Comments on: No, Seriously, U.S. Broadband Competition Sucks

By: Pourquoi Google veut devenir fournisseur d’accès ? | Le Journal de l'Informatique

Sat, 24 Apr 2010 20:11:29 +0000

[...] retard, c’est que les entreprises qui fournissent le haut-débit en Amérique n’ont pas de véritable concurrence. Pour avoir accès à Internet, les Américains doivent choisir une entreprise de [...]

By: Pourquoi Google veut devenir fournisseur d’accès | Le Portail de Toute L'Actualités du Monde

Sat, 27 Feb 2010 08:56:11 +0000

[...] tel retard, c’est que les entreprises qui fournissent le haut-débit en Amérique n’ont pas de véritable concurrence. Pour avoir accès à Internet, les Américains doivent choisir une entreprise de [...]

By: Net Neutrality is About Corporate Interests, Sez Spokesmodel — Technology Liberation Front

Mon, 26 Oct 2009 14:23:12 +0000

[...] which comes off as slightly glib. TV talk is extemporaneous, of course. I tend to lean Julian Sanchez’ way, believing that competition is insufficient in many respects. This is a product of FCC policy as [...]

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By: juliansanchez

juliansanchez — Wed, 14 Oct 2009 09:40:03 +0000

I've never seen anyone argue that neutrality is a means to promote broadband competition. It's the other way around: The argument for neutrality regulation depends pretty crucially on the premise that there's not much real competition in broadband. If you're not terribly sanguine about neutrality regulation, it's therefore tempting to kick out that leg by showing there's really pretty good competition after all. But I'm suggesting people should resist that temptation, because it's probably not true. As I note at the end, though, I agree–for somewhat different reasons–that regulatory enforcement of neutrality could well slow the process by which we start getting more competition.

By: dm

dm — Wed, 14 Oct 2009 01:50:46 +0000

It's not that network neutrality fosters competition, but lack of competition could threaten neutrality. Neutrality is viewed by people like me as a stepping stone (alternatively a foundation stone) for innovations in network services and the use of the network as a broadcast medium; it's not a means of fostering competition, but the existence of competition is an argument that neutrality might be preserved (as long as customers demand it).

The only problem is that such palliative competition isn't as widespread as it might seem upon a superficial look at the statistics.

By: Matt S

Matt S — Wed, 14 Oct 2009 00:53:56 +0000

One of the issues with net neutrality is that it does nothing to enhance competition. It might be seen as a palliative to a lack of competition -- keeping monopoly providers from abusing their position.

But in fact, it makes competition less likely, as the regulatory bar is raised. New entrants see a higher cost of going into business. The cost is realized as either a need to hire lawyers and lobbyists, or as a greater likelihood of being sued. Each customer becomes a liability, as it's one more person who might file a grievance.

If net neutrality really were about competition, the rules would only apply to places lacking competition. That's obviously not how they are written. Relating competition to neutrality is a red herring.

By: Brooke Oberwetter

Brooke Oberwetter — Tue, 13 Oct 2009 19:44:55 +0000

Julian,

In late October 2007, the FCC prohibited exclusivity contracts between MVPDs and the owners of multiple dwelling unit structures–or, more accurately, the deemed such contracts to be unenforcebale. It was largely the exclusivity contracts that prevented ISP competition in MDUs–the buildings were already wired by the incumbent video provider–usually a cable company–which made it possible for them to offer broadband service much more cheaply. The issue was working its way through the courts until May of this year (it was challenged by NCTA), so the process of opening up MDUs to video/ISP competition is just beginning, but within a couple years, there should be substantially more competition there.

By: Stupid American

Stupid American — Tue, 13 Oct 2009 16:19:31 +0000

You hit the nail on the head with your second paragraph. As an “average joe” who uses broadband in a rural town, here is my anecdotal experience: We have two choices within our city limits (not our ZIP), Cox cable and AT&T. Outside city limits you have one choice AT&T or in some places (this is farm country), no choices. I pay $55 per month for 6Mb/1Mb and am happy with that. But 200K would never serve my modest uses and I would never consider paying a premium for that speed. 200K is NOT broadband and as you point out, a hulu stream and a Skype session would run that immediately into the ground. The bare fact is that the infrastructure might sort of be here in small-town USA, but only to the edge of town and not to the edge of the ZIP code.

By: juliansanchez

juliansanchez — Tue, 13 Oct 2009 16:09:14 +0000

Oh, d'accord. None of this should be read as a defense of neutrality regulation per se, I just don't want to lean too heavily on a claim about the current adequacy of competitive checks that I'm doubtful would hold up.

By: dm

dm — Tue, 13 Oct 2009 16:01:32 +0000

No, I think "sucks" is actually about right.

I live in the city where many of these technologies originated, and yet my broadband choices are between a cable company known to play games with its usage agreement and tweak people's bandwidth usage, and the incumbent phone company, which, since I am too far from the central office for true DSL, gives me about half-DSL. Or, I suppose I could pay absurd prices for a wireless solution, but that doesn't strike me as "competition", exactly, any more than Ferrari competes with Ford (or even BMW).

Julian's example of "mom asking junior to pause his Hulu stream so she can use..." Amazon (never mind Skype) is quite real and apparently more widespread than you seem to believe.

Now, thanks to regulation, I'm at least able to choose an ISP that gives me the other services I want (given that I've settled for half-DSL).

By: Berin Szoka

Berin Szoka — Tue, 13 Oct 2009 15:56:26 +0000

If broadband providers actually did vary their practices geographically in a way that wasn't firmly rooted in the congestion patterns unique to certain areas, I'd say you'd have strong grounds for an antitrust suit—where the standard would be consumer welfare rather than some abstract principle of Neutrality.

By: juliansanchez

juliansanchez — Tue, 13 Oct 2009 15:43:17 +0000

Well, remember, the FCC divides it up by zip codes; I doubt the telcos do. They could vary their NMP by market -- which is not only possible, it's how they in fact do trials of new congestion management protocols. Whether that make sense will depend on, among other things, on whether they enjoy significant power in their market, not on whether their market has slivers of overlap with zip codes that host more competitive markets. Now, if the point is that coverage need not reach every house in the larger market to generate competitive pressure, of course that's a sound point. But it still doesn't make zip code level measures super helpful.

By: juliansanchez

juliansanchez — Tue, 13 Oct 2009 14:50:16 +0000

So first, apologies if I implied that Jerry didn't himself understand the limitations of the FCC data; I'm sure he did, and as I say, offered plenty of caveats in the original post. But I wasn't at all sure that Peter's readers at Reason would know as much. Second, the extent to which the zip code thing matters obviously will vary a great deal depending on the specifics. If it's just a question of having a lucky monopoly in a few blocks of an otherwise competitive area, it's hard to believe it will make much difference in terms of what's available to the houses on the underserved block. It may be different if there's an apartment or housing complex where management have an exclusive deal with a single provider—Iast place I lived, I discovered after moving in that the management company had basically contractually bound me to RCN for wireline service. And I get a sense that there are a whole lot of cases where there's a neighborhood served by a provider where, literally, a couple houses spill over into neighboring zip codes that aren't really part of the same market.

Much more significant, I think, is this counting of wireless providers that aren't really competitive with broadband—and indeed, may be capped in ways that make them unsuitable for primary broadband quite apart from speed. Now, to be sure, some people's needs are served by 200 Kbps. Or by dial-up. Or by cosplay. But I'm not calling any of them broadband. I think the relevant standard here is whether it's usable for paradigmatic current-generation broadband applications, and ideally capable of supporting the next wave. In other words, Mom doesn't have to tell Junior to pause his Hulu stream of The Daily Show so she can see grandma on Skype.

By: Berin Szoka

Berin Szoka — Tue, 13 Oct 2009 14:09:33 +0000

Bingo, Jerry!

In fact, if what we're most concerned about is network management practices (NMP), the dynamic Jerry describes would likely operate on a much larger level: If Comcast's NMP are the same across its entire system, then Comcast has to take into account competition in those areas where there are four (or more) competitors, and competitive pressure is likely to deter Comcast from engagement in the kind of NMP that most concern advocates of net neutrality mandates: "censorship" of speech and blocking services that compete with its own offerings or those of its affiliates (e.g., VOIP or online video).

Even if it were technologically possible to vary NMP significantly even with a single zip code (or at least from one to another), Comcast would pretty silly if its NMP in areas where no broadband competition existed were markedly different from those where competition was fierce.

By: Jerry Brito

Jerry Brito — Tue, 13 Oct 2009 02:37:20 +0000

Hey Julian- You have to take into consideration the context of how I used those numbers. My point was that if Genachowski's argument 'depended on the idea that we don't have competition in broadband then he was in trouble' because his own Commission's numbers said the opposite. The thing to do as a good Obama appointee would be to study the issue closely and develop some real empirical evidence before simply regulating a large part of the economy. So, are the FCC's numbers fudged? Sure. Can I rely on anecdotal evidence of a lack of competition in deciding if, and how far, we should regulate? No.

A couple other points. The whole notion of some Platonic ideal of "broadband" is pretty useless in my view. 200 kbps may be peanuts to a power user of your status, but it probably suits a lot of people just fine. Second, you don't need every home in a region to be served by more than one provider to get a competitive effect on price as long as two or more providers are competing in a region, such as a zip code. Say my side of Vermont Ave only gets Comcast, but the other side has a choice of Comcast and Verizon. I still benefit from the price and quality competition because Comcast can't cost effectively discriminate against the few blocks over which it has a monopoly. The ad it places in the Washington Post lists the same price for the whole area. So, while very granular data would be welcome, it's not as if zip code data is useless.

By: Ryan Radia

Ryan Radia — Tue, 13 Oct 2009 02:07:22 +0000

It's an overstatement to say that broadband competition in the U.S. is robust, but it's also an overstatement to say that broadband here "sucks."

The reality seems to be somewhere in between -- if you live in or near a major metropolitan area, you probably have at least one decent broadband provider. If you live in a city that has FiOS, you probably have two decent broadband providers. If Sprint's Xohm, RCN, or any one of several "overbuilders" are available in your area, you may even have 3 decent providers. Clearwire, Sprint, and soon Verizon and AT&T are building 4G (LTE/WiMax) networks that offer multiple-megabit speeds without stringent usage caps.

You're absolutely right that we'll never win the battle against net neutrality if we cling to shoddy statistics on broadband deployment. Lots and lots of very vocal consumers feel like the market isn't serving their needs, and in some cases their concerns are not illegitimate. If you live in Rochester, NY, and your two choices are Frontier DSL and Time Warner Cable, it's hard to take seriously oft-repeated claims that broadband in America is 'vibrant." But entrenching the status-quo isn't the answer, either, and that's exactly what net neutrality would do.

By: Will Net Neutrality Cure Comcast? - Hit & Run : Reason Magazine

Will Net Neutrality Cure Comcast? - Hit & Run : Reason Magazine — Tue, 13 Oct 2009 01:46:15 +0000

[...] Julian Sanchez takes me to task for using sketchy FCC data about broadband competition, which he says is seriously misleading. I [...]

By: dm

dm — Mon, 12 Oct 2009 22:47:36 +0000

Excellent post! I think it sheds a bit of light on the disconnect between some of the bloggers here and some of the frequent commenters. I mean, I've actually tried to find decent broadband service at my home in a major metropolitan area, and have not found a lot of competition --- and what competition is available to me is there by the good grace of regulators forcing the local telco to give other ISPs equal access to customers.

What network neutrality regulation do you think would help entrench the status quo, in the form of delaying 4G rollouts? That the ability to charge different fees for different types (as opposed to different volumes) of service will limit potential profits?

It's true that having the ability to monetize new types of services might make ISPs willing to push them (as opposed to the way network neutrality merely leaves ISPs tolerating their presence) is sometimes a tempting mechanism to get new technologies deployed. This is, I think, one of the stronger arguments against network neutrality.