On the Comcast Kerfuffle: The Market Meme

by on October 23, 2007 · 14 comments

While Comcast scrambles to explain itself, and those better versed in the technical issues debate the merits (see the comments) of what they surmise Comcast to be doing, I think it’s important to focus on another angle.

Look at the press and consumer reaction to the allegation that Comcast defied the public’s expectations. For example, Rob Pegoraro of the Washington Post has announced that he is investigating the issue for his column on Thursday, and has asked the public to help inform his thinking.

A mass of Comcast customers are weighing in, fairly or unfairly heaping a wide array of Internet woes on this ISP. And here’s a key quote from one commenter: “I got rid of comcast the second that Verizon FIOS was available in my neighborhood . . . .”

Are consumers helpless against the predation, real or imagined, of this ISP? No they are not. The market forces playing out before us right now are bringing Comcast sharply to heel – and other ISPs too: they are watching with keen interest – nevermind whether Comcast has done anything wrong from a technical or “neutrality” standpoint.

The challenge again is for proponents of broadband regulation to show how law, regulation, and a regulatory agency could do a better job than the collective brainpower and energy of the Internet community.

  • http://scruffydan.com ScruffyDan

    The problem is what do you do when Comcast (or any other dishonest) ISP is your only choice? If Comcast is your only choice then you are helpless.

    Broadband regulation should work to foster a more competitive market, which in turn should make most of these types of problems disappear.

  • http://scruffydan.com ScruffyDan

    The problem is what do you do when Comcast (or any other dishonest) ISP is your only choice? If Comcast is your only choice then you are helpless.

    Broadband regulation should work to foster a more competitive market, which in turn should make most of these types of problems disappear.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    Regulatory intervention is the outgrowth of companies doing underhanded and unethical behavior on a consistent and long term basis. So if we don’t want regulation why are there no calls for these companies to act ethically to begin with?????

    Since there are no posts suggesting that these companies act ethically, the implicit assumption is that it is OK for companies to “steal” from customers until caught. Once caught, to quickly apologize (as a demonstration of how the free market works to regulate itself) and to then initiate a new hidden scheme to defraud the consumer until caught again, and again, and again, and again.

    Consumer vigilance it a vital ingredient to a free market, but so is ethical and open corporate behavior. If you don’t want regulation, behave responsibly.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    Regulatory intervention is the outgrowth of companies doing underhanded and unethical behavior on a consistent and long term basis. So if we don’t want regulation why are there no calls for these companies to act ethically to begin with?????

    Since there are no posts suggesting that these companies act ethically, the implicit assumption is that it is OK for companies to “steal” from customers until caught. Once caught, to quickly apologize (as a demonstration of how the free market works to regulate itself) and to then initiate a new hidden scheme to defraud the consumer until caught again, and again, and again, and again.

    Consumer vigilance it a vital ingredient to a free market, but so is ethical and open corporate behavior. If you don’t want regulation, behave responsibly.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    Since my prior post, I ran across Ed Felten’s take on this. Ed writes:
    “Comcast is making things worse by refusing to talk plainly about what they are doing and why. (This is an improvement over Comcast’s previously reported denials, which now appear to be inconsistent with the facts.)

    ….

    It looks like Comcast is paying the price for trying to outsmart their customers.”

  • http://thegreateric.com Eric

    Um, there are a lot of us who have a choice between Comcast, shitty DSL, or shittier dial-up.

    I too, eagerly anticipate the day I can get Fios so I can drop them like a rock, but in the meantime they have an effective monopoly on broadband in a great many areas.

    Either regulate the hell out of them until they’re delivering the most open, best possible service to their customers at the cheapest possible price, or do something to promote actual competition and consumer choice. Because lacking either, we’re at Comcast’s mercy – and the lesson from this is that they’re not above abusing that.

  • http://www.cato.org/people/harper.html Jim Harper

    As if on cue . . . I agree that more competition is better. It’s coming faster because Comcast has violated consumer expectations (at the very least as to transparency). It would come slower under regulation.

    Your two comments are so interesting in how they treat regulation. ScruffyDan, I agree that regulation should work to foster a more competitive market. But it doesn’t. What regulation does is stultify markets so that “compliance” is a dimension of goods or services as important as giving consumers what they want. And the terms of “compliance” are dictated (more and more with the passage of time) by the regulated parties themselves, as their lobbyists seek protection for their business models against new competition. These are things regulation ideally shouldn’t do, but it’s what regulation does.

    Thus, Steve R., regulation is not really a punishment for businesses. It ends up punishing consumers because companies are less responsive to us, less threatened by competition, and more responsive to regulatory agencies. They use regulation to suppress competiton and keep the marketplace in which they work under control.

    Thanks, both of you, for your fair comments.

  • http://www.cato.org/people/harper.html Jim Harper

    While I was writing the above comment, two more came in. Thanks also for those. The response above is adequate for them as well. But, except. . .

    “regulate the hell out of them” – as if it’s a punishment.

    I assumed when I got to Washington, D.C. that companies didn’t like regulation. It turns out that they only dislike regulation that puts them at a competitive disadvantage. They like regulation (and taxation) that gives them advantage, and they’ll work to make it so even if it doesn’t at first.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    Since my prior post, I ran across Ed Felten’s take on this. Ed writes:
    “Comcast is making things worse by refusing to talk plainly about what they are doing and why. (This is an improvement over Comcast’s previously reported denials, which now appear to be inconsistent with the facts.)

    ….

    It looks like Comcast is paying the price for trying to outsmart their customers.”

  • http://thegreateric.com Eric

    Um, there are a lot of us who have a choice between Comcast, shitty DSL, or shittier dial-up.

    I too, eagerly anticipate the day I can get Fios so I can drop them like a rock, but in the meantime they have an effective monopoly on broadband in a great many areas.

    Either regulate the hell out of them until they’re delivering the most open, best possible service to their customers at the cheapest possible price, or do something to promote actual competition and consumer choice. Because lacking either, we’re at Comcast’s mercy – and the lesson from this is that they’re not above abusing that.

  • http://www.cato.org/people/harper.html Jim Harper

    As if on cue . . . I agree that more competition is better. It’s coming faster because Comcast has violated consumer expectations (at the very least as to transparency). It would come slower under regulation.

    Your two comments are so interesting in how they treat regulation. ScruffyDan, I agree that regulation should work to foster a more competitive market. But it doesn’t. What regulation does is stultify markets so that “compliance” is a dimension of goods or services as important as giving consumers what they want. And the terms of “compliance” are dictated (more and more with the passage of time) by the regulated parties themselves, as their lobbyists seek protection for their business models against new competition. These are things regulation ideally shouldn’t do, but it’s what regulation does.

    Thus, Steve R., regulation is not really a punishment for businesses. It ends up punishing consumers because companies are less responsive to us, less threatened by competition, and more responsive to regulatory agencies. They use regulation to suppress competiton and keep the marketplace in which they work under control.

    Thanks, both of you, for your fair comments.

  • http://www.cato.org/people/harper.html Jim Harper

    While I was writing the above comment, two more came in. Thanks also for those. The response above is adequate for them as well. But, except. . .

    “regulate the hell out of them” – as if it’s a punishment.

    I assumed when I got to Washington, D.C. that companies didn’t like regulation. It turns out that they only dislike regulation that puts them at a competitive disadvantage. They like regulation (and taxation) that gives them advantage, and they’ll work to make it so even if it doesn’t at first.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    Again, why are there no posts on the TLF demanding that corporations behave responsibly to avoid “onerous” regulation?????

    This morning I saw that TechDirt is reporting that “Verizon Fined For Pretending That Limited Service Was Unlimited”. In that article Mike makes the statement that “Comcast was famous for many, many years for being one of the biggest ISPs to lie about offering unlimited service. It’s a story that comes up in the press every year or so, and every year Comcast gives its own doublespeak about how it only cuts off the worst “abusers.””.

    If companies purposely abuse customers on a regular and consistent basis, regulation will follow. The fact that New York is investigating Verizon is a precursor to the implementation of future regulation. Net Neutrality regulation comes to mind. So if the posters on TLF want a free market, without regulation, they must demand that corporations act ethically.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    Again, why are there no posts on the TLF demanding that corporations behave responsibly to avoid “onerous” regulation?????

    This morning I saw that TechDirt is reporting that “Verizon Fined For Pretending That Limited Service Was Unlimited”. In that article Mike makes the statement that “Comcast was famous for many, many years for being one of the biggest ISPs to lie about offering unlimited service. It’s a story that comes up in the press every year or so, and every year Comcast gives its own doublespeak about how it only cuts off the worst “abusers.””.

    If companies purposely abuse customers on a regular and consistent basis, regulation will follow. The fact that New York is investigating Verizon is a precursor to the implementation of future regulation. Net Neutrality regulation comes to mind. So if the posters on TLF want a free market, without regulation, they must demand that corporations act ethically.

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