What it would take to change my mind on net neutrality

by on November 24, 2017 at 12:30 am in Current Affairs, Economics, Law, Uncategorized, Web/Tech | Permalink

Keep in mind, I’ve favored net neutrality for most of my history as a blogger.  You really could change my mind back to that stance.  Here is what you should do:

1. Cite event study analysis showing changes in net neutrality will have significant and possibly significantly negative effects.

2. Discuss models of natural monopoly, and how those market structures may or may not distort product choice under a variety of institutional settings.

3. Start with a framework or analysis such as that of Joshua Gans and Michael Katz, and improve upon it or otherwise modify it.  Here is their abstract:

We correct and extend the results of Gans (2015) regarding the effects of net neutrality regulation on equilibrium outcomes in settings where a content provider sells its services to consumers for a fee. We examine both pricing and investment effects. We extend the earlier paper’s result that weak forms of net neutrality are ineffective and also show that even a strong form of net neutrality may be ineffective. In addition, we demonstrate that, when strong net neutrality does affect the equilibrium outcome, it may harm efficiency by distorting both ISP and content provider investment and service-quality choices.

Tell me, using something like their framework, why you think the relative preponderance of costs and benefits lies in one direction rather than another.

Consider Litan and Singer from the Progressive Policy Institute, they favor case-by-case adjudication, tell me why they are wrong.

Or read this piece by Nobel Laureate Vernon Smith, regulatory experts Bob Crandall, Alfred Kahn, and Bob Hahn, numerous internet experts, etc.:

In the authors’ shared opinion, the economic evidence does not support the regulations proposed in the Commission’s Notice of Proposed Rulemaking Regarding Preserving the Open Internet and Broadband Industry Practices (the “NPRM”). To the contrary, the economic evidence provides no support for the existence of market failure sufficient to warrant ex ante regulation of the type proposed by the Commission, and strongly suggests that the regulations, if adopted, would reduce consumer welfare in both the short and long run. To the extent the types of conduct addressed in the NPRM may, in isolated circumstances, have the potential to harm competition or consumers, the Commission and other regulatory bodies have the ability to deter or prohibit such conduct on a case-by-case basis, through the application of existing doctrines and procedures.

4. Consider and evaluate other forms of empirical evidence, preferably not just the anecdotal.

5. Don’t let emotionally laden words do the work of the argument for you.

6. Offer a rational, non-emotive discussion of why pre-2015 was such a bad starting point for the future, and why so few users seemed to mind or notice as the regulations switched several times.

7. Don’t let politics make you afraid to use your best argument, namely that anti-NN types typically develop more faith in an assortment of government regulators in this setting than they might express in a number of other contexts.  That said, don’t just use this point to attack them, live with and consistently apply whatever judgment of the regulators you decide is appropriate.

If you are wondering why I have changed my mind, it is a mix of new evidence coming in, experience over the 2014-present period, relative assessment of the arguments on each side moving against NN proponets, and the natural logic of the embedded trade-offs, whereby net neutrality typically works in a short enough short run but over enough time more pricing is needed.  Of course it is a judgment call as to when the extra pricing should kick in.

Here is what will make your arguments less persuasive to me:

1. Respond to discussions of other natural monopoly sectors and their properties by saying “the internet isn’t like that, you don’t understand the internet.”  If someone uses the water sector to make a general point about tying and natural monopoly, commit internet error #7 by responding: “the internet isn’t like water!  You don’t understand the internet!”

2. Lodge moral complaints against the cable companies or against commercial incentives more generally, or complain about the “ideology” of others.  Mention the word “Trump” or criticize the Trump administration for its failings.  Call the recent decision “anti-democratic.”

3. Cite nightmare or dystopian scenarios that are clearly illegal under other current laws and regulations.  Cite dystopian scenarios that would contradict profit-maximizing behavior on the part of the involved companies.  Assume that no future evolution of regulation could solve or address any of the problems that might arise from the recent switch.  Mention Portugal as a scare scenario, without explaining that full internet packages still are for sale there, albeit without the discounts for the partial packages.

Are you up to the challenge?

If I read say this Tim Wu Op-Ed, I think it is underwhelming, even given its newspaper setting, and the last two paragraphs are content-less, poorly done emotive manipulation.  Senpai 3:16 is himself too polemic and exaggerated, but he does make some good points against this piece, see his Twitter stream.

Net neutrality defenders, as of now you have lost this battle.  I’d like to hear more.

1 Ray Lopez November 24, 2017 at 12:41 am

Tyler Cowen: 1 – Net Neutrality Supporters 0. Brilliant checkmate!

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2 Ray Lopez November 24, 2017 at 1:04 am

Not to toot my own horn, but in the origin of ideas, it seems I was the first person in the history of cyberspace (that I know of) to explicitly cite natural monopoly ‘water rights’ and link it to net neutrality, in the comments section of “Game of Theories: Real Business Cycle Theory by Alex Tabarrok on November 22, 2017 at 7:25 am”. A day later, “Prior” followed up on this theme in the comments section of the TC blog post on 11/23/17 “Further Thoughts”. Of course it’s an obvious connection to make (natural monopoly is often exemplified in econ textbooks as a water utility), and I don’t claim I’m a genius for doing so (yes I do) or that TC’s great mind thinks alike by citing the water utility natural monopoly analogy.

Bonus trivia: my 1% family owns $100k shares of AT&T as well as a good chuck of Time Warner.

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3 Dave November 24, 2017 at 1:18 am

I’m never sure if your posts are sincere or a parody.

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4 Ray Lopez November 24, 2017 at 3:29 am

@Dave – it’s both Dave. Everything I say is true, but done in an ironic way. And I meant ‘chunk’ not “chuck”. And we own big chunks of Comcast, CBS, Time Warner, and Viacom (I hate that company, what do they own besides Nickelodeon? Family is stupid for having such a big holding of that loser. Tried to get them out of it but they won’t let me manage their stocks, despite knowing nothing about stocks. Don’t get me started…)

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5 Enrique November 24, 2017 at 3:25 pm

Agreed. The fears of a non-neutral Internet are looking more like the overhyped fears about the Y2K problem.

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6 G. Tree November 24, 2017 at 12:53 am

What will it actually take for TC to change his mind on net neutrality: for republican donors to decide that they are for it.

I realize that TC will find that argument “non persuasive”, but that’s no reason for us to be willfully blind.

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7 clockwork_prior November 24, 2017 at 2:29 am

Prof. Cowen is not a Republican, he is a proud libertarian, and as such, would only care about libertarian dollars, one assumes.

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8 clockwork_prior November 24, 2017 at 2:37 am

You say donors, I say dollars – cannot we call the whole thing off?

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9 bob November 26, 2017 at 7:53 am

+1, and seems to apply to most of his posts now

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10 cw November 24, 2017 at 1:36 am

I don’t think the tools of economics are strong enough to predict what will happen with any confidence. I don’t think a short period of time in 2014 is a big enough sample size to predict what will happen. I think you have to instead use history’s model of human nature to imagine what could happen and then weigh the severity of what might happen against the likelihood of that happening. One thing that for sure could happen is demand pricing. HBO or the networks that carry it might charge more to watch Game of Thrones on Sunday. That wouldn’t be terrible. It also seems possible that ATT for instance could favor some web businesses over others. Maybe a video channel that they own or that has paid them extra works better than all the others. Something like this could make it more difficult for smaller or new channels to compete. And if ISPs are allowed to interfere with content it is very likely there are ways to influence public opinion we haven’t though of yet. No one was worried about the Russian’s using twitter and facebook to spread disinformation a year ago.

Basically, in a democracy the many have to constantly fight the few to keep them from gaining control over government and the economy. This seems to me to be just another example of that. History has shown over and over that the few in control will happily make the many’s lives worse if there is money and power in it. Think about our health care “system”. It’s a vital necessity the few have taken advantage of that fact combined with the systems super crazy structure to soak the many. The internet is vital infrastructure. We all know how integrated and necessary it is in almost everyone’s lives. My wife telecommutes. ATT could easily decide she is a business and place a surcharge on our service. They could triple our prices. We have one other ISP where we live, Charter Cable. They could find out what ATT is doing and do the same. Or ATT could buy them, like they are trying to buy TIme Warner. That wouldn’t be possible with net neutrality.

Giving a few gigantic companies potential control over how content is delivered or maybe even what content is delivered means giving them potential control over a vital necessity in almost everyone’s lives. Why take that risk? What are the benefits for the many? That is the point. Knowing what we know of history and human nature, why take that risk? Especially since it’s a risk without benefits.

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11 anon November 24, 2017 at 9:40 am

I was thinking along similar lines. Frankly, I do not care very much about the economics of the whole net neutrality question. I see it as a struggle for power over who controls our information flows. If the companies are given this power, they might or might not use it against me, but I would rather err on the side of caution and not let them have the power in the first place.

I have always seen the internet as a technology that liberates people from the control of the existing (often oppressive) power structures. The whole point is that even people without economic or political power are on equal footing with the powerful people. Thus my argument for net neutrality is essentially a moral one: it is not right to let any centralized power to decide what information gets transferred in the internet. Arguing against net neutrality because it makes economic sense sounds to me similar as arguing for slavery because it makes economic sense; maybe it does, maybe it does not, it is almost completely besides the point.

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12 Harun November 24, 2017 at 1:29 pm

“If the companies are given this power, they might or might not use it against me, but I would rather err on the side of caution and not let them have the power in the first place.”

Don’t worry. Government won’t use that power against you.

Meanwhile, unless you are in some crazy monopoly town, multiple companies will compete to give you what you want.

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13 cw November 24, 2017 at 3:59 pm

I think there are lots of towns where there are few ISP choices. I live in Madison wi, which is not a small town.

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14 Andrew November 25, 2017 at 2:26 pm

It’s hardly some outlier scenario to live in a place with only one isp. If we had competitive markets for bandwidth intensive internet the way we do for wireless it would be one thing but many or maybe most people do live in the crazy monopoly town.

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15 Jameson Quinn November 26, 2017 at 10:00 am

The proposal is not to give this power to government, but to ensure that nobody has it by placing it in a DMZ in
between governments and corporations. That plan could fail, but it would take two failures (one side wins the power, then that side uses the power) for anon to suffer the consequences, as opposed to one failure if the power is clearly in corporate hands from the start.

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16 fjkld November 24, 2017 at 10:38 am

Yeah, but do you have a *model* that makes those points?

If you can’t frame your argument as the outcome of an optimisation problem you don’t have a point.

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17 mpowell November 24, 2017 at 11:01 am

Is this sarcastic or not? From the asterisk I’m not sure. One of the worst tendencies of economists is to require mathematical models for situations where the uncertainty of inputs to the model make model formation pretty much useless. It is not unreasonable to use stylized models and do something like the above comment, weighing worst case outcomes vs proposed benefits. What do we imagine the benefits of the new regime will be for the customer? Do we really expect cheaper internet with features eliminated? Is this even a good thing? Do we have a problem supporting low latency features with neutrality that we are now fixing? Just the line-up of who is favor/again net neutrality ought to prejudice your weighing of these stylized conditions about what the likely outcomes will be.

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18 Anon7 November 24, 2017 at 4:23 pm

Your premise is wrong.The usual problem of democracy is the many, not the few. The many have spoken and like using facebook and twitter and so people will try to exploit the ignorance of the many regardless of the structure. And you don’t address why current anti-trust law/regulation would be inadequate to deal with “price-gouging”.

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19 Chris Brand November 27, 2017 at 1:05 pm

“it seems possible that ATT for instance could favor some web businesses over others”. do you not realize that *this already happened*?

2005, Telus in Canada blocked access to a website supporting a strike against the company.
2010. Windstream admitted to redirecting searches to their own service.
2011, MetroPCS announced plans to block video streaming except from YouTube.
2011, a number of smaller ISPs were caught using Paxfire to redirect user searches.
2011-2013, Google Wallet was blocked AT&T, Sprint, and Verizon because it competed with their product Isis.
2012, Verizon blocked tethering applications.

and of course in 2013, when asked about favoring some services, content or sites over others in Verizon v FCC, Verizon stated that “but for these rules we would be exploring those types of arrangements.”.

I didn’t include the numerous examples of ISPs blocking particular technologies (e.g. VOIP) that compete with their products.

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20 Brian Gibson November 24, 2017 at 1:36 am

I am not an economist. I am a network engineer with over 25 years of experience in the industry. So I will not attempt to offer economic studies to push my view that net neutrality is a desirable outcome. I will instead offer some technical details as to why opposition to net neutrality makes little sense.

Let’s start with the basics of how Internet access works in this country. An ISP offers a person/company a fee for some combination of network bandwidth rate and total upload/download data. I agree with the ISP to purchase a connection to the Internet for 1 Gb/s for $100 a month. For just about every single consumer and business they expect that 1 Gb/s means just that. I can get up to that data rate and no higher. Let’s assume there are no data caps in my agreement for this scenario. And let’s assume that my provider didn’t bury a lot of qualifiers in my terms of services agreement(TSA) that almost no one can understand or even reads.

So for the consumer, there should be no problem if they want to watch 20 4K streams simultaneously that aggregate to 1 Gb/s. I paid for 1 Gb/s. There shouldn’t be any issue if I get it. Pretty straight forward.
For the provider it is pretty straight forward as well. The provider purchases a 40 GB/s DWDM circuit with an ISP. The provider expects that they will be able to use all 40 Gb/s of that service. Again, pretty straight forward.

Sorry if that is pedantic but I wanted to make sure that everyone had the basic ground rules covered.

So far this is basic commerce. On its face, there is no logical argument as to why either side should not expect their connections to work. Both sides pay fair market value for their service and neither is exceeding their bandwidth limits.

So now we start getting into the portion where the politicians start arguing about fairness, wrongly They argue that Verizon(I use Verizon only because they are the biggest) shouldn’t have to carry the traffic for the content provider since the provider isn’t a Verizon customer. The problem with that argument is that Verizon has an agreement with the provider’s ISP to peer for a certain amount of bandwidth, usually a very large number. So while Verizon may not have an agreement with the provider they do have an agreement with the provider’s ISP. So, again, there is no logical reason why Verizon should be allowed to rate limit the provider based on the flawed free rider argument. Everyone involved in the data flow has paid for that data flow to work properly. This is simply a poorly thought out argument created by politicians that don’t understand the market.

The other primary argument I have read is that there is a need for certain types of content to be given preferential treatment. Video conferencing, medical treatment, and gaming, for example of problems with high latency and/or unreliable delivery order of packets. This is a valid point insofar that they do need priority treatment. It is not a valid point because of two major reasons.

A) Priority queuing is pretty standard technology that has been around for 20 years. By assigning certain packets Quality of Service(QoS) or Class of Service(CoS) you can ensure that they get moved to the front of the line. This prioritization has almost zero impact on other applications including services like streaming video. Given the size of the backbone pipes out there today there is little reason to believe that there is congestion to the point that packet loss would occur. Every single ISP can set up priority queuing today, under Net Neutrality, if they so choose. And they can charge for it. Charging different rates for types of service and priority is perfectly fine. Rate limiting by content provider unless they pay a fee is nothing but rent seeking.
B) While priority queuing does exist today and could easily be deployed, ISPs are under no obligation to respect the QoS/CoS of other ISPs. And they generally don’t. So there is no end to end prioritization if a packet leaves an ISP. Instead ISPs either discriminate based on source addresses or heuristics to decide what should or should not be prioritized or limited. Thus a content provider can’t even purchase an end to end guarantee of service.

So the truth is that there is little business need for ISPs to be able to rate limit providers. And before anyone argues that the ISPs aren’t looking to rate limit but rather create “super highways” for providers it should be made clear that this is simply not true. Unless their backbones are saturated, which there really is no reason for in this day and age, the only valid reason for discriminating traffic is simply to put some traffic at the front of the line. For most applications, that will have no discernible impact of quality.

The cable companies can see the writing on the wall. Their days as content providers are coming to an end, at least as traditional cable companies. That is a massive drop in revenues. So they want to ensure that they can have a leg up on other content providers. People wrongly assume that they are going after Netflix. They aren’t. They are going after Sling and Playstation Vue. Without Net Neutrality it would be trivially easy for the providers to render those service unusable without the customer having a clue they were doing it.

Now the truth is that the ISPs are living with Damacles’ Sword hanging over their head so they aren’t going to ever flaunt this power because they know that if they did the government would come in and put the hammer down on them. But they know how to harm their competitors in a way that can’t be proven. They have done it in the past. So throwing our hands in the air and saying “let the market decide” really isn’t a compelling argument against net neutrality.

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21 cw November 24, 2017 at 1:46 am

It’s always nice to hear from somebody that actually knows something.

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22 Harun November 24, 2017 at 1:35 pm

Except they don’t know what they are talking about:

‘And let’s assume that my provider didn’t bury a lot of qualifiers in my terms of services agreement(TSA) that almost no one can understand or even reads.’

that seems like a huge assumption that might be important.

Here’s an example from my world, seen from the this kind of viewpoint:
“I order something at 11:00pm from Amazon with overnight service. Its shipping from California and I’m in Maine. Therefore I should see this in my mailbox by 5:00 pm the next day. I don’t have the time to read the actual shipping rules, or consider that its really hard to ship from California to Maine. But I did agree to something that calls itself “Overnight” so my assumption should be enforced!!!!!! Sure in the fine print it says order must be in by 3:00 pm, but dammit, I want it tomorrow! Sure its physically impossible, but I want it tomorrow!

And engineer might even calculate it out that, yes, if he immediately jumped on a private jet he could indeed deliver that phone case from California to Maine.

In reality of course, that’s not how the world works.

THE AGREEMENT NEVER SAYS YOU’RE ALWAYS GUARANTEED A DOWNLOAD SPEED NO MATTER WHAT.

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23 Larry Siegel November 24, 2017 at 3:30 pm

…and every consumer knows that the actual download speed varies between a tiny fraction of the “guaranteed” DL speed and a somewhat larger fraction, depending on traffic.

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24 ototuan November 25, 2017 at 2:12 am

Yes! I agree with you

25 Chip November 24, 2017 at 2:20 am

“They are going after Sling and Playstation Vue. Without Net Neutrality it would be trivially easy for the providers to render those service unusable without the customer having a clue they were doing it.”

How does a product become unusable without a user noticing?

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26 Brett November 24, 2017 at 9:14 am

The user will notice, but maybe not know who to blame. You slow, degrade, or interrupt the stream. Then when the user complains you blame the content provider, the user’s router, excessive demand, etc. Then you extort a payment from the content provider and stop the funny business.

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27 Pshrnk November 24, 2017 at 11:35 am

“Then you extort a payment from the content provider and stop the funny business.”

Really?

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28 derek November 24, 2017 at 9:14 am

Someone somewhere might have faster internet. The instability comes from the force being disturbed.

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29 Brian Gibson November 24, 2017 at 9:47 am

How many people complain to their ISP when a website is slow or unreachable? What is the standard ISP response?

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30 TMC November 24, 2017 at 12:58 pm

Cox was thought to have been playing with quality of voip if it weren’t there own. My mother’s line had terrible jitter numbers until I called. It was fixed the next day. Not sure if they really did this on purpose.

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31 apoptosis November 24, 2017 at 3:23 pm

I had pretty bad lag with my VOIP on comcast that is better since I moved and have a new ISP. Can’t prove it was comcast doing something, but getting regular mailers and emails from Comcast asking me to buy their triple play package that includes their version of VOIP made me wonder if someone inside was playing games. Kindof like when they started charging me rental fees again for a modem that I’d returned to them years earlier. I see it all as somebody on the inside is playing games. If a company wants my trust, they have to do better than that.

32 Harun November 24, 2017 at 1:38 pm

You do a speed check. You check other websites. If you’re internet is down, you call the ISP.

Now…if you noticed that you always get bad service from the ISP…you switch ISP.

Do you claim that no one ever switches ISPs? That is risible. We all call up our cable companies, phone companies, and threaten to switch all the time…therefore switching is very, very possible.

Unless you’re in some monopoly town. Then, maybe you should move to a better city just like you expect others to move for jobs.

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33 Matt November 24, 2017 at 2:39 pm

This is the second time I’ve seen this comment, and I’m not very far down in the comments. Something like 50% of the U.S. only has access to one ISP. About 67% has two or less. How exactly is switching “possible?” It’s effectively one choice for effectively all people. We’re in a (local) monopoly situation, and that’s the whole point.

34 apoptosis November 24, 2017 at 3:17 pm

re:”Unless you’re in some monopoly town. Then, maybe you should move to a better city just like you expect others to move for jobs.”

Sounds like a marketing slogan: “Your Local ISP. Love it or Leave it!”

35 Ray Lopez November 24, 2017 at 3:24 am

@Brian Gibson – you may be a network engineer but you seem to not consider or ignore various things in pursuit of your “Net Neutrality is Good” thesis. First, advertised limits are not the same as actual limits. Kind of like “MPG” in cars on a treadmill are not the same as actual MPG. For cable ISPs, during the peak afternoon period traffic slows down, despite their extravagant claims (and that includes Verizon FiOS). So indeed there are still bottlenecks, that need money invested by way of net non-neutrality to be eliminated. Here in the Philippines, you get less than 1 Mbps despite paying for three or four. Second, your thesis presumes that ISPs “…know how to harm their competitors in a way that can’t be proven. They have done it in the past. ” without specifying how. This is metaphysics. If you can’t measure it, it probably doesn’t exist. Finally, even in today’s net neutrality world, as TC pointed out in the OP, you have “walled / gated” access. For example, I’m posting from Manila, PH at the moment, but if I try and log into my Bank of America USA account, it won’t let me, since it senses I’m from PH which is associated with fraud (and despite BofA having a Manila branch). That’s discrimination. If I use a VPN proxy server, it must be US based, or the same thing will happen. And some US banks go to the extreme of actually having a list of popular VPN servers that are known, and blacklisting those if you try and log on via those servers. So effectively we already have, as TC pointed out, non net-neutrality but without the benefits of net non-neutrality, namely, the ability of big companies that invest in the internet backbone to make even more money so they can upgrade their equipment.

Bonus trivia: people mention AT&T as a big company that will benefit from net non-neutrality, but last I checked (and we’re shareholders, see upstream) I think their official corporate stance is actually they are in favor of the status quo of net neutrality. Not that it really matters, as TC says they’ll make money regardless. They give a decent dividend too, though I don’t like their wheel-and-deal management, a style pioneered by, inter alia, C. Michael Armstrong in the dot-com era.

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36 clockwork_prior November 24, 2017 at 3:37 am

‘First, advertised limits are not the same as actual limits.’

That blatant fraud is allowed in the U.S. and other countries in this regard has nothing to do with net neutrality.

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37 TMC November 24, 2017 at 1:00 pm

No, they advertise ‘up to 50 megs’ or whatever number. Everyone knows the will get the 50 almost all the time and that the cost would be higher if it were guaranteed to always be 50.

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38 Harun November 24, 2017 at 1:40 pm

Exactly.

I know these NN types.

They expect Amazon Prime to mean they get 2 day delivery, when everyone else knows it means you sometimes you get 2-day delivery.

Maybe we should have Delivery Neutrality where no one can pay extra for Overnight.

39 Brian Gibson November 24, 2017 at 9:46 am

You are kinda jumbling a few different points here.

Cable ISPs were notorious for oversubscribing their aggregation points at the last mile similar to how DSL lines would oversubscribe. But that is largely not a major issue anymore.

The bottlenecks in performance continue to the peering points between the different ISPs. Sometimes they are due to poor engineering design. Sometimes they are due to intentional attempts to limit access to an ISP. Regardless that was a localized issue and not a backbone issue. Most of the cable providers have addressed the aggregation choke points. The backbone, meaning the core network connections of the major Tier 1 and Tier 2 ISPs, has plenty of bandwidth. There have been massive upgrades in network performance. In the last 5-7 years top circuit speeds went from 10 Gb/s to 40 Gb/s to 100 Gb/s. And 400 Gb/s was just recently tested. That is a single strand of fiber.

However the reason why ISPs can harm their competitors without you being able to prove it is precisely because of what you suggested, claims of bottlenecks that may or may not exist. Higher latency, higher jitter, packet loss. These can all be created artificially if you want to and the end user would have no way of knowing whether it was due to network congestion on their ISP’s network or the provider’s ISP network. The ISP can arbitrarily render a provider’s service unusable randomly and eventually most customers will stop using it. The ISPs could do that pretty easily at the consumer level because very few consumers would have any ability to identify it. The providers could identify if an ISP was doing it but without NN neutrality there would be little they could do to stop it. Tyler’s claim that they could bring an anti-trust suit against the ISP is specious as well. It would be very difficult to prove in a court of law.

Your point about ISPs blocking foreign traffic isn’t really relevant to the discussion of NN.

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40 Hazel Meade November 24, 2017 at 11:15 am

As Tyler points out in his previous post, the cable companies would constantly be vulnerable to competitors who didn’t purposely degrade the quality of service of certain content providers. If someone notices that Vue doesn’t work very well on their comcast connection, but it works great on Verizon, they are going to switch.
Or they discover that somehow it works awesome when they are using their T-Mobile phone as a wi-fi hotspot, same thing.

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41 Brian Gibson November 24, 2017 at 11:22 am

How does the typical consumer compare performance on FIOS compared to Spectrum? If Vue starts becoming unreliable for a consumer do they change ISPs or do they change content providers? I think it would be pretty difficult to support the claim that they would change ISPs. Changing ISPs is far more labor intensive for the end user than changing content providers, especially when content providers are largely providing the same content.

And that assumes that the customer has access to multiple ISP providers of comparable capability. And it assumes that only one provider would be doing it. Those are two big assumptions that are not consistent with the current market.

42 clockwork_prior November 24, 2017 at 11:38 am

‘changing content providers’

There is a helpful web site that allows you to quantify just how much it will cost to cancel a cable contract (which may or may not be the same as using your cable company as an ISP, of course) – ‘Here’s a breakdown of fees and contact information per provider. Bear in mind that termination fees often depend on your specific package, so you’ll find out the fee when you call or email your provider. If you don’t see your provider listed, let us know in the comments! We’ll update our list accordingly’ – https://www.reviews.org/tv-service/television-cancellation-fees/

Eye opening, to be honest – people really put up with this in the U.S.? Amazing.

43 Hazel Meade November 24, 2017 at 12:45 pm

@Brian Gibson,
Well, if all your friends are on Verizon and are using Vue, wouldn’t that incentivize switching? Imagine if Facebook didn’t work right on Comcast – would everyone use Comcast’s crappy facebook equivalent? No… because so much of the internet depends on other people using the same service. In order to prevent the rise of the next Facebook or Netflix, the ISPs would have to collude to make that service crappy everywhere.

44 Brian Gibson November 24, 2017 at 12:50 pm

Facebook as a specific market demand that would make it difficult for ISPs to divert the traffic to somewhere else.

There are only a limited number of providers that provide content that requires everyone be on the same service. Social media services and gaming services are probably the most notable.

Streaming services and search mechanisms do not require we use the same service.

45 ItMe November 24, 2017 at 1:33 pm

This argument rests on the assumption of competition in the market. But it seems obvious to me that your T-Mobile phone hotspot is not a substitute for a fixed line broadband connection (wireless signal is relatively slow, unreliable, and data-capped), and fixed line connection providers are usually monopolies for structural reasons.

I thought structural monopolies were textbook examples of reasonable regulatory intervention, so all these market-based competition arguments are surprising to me. Entry costs into this market are sky-high and scaling costs in this market are also sky-high. Why then assume ideal conditions for market competition?!

46 Harun November 24, 2017 at 1:43 pm

I’ve used my phone as a hotspot. It works great unless you want to watch TeeVee.

Maybe TV watchers should pay for premium service, like those who want Fedex 10:30 am delivery.

Nahhhhh, make everyone pay more instead.

47 ItMe November 24, 2017 at 1:50 pm

@Harun, sounds like we agree that while hotspots are great they aren’t substitutes for fixed lines. If they aren’t substitutes then they can’t be competition.

Your FedEx example doesn’t really address consumer broadband markets, but is actually a good picture of competition on the supply/provider side: at every point of use I get a choice of different providers at different price points to send the same package to the same destination. Content providers on the internet can never have this choice.

48 ItMe November 24, 2017 at 2:14 pm

Plus if wireless and wired are such perfect substitutes in such a competitive market then why do so many people (basically everyone) subscribe to both simultaneously?!

49 cw November 24, 2017 at 4:06 pm

Can’t always switch. In Madison, ATT “owns” the lines. Any other provider has to pay a surcharge to use the lines. WHen I first moved here 20 years ago there used to be other phone providers using ATT lines but ATT drove them all out of business.

50 byomtov November 25, 2017 at 12:15 pm

Switching cable providers is not quite so easy as deciding to stop eating at a certain restaurant after one or two bad experiences there.

Tyler’s argument, if you describe it accurately, overlooks entirely too much. Besides, it falls into a certain class – “Companies would never do that because competition, reputation, etc.” that is often simply a fallback for ideologues, and ignores real world complications.

51 Andrew November 25, 2017 at 4:05 pm

But that’s the thing in most of America there isn’t anyone else to switch to.

If mobile internet were really capable of substituting for fixed line it would be one thing but there are so many applications where it’s not. I don’t really understand the argument that a monopolist should be in a position to shape how I use the internet and shake people down for money instead of just connecting things.

52 Ray Lopez November 25, 2017 at 2:28 am

@Brian Gibson – who says: “Cable ISPs were notorious for oversubscribing their aggregation points at the last mile similar to how DSL lines would oversubscribe. But that is largely not a major issue anymore” – I beg to differ. I think it’s the heart of the issue, and “Roadrunner” downstream of this, also with 25 years of telecom experience, seems to agree.

Put another way: if bandwidth was so huge and data bottlenecks did not exist, we’d not even be having this debate, everybody could download the entire Godfather movies in three seconds and do virtual reality videoconferencing and whatnot, for a monthly bill of a few dollars. But we can’t. Hence somebody has to pay for the infrastructure to do that, and that somebody sure ain’t the parasite Netflix, which as I pointed out in another thread technically is infringing copyright every time they “rent” a movie to subscribers, disguised as a “sale” for copyright “first sale doctrine” exceptions.

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53 Brian Gibson November 25, 2017 at 10:13 am

It really is amazing how the anti-NN people have been convinced that Netflix is a parasite that must be punished because they actually use the bandwidth they pay for.

The biggest reason why you can’t download the Godfather movies in seconds or do virtual reality video conferencing isn’t the computer, not the bandwidth.

I have literally no idea what you are referring to when you claim that Netflix is infringing on copyright. They have agreements from the IP owner to distribute the content.

54 Sholto November 27, 2017 at 4:30 am

@ Brian Gibson – just wanted to thank you for putting so much thought and energy into this discussion. We take for granted when people try to inform and engage.

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55 ʕ•ᴥ•ʔ November 24, 2017 at 10:29 am

Ray, I am sure you are old enough remember the day commercial interests were very specifically allowed to join what had been a collaborative research network.

I believe your answer is “many have since corrupted that vision, and that is fine.”

https://en.m.wikipedia.org/wiki/Commercialization_of_the_Internet

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56 derek November 24, 2017 at 9:13 am

So who comes up with the money to improve the service? Those network cables, switches and all the various bits and pieces need to be installed and maintained, and upgraded as technology improves.

So what signal do these people have to know that their customers want something? Price. Offering premium services for a price is how they generate capital to provide the premium services.

So you want to have regulators decide what a premium service is. Why not let the consumers?

And you make a very basic mistake in your argument. It isn’t volume, it is flow. The networks that these providers maintain have demand characteristics that change over time. It is not unreasonable to expect customers who require a given flow at all times to pay for that. How it is provided should be up to the one who has to do it.

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57 Brian Gibson November 24, 2017 at 10:15 am

The ISPs get money from their customers for the services they provide. If enough people purchase their service, they will expand it to meet the demand. That’s how the ISP business has been working since inception.

NN doesn’t restrict an ISP’s ability to provide a premium service. ISPs are free to provide “short path” connectivity for users that bypass common last mile issues. They can offer prioritized traffic services as well. They have been doing that for voice services for a long time and will continue to do so. NN does nothing to restrict either of these.

What the ISPs CANNOT do is determine that they don’t like SlingTV so they rate limit it unless Sling is willing to pay them off. That is nothing but a shakedown.

“And you make a very basic mistake in your argument. It isn’t volume, it is flow. The networks that these providers maintain have demand characteristics that change over time. It is not unreasonable to expect customers who require a given flow at all times to pay for that. How it is provided should be up to the one who has to do it.”

I’m not sure how to respond to this properly. You are redefining the service offering here so that it is no longer a rate based service but an application flow based service. I’m unfamiliar with ANY ISP that provides such a service. In fact, I can’t imagine any ISP ever offering such a service because they would be reliant on other ISPs to guarantee the flows as well. The ISPs want the ability to generate revenue on both sides of the flow despite already doing that. The providers are paying for their Internet access. The argument that they should pay an additional fee or suffer degradation of service seems anti-market.

Why should the ISP have decision making authority on what I should or should not be able to access? I purchased a service from them. And if my ISP purchases/builds their own content provider service and intentionally makes that service more reliable/better by rate limiting the other providers, is that an acceptable market condition to you?

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58 Shazam November 24, 2017 at 10:24 am

Tyler Cowen, your ass is now wholly owned by Brian Gibson.

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59 sirr November 24, 2017 at 11:30 am

+1

60 TMC November 24, 2017 at 1:07 pm

BS. Brian get the networking, but not the issue being discussed. He touches on it with peering, but misses that peering used to be pretty much 50/50 in traffic. Netflix sprang up and suddenly video was 40% of internet traffic. About 70% today. These peering agreements in no paid for the extra resources required to accommodate the traffic. Networks had to be updated and someone had to pay for it. It’s like you move into a neighborhood that provided free electricity as par of your HOA fee, and then set up an aluminum smelter in your backyard. It just blows up the presumptions of the agreement. Netflix was legally right, but it was a situation that was going to blow up in their face, and it did.

61 Harun November 24, 2017 at 1:44 pm

TMC +1 great analogy.

62 Brian Gibson November 24, 2017 at 4:15 pm

TMC,

Netflix certainly did disrupt the market. They were actually using their agreed to data rates and the ISPs weren’t prepared for that.

If their use was causing that much trouble for the ISPs we should then see that high bandwidth circuits should rise in price.

But the fact is the exact opposite. DIA circuits are collapsing in price. Because the carriers upgraded their infrastructure to 40 and 100 Gb/ circuits. Now what they needed is to get more people buying their high speed circuits.

Again, the point of NN isn’t to take down Netflix. It’s to take down their other content redistributes like Sling and make people use the ISP distributions.

63 TMC November 24, 2017 at 4:41 pm

“Again, the point of NN isn’t to take down Netflix. It’s to take down their other content redistributes like Sling and make people use the ISP distributions.” True, but it’s been said about 100 times over the past 3 days that that’s already illegal.

Circuits have always been dropping in price, partly because Netflix and the like were forced to use better solutions like colocation to ease up on the problem.

64 Hazel Meade November 24, 2017 at 11:22 am

NN doesn’t restrict an ISP’s ability to provide a premium service. ISPs are free to provide “short path” connectivity for users that bypass common last mile issues. They can offer prioritized traffic services as well. They have been doing that for voice services for a long time and will continue to do so. NN does nothing to restrict either of these.

What happens if some people are willing to pay for prioritization and some aren’t?
Let’s say Netflix pays for prioritization with it’s ISP, so it can get it’s packets out faster . It’s ISP has a peering agreement with comcast, which has to include prioritization on Comcast’s network, so it’s ISP will have to pay for that, so that cost flows back to Netflix via their ISP. Now, Comcast isn’t exactly charging Netflix directly for prioritization, but it is charging some providers for prioritization and not others via the peering agreements and the prioritization that the content provider is already paying for with their ISPs. How does this functionally differ from content based prioritization? If some providers are willing to pay their ISPs for prioritization and others are not then is that not precisely what Net Neutrality advocates believe should be forbidden?

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65 Brian Gibson November 24, 2017 at 11:28 am

You are highlighting the basic flaw in the argument that the ISPs want to offer “fast lane” service. The ISPs don’t share prioritization queues. So they can’t guarantee priority service for their customers beyond their own network. Which is why priority services are always limited to on net services like SIP.

Which is why Netflix and other content providers strongly oppose this. They aren’t looking for priority service. They are looking to ensure that they aren’t rate limited. Streaming services are largely indifferent to latency. But they can’t tolerate packet loss of any note. Packet loss on the Internet is rare except when a service is rate limited or forced to go through a crappy peering point. The ISPs want to change that and be able to rate limit content providers unless they pay a fee to not be rate limited.

66 Hazel Meade November 24, 2017 at 12:50 pm

I’m not sure this is actually the argument most proponents of net neutrality are making. The argument is frequently made that paid prioritization in itself violates the principle of net neutrality, not just that content providers shouldn’t be rate limited. If some content providers can afford to pay for prioritization and other’s can’t that is what is supposed to be bad for competition.

67 Brian Gibson November 24, 2017 at 1:05 pm

Most proponents of NN, and opponents, don’t have a firm understanding of the technical details.

Most providers have no need for prioritization. Some, particularly two way audio/visual, do. There is absolutely no problem with prioritizing that traffic because that traffic suffers pretty badly from queuing. Streaming video can be prioritized as well but most of the modern streaming services are pretty tolerant of jitter and latency. As long as there isn’t a lot of packet loss they are fine.

68 Harun November 24, 2017 at 1:47 pm

“They are looking to ensure that they aren’t rate limited.”

Right. And they could easily tell their customers if they are being rate limited.

“Hey, Reddits says Netflix is being throttled on XYZ.”

XYZ will be pretty careful not to get the bad publicity.

Especially as if they were being throttled customers would very much notice.

And thanks to all these discussions everyone is paranoid that its the ISP.

Which is fair enough as Comcast did try some stuff in the past.

But many of us have more choices than Comcast now.

69 Jim Cushing November 29, 2017 at 1:14 pm

“NN doesn’t restrict an ISP’s ability to provide a premium service…They can offer prioritized traffic services as well.”

Depending on how you define NN. Prioritized traffic is contrary to a “net neutrality” as a concept (as prioritization is, by definition, non-neutral), but it may or may not be contrary to any net neutrality law. But there is presently no (so far as I’m aware) net neutrality *legislation*, so what net neutrality means in terms of the law is very vague. For now, it means what powers the FCC claims under Title II, except those that they promise to exercise forbearance on…until they don’t. And come December, the FCC will abandon those powers, perhaps until the next administration restores them.

The point being, from a legal standpoint, net neutrality is vague and perhaps meaningless. So it’s nearly impossible say what is and is not allowed under net neutrality.

Splitting hairs aside, thought, NN proponents often say that prioritization (“pay for play”) should *not* be allowed, under the belief that it would shut the little guy, the would-be Netflix competitor out, because they cannot pay for prioritization.

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70 fjkld November 24, 2017 at 10:41 am

Yeah, but where’s your model?

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71 Roadrunner November 24, 2017 at 12:34 pm

Brian, I have also been in telecom for 25 years, and while you make a lot of valid points, you are being a bit idealistic.

You know darn well that the advertised rates are not guarantees. To change them to guarantees would require additional network buildout and large increases in rates. You would have to build out your network to handle peak load at all times.

Some folks will pay for the guarantee, most would prefer status quo best effort at existing prices, I’m guessing. So guarantees will not solve the problem.

Going non-nn allows carriers and content providers to work collaboratively to roll out high bandwidth products, in such a way that you don’t have to massively overbuild.

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72 RustySynapses November 25, 2017 at 8:10 am

I favor net neutrality, but isn’t Pai’s response to this that ISPs won’t invest enough to improve their networks unless they can generate rent from discriminating?

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73 Oreg November 27, 2017 at 8:29 am

Yay, Brian Gibson!

The problem of the U.S. ISP market is a lack of competition, which is why internet access in the U.S. is slower and more expensive than in most other developed countries. The lack of competition stems from the last mile not being regulated like the natural monopoly it is.

Differentiating services, the purported goal of dropping NN, can improve service quality—but only in a competitive market. In a non-competitive market it only enables providers to nickle and dime consumers.

What is the problem that abandoning NN is supposed to solve?

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74 anon November 24, 2017 at 1:38 am

“1. Cite event study analysis showing changes in net neutrality will have significant and possibly significantly negative effects.”

Have you cited event study analysis showing changes in net neutrality will have significant and possibly significantly positive effects? Or do you consider stock price fluctuations to be more comprehensive evidence?

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75 Alex November 24, 2017 at 1:52 am

This was originally my question as well, but I don’t think I got a substantive answer.

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76 Chip November 24, 2017 at 2:23 am

The internet thrived without NN. Obviously. Why do you need a study to say so?

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77 clockwork_prior November 24, 2017 at 2:34 am

The Internet is based on net neutrality, when defined as all data packets being sent and received from all other IP connected devices are treated equally. Which is what made the Internet so effective – anyone could develop a protocol to make the Internet more useful, such as radio stations using MP3 streaming or bittorrent as a way for Steam to use a better protocol to distribute data.

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78 Chip November 24, 2017 at 2:51 am

Not true. Google, Netflix, FB etc have long had dedicated fast lanes to ISPs that give them an edge.

This idea of equality and fairness has drifted over into tech from politics, and it’s just as meaningless. An emotional smokescreen for politicians and other vested interests to screw with the free market.

There is a concern with ISPs consolidating into a price-fixing oligopoly but as Tyler said, there are existing ways to deal with this.

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79 clockwork_prior November 24, 2017 at 3:03 am

‘Not true.’

Depends – Akamai has been around for decades at this point, but saying that google or facebook have dedicated lanes to a local user is simply not accurate. To say that google anor facebook have a dedicated lane to Akamai is quite accurate, as is saying that Akamai has dedicated lanes between its servers. This has nothing to do with your local ISP treating a data packet equally, whether it came from Akamai or Cloudflare.

‘Akamai Technologies, Inc. is an American content delivery network (CDN) and cloud services provider headquartered in Cambridge, Massachusetts, in the United States. Akamai’s content delivery network is one of the world’s largest distributed computing platforms, responsible for serving between 15% and 30% of all web traffic. The company operates a network of servers around the world and rents capacity on these servers to customers who want their websites to work faster by distributing content from locations close to the user. When a user navigates to the URL of an Akamai customer, their browser is redirected to one of Akamai’s copies of the website.’ https://en.wikipedia.org/wiki/Akamai_Technologies

‘This idea of equality and fairness has drifted over into tech from politics’

Not true.

80 The Cuckmeister-General November 24, 2017 at 5:02 am

Hahaha I like watching these Chip/prior arguments it’s like two retarded, armless, gimps trying to box each other hahahaha.

81 Brian Gibson November 24, 2017 at 9:49 am

Could you define what these “fast lanes” are that you are referring to?

82 derek November 24, 2017 at 9:53 am

Nonsense. The internet is based on customer demand. It just happens that customers demand an open network because they have found it the best way of providing the services and information that they like.

There are closed controlled networks offering defined products and services, and they are losing to the open network.

When customers demand a more closed network ( I say when because the same openness that allows mp3 streaming also allows wide distribution attack vectors for criminal activity ) customers should be able to get what they will pay for.

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83 ʕ•ᴥ•ʔ November 24, 2017 at 10:24 am

Maybe the Internet is a computer scientists’ invention that business interests now want to corrupt.

84 ʕ•ᴥ•ʔ November 24, 2017 at 10:22 am

Chip, go read

https://www.amazon.com/Where-Wizards-Stay-Up-Late/dp/B00AQU7OFS

Apparently also available as a legal pdf download at monoskop

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85 Yosarian2 November 24, 2017 at 4:31 pm

The internet has never thrived without net neutrality.

Up until 2014, the FCC regulated net neutrality. Then a supreme court decision (“Verizon v FCC”) went in favor of Verizon, and the Supreme Court decided that the FCC could not regulate net neutrality in the way it previously had been. At that point, the FCC adapted and started regulating net neutrality using a different legal mechanism.

But there has never been a period when the FCC was not regulating net neutrality. Everything that we have on the internet has developed under a regime of regulated net neutrality. Any discussion about how the internet in the US might change without net neutrality is going to be speculative, since we’ve never actually seen that.

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86 mpowell November 24, 2017 at 11:17 am

Cowen is framing this as ‘persuade me that NN is a good idea, I used to believe it’. Great framing for him. I choose this alternative framing: ‘Cowen has lowered his credibility by adopting the anti-NN position and hasn’t offered any persuasive arguments for his position’.

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87 TMC November 24, 2017 at 1:23 pm

Nope. NN sounds good until you look at it. It wants to fix something that is already illegal and then goes on to make illegal other networking features that make the internet work better. To once again quote the cisco engineer that Tyler quoted yesterday ” It will set the internet back 20 years.” That guy understood the law and the technology.

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88 ʕ•ᴥ•ʔ November 24, 2017 at 1:54 pm

Straw man and switch.

Some people say “Net Neutrality” and then ask for strange things, as outliers, but the bait and switch is “therefore the market will always ensure a globe spanning network, where every Louisiana school kid will have access to MRU.”

Nope. Once you make everything contractual, as opposed to architectural, the architecture will start to erode. Has started.

A global, perhaps someday interstellar, computing fabric should be our birthright, but you are throwing away a thousand year potential for a quick profit.

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89 TMC November 24, 2017 at 4:48 pm

The strawman is that NN will stop an ISP favoring it’s own content over another’s. That’s already illegal as discussed 100x already. Some people see it as every packet is equal, which kills any quality of service. This is the setback. It is used only somewhat on the internet right now because big pipes were cheaper. Some applications need it and more coming online that will drive universal QoS – the opposite of what NN dictates.

90 lxm November 24, 2017 at 7:00 pm

+1

91 ʕ•ᴥ•ʔ November 25, 2017 at 8:23 am

TMC, are you in favor of some other law which insures a uniform, continuous, and global computing space?

Or are you just under the false impression that “antitrust” does that ..

92 TMC November 25, 2017 at 11:03 am

Here is a list of times companies got caught by antitrust law:
https://imgur.com/gallery/uUDCS?s=sms

The idiot writing the post thinks that showing how companies got caught before NN and had to correct their action and pay fines somehow strengthens his case for being in favor of NN. He ends with a Verizon tale that is BEFORE NN is enacted.

Either way, existing law handles your concerns and does not come with the burden of technological ignorance built into it.

If antitrust did not handle favoring one content provider over another, then I would still ditch NN and pass a law that would bar that specifically.

Unfortunately NN is vaguely written (nobody can even agree what it regulates) so that it give power to the FCC to do whatever it likes in the name of NN.

93 Brian Gibson November 25, 2017 at 11:56 am

TMC,

Which of those examples led to an anti-trust ruling against the provider?

“If antitrust did not handle favoring one content provider over another, then I would still ditch NN and pass a law that would bar that specifically.”

What exactly do you think net neutrality does?

“Unfortunately NN is vaguely written (nobody can even agree what it regulates) so that it give power to the FCC to do whatever it likes in the name of NN.”

Virtually all regulatory law is vaguely written because Congress prefers to defer to the subject matter experts rather than define the regulations themselves.

NN has been in place for 3 years. Can any of the providers show material harm because of it? Has there been a single ruling against an ISP since NN was put in place?

Ajit Pai wants to claim that investment in network infrastructure slowed down since 2015 but his evidence is sketchy to say the least. The major ISPs keep trying to consolidate and that has been happening since well before NN.

94 ʕ•ᴥ•ʔ November 25, 2017 at 12:26 pm

TMC, that was not my question.

I believe the answer to my question is that without some kind of net neutrality rule, there is no protection for the internet as a ubiquitous and general computing space.

That is what the computer scientists invented, it is what we want to preserve.

95 clockwork_prior November 24, 2017 at 2:00 am

‘responding … You don’t understand the internet’

Actually, you really don’t. At least this time, you were clever enough to not provide any further examples.

‘Net neutrality defenders, as of now you have lost this battle.’

If you say – in most the world, net neutrality remains the default setting of how the Internet functions. Much the same applies to how the rest of the world uses cell phones – pop a SIM card into the smart phone you bought, start talking/surfing. That is not the case in the U.S., and reading American based discussions about cell phones is always mind bending, like this being the sort of discussion which tends to demonstrate just how exceptional the U.S. is.

At its most basic, net neutrality is about your ISP providing the service you are actually paying for (any discussion involving how you are not receiving the service you signed up for is thoroughly explained by the deceptive marketing your ISP engaged in). And that service is the ability to send and receive data packets from every other connected IP address, and to have all data packets from all IP addresses be treated equally, without ISP interference.

This being the sort of service that allowed http (you know, that whole world wide web thing), RSS, bittorrent, streaming, etc. to be created by using the essential brilliance that is at the core of the Internet – data packets being sent between all connected IP addresses, without interference.

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96 Humean Being November 24, 2017 at 4:55 am

I don’t know what you mean when you say that net neutrality is the norm around the world. Censorship is common. Look at China.

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97 clockwork_prior November 24, 2017 at 5:24 am

Well, fair point when talking about the Great Firewall, which is certainly a competing framework for the future of something that is not actually the Internet as most of the world knows it. One assumes that China’s vigorous rejection of a free Internet is not what those who oppose net neutrality prefer.

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98 Bob November 24, 2017 at 2:09 am

1. Respond to discussions of other natural monopoly sectors and their properties by saying “the internet isn’t like that, you don’t understand the internet.” If someone uses the water sector to make a general point about tying and natural monopoly, commit internet error #7 by responding: “the internet isn’t like water! You don’t understand the internet!”

Aren’t you the guy that claimed in a recent post that the internet was like the de Beers diamond monopoly?

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99 clockwork_prior November 24, 2017 at 2:24 am

Well, that example was intended to be viewed through a Straussian lens.

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100 TMC November 24, 2017 at 4:50 pm

Or a simple monopoly analogy that you should have been able to get.

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101 clockwork_prior November 24, 2017 at 2:19 am

Just an idle question – how many Americans pay for their phone service to be ISP based?

Here, I have an ISP, and on top of that, I use a SIP provider that costs 20 euros a month. In exchange, all calls in Germany, both to landlines and all cell providers are free. In addition, all landline/cell phone calls to the U.S. are free (well, maybe not for the American). All calls in the EU are free (though not for cell phones, depending on various factors). My normal phone plugs into the router (when the router is off, the provider has an MP3 based answering service, and sends the recorded message as e-mail too). I can have 5 phone numbers (different messages for each, of course), and keeping my old number was simple. Neither the service nor phone number are actually based on location – no problem to keep using them for the next ten years, wherever I live. And the service does not care about a devices operating system or software versions, apart from the router itself.

Since Germany is a socialist hellhole (why, even the router is made by a German company in Germany), I’m curious what sort of cheaper and more advanced services one can use in the U.S. Especially as there would be several people in the U.S. I would pass such good news on to – one of whom now works at Mercedes in the U.S. and was shocked to be charged $3 for receiving a call from Germany on his cell phone and talking an hour – even after he had been warned.

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102 Chip November 24, 2017 at 2:39 am

Germany is a poor example. They’re an old-industry economy which, apart from SAP, has no significant internet/software companies. Please don’t cite Rocket – they just copy and paste.

And the government is drunk on censorship.

If a heavily regulated industry with government busibodies is your thing, Germany is paradise. If you like rapid and unpredictable innovation in the free market, we’ll, that’s the US tech scene up to NN.

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103 clockwork_prior November 24, 2017 at 2:57 am

‘And the government is drunk on censorship.’

Mainly because the previous government was drunk on genocide, and the current government would really prefer to prevent that from happening again. No theoretical slippery slope arguments when it comes to Germany in this area (though you are more than welcome to mock Canada all you wish in this regard).

‘If a heavily regulated industry with government busibodies is your thing, Germany is paradise.’

Which is why Germany is full of competing companies in these areas – energy (natural gas and electricity), ISPs, cell phone companies, postal services, and parcel companies, right?

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104 The Cuckmeister-General November 24, 2017 at 5:14 am

Hahaha round two of the fight between the two MR retards hahahah.

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105 clockwork_prior November 24, 2017 at 5:27 am

And you are the second person to completely not address the question – does America offer a better SIP deal in terms of being able to call all American landline/cell numbers for free, along with free calls to a landline between the U.S. and the EU, for 20 euros/dollars a month?

106 The Cuckmeister-General November 24, 2017 at 5:38 am

HAHAHAHAHHA

107 The Cuckmeister-General November 24, 2017 at 5:40 am

But let’s get this straight – the US is my country and I’m pretty damn serious about it. I have served this country like few others and I will not have you foul mouthing it. Now go play with your retard friend Chip.

108 Chris Wegener November 24, 2017 at 7:08 pm

You still haven’t answered the question. Being insulting isn’t answering the question.

The points clockwork_prior presents about the superiority of cell service in Europe are spot on.

109 TMC November 24, 2017 at 4:57 pm

Most bundles here are about the same $25 or so. This is through the ISP. Basically work as you describe. All US/Canada/Mexica include and calling the EP is a penny or so a minute. I have had majicjack for 10 years with no issue at $35 a year. Other providers charge between $7 and $20 a month.

https://getvoip.com/residential/

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110 TMC November 24, 2017 at 4:59 pm

If you still call the US a lot, majicjack may be a good deal for you. $3 a month and you’d have free US calling, just choose a US number.

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111 B Cole November 24, 2017 at 2:21 am

Is there a nation with better internet service than the US? If so, how do they do it?

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112 clockwork_prior November 24, 2017 at 2:27 am

Lots of nations have much better Internet service. They do this, hard as this might be to imagine, by investing in their Internet infrastructure.

And at least in Germany, by punishing any ISP that makes deceptive claims about offering a 10/100 mps service which is not actually available at 10/100 mps all the time.

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113 Chip November 24, 2017 at 2:55 am

“With an average Q2-Q3 2016 download speed comparable to that in Bulgaria and Moldova, Germany’s fixed broadband is slower than you might expect from Europe’s largest economy. At 40.38 Mbps, Germany ranks 29th in the world for average fixed broadband download speed and 72nd for average upload. ”

http://www.speedtest.net/reports/germany/

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114 clockwork_prior November 24, 2017 at 3:15 am

You might not have noticed, but I have never said that Germany is a leading example of high speed Internet, especially as everyone in Germany knows it isn’t.

What has been repeatedly written is that a German ISP has to deliver on the performance that was paid for in the contract.

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115 clockwork_prior November 24, 2017 at 3:17 am

Rereading the comment, confusion seems possible when read as a stand alone. So, to repeat, Germany is not an example of high speed Internet, it is an example of forcing ISPs to provide the contractual service their customers pay for.

116 Hazel Meade November 24, 2017 at 1:08 pm

So … It’s really hard to argue that punishing ISPs for not delivering 10/100 mps service 24/7 leads to better internet service.

117 Harun November 24, 2017 at 1:51 pm

Which suggests regulation in general is not a good solution.

118 Joshua November 24, 2017 at 5:47 am

South Korea’s internet and phone network crush the United States.

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119 clockwork_prior November 24, 2017 at 5:53 am

And one assumes that a South Korean ISP does not offer a service at 10/100 mps which actually only delivers 1/10 mps, then shrugs their metaphorical shoulders and blames their failure to deliver the service they were paid to contractually deliver on ‘net neutrality.’

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120 Hazel Meade November 24, 2017 at 1:10 pm

South Korea is a small country with a much higher population density. A more valid comparison would be to compare the New York Metro area to South Korea, not average rates across the US.

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121 Harun November 24, 2017 at 1:54 pm

Why doesn’t the world beating South Korean telecom invest in the US market. With their better service, lower cost, and excellent quality, they should seize tons of market share.

They should also have huge access to capital as they have a captive South Korean market, too.

p.s. they censor the internet in South Korea.

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122 Anon November 24, 2017 at 12:22 pm

From what I’ve gathered from Reddit and online other online discussions, the internet in United States is complete crap. Seriously, every time the comparison to Europe comes up in these discussion, there’s a bunch of Americans who can’t believe how much they are actually scammed by their ISPs.

I have lived in three different countries in Europe and I have never encountered data limitations like many people seem to have in the US. In all of these three countries a typical internet connection would be 50-100mbps speed, without any data caps at 30-40 euros per month. Especially in Northern Europe it’s typical that even mobile data plans are without any data caps. Looking at the prices of one of the major ISPs in my home country, Finland, I can at this moment get 4G mobile internet, 200mbps speed, no data caps, at 30 euros per month.

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123 Harun November 24, 2017 at 1:57 pm

“In all of these three countries a typical internet connection would be 50-100mbps speed, without any data caps at 30-40 euros per month.”

This is what you pay in major US cities, or even less.

The comparisons you see on Reddit are people from Copenhagen comparing speeds to people in Mule Shoe, TX.

Reddit is not reality.

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124 Harun November 24, 2017 at 2:03 pm

Example: ATT now has a 1,000mbps speed, no data caps, at 80 dollars per month.

https://www.attsavings.com/internet-plans/att-fiber/internet-1000

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125 TMC November 24, 2017 at 5:01 pm

“If so, how do they do it?”

You cram a crapload of people into a small area.

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126 Donald Pretari November 24, 2017 at 2:38 am

The point of competition is to allow consumers to decide among alternatives. The only way to discover that is to have alternatives. Any argument that limits alternatives limits alternatives, thereby decreasing choices. Anyone who says that we don’t need more competition in this sector doesn’t know any such thing. He can’t, since he’s limited the list of choices artificially, and is discussing a reality that wasn’t allowed to occur. People are constantly claiming to be smarter than they are. Poodles don’t announce themselves as poodles, they just give arguments for limiting competition and benefiting particular businesses, often very large and lucrative businesses given to largesse. Why we should believe an economist over a regulator musts need a highly comical answer. Pardon me if I demand competition and choice and find arguments against such as less than unpersuasive special pleading. “Paradoxically, in some sectors, less choice leads to more choice.” Thank you, Comrade Zhdanov. Your searing logic still amazes us.

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127 John F November 24, 2017 at 4:28 am

I do not understand the “save net neutrality or we are doomed” urgency from the pros. What is going to happen that cannot be reversed? The bandwidth is there, it’s not going anywhere, worst case they charge more for four years. Even short term, Trump is most likely of any GOP president to respond to public grousing and step in.

NN is “do nothing/status quo.” It is obvious we are nowhere close to peak internet (especially now we are getting tastes of it), and sorry we should not be pushing internet into the ‘mature industry’ phase. The tech-progressive culture-upending industries ought to be a little wild. I wonder how the industrial revolution would have gone if today’s regulatory culture had its say

I did laugh reading reddit, #8 largest website in the world, pretending to be the little guy victimized by big bad Comcast. And still I have yet to read a good pro-NN polemic let alone argument.

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128 Humean Being November 24, 2017 at 5:28 am
129 tjamesjones November 24, 2017 at 6:36 am

is this something to do with bitcoin?

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130 George November 24, 2017 at 7:50 am

Is the experience of other countries irrelevant?

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131 Lucas November 24, 2017 at 7:57 am

1) Read Lawrence Lessig for compelling legal arguments about net neutrality. It is not just about consumer access. It’s about access to consumers. This is not new. So any arguments for or against could be seen as opportunistic and reactive. Just as TC is looking for compelling arguments for neutrality, I do not see the same rigor being applied against. Which leads to

2) The timing of this cannot be ignored. The current administration is applying a scorched earth policy to roll back any legislation the previous administration put in place. This is an overarching strategy and a campaign promise that is being executed in many domains.

A major flaw in our democracy is that any strategy can be reversed for reasons that do not measure the success of that strategy objectively. I do not think we have had the time to truly measure if the net neutrality legislation in place actually does or does not work. Given the complexity of measuring that success, having net neutrality in place is a “safe bet.” It seeks to mitigate risks.

If the previous administration had (and maybe they did, I would need to research) put in place more legislation around air travel safety to hold airlines accountable, would we all feel safer flying if the current administration applied the same rollback strategy?

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132 Harun November 24, 2017 at 2:19 pm

“A major flaw in our democracy is that any strategy can be reversed for reasons that do not measure the success of that strategy objectively.”

Except entitlements, the ACA, etc.

Weird, huh? You think its a flaw because Obama’s phone stuff could get killed, but the ACA not being able to be repealed is probably fine.

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133 Lucas November 24, 2017 at 4:57 pm

Let me clarify: 4 or even 8 years are arbitrary milestones which indicate change, sometimes disruptive. They have no correlation to how long it takes to effectively implement and measure the success of a strategy. Does that make sense? Nothing partisan in this statement.

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134 TMC November 24, 2017 at 5:04 pm

The against argument is easy. If regulation is doing no good then get rid of it. Regulation always occurs with an expense, so save the expense.

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135 Lucas November 24, 2017 at 5:12 pm

I am strongly anti-regulatory, and I am also not providing an economic argument strongly for net neutrality. What I am arguing is that net neutrality is not being measured prior to dismantling it because dismantling it is part of a broader strategy that is aligned to dismantling, not improving based on a quantitative analysis that indicates improvement is necessary.
So if cost is the reason, those numbers would be helpful. How much is being spent on enforcing net neutrality? How much is being spent overturning it?

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136 TMC November 25, 2017 at 10:51 am

No idea how much to overturn. Can’t be that much to stop enforcing rules. We save the cost of enforcing, and the known downsides of a poorly written law. I can’t imagine arguing to keep it if there are zero know benefits.

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137 Adam November 30, 2017 at 11:15 am

“I can’t imagine arguing to keep it if there are zero know benefits.”

There are benefits, you just choose to repeatedly ignore them because you have an ideological ax to grind.

138 Lee A. Arnold November 24, 2017 at 8:04 am

1. Ending net neutrality is anti-Coase. It causes more transactions costs on the demand side for consumers, and on the supply side for small innovators. The case against net neutrality appears to be based on the idea that people always have lots of time and money to sort this stuff out. This is a standard canard in economics. But consumers do not always have the extra time and voice to battle a monopoly. Governments (regardless of having “anti-trust mechanisms in place”) and consumer interest groups do not have the extra time and resources to battle this stuff on a “case-by-case” basis, indeed in a plethora of Dickensian lawsuits. (Oh, sorry for the emotion.) You are pitting individuals against a corporate system that will always have more resources to win in the courts.

2. In the argument for the emergence of new ideas, It will almost always be better to make a simple law such as “net neutrality” in order to protect the emergence of new ideas and creative actors. It depends on how that simple law is written, of course. If you could end net neutrality and still guarantee the emergence and hearing of new ideas, that would be a different matter. But in the present media environment, you cannot automatically guarantee it. The assumption that the finite attention spans and purses of consumers will demand the “space” for new idea emergence, is by itself prima facie illogical and not empirically demonstrable.

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139 R. Paul November 24, 2017 at 8:37 am

The Cons-ta-tu-tion does not say anything about “net neu-tral-ity” therefore we cannot pass any laws regulating it otherwise that would go against The Cons-ta-tuion

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140 Lee A. Arnold November 24, 2017 at 9:02 am

Freedom of speech requires access to the media of speech.

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141 R. Paul November 24, 2017 at 9:11 am

I believe that you require a Letter of Marque granted by Congress before engaging an opponent in the comments section, sir.

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142 Lee A. Arnold November 26, 2017 at 8:00 am

I believe that you will require a Lot of Money.

143 derek November 24, 2017 at 9:59 am

1. If it is so good there is no need for rules because the consumers will demand it, as they are.

2. Mr. Lee A. Arnold. I am a Nigerian Prince, and I am in need of your valued services. You are upstanding and trustworthy, and I need an intermediary to move some money out of the country to pay for medical care for my dear mother. Please forward your banking information and I will follow up with instructions. You will be amply remunerated for your troubles.

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144 Lee A. Arnold November 26, 2017 at 7:57 am

Another example of analytical thought that is mistaken to be comprehension.

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145 George Feese November 24, 2017 at 8:49 am

This comment from Cowen confused me: “Cite dystopian scenarios that would contradict profit-maximizing behavior on the part of the involved companies.”
Question: Don’t we often observe regional maximizing tactics that destroy profits strategically for many companies and industries? The 2008 US financial crisis in the US seems a relevant example. Even Greenspan, ex post, acknowledged his assumption was incorrect (right?). So, Mr Cowen, why would these observable “dystopian scenarios” make an argument less persuasive for you?
(BTW, keep up the great work fighting “fear”! Fear grips so many countries / societies /tribes / families and is a tremendously efficient and effective value destroyer!)

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146 Basilisc November 24, 2017 at 9:21 am

Speaking as an economist, I would say that the issue cannot be understood in terms of economic costs and benefits, or economic efficiency. The internet is partly a tool for delivering economic goods, but more importantly a tool for cultural interchange.

Strictly from an economic standpoint, one must consider the increasingly oligopolistic nature of content provision and of internet distribution, neither of which our entrenched political leadership shows any interest in combatting. A non-neutral internet would transfer these rents upstream to be divided among the members of these various ologopolies. I doubt that increasing opportunities for rent-seeking in this way would increase efficiency.

But let’s leave aside the economics and think more about culture. Think of webpages as books, and now think of different ways to deliver books to readers. A bookstore is precisely the wrong analogy, because nothing on the internet is “owned” – even the movies or books that I have supposedly “purchased” can be taken from me in a millisecond if Apple, Amazon or whoever “sold” it to me so chooses. Nor is most of my internet consumption based on purchasing content. .A better analogy is a library. In a net-neutrality world, I pay a fee to borrow a certain number of books per month. A higher fee allows more books, a lower fee less. But I get to decide which books I want. In any case, I don’t consume a webpage the way I consume an apple or even a car – I read a blogpost or watch a video, and then I have consumed it. Webpages, like books, are nonrivalrous. So being able to borrow books from the library has value for me, but does not impede anyone else from doing so – in fact, unlike the internet, a library has a limited number of copies, so the nonrivalrous aspect is even stronger.

If the library was not neutral in this sense – if publishers could pay the library to stock or not to stock certain books, if the library could charge me more or less to borrow certain books – would that be more “efficient”, in the sense of encouraging libraries to stock more books that more people want, and publishers to produce and distribute more books that more people want? Yes, probably you could demonstrate this in a clever model. But is that the kind of internet we want?

I would say emphatically that it is not. The value of the internet is not in its delivering economically valued services, but in providing the building blocks for a vibrant, vital, creative, innovative, culture. This means, going back to the library, giving readers the opportunity to borrow books that are not favored by the average reader. That are not profitable for the big publishers. That may appeal to a tiny minority, or may appeal to a majority but be hateful to a small, wealthy, influential minority. I just don’t know which books are best for society – and neither do you, and neither do libraries, and neither do publishers. But a culture based on non-discriminatory libraries is a hell of a lot healthier than one based on supply and demand.

Sorry, I’m not a good enough economist to model all this. But I’m sure someone out there is.

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147 mavery November 24, 2017 at 9:40 am

To me, it’s a simple question of who captures surplus under monopoly conditions. With NN, Comcast’s (or whomever’s) ability to price discriminate is limited. Since they operate as a monopoly firm in most regions, more efficient price discrimination means the monopoly firm is able to capture a larger share of the surplus.

The best argument I’ve heard against this is that these firms are not monopolists because people have smartphones, but my experience doesn’t bare this out. Comcast acts and prices like a monopolist where I live, and the alternatives offered by, say, cell phone providers don’t really compare.

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148 derek November 24, 2017 at 10:00 am

Odd that. The monopolist is the one who offers the most compelling service compared to the competitors.

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149 Sholto November 27, 2017 at 4:38 am

Not sure if I understand that comment. A monopoly is an example of market failure where competitors are unable to offer a better or similar service or where customers are unable to effectively switch. The monopolist is in a position where they do not need to offer a better service. A monopolist might have grown originally around a better service, but they achieve the status of monopoly when they no longer need to.

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150 Harun November 24, 2017 at 2:21 pm

“Since they operate as a monopoly firm in most regions,”

So, what about people who live in regions where Comcast is not a monopoly?

We are supposed to just accept this because your locality is clueless?

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151 Harun November 24, 2017 at 2:22 pm

Why does my locality, Sacramento CA, manage to have 3 major ISPs plus a host of smaller ones?

Is it because we’re more market friendly in California?

I doubt it.

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152 Yosarian2 November 24, 2017 at 4:26 pm

Most people in this country only have access to one ISP. Some have access to two.

The fact that some parts of California, which is in some ways the tech capital of the world, has more, does not mean that you should treat that as the default, when by any objective measure it clearly is not.

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153 Jonathan November 24, 2017 at 5:39 pm

This just isn’t true. Look at the FCC statistics and don’t be fooled by 25/3 as the minimum definition of broadband. Even of you accept it, most of the country can now get their cable company, 4 wireless companies (albeit with data caps, but often data caps with zero-rated exceptions for, say Netflix) and two satellite companies, Exede and DirecTV.

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154 Komori November 25, 2017 at 12:02 pm

Satellite isn’t at all a comparison for land-line service. The speed of light is a fundamental limitation, and having to go all the way up to a satellite and back down adds large amounts of latency, more than enough to be noticeable, and not just in a latency sensitive situation like Voice-over-IP, but in basic web browsing as well.

155 ʕ•ᴥ•ʔ November 24, 2017 at 10:13 am

I cannot argue within Tyler’s framework, but it might be worth mumbling a few words at the bottom of the page about why technologists approach it so differently.

ARPANET came at a special time, with a very unique vision. All nodes connected could be client or server. There was no top or bottom. There was no hierarchy. Anyone could invent a service, and anyone could subscribe to it. As nodes went from hundreds to thousands to millions it created a (to us) a limitless uniform space.

It was an infinite chessboard, more or less implemented in the concrete.

Anyone who seeks to chop that up, be it Chinese sensors or greedy ISPs, may think they are making a “mod” but they are abandoning a vision.

And I think that is important.

(There were always technicalities for remote nodes, expensive connections, places where symmetrical connections were cost prohibitive, but those were challenges faced again and again in pursuit of a uniform, continuous, and global computing space.)

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156 ʕ•ᴥ•ʔ November 24, 2017 at 10:15 am

Ha. Censors. Moar coffee.

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157 ʕ•ᴥ•ʔ November 24, 2017 at 11:11 am

It would be sad to think that the computer scientists’ uniform, continuous, and global computing space only came once in the history of humanity, by accident, and then never again.

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158 Abelard Lindsey November 24, 2017 at 11:16 am

The way for advocates of net neutrality to convince the rest of us that it is a good thing would be to stop using it as a smoke screen to push for regulation of content, imposition of taxes, and all of the other stuff that liberals try to push under the rubric of “net neutrality”.

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159 ʕ•ᴥ•ʔ November 24, 2017 at 11:20 am

Has anyone ever agreed on any term? If libertarians or conservatives have different visions, why not “neutrals?”

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160 ʕ•ᴥ•ʔ November 24, 2017 at 11:31 am

What I am personally saying, as my “neutral,” is that law may be required to preserve the original, conceptual, uniform, continuous, and global computing space on the Internet.

Details are negotiable.

But the goal might require recommitment.

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161 Steeplechase November 24, 2017 at 11:40 am

“Cite event study analysis showing changes in net neutrality will have significant and possibly significantly negative effects.”

Real world examples: AT&T blocked customer access to Facetime in order to drive them to more expensive mobile data plans. Or the time AT&T throttled users then lied about it (something AT&T’s still fighting a lawsuit over). Or that time Comcast applied arbitrary and completely unnecessary usage caps and overage fees to its broadband service (again, thanks to a lack of competition), then exempted the company’s own content from those caps while still penalizing competitors. Or how about that time Verizon blocked competing mobile wallets from even working on its phones to give its own payment platform an advantage?

There’s plenty more very real, very non-speculative examples where that came from, and the problem gets worse if you look at the bad behavior by ISPs on the privacy front (also caused by a lack of competition). Like when AT&T decided to charge users hundreds of extra dollars a month just to opt out of snoopvertising, or the time Verizon was busted covertly modifying user packets to track users around the internet without telling them — or letting them opt out.

If you think these very real market harms are “speculative” you’ve been in a coma for the last decade. Yet this argument that net neutrality is an entirely theoretical problem sits at the heart of the FCC’s order. It’s an order that makes it abundantly clear that the real goal is to completely dismantle the FCC’s authority over broadband mono/duopolies, then shovel any remaining authority to an FTC that’s technically incapable of actually policing abuses in the sector. Anybody framing this as anything other than a grotesque example of crony capitalism is either viciously misinformed — or intentionally lying to you for personal financial benefit.

More here: https://www.techdirt.com/articles/20171122/09473038669/fcc-releases-net-neutrality-killing-order-hopes-youre-too-busy-cooking-turkey-to-read-it.shtml

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162 Harun November 24, 2017 at 2:23 pm

“AT&T blocked customer access to Facetime”

And yet, I can now use my ATT phone to facetime people. So, how did they lose?

Did “regulators” solve the issue, or customer outrage?

And of course, that’s a mobile app really. Just switch to Verizon or whoever.

Only Cable is a monopoly in some areas…not all.

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163 Steeplechase November 24, 2017 at 4:18 pm

The example of AT&T blocking Facetime speaks to the non-speculative nature of peoples’ very real concern that, “In the absence of any rules, violations of the open internet will become more and more common.”

Cable is a monopoly in some areas, and in other areas the market looks more like an oligopoly.

Examples of regulators/courts resolving net neutrality violations:

During oral arguments in Verizon v. FCC in 2013, judges asked whether the phone giant would favor some preferred services, content or sites over others if the court overruled the agency’s existing open internet rules. Verizon counsel Helgi Walker had this to say: “I’m authorized to state from my client today that but for these rules we would be exploring those types of arrangements.”

In 2012, the FCC caught Verizon Wireless blocking people from using tethering applications on their phones. y blocking those applications, Verizon violated a Net Neutrality pledge it made to the FCC as a condition of the 2008 airwaves auction.

In 2011, MetroPCS, at the time one of the top-five U.S. wireless carriers, announced plans to block streaming video over its 4G network from all sources except YouTube. MetroPCS then threw its weight behind Verizon’s court challenge against the FCC’s 2010 open internet ruling

In 2005, North Carolina ISP Madison River Communications blocked the voice-over-internet protocol (VOIP) service Vonage. The FCC stepped in to sanction Madison River and prevent further blocking

More here: https://www.freepress.net/blog/2017/04/25/net-neutrality-violations-brief-history

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164 ʕ•ᴥ•ʔ November 24, 2017 at 12:01 pm

Might be interesting to note that addresses in IPv4, the Internet we all first met, are addresses in a conceptual 4 dimensional space. Uniform. Those home security cams with flaky security are there for all to see because they are peer addresses with Apple.com They do not have less visibility.

The nerds gave everyone in the new protocol, IPv6, a uniform address in an 8 dimensional space. They intend 2^64 users to see each other, conceptually, without mediation.

That’s the vision.

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165 Harun November 24, 2017 at 1:26 pm

“Lodge moral complaints against the cable companies or against commercial incentives more generally, or complain about the “ideology” of others.”

All the while they ignore that localities gave the cable companies monopolies, and that its obvious that a better solution would be to first remove those rather than try to fix things from Washington DC.

I say this as someone who is in a market with multiple ISPs where service has improved greatly due to this competition. We have 3 majors plus a ton of other options. I’m using microwave internet right now, for example, not cable or phone.

You can call up Uverse right now, threaten them with Comcast, and they will match rates, increase speed of service, etc.

‘Oh, you’re being offered higher speeds for less from Comcast – We’ll match that!’

I really cannot see in such a situation that Uverse, Comcast, Consolidated, or my microwave ISP wouldn’t use a “They block Google! We give it to you for free!” as a competitive weapon.

I think many people who are for Net Neutrality have been swayed by people living in smaller towns or cities where Comcast is the only choice, so of course they have a much different experience. Why they feel a national government solution is better is bizarre to me. I suspect its because its feels easier in today’s world to ask DC to “do something” vs. get your local government to find a way out of a contract?

Also, I do think its not as rewarding to virtue signal about “My Local Town’s dumb contract” vs. “Big Business is gonna take muh Netflix.”*

*Obviously, NN supporters are often much smarter than this, but I have seen a lot of this kind of reflexive “join the cool crowd” social media posting. That’s who I’m complaining about.

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166 Harun November 24, 2017 at 1:28 pm

I will also posit that some very large corporations were very clever in somehow portraying themselves as plucky heros here: google, netflix etc.

Now, Comcast deserves all it gets, but just because Comcast is bad doesn’t mean Netflix is therefore good. Both can be bad.

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167 ʕ•ᴥ•ʔ November 24, 2017 at 1:57 pm

The harm comes in the future, when no one sees your grandkid’s invention, because everyone has the “big six” providers, and who needs more?

When “anyone can have a server” becomes “anyone with a billion dollars.”

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168 Harun November 24, 2017 at 2:25 pm

So, its like when i had an invention in 1990s and could only sell to three major chain stores?

Did you advocate for “store neutrality” then? No.

Also, I live in a town with multiple ISPs…I don’t get this fear at all. People switch all the time.

And no one owns servers now…its all in the cloud, no?

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169 ʕ•ᴥ•ʔ November 24, 2017 at 2:29 pm

I am sure you can sit back and think about how chain stores are different than information utilities.

And you should be able to explain how the cloud was born in neutrality, would have been impossible without it.

170 ʕ•ᴥ•ʔ November 24, 2017 at 2:33 pm

I mean geez, let’s remember what ISP stands for.

171 Brian Donohue November 24, 2017 at 2:15 pm

Good post, many very good comments. Thanks Tyler et al.

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172 Yosarian2 November 24, 2017 at 4:21 pm

>6. Offer a rational, non-emotive discussion of why pre-2015 was such a bad starting point for the future, and why so few users seemed to mind or notice as the regulations switched several times.

I think this question is somewhat misguided. I would be fine with a pre-2014 version of Net Neutrality, before the Supreme Court case “Verizon v FCC” in 2014 stopped the FCC from regulating net neutrality in the manner it had been doing (and the previous case along the same lines, Comcast v FCC in 2010.)

The Comcast case specifically I think underlines the kinds of things I am concerned about, since that one was specifically about Comcast getting caught throttling peer to peer services, in a way that was illegal under the net neutrality regulations at the time. So I don’t think it’s a “nightmare or dystopian” scenario that the cable companies would use their monopoly control over ISP services to make other online services that compete with their television business basically unusable; in fact, that is exactaly what Comcast was trying to do in the case that started all of this.

The reason that the FCC started regulating the internet similar to a utility was because the Supreme Court decision didn’t really give them any other way of doing it.

I wouldn’t necessarally be opposed to a new law which created net neutrality but allowed certain exceptions, but I think we do need some net neutrality regulations in this area.

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173 Aaron November 24, 2017 at 4:51 pm

1) Removing NN allows ISPs to extract money based on value of the content of Internet traffic. But the content is generated by website publishers, not the ISPs. Giving IPSs a cut is economically inefficient and reduces the incentives for innovate on the part of the content providers.

2) Removing NN means we need a new level of corporate bureaucracy to negotiate the deals and extra legal resources dedicated to managing these arrangements. Unless removing NN generates some tangible benefits this is a waste of human capital.

Note, I would be in favour of allowing ISPs to prioritize certain classes of content, ie live Internet video or low-latency online gaming, since that does have a tangible broad benefit. But picking specific sites or services to favour should not be allowed.

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174 Aaron November 24, 2017 at 5:02 pm

3) From 2009-2016 they they were constrained by an FCC that was under the control of a Democratic administration which was very sympathetic to Net-Neutrality. Thus ISPs were anxious to demonstrate NN was unnecessary and were therefore extremely constrained in their actions. Conversely, a Republican administration is very hostile to Net-Neutrality and so they are relatively unconstrained for at least the next 3 years, during which time they can create a very large business infrastructure that violates NN and will be very hard to undo.

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175 ItMe November 24, 2017 at 6:28 pm

Contra (1), content and ISP infrastructure are complementary goods. If ISPs can’t benefit financially from high-value content (e.g. Bojack Horseman on Netflix), then they have less incentive to create infrastructure for such content (fast reliable connections suitable for TV). In fact, it’d be inefficient for *Netflix* to capture all the rewards for producing and distributing Bojack since it’s impossible to distribute without valuable infrastructure that Netflix pays nothing for. I think this is a big part of the anti-nn argument.

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176 Steeplechase November 24, 2017 at 10:25 pm

Right now a basic Netflix plan is $7.99/month and a premium plan is $13.99/month. In contrast my DSL line costs ~$59.99/month. Is Netflix capturing all the rewards under this arrangement? Surely, there’s an existing symbiotic relationship in the form of ongoing subscriber revenue even under the current regulatory regime where ISP’s benefit from Netflix producing and distributing Bojack.

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177 Aaron November 24, 2017 at 6:51 pm

The ISP’s incentive to create infrastructure comes from their desire to obtain and retain customers. And they extract some of the rewards from Bojack when their customers pay them for the bandwidth to watch Bojack. And Netflix pays for the infrastructure and bandwidth they use by paying their ISP for their bandwidth directly, but also by their customer’s paying their ISPs for the bandwidth on their end as well (reducing some of Netflix’s profit).

But the ISP has absolutely nothing to do with the fact that Bojack makes that bandwidth more valuable, therefore they have no reason to demand any of the value. In fact, thinking of it in these terms it seems clear to me that the ISP extracting value would be best characterized as extortion.

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178 lxm November 24, 2017 at 7:51 pm

Why isn’t internet access a public utility? Do we want kids in rural America to grow up with no internet access? Well that’s what will happen if NN goes away because Charter, ATT, Comcast etc have no interest in reaching rural areas because there is no profit in it. What is needed is public utilities to provide this service which in many states is against the law to the influence of the major internet providers.

So who wins? Big internet providers (who treat their customers badly) or the American public?

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179 Dan J November 24, 2017 at 8:06 pm

To me the major reason the ISPs want to remove NN is that they want to be able to price discriminate on their customers. With all internet traffic treated the same the ISPs only ability to price discriminate is on internet speeds, which is a very coarse methodology. Without NN they would be able to charge extra for all sorts of other things to move the consumer surplus triangle into the profit side of the equation.
I have yet to see real discussion around that topic.

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180 jorod November 24, 2017 at 9:59 pm

As I understand it, the regulations were proposed, never passed or went into effect.

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181 Skythe November 25, 2017 at 6:38 am

This post (and many comments) could come straight from an ISP.

“We know it will seriously damage the internet and make startups basically impossible, but its money so WHAT ARE YOU WAITING FOR?”

Terrible, George Dubya level ignorance, Tyler. 🙁

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182 clockwork_prior November 25, 2017 at 8:28 am

One commenter, whose opinion apparently can only be read by a select few, feels ignorance is not the root cause.

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183 silicon November 25, 2017 at 2:32 pm

NN is good for small businesses and startups. This is because it allows anyone starting any product to, at any time, create and serve a website or webservice and have equal access to any customer. If NN is repealed, then ISP’s could charge small businesses more fees (above hosting costs) to get their content to the customers. So even for a small restaurant’s “This is who we are, this is our menu and hours” could become expensive since ISPs have little incentive to serve these “small websites” for cheap when larger companies like Amazon and Facebook will be willing to pay the extra.

Additionally, consumers might just stop choosing to have access to those websites and web services. One way the repeal of NN could go is that consumers get “packages”, like cable packages. So if I only have the “social media and sports” package, I might just not have access to hypothetical SmallBusiness.web. Smallbusiness.web might have to pay a premium to get on many packages, and a very large premium to get onto the “basic” packages.

You could argue that this is kind of how right now, businesses have to pay for advertising and web hosting anyway. But It’s also a little silly that they have to pay extra rent for the ~kinds~ of content they are serving. When it doesn’t cost the ISP any more to move a particular marginalrevolution.com packet vs a smallbusiness.web packet, but because of the type of content, one may cost more than the other both to the websites and the consumers. To me, that just sounds like the ISP is needlessly benefiting of the content that other people worked hard to create, and providing no further additional benefit. This doesn’t apply to Googles and Facebooks since they already have special deals with ISPs. But for everyone else, it may raise the barriers to entry.

I would also like to emphasize that this doesn’t simply apply to *just* business websites and streaming – it applies to say Squarecash (that thing where you swipe your credit card into an ipad, which is probably connected to WiFi), your smart thermostat, your cute raspberry pi project your kid made, tons of portfolio websites, any student’s cool online project that they want to show the world, academic websites, etc. The internet is wonderful as a place where independent and creative actors can produce and distribute content freely. Placing limits on that adds an unnecessary barrier where the only people who benefit are ISPs and established companies that can afford to monopolize our consumption and actions more.

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184 Tom G November 25, 2017 at 3:55 pm

GREAT list, Tyler, of “what it would take to change my mind”.

You should list what it would take for you to think Trump is doing a job — changing your mind about him as Pres.

You should consider asking your interviewees about a position they have that they aren’t really sure is right — and what it would take to change their minds to the other position.

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185 Tom G November 25, 2017 at 3:55 pm

>> Trump is doing a good job.

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186 Ryan T November 25, 2017 at 10:37 pm

Generally, the burden of proof in a policy change rests on those proposing the change.

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187 Butler T. Reynolds November 27, 2017 at 8:39 am

Exactly. The burden is on those proposing to change Tyler’s mind.

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188 Mitchell Smith November 28, 2017 at 6:30 pm

Why are Internet speeds faster in Europe and Asia, and at a lower cost? They have competition, and we don’t.

Nearly all Americans have one or two ISPs to choose from. In the absence of net neutrality, what is to stop those ISPs from charging just $5 more per month for access to Hulu, Netflix, Amazon, YouTube, etc.? Most people will pay the $5, profits will skyrocket, but those who won’t pay might be pushed back to the ISP’s cable TV offering, which is much more profitable than Internet access. Either way, ISPs win and consumers lose.

I understand that we invented the Internet, and so these other countries had the benefit of our experience in creating their Internet infrastructure, but privatizing Internet access was a horrible mistake. Our Internet should have been done entirely by the government, which would then resell access to private companies, creating competition, as is the case in most modern developed nations.

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189 Nicholas Lilovich November 29, 2017 at 12:48 pm

The world is complicated – models only get us so far.

Given that it seems the profitability of extremely large firms relies more on the cultivation of market/monopoly power and regulatory rents than innovation or even investment, I would be a lot more convinced by empirical data that shows more restrictive regulations are harming customers in some or that less restrictive customers benefit them.

I do not believe any empirical data exists to support the repeal of net neutrality in the USA. In fact, the data that does get presented (by people who are extremely motivated to present the best possible case to the public) seems verifiably false (see link below).

The world is complicated. People have to use heuristics to make decisions. Here’s the one I’m using now: When someone is well-resourced extremely motivated, but their argument remains verifiably poor, I’m pretty sure they’re wrong.

http://www.dslreports.com/shownews/The-FCC-is-Lying-When-It-Claims-Net-Neutrality-Hurt-Investment-140782

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190 Brian Gibson November 29, 2017 at 5:35 pm
191 Ebenezer Scrooge November 29, 2017 at 6:18 pm

I take issue with one of Tyler’s no-nos. “Assume that no future evolution of regulation could solve or address any of the problems that might arise from the recent switch.”

It looks to me like Tyler doesn’t believe in regulatory capture or path dependence. I suppose he thinks that the Internet is different.

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192 MH December 3, 2017 at 6:26 pm

It is suspicious to write only in extreme tones – in either thick technical detail with rigorous intellectual abstraction, or in general pedantic terms. It is reasonable to expect that a good argument could be articulated, more or less, in the middle.

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193 egl December 4, 2017 at 1:18 am

I’m a little late with this, but I can foresee a lot of new negotiations and surplus transfer.

Consider a market with two last-mile providers X and Y. X goes to Bing and says, “I have 25% of the market. I can offer you 90-th percentile latency of 10ms or 500ms for your search traffic. I want $1M or $1 respectively.” It’s pretty hard for the end user to figure out that this is what’s going on, so it’s really a negotiation between Bing and X. You can replace Bing with anyone providing content to the end user, large and small, including amazon.com and marginalrevolution.com.

Notice that the 75% market share of Y doesn’t, to first order, affect this discussion: Bing can’t get to X’s users unless those users switch to Y. Bing has already invested in data centers and large bandwidth to and throughout the Internet, so the issue is the ISP’s provision and control of the last mile. Notice also that we’re talking about text, not high-bandwidth applications like video streaming.

Would this be a good, bad, or indifferent development?

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