 2017 at 10:56 am

So your skype call will be crap so that your netflix video, which buffers anyways, can get through right away. Smart*.

*Not really

48 Neuter May 30, 2017 at 11:34 am

You fail to understand how the internet works. If Netflix buffers and Skype breaks up, you have too little bandwidth at your disposal. No amount of ISP prioritization will fix this. You need to either upgrade your broadband speed or chose a lower bitrate in Netflix settings.

49 Thomas May 30, 2017 at 12:32 pm

“You fail to understand how the internet works. If Netflix buffers and Skype breaks up, you have too little bandwidth at your disposal. No amount of ISP prioritization will fix this. You need to either upgrade your broadband speed or chose a lower bitrate in Netflix settings.”

Only if you are assuming infinite resources at the ISP. Back here in reality, the share of your neighbors using Netflix impacts you loading a Skype call, an email service, or a mostly text site like MR.

50 Neuter May 30, 2017 at 12:57 pm

Thomas wrote:
> Only if you are assuming infinite resources at the ISP.

You need not assume infinite resources at the ISP. Just enough resources to serve the customers, which they have contracted with. Which is there bloody job, no excuses accepted.

> Back here in reality, the share of your neighbors using Netflix impacts you loading a Skype call, an email service, or a mostly text site like MR.

Only if the network is underprovisioned, which only happens due to bad engineering.

51 Thomas May 30, 2017 at 5:08 pm

“> Back here in reality, the share of your neighbors using Netflix impacts you loading a Skype call, an email service, or a mostly text site like MR.

Only if the network is underprovisioned, which only happens due to bad engineering.”

The contract sold to you by an ISP in the United States is for “up-to” speeds, not guaranteed speeds. Similarly, your bus pass doesn’t guarantee you the right to a 24/7 seat, as I’ve written here before, which still seems to elude you.

52 Neuter May 31, 2017 at 1:36 am

Thomas wrote:

> The contract sold to you by an ISP in the United States is for “up-to” speeds, not guaranteed speeds.

Regardless of the “up-to” moniker, consumers have a reasonable expectation that the product will work as advertised. You cannot endlessly hide behind weasel words without getting regulated or sued.

> Similarly, your bus pass doesn’t guarantee you the right to a 24/7 seat, as I’ve written here before, which still seems to elude you.

ISPs are not busses.

53 Thomas May 31, 2017 at 3:12 pm

Busses have bandwidth. The city government sells you a bus pass. You don’t have unlimited access to busses. There is no “bus neutrality” why? Because of net neutrality supporters affinity for government, perhaps?

54 Neuter May 31, 2017 at 3:40 pm

Thomas wrote:

> Busses have bandwidth. The city government sells you a bus pass. You don’t have unlimited access to busses. There is no “bus neutrality” why? Because of net neutrality supporters affinity for government, perhaps?

What are you going on about? Busses have very few things in common with broadband networks and have nothing to do with net neutrality.

55 Hazel Meade May 29, 2017 at 12:33 pm

I think a lot of people fail to understand that strict net neutrality is enormously impractical on the internet today. Some services, such as video on demand, HAVE to be prioritized in order to work efficiently and smoothly. People don’t want a one second lag in video. But they don’t care if their email arrives one second later. And then there is a kind of paranoid fear of some net neutrality proponents that the Cable TV companies will just take over suppress all internet content except their own. Which is rather absurd – we literally had that in 1992 with AOL and Prodigy, and consumers wanted the “real” internet, which is why AOL is just a content provider now and Prodigy no longer exists. We’re not going back to the era when there were three television networks and you had to get all your news via those three content providers.

56 Anonymous May 29, 2017 at 12:49 pm

“Impractical” is certainly the wrong word. ARPANET in the 1970s was neutral because that is the straightforward way to build a peer-to-peer packet switched network.

Do you know what a “man in the middle attack” is? That is when someone in the middle of a communication chain listens in, and corrupts the message. That’s what ISPs could potentially do, by listening in on your Netflix and hobbling it.

To say they must, because commercials, is just dumb. On a neutral net you choose content providers with as many commercials as you, the consumer, prefer. Got to PBS.org for all I care.

Even if you wanted an active filter, you can do that too on YOUR network or computer. You should not assume that your ISP and your interests magically align always and forever. Your ISP can and already does treat you in some senses as “the product.”

57 Harun May 29, 2017 at 12:57 pm

Switch ISP’s then.

My city has 4-5 choices.

By the way, your concern seems to be about privacy. I get that, but is net neutrality going to solve that? Isn’t its just prioritizing (or not) kins of data?

Net neutrality complaints I have seen by average joes have all been heavy Netflix users who want video on demand. They are angry because Comcast “throttles” their internet at 8:00 pm on Thursday night and they don’t get their promised full speed rates.

58 Harun May 29, 2017 at 1:00 pm

And my point is that once you have competition in a market, the ISP’s don’t dare throttle very much if at all.

In my market, with heavy choice now, reliability is up, and video on demand is pretty decent. If there’s a problem its usually a router issue not the internet speed.

I think the Netflix/ISP issue was basically “who pays for the bandwith rollout needed for the new demand.”

This seems to have been solved in my area.

59 Anonymous May 29, 2017 at 1:27 pm

When you think about it, the number of providers you have is orthogonal to the contract they have with the backbone.

You could have one provider, honoring ARPANET derived standards. I agree this would be bad.

You could have many providers, all honoring ARPANET derived standards. I agree this would be good.

Somehow you’ve been tricked into thinking “many providers” goes with breaking a very important technical protocol. It is the “no filtering” rule that lets the next generation’s genius invent something and not be blocked by established interests.

Net neutrality is super pro innovation.

60 Komori May 30, 2017 at 10:37 am

This is the core problem. My city has 4-5 major providers, but they’ve divided up the market and most areas only have 1 or 2 available. If we went back to the last-mile line-sharing rules (Telecommunications Act of 1996) that would solve the problem, but the major ISPs (like Comcast and Time Warner) are even more rabidly against that than they are net neutrality, so it’s not likely to happen.

61 TMC May 30, 2017 at 11:01 am

Man in the middle is used to compromise security. Comcast already knows what data is going through it’s pipe, and certainly knows what content is coming from Netflix.

62 Adam Bowers May 30, 2017 at 2:04 pm

They only “know” what data is going through its pipes if the content isn’t encrypted (Netflix uses encrypted connections). They do know you who you are making requests to, but there are ways to prevent this as well (VPN, Tor, etc).

63 Harun May 29, 2017 at 12:52 pm

This is my understanding. Your average Net Neutrality supporter on Reddit seem to be someone stuck in small cities or towns with only Comcast available. And its slow and service sucks…because monopoly.

So, they think net neutrality will help them fight Comcast. These people tend to be heavy, heavy Netflix types, and they think they will get better speeds with net neutrality.

My analogy is that its like having a town with a million stop signs everywhere that slows you down compared to a town without many. The “neutrality” solution is to limit everyone to a 15 mph speed limit, so the stop signs in my home town don’t make my car seem slower than other town’s cars. Because we can’t have roads with different speed limits and traffic patterns as it won’t be fair.

In reality, they need competition, to remove the stop signs. But that is not as immediate as the federal government bashing Comcast, the government “making” them work better.

This seems to be the average view of many matters: if only the federal government were in charge things would be much better!

64 Ricardo May 29, 2017 at 2:42 pm

I agree completely on the issue of competition. Until other ISPs enter that small-town market, though, there is a real risk of Comcast seeking to prioritize streaming services owned by itself or its affiliates. Hulu, for instance, is partially owned by Comcast and Time-Warner.

65 Troll Me May 30, 2017 at 10:42 pm

“The “neutrality” solution is to limit everyone to a 15 mph speed limit”

Completely false. Net neutrality means that every data packet reaches its destination in the fastest possible manner, on condition that all data packets are treated equally.

66 Neuter May 29, 2017 at 4:45 pm

> I think a lot of people fail to understand that strict net neutrality is enormously impractical on the internet today. Some services, such as video on demand, HAVE to be prioritized in order to work efficiently and smoothly.

This is so wrong on all levels, including technical. Repeat after me: THERE IS NO PRIORITIZATION ON THE INTERNET. THERE IS NO PRIORITIZATION ON THE INTERNET.

No matter what you do to your packets or how you tag them for quality of service, all efforts at prioritization between ISPs will be ignored. All the data that transits providers is treated as undifferentiated bulk data.

Video on demand and any other over the top video service works just fine over the Internet, regardless of there being no quality of service or prioritization.

67 Troll Me May 30, 2017 at 10:46 pm

Let the consumer choose.

If they prioritize video content, they will pay for a high speed connection. If that doesn’t matter, they will spend less on a lower speed connection.

Don’t let telecoms decide what speed I want for which service. The consumer interest is best represented by a backbone that is dumb pipes. No doubt ISPs will resist, as is their right. But this means that consumers, who are diffuse and organize only with great difficulty (which generally does not happen at all), should not expect to be well represented in the bargain unless politicians are pressured to do their job to ensure that consumer welfare is also considered in the process.

68 Wil Wade May 29, 2017 at 1:51 pm

Disclaimer: I am a Net Neutrality supporter and did not spend the $40 to read the entire article.

“The media companies, arguably the intended beneficiaries of the regulations, were unaffected”

I would say that existing companies are not the intended beneficiaries, in fact they are likely to eventually come to harm due to net neutrality. Net neutrality has two beneficiaries that I can see:

1. Companies that do not yet exist. Lower cost of access to consumers helps companies with fewer resources.
2. The consumer. (Some would disagree, but traditionally more choice is better and more choice is more likely in a world with net neutrality)

I would be very interested in seeing some studies that tests these beneficiaries.

69 Tom T. May 29, 2017 at 2:07 pm

The Netflix consumer, certainly, since he doesn’t have to bear his full costs. Others not so much.

70 prior_test2 May 29, 2017 at 3:11 pm

If I pay my ISP for a measly 16mps at 20 euros or so a month (an exceedingly run of the mill German offer, which is not very good in comparison to many other countries in Europe) for data transfer, why should it matter where the data comes from?

71 Thomas May 29, 2017 at 8:30 pm

“I have a monthly bus pass, why does it matter if I live on the busses?”

You have “up to” bandwidth. You can buy guaranteed up/down speeds and guaranteed uptime. It’s thousands per month for t1. You can buy a guaranteed transit seat too. They sell at dealerships for tens of thousands of dollars.

72 Neuter May 30, 2017 at 2:13 am

You grossly overstate the cost of guaranteed bandwidth. Wholesale costs of dedicated bandwidth are less than $0.20 per Mbps per month. Buying at scale and peering brings these costs down.

In other words, even if the grandparent pegged their connection 24/7 the costs to their ISP would be less than 15% of the monthly subscription.

73 prior_test2 May 30, 2017 at 9:02 am

`You can buy guaranteed up/down speeds and guaranteed uptime´

I already did that – otherwise the contract is fraudulent. At least in Germany, companies are not allowed to advertise 16mps and only provide 5 mps reliably.

74 Anonymous May 29, 2017 at 8:44 pm

Huh?

You do not understand. ISPs signed contracts with consumers to deliver a certain bandwidth. Netflix subscribers did not exceed that. They just used more of their purchased bandwidth than USPs expected.

ISPs were like “We sold you 20mbps, how DARE you actually use 10mbps! We will have to surcharge Netflix for you actually using your contractual connection!”

Now you can apologize for ISPs a little bit, saying that their actual bandwidth capacity was based on a statistical model of pre-Netflix usage.

But only a little bit because the contract was for consumer bandwidth period, and everything has gotten massively cheaper since those contacts were written.

A 2005 promise to deliver 20mbps is a lot easier to fulfill today.

75 Neuter May 30, 2017 at 2:14 am

+1

76 Thomas May 30, 2017 at 3:04 am

ISPs signed X.

At contract expiration, they want to change terms.

This is illegal/immoral/they cant do it!!! Because no reason.

77 Neuter May 30, 2017 at 4:00 am

What point/argument are you trying to make?

78 Thomas May 30, 2017 at 12:41 pm

“You do not understand. ISPs signed contracts with consumers to deliver a certain bandwidth.”

ISPs signed X.

“ISPs were like “We sold you 20mbps, how DARE you actually use 10mbps! We will have to surcharge Netflix for you actually using your contractual connection!””

At contract expiration, they want to change terms.

“Everything you have written”

This is illegal/immoral/they cant do it!!! Because no reason.

79 Neuter May 30, 2017 at 1:10 pm

The crux of the matter is whether it is reasonable for the ISP to raise prices, even though their costs have not increased, and is this even allowed, if the ISP has a monopoly.

80 mobile May 30, 2017 at 1:07 pm

The intended beneficiaries of the regulations are the regulators.

81 thomas May 29, 2017 at 2:44 pm

Net neutrality is a farce. If we wanted net neutrality, we would legislate it and compensate carriers for the taking. If we wanted full control of the Internet in order to limit political expression according to the whim of government employees, we would do what Obama did.

82 Neuter May 29, 2017 at 4:37 pm

What taking?

Why did Obama do?

83 Thomas May 29, 2017 at 8:35 pm

A taking for the loss of property value. The absence of net neutrality is status quo and is part of the value of ISPs property. If the government eliminated private air travel and first class, call it “neutrality of the skies”, that would be a taking too. “Disneyland neutrality” and the prohibiting of tiered line access would be a taking too.

84 Neuter May 30, 2017 at 1:57 am

I don’t see how there is any loss of property value. The ISPs still own their infrastructure and have full use of it. The ISPs are on record that net neutrality will not affect their business nor reduce their investments in it.

Your analogues are straw men and not applicable. The government is not eliminating private ISPs and not eliminating ISP speed tiers.

Net neutrality only prohibits discrimination, which is and was the status quo.

To give a more apt analogue, no business was compensated when they had to remove “whites only” policies.

85 Thomas May 30, 2017 at 3:11 am

‘I don’t see how there is a loss of property value’

Well i provided examples but if those arent enough you might ask why ISPs are fighting for nothing. Given the rest of your post demonstrates very low G, i am not hopeful.

T: example of taking via prohibition of use of property for profitable status quo use.

N: strawman cuz ? and i said so. Sure, the internet backbone is worth more if you can charge for tiered content creator access but also it’s not becuz that is what is convenient to my argument.

I am now fully in support of Neuter’s street neutrality. Constant Semi trucks to his neighbors house is just fair!! Some people prefer their Netflix in physical media.

86 Neuter May 30, 2017 at 4:53 am

> you might ask why ISPs are fighting for nothing.

ISPs will fight any additional regulation, regardless of it’s impact to their business. Just because the ISPs oppose it, does not mean it’s a taking they should be compensated for.

> Given the rest of your post demonstrates very low G

What does that even mean?

> T: example of taking via prohibition of use of property for profitable status quo use.

That is so wrong on so many levels. Discrimination, zero rating and prioritization is not the status quo. It has only recently become feasible to do any of those. Historically the Internet was neutral both by design and due to technical limitations. Secondly, ISPs are on record stating that network neutrality will not affect their business or their willingness to invest in it. Thus there is no existing profitable business being taken away.

> N: strawman cuz ? and i said so.

I very clearly stated why your arguments are straw men. The government is not eliminating private ISPs and not eliminating ISP speed tiers. ISPs are not air carriers or amusement parks.

> Sure, the internet backbone is worth more if you can charge for tiered content creator access

This is not a given. Whatever the ISP may (observe this is not guaranteed) gain in charging content creators, they lose in what their subscribers are willing to pay (lower utility) and by inviting competition (who do not extort charges from third parties).

> I am now fully in support of Neuter’s street neutrality. Constant Semi trucks to his neighbors house is just fair!!

Nice! Misdirection by use of another strawman. Streets are not broadband lines. How about something even remotely relevant?

87 Thomas May 30, 2017 at 12:45 pm

ISPs have property. Until net neutrality it was legal to use the property to generate revenue via tiered access. Net Neutrality prohibits this. This is clearly a taking. This isn’t even germane to the argument of net neutrality per se. The fact that you can’t acknowledge that limiting the profitable use of a property lowers the value of that property says a lot about your willingness to actually address truth and reality. Would you really argue that heretofore unused timberlands being suddenly declared off-limits to logging does not lower the property value?

88 Neuter May 30, 2017 at 2:30 pm

Thomas,

For arguments sake, let’s say net neutrality results in a taking. I do not think the ISPs should be compensated for this alleged taking.

89 Thomas May 30, 2017 at 5:13 pm

“I do not think the ISPs should be compensated for this alleged taking.”

So you support theft by the government. My crystal ball isn’t surprised.

90 Troll Me May 30, 2017 at 10:37 pm

If a company can profit by destroying consumer value and undermining fundamental societal and cultural principles relating to free press and strong competitive forces, this reduced profit does not need to be compensated.

It would be like saying that we should pay those who dump toxic waste for banning their dumping, because it negatively affects their profits. In fact, this type of logic was built into the TPP, in the form of the Investor-state dispute settlement mechanisms that would have forced governments to pay out to any company that could demonstrate reduce profits as a result of a new law or regulation.

91 Neuter May 31, 2017 at 1:03 am

Thomas wrote:

> So you support theft by the government. My crystal ball isn’t surprised.

Your tin foil hat is showing. I suppose next you are going to proclaim taxation is theft.

You don’t compensate en extortionist for outlawing an extortion racket.

If you want to invoke unfettered property rights, you may do so after the ISPs vacate the public right of way and return all public monies they have received.

92 Thomas May 31, 2017 at 3:15 pm

Tin foil hat? You just stipulated that net neutrality is a taking of property from a private citizen(s) to the government and you don’t support the government paying for it. That’s literally theft. No tin foil required.

‘You don’t compensate en extortionist for outlawing an extortion racket”

You do if you redefine extortion to include previously legal activities and that redefinition reduces the value of private property.

“If you want to invoke unfettered property rights, you may do so after the ISPs vacate the public right of way and return all public monies they have received.”

Unlike you, I am being consistent. I fully support this quoted plan, provided the ISPs are reimbursed for their property being seized, something you oppose because you like Venezuela or something.

93 Neuter May 31, 2017 at 3:57 pm

> You just stipulated that net neutrality is a taking of property from a private citizen(s) to the government and you don’t support the government paying for it. That’s literally theft. No tin foil required.

I apologize for the tin foil hat thing. It was uncalled for, whatever your opinions.

I’m not sure you can really classify corporations as private citizens. I’d also point out that there is no taking of property. The ISPs still own and operate the networks. Thus it cannot be literally theft. You could call it an encumberance.

>>‘You don’t compensate en extortionist for outlawing an extortion racket”

> You do if you redefine extortion to include previously legal activities and that redefinition reduces the value of private property.

Can you name any occasion when this has happened? It’s not like bars were compensated when prohibition became law.

> I fully support this quoted plan, provided the ISPs are reimbursed for their property being seized,

Ok, even if I completely disagree with you, for reasons I and Troll Me have stated (and which you neatly sidestepped and/or ignored), I’ll play along. How much should the ISPs be reimbursed?

> something you oppose because you like Venezuela or something.

Nice quip. When are you moving to Somalia?

94 Thomas May 29, 2017 at 8:37 pm

Obama ordered Wheeler to establish net neutrality. Or if you are a Democrat, the meetings Wheeler had at WH just before his non-partisan decision were tarmac level coincidences.

95 Neuter May 30, 2017 at 1:47 am

How does Obama ordering Wheeler to establish net neutrality “limit political expression according to the whim of government employees”?

96 Thomas May 30, 2017 at 3:13 am

Reading comp.

97 Neuter May 30, 2017 at 4:05 am

I’m not sure what you are trying to achieve with your snark about reading comprehension, but it certainly does not advance your argument. Perhaps this is because you have no basis for your statement?

The question remains. How does Obama ordering Wheeler to establish net neutrality “limit political expression according to the whim of government employees”/

98 Thomas May 30, 2017 at 12:46 pm

The answer is that it places the internet under the vast scope of FCC regulation which will, with 100% certainty, be used to limit unpopular political speech at some time in the next 20 years.

99 Adam Bowers May 30, 2017 at 2:17 pm

100% huh? Sources please.

100 Thomas May 30, 2017 at 5:09 pm

Source is that I will bet you $1,000 that net neutrality will result in the censoring of some political speech within 20 years from its date of effect.

101 Neuter May 30, 2017 at 2:18 pm

Thomas,

I envy the clarity of your crystal ball. While it is a reasonable fear that (any) regulation will lead to abuse of power, that does not mean your conjecture holds.

102 Troll Me May 30, 2017 at 10:29 pm

If there is an easily identified interest to want to abuse that power for easily identifiable reasons, in the absence of institutions empowered to ensure against such events, then it can only be assumed that such power will be abused. If not today, then tomorrow.

What institutions are empowered to prevent such abuses, and are demonstrated as being in the habit of actually using their authority for such purposes?

103 Anonymous May 29, 2017 at 8:47 pm

Obama, and the FCC, wanted to maintain a status quo in place since the 1970s.

To prevent changes that would, in the opinion of many technical principals, undermine the value of the ‘net.

And why? To ensure asymmetrical advantage to a business tier.

104 Thomas May 29, 2017 at 11:05 pm

Then why the utility approach? Why open the doors for the content policing and redistributive policies your base is clamoring for, salivating at the mouth for, when your goal is, allegedly, to ensure packets are treated equally? It’s a farce. Legistlate packet neutrality, pay for the property taking, and have a good day. Unless that isn’t what you are really after?

105 Anonymous May 30, 2017 at 12:18 am

Why? Because a “common carrier” has had a special place in US communications law since 1934.

106 Neuter May 30, 2017 at 1:46 am

What redistributive policies are you referring to?

107 The future May 29, 2017 at 11:07 pm

Vox.com: “The internet is a hate-filled, disproportionately white and male place, and this is what the FCC can do about it.”

108 Anonymous May 30, 2017 at 12:20 am

To be sure there are also leftists who don’t understand the “net, and who want “neutrality” to mean something other than the technical definition.

109 Thomas May 30, 2017 at 12:55 am

I don’t disagree with neutrality. I do believe that neutrality requires compensation as it reduces the value of internet infrastructure. I oppose net neutrality because experience has taught me much about the racist, sexist, and violently communist left. I’d support simple legislation and compensation. The utility approach is Obama’s long game “justice arc” toward communism, racism, and sexism.

110 Troll Me May 30, 2017 at 10:26 pm

There was never much doubt that the effect on profits would not be huge. The problem is that consumers are robbed of their right to choose, by their price plan with their ISP, the speed at which they access their content. And in the meantime, this serves as barrier to independent or startup outlets which may not have the budget for this preferential treatment, regardless of what value consumers place on their production.

It is a barrier to competition, and in a land that claims to stand for free markets and free media, such barriers should be opposed.

It’s as though consumer surplus does not exist in the land of net neutrality discussions. And even though it’s hard to put a dollar figure on the value of free press, there can be little doubt that abolishing net neutrality would have a diversity of negative effects on press freedom in the long run.

Among other things, any outlet producing content not popular with the NSA, for example, might find its traffic significantly interfered with on a very regular basis, with the eternally plausible excuse (and counter-evidence essentially impossible for a small player to procure) provided by the lack of net neutrality.

Abolishing net neutrality is one of many steps on the road to fascism. Formerly, a rejection of a permit or the financial barriers involved in auctioning radio or TV licenses, was plain as day visible to anyone involved, and print options proliferated easily. The end of net neutrality provides a means of censorship with eternal plausible deniability.

111 Troll Me May 30, 2017 at 10:57 pm

Being not a big deal in one way does not imply not being a big deal in some other way.

Profits do not define the social value of an activity, and economists should be better positioned than just about anyone to make such statements with clarity and precision.

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