[xnull1guest]

The Net Neutrality 'debate' is an example of politics I'm beginning to see all the time in the United States. A real problem is presented along with a single problematic solution from which voters, with as much or little influence they actually have, and their representatives are asked to select the 'lesser of two evils'.

The real discussion is not whether the country's big media duopoly should be forced to conduct their business model like a public utility or not, but whether a duopoly is healthy at all. If communication infrastructure requires few large investors and centralized ownership it is a natural monopoly and should be managed as such (and in fact resold on a market of small service providers a la the UK's internet and American power). If it does not, let anti-trust law hammers fall. Comcast and Time Warner consistently collect the very worst consumer reviews (Comcast was the worst of all corporations for year running). They are both larger and more predatory than Ma Bell was leading up to 1984.

[rayiner]

You have to put the telecom debate in the proper historical context. It's not some sui generis issue. It's part of a broader debate about how much involvement government should have in regulating services. There was a time when the government told trucking companies how much they could charge for a shipment. The overwhelming trend since then has been to deregulate industries if possible, or replace heavy-weight regulations (rate setting, etc) with lighter-weight ones. Full-on Title II represents 1970's-style regulation that neither party wants to go back to, which is why the debate is between no action at all or "Title II with heavy forebearance."

People talk about regulating telecom like the power company, but the trend over the last 30 years has been to deregulate the power companies as much as possible.

NB: The UK example is a poor one. British Telecom was originally a government entity, and was "privatized" under agreements that made clear that they would be subject to constraints. In contrast, since 1996, the telecoms have invested tens of billions of dollars in capital under the premise that the industry was deregulated.

[slantedview]

Regulation, in this and many cases, is a way for the government to ensure that companies don't use the privileges granted to them by the government (such rights to lay cable lines) as an anti-competitive tool - which they naturally will try to do. The privileges have to come with restraints - else bad things happen.

[rayiner]

The premise of your contention is false. Websites like Ars have perpetuated this misconception that the cable companies have exclusive rights to put wires in the ground.[1] But I have not been able to validate this idea with my research. Every franchise agreement I've read makes clear that it isn't exclusive.

Which is exactly how Congress chose to deal with the possibility of companies abusing exclusive rights to put wires down on public rights of way--by making it illegal for municipalities to give them exclusive privileges.

[1] E.g. http://arstechnica.com/information-technology/2013/08/snubbe.... Ars talks about how Baltimore's franchise agreement with Comcast "effectively makes the company the exclusive cable television provider in the city." (Quoting the Baltimore Business Journal). If you actually read the 2004 franchise agreement, it clearly says it's not: http://www.baltimoregrassrootsmedia.org/PublicAccessTV/Franc... ("City hereby grants to Franchisee, subject to the terms and conditions of this Agreement and the Franchise grant ordinance, a non-exclusive Franchise with the right, privilege and authority to construct, operate, repair, maintain, and reconstruct a Cable System on, over, under upon, across, and along the Public Ways within the Franchise Area in accordance with the City's specifications and this Agreement.")

[belorn]

In your research, how many other companies has built a Cable System in Baltimore? If its non-exclusive only on paper, and in practice a monopoly, what actually effects does it have on quality, service, and price?

[rayiner]

You're changing the goal posts. We were talking about companies using "privileges granted to them by the government (such rights to lay cable lines) as an anti-competitive tool." Comcast is a near-monopoly here in Baltimore (though, I'm one of the lucky ones who has FiOS that Verizon managed to sneak in when the city wasn't looking), but it's not because they abused their privileges.

Ars makes it seem like Comcast bamboozled the city into signing an exclusive franchise agreement, but in reality nobody else wants to build here for the same reason Google didn't want to build here. Large parts of the city are a burned-out husk, a quarter of the population is below the poverty line, and it's unacceptable in the eyes of the city for anyone to just build-out to the parts of the city that might be able to afford fiber service.

[belorn]

My goal posts is not to vilify Comcast as a company in bed with government, but to find an explanation to why there is a near-monopoly. If a company has poor service, bad quality, and high prices, there should be competitors that are willing to earn revenue by competing with better service, better quality and lower prices. This is basic theory of the market, and as it goes, only government intervention allows for a monopoly in that environment.

So what is it. No person willing to fund a company in Baltimore? No investors willing to spend the same price as Comcast, or less if a smart founder can out-perform the past production cost?

If you can explain the monopoly without invoking government intervention, I am all ears.

[fnordfnordfnord]

THE PRICING OF POLE ATTACHMENTS http://www.phoenix-center.org/pcpp/PCPP34Final.pdf

It's a wacky wacky pricing scheme to get space on poles and in utility rights of way.

[deciplex]

If a city reserves the right to grant other parties the right to lay down the cable in the future, but never actually exercises that right, they have effectively given Comcast an exclusive franchise.

[driverdan]

That may be the intent of regulation but what ends up happening is that companies shape the regulation in a way to benefit the incumbents and push out competition.

The government should stop granting companies privileges and let the free market work.

[xnull1guest]

I absolutely acknowledge that bad regulation is a problem, and wish more liberal minded folk would as well. But the problem is again not a binary one: the 'free' market also favors monopolies and incumbents and without a system of punishment and enforcement it is fact (historical and current) that companies will do everything in their power to externalize costs, fix their own success and seek rent.

So it's more a matter of creating 'good' regulation and designing markets (think cap-and-trade) that meet all criteria. It's not easy and you are right to be skeptical of industry's current role in designing its own regulation.

[fpgeek]

People talk about regulating telecom like the power company, but the trend over the last 30 years has been to deregulate the power companies as much as possible.

And it's not like anything has happened since then that has made people rethink power company deregulation, too: http://en.wikipedia.org/wiki/California_electricity_crisis

[warfangle]

> resold on a market of small service providers a la the UK's internet and American power

And American wired telephone service (infrastructure owners must allow competitors to lease that infrastructure).