[rayiner]

People trot out "regulatory capture" but can never give a straight answer about what is being captured and how that leads to a lack of competition.

Verizon wants to wire up the yuppie neighborhoods here in Baltimore with FiOS. That'd be major competition for Comcast, because those yuppies subscribing to triple play are where all the money comes form. The city won't let them do it, because they demand Verizon wire up all the poor neighborhoods too (which cost just as much to service but won't turn a profit).

Is the theory that Comcast has regulatory-captured the Baltimore city government, forcing them to impose this requirement? Because I've seen absolutely zero evidence for that proposition.

When Google goes into cities, they demand exemption from regulation. The regulations they get exemption from are not ones that give benefits to incumbents. They are liberal public policy choices: you have to wire up poor neighborhoods if you want to wire up rich ones, you have to kick in money to support public access TV, you have to get permits and your fiber cabinets can't be too big, etc.

[daniel-cussen]

This is too true. It's more regulatory moats than regulatory capture. At any rate, it's not profitable after, probably, the first time.

It's strange how cities force companies to wire this way. It's as if they forced a luxury brand, Hermès, say, to open a store in the most shit-hole, criminal part of town in order to gain the right to open a store in the yuppie part of town.

[jpatokal]

Access to the Internet is increasingly viewed as a right and/or an essential service. Access to overpriced handbags, not so much.

Providing health care to the destitute isn't profitable either; doesn't mean we shouldn't be doing it.

[JumpCrisscross]

> Access to the Internet is increasingly viewed as a right and/or an essential service. Access to overpriced handbags, not so much.

Clothes are seen as essentials in Western society. Luxury brands, not so much. Yet access to internet and access to cutting-edge broadband are treated similarly by regulators in the U.S. That's the asymmetry.

[nitrogen]

...access to internet and access to cutting-edge broadband...

At the pace technology advances, there's not so much difference between the two. Since companies are still constantly pushing the limits of technology, the majority of the benefits of connectivity come at the higher end of the bandwidth spectrum.

[rayiner]

I disagree. Almost all of the "internet as a human right" uses of technology are at the lower end of the bandwidth spectrum: e-mail, job applications, Wikipedia, etc. 95% of what's socially valuable on the internet can be done with HTML 2.0.

[nitrogen]

95% of what's socially valuable is feeling like an equal -- that means edX videos, Khan Academy, Coursera, YouTube, live streaming, backup software, immersive games, etc.

[snowwrestler]

Regulatory capture doesn't have to mean literal corruption. It can cover situations where governments acting on their own and in good faith, assume the status quo and grandfather incumbents. It might not even be on purpose, but rather the logical consequence of a distaste for laws and regulations with retroactive effects. But the end result is the same: legal obligations that impact new players more than old.

So the question is whether Comcast has to meet the same standard of building out their network in poor neighborhoods as Verizon does.

[rayiner]

The "capture" part of the phrase necessarily means corruption. It's where incumbents control the regulatory process to keep competitors out. Unintended consequences from regulation is not "capture."

In every city I've studied, incumbents are bound by the same requirement to build-out their network as potential competitors. I'm sure there are exceptions to this, but the only one that comes to mind is Google Fiber: they get a pass on build-out requirements. These requirements curtail the most obvious route to competition: deploying in dense, rich neighborhoods where the incumbents generate most of their profits.

[hyperpape]

I've never felt that implication.If companies engage in effective (but legal) lobbying to benefit themselves at the public expense, that's regulatory capture even if it's not literally corruption.

I guess it could be an argument about what corruption means, but I think that people underestimate how dysfunctional the legislative and regulatory processes can be even without any legal violations.

[rayiner]

Regulatory capture is more than just lobbying, it's a hijacking of the regulatory process by regulated companies. In any case, lobbying is an attractive narrative, but I don't see the link between lobbying and the actual anti-competitive regulations. Verizon and Comcast didn't lobby to be forced to build fiber/cable all over vast swaths of ghetto. AT&T isn't lobbying for San Francisco to impose inane restrictions on where you can put fiber cabinets.

To put it another way: look at the regulations Google demands exemption from in return for building fiber: build-out requirements, slow permitting, etc. Did the incumbents lobby for these things? No. They arose out of municipal politics that have little to do with lobbying.

[nl]

Self interested lobbying is different to regulatory capture.

Even Wikipedia says:

Regulatory capture is a form of political corruption that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups that dominate the industry or sector it is charged with regulating.

I don't think I could say it better. Regulatory capture is different to lobbying because the regulatory agencies act in the interest of the company instead of the public. Lobbying is when the company puts forward its own interest.

[snowwrestler]

If all the ISPs have to meet the same build-out requirements then I agree that that is not regulatory capture. Thanks.