Is Comcast a monopolist? You’d think so, given the tone of much of the coverage of the firm’s BitTorrent affair. And supporters of neutrality regulation often scoff at the idea that competition, not regulation, is the best way to prevent market abuses. But competition may be livelier than most people assume. This was evidenced by the “other” Comcast story in the news today — the release of its third quarter financials. The results, which were — according to most reports — disappointing. Of particular note was the drop in new subscribers for high-speed Internet access, coming in at 450,000, down from 538,000 a year ago.

The reason: competition.

“So what’s going on here?” ZDNet asks, and then answers: “Two words, Verizon and AT&T.”
In an article posted today, ” ZDNet’s Larry Dignon indicates that Comcast has been losing ground as its rivals have been gaining subscribers.

Yes, as argued by the Washington Post’s Rob Pegoraro, more competition is always needed. But the competition that exists now is more than a kerfluffle.

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The WP’s Rob Pegoraro has a pretty good take on the Comcast-BitTorrent situation in an online article posted today. Comcast, he says, “would like to be seen as a crossing guard who sometimes must step into a busy intersection to keep pedestrians (customers who just want to get their e-mail) from being mowed down by jerks in speeding SUVs (a few intensive peer-to-peer users).” And that shouldn’t necessarily bother anyone, except that the firm should have been upfront about what it was doing.

The bottom line, according the Pegoraro: “Customers ought to have a simple remedy in these cases. When a telecom company has a problem communicating with them, they should take their business elsewhere,” adding a caveat that there should be a lot more competition.

All in all, a fairly reasonable — and clearly-written — explanation of the whole kerfuffle.

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More good stuff from Ed Felten on the Comcast dispute:

Pretend that you’re the net neutrality czar, with authority to punish ISPs for harmful interference with neutrality, and you have to decide whether to punish Comcast. You’re suspicious of Comcast, because you can see their incentive to bolster their cable-TV monopoly power, and because their actions don’t look like a good match for the legitimate network management goals that they claim motivate their behavior. But networks are complicated, and there are many things you don’t know about what’s happening inside Comcast’s network, so you can’t be sure they’re just trying to undermine BitTorrent. And of course it’s possible that they have mixed motives, needing to manage their network but choosing a method that had the extra bonus feature of hurting BitTorrent. You can ask them to justify their actions, but you can expect to get a lawyerly, self-serving answer, and to expend great effort separating truth from spin in that answer.

Are you confident that you, as net neutrality czar, would make the right decision? Are you confident that your successor as net neutrality czar, who would be chosen by the usual political process, would also make the right decision?

Even without a regulatory czar, wheels are turning to punish Comcast for what they’ve done. Customers are unhappy and are putting pressure on Comcast. If they deceived their customers, they’ll face lawsuits. We don’t know yet how things will come out, but it seems likely Comcast will regret their actions, and especially their lack of transparency.

That final point is important. The alternative we face is not regulation or letting companies do whatever they want. The alternative is regulation vs. a variety of other mechanisms—bad PR, lawsuits, customer defections—that can punish Comcast for bad behavior.

But the market process, like the regulatory process, is a process, and processes take time. In an otherwise excellent piece on Comcast’s dubious explanations for its routing policies, my Ars colleague Eric Bangeman included the a sub-heading “when the market can’t sort things out.” It’s seems to be true that the market hasn’t set things straight yet. But that shouldn’t surprise us. It’s been barely a week since the story broke in the mainstream media.

After all, imagine if the shoe were on the other foot: supposed we had passed Snowe-Dorgan last year and network neutrality were the law of the land. How would the FCC have reacted? Well, Snowe-Dorgan envisions a complaint process with a 90-day response period. So somebody would have had to have filed a complaint (it’s possible this could have been done in late August when the story first hit the tech press), and then the FCC would have needed to investigate and hand down a ruling. That ruling may or may not have gone against Comcast, and if it did go against Comcast it likely would have been challenged in court, delaying compliance by months if not years. So it’s hardly an indictment of the market process that it hasn’t magically made Comcast behave itself after barely a week of negative publicity. If Comcast emerges unscathed in a few months (i.e. few customer defections, no successful lawsuits, and no significant changes in policy) then the “market failure” narrative will be a lot more compelling.

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