Net Neutrality and Comcast/Netflix agreement

[Weaver]

snip

It's expensive, good, you realize that. What practical things can we do about it? Seriously.

The free market can cause natural monopolies in products like this. There's little that can be done.

Giving the government more regulatory authority doesn't fix the problem. It'll probably make it worse on Internet consumers.

How will, say, forcing Comcast to not charge you for accessing youtube, make things worse for consumers? From a technological standpoint it costs them virtually nothing to route that data.

Look, Comcast invested in Telecom and they were a key part in providing infrastructure to areas. Do they deserve their revenue? Absolutely. I'm not arguing against that.

What I am arguing, however, is that business without ethics is bad business. And any company that can get away with say, dictating what sites people can and cannot access unless they want to pay more, is unethical to me. The Time Warner/Comcast merger makes a huge company that is able to call the shots of basically the majority of the telecom infrastructure of the country. This is dangerous.

Now, I'm not American so my knowledge of the US Antitrust laws isn't great. My understanding is, however, they should have prevented this horizontal merger to begin with. However, it's an incredibly complex merger and my unfamiliarity with American law does prevent me from speaking with any reasonable informed opinion on what should or shouldn't be done.

This Reuters article on the merger was quite interesting. It claims they are a "Monopsonie" which avoids much of the litigation levied at monopolies.
http://blogs.reuters.com/great-debate/2014/02/19/the-anti-trust-case-against-comcast-time-warner/

 

[Trelmayas]

That has nothing to do with the FCC rules. I just feel bad for Comcast. They bought the worst network from GE and have thus far done nothing to change that, at all. Now, they want to buy the worst customer service rated ISP. Why do they keep buying bad companies?

"Protect citizens" from voluntary contracts they don't have to have makes no sense. I can understand the reasoning for protecting water basins and reservoirs. That makes sense. Protecting people from voluntary consumer interactions makes no sense. Do your own research before taking the plunge like any reasonable person. Netflix has become a streaming giant in the last few years with their insanely popular and all-dropped-at-once-seasons-of shows. They're chugging down data like it was a Jaeger Bomb. Comcast responded to what was probably screwing their bottom line like it was hot.

I don't feel the least bad for Comcast. In college, they cut off my house's internet access, wouldn't tell us why, but continued to bill us anyways, threatening to sue if we didn't pay the bill for service they acknowledged they were not providing. It wasn't until we got legal representation of our own that they backed down. Comcast has always been run as a corrupt company using their market position and size for borderline illegal activities. And for the past several months they've been throttling Netflix in order to promote their own video streaming service. And they get away with it because in many communities they have a monopoly, and the average customer is likely to blame the slow speeds on Netflix, not Comcast's sabotage.

Monopolies are bad for everyone. A company using their monopoly in one field (ISP) to force out competitors and attain a monopoly in another field (video streaming) is outright detestable. As much bungling as comes with government intervention, I prefer the incompetence of the government to the outright malice of companies like Comcast.

 

[faefrost]

Here's my main issue with "Net Neutrality". At it's heart it is attempting to solve through heavier government regualtion and essentially takings of private networks, a problem that was essentially created by government regulation and takings in the first place.

The problem with Net Neutrality isn't that we need government to force the monopoly providers of the last mile of telco/internet service to treat all traffic the same. The problem is that through government regulations we gave those providors monopolies in the first place and continue to enforce that status. Don't regulate the whole internet. De regulate the last mile and the problem goes away.

 

[Gorrath]

snip

And this op-ed in the WSJ lays out all your complaints and throws them off the table:

http://online.wsj.com/news/articles/SB10001424052702303426304579404832175692084?mod=opinion_newsreel

That article didn't say one damned thing about collusion, government backed monopolies or the free market's power to fix issues with the former. What's more, the author of the op-ed tips his hand by referring to anyone who backs the idea of Net Neutrality as "crazies". Netflix and Comcast coming to a deal that will serve both of their interests does not in any way assuage the problems I mentioned.

The following part of the op-ed is particularly ridiculous.

Jenkins writes:

"Netflix's Reed Hastings routinely touted their ideal to gain leverage over downstream carriers like Comcast. Then a federal court in January invalidated Washington's net-neut rules and he rushed out a statement of the obvious to reassure shareholders, saying in essence: Never mind! Comcast et. al. don't really have an economic or political incentive to block our service. Just the opposite. Consumer expectations of the Internet are set. Carriers must supply unimpeded access to every kind of web content or else."

Consumer expectations are set and thus carriers must supply unimpeded access to every kind of content or else? Or else what? The consumer will find a non-existent competing service to go with instead? Consumer expectations are a market force applicable to markets that aren't controlled by monopoly or collusion and are completely meaningless where the consumer has no other options.


Jenkins also writes:

"We could go into a disquisition about how public policy has left America with inadequate last-mile broadband competition, but even so, the deal is favorable to Netflix, not Comcast."

So sure, we COULD talk about government back monopolies and why they are inadequately controlled by free market forces, but instead we'll just talk about how this deal helps one corporation over the other, not how it may impact the actual consumer.

But Jenkins actually mentions a bit about that a few paragraphs earlier when he writes:

Now in other newspapers you can read experts fretting that the cost of Netflix's solution will be "passed along" to Netflix's customers. This is idiotic. All businesses collect their costs from their customers or they aren't long in business. But the real question here wasn't who bears the cost. It was who bears the incentive to handle traffic efficiently.

Right, the customers are, in fact, going to end up eating the cost. The real question in the Net Neutrality debate is exactly what he says it isn't; who is going to bear the cost of price increases when ISPs have monopoly power? No one worth their salt was saying Netflix was going to have to eat the cost, or that Netflix was going to suddenly cease to exist or that Netflix and Comcast couldn't or wouldn't come to some kind of agreement that's beneficial to them. The question was who ends up paying for the cost of their new relationship? And the answer is, the consumer, who in turn may have no other market choice with-which to prevent further increases in cost to themselves.

The article didn't address a single point that I made and when it did skirt my points, it either dodged them outright or admitted the problem and then immediately claimed that it wasn't the REAL problem. And that the REAL problem is also now not a REAL problem.

 

[barbzilla]

Yes, it has everything to do with the FCC since the FCC is the one who was recently banished from the books on this scenario. You can avoid it all you like, but lobbying for big business is like saying you want Walmart to run for President.

You do not know what you are talking about. The FCC lost the court battle because the other side said "They do not have the statutory authority to regulate the Internet." And that is true. The FCC, like most other government bureaucracies, loves to find ways to expand its authority outside of what it is tasked to do. If people are smart, they sue to stop that shit in its tracks.

And normally I would agree with you on government stepping outside its power. However, in this scenario the power the government wanted to assume was to prevent big businesses from abusing its customers. I am a business owner myself, and I am well aware of what ethical business practices look like, and net neutrality helps to enforce that. Did the FCC overstep its bounds? Yes, but there is nothing in place to protect the internet as of yet as it is a new technology and not included in our existing law. That is nothing more than an oversight, and I'm certain you are well aware of that fact, but have chosen to ignore it.

 

[barbzilla]

How can they? When Comcast/Time Warner is the only ISP in the area, unless you're a billionaire who can run fiber all over the city they won't let you use the lines, and they won't let you start up an ISP on their infrastructure. People don't use them because they want to, they use them because they're literally the only way to get internet in their entire city.

It's a complete and utter monopoly which leads to the breakdown of free market philosophies.

In such a case, government oversight is required unless you want to start paying $250 a month for internet because they can charge it as they're the only game in town.

I honestly don't understand why people think it's okay for Comcast/Time Warner to strong arm websites into paying them money for access. If you're trying to start a website and don't have hundreds of thousands of dollars to pay Comcast or they just cut off access to your site, what would you do? What if customers have to pay a $60 a month fee on top of their current plan if they want to properly use a video streaming service? It is total bullshit.

This is against the philosophy of the internet and is the culmination of corporate collusion and immense greed at the cost of one of the greatest things we've made as humanity. The merger, in my opinion, is in violation of antitrust laws but nothing will come of it because corporations rule America now. They rule the government, they rule the citizens, and they line the pockets of politicians to get everything they want which is to fuck you out of money, and hard.

It's because it's expensive to create the ISP infrastructure. We have a small population density in the United States.

Those of us with practical and professional economic experience and knowledge know why the ISP market is the way it is. And unless America suddenly doubles or triples in population, this won't change until the technology and construction of it gets much, much cheaper. But labor, especially organized labor, is insanely high in the United States in various locales (PA being one of them) making infrastructure jobs take forever to do, cost a buttload of money, and see very little profit long-term.

Monopolies string up because nobody but the one company cares to invest in a particular area. The Internet is a stationary product unlike, say, DVDs. It requires infrastructure and cannot be "produced" in one place and shipped over. It involves planting down towers, cables, and buildings for servers and shit. It's very expensive.

These are just the facts on the ground right now. Bethlehem Steel had a near monopoly on jobs in the Lehigh Valley area for decades. When it crashed and burned (the song "Allentown" by Billy Joel was actually about Bethlehem but nothing rhymes with it) due to not adapting to the globalized economy, the area didn't completely fold up. It even has a casino now. And the only place where Peeps are made in the entire world is at the Just Born factory in Bethlehem.

This is the first real point I feel you have made, and I wanted to acknowledge that. You are correct about why the prices are high, and I also agree with you on paying for the level of data usage that you go through. What I don't agree with is the business model where large corporations get to double dip the pool (so to speak). It isn't fair for them to charge for the usage on one end, then charge netflix extra for the privilege of not sucking for all of its customers. This is why there needs to be safe guards in place to prevent profiteering and exploitation of customers.

 

[Kolby Jack]

When it comes to big business versus government, I'll stick with the government. The FCC was 100% in the right on this one; private companies have no right to limit the content produced by OTHER private entities. We pay them for bandwidth, and we pay the content providers for content (directly or otherwise). Having the content providers pay the ISPs just to provide content is bullshit. It'd be like paying a publisher for the promise of books, then paying for the books when they come out, while ALSO having the author give a portion of the earnings to the publisher as well. Hopefully this shit won't fly.

Then, you're a little foolish. Big business can't force you to do something. Government can and does on a regular basis.

No, the FCC was not. They do not have statutory authority to regulate the Internet. That's out of their purview. That's why the FCC lost the case. And why so many on the right made a big stink last week about that "editorial bias" study the FCC wanted to conduct. As the FCC has zero authority over print media.

You might not like that, but certain sites take a massive amount of bandwidth, which uses a lot of data, which screws over the ISPs, who under the rules could only offer "unlimited" plans. So, if you want massive price increases or for them to be able to charge you what you actually use, fine. I'd rather the market shape itself.

Actually, the FCC DOES have authority to regulate the internet. It's kind of IN THE NAME. Is the internet not part of communications all of a sudden? The communications act which created the FCC way back when gave them authority to regulate communications through wire and airwaves. The internet may not have even been in the imaginations of the 1930's congressmen, but I'm pretty sure the spirit of the act would include the internet in its scope. It just so happens that the FCC's stance on internet regulation is that its lawful use SHOULDN'T be regulated by ANYONE, and they enforce that stance. This whole dumb business started because the wording they used to have such authority was deemed poor. They're looking to change the wording now, which hopefully will fix things.

And cry me a fucking river about some web content being higher bandwidth than others. That's just a reality of data transfer. If the ISPs weren't ready to deal with it, that's their own damn problem to solve with their own damn money, which, by the way, they seem to have plenty of. It's not like Verizon is on the verge of going bankrupt due to high-bandwidth content providers.

 

[DudeistBelieve]

I want the government far far far fucking away from the Internet.

Honest? Lets let, for once, the free market decide. I mean this is technology, one of the few places the free market can really make an impact. All it takes is someone to come along, bring a faster download speed for less a price or even the same price and there ya go. The only problem is educating Joe Public... because hell, I myself I don't know my download speed. All I know is I haven't had much problems with anything.

the moment we bring the FCC into it... I mean thats a whole can of worms, and I'd really rather not pay taxes for it.

How can they? When Comcast/Time Warner is the only ISP in the area, unless you're a billionaire who can run fiber all over the city they won't let you use the lines, and they won't let you start up an ISP on their infrastructure. People don't use them because they want to, they use them because they're literally the only way to get internet in their entire city.

It's a complete and utter monopoly which leads to the breakdown of free market philosophies.

In such a case, government oversight is required unless you want to start paying $250 a month for internet because they can charge it as they're the only game in town.

I honestly don't understand why people think it's okay for Comcast/Time Warner to strong arm websites into paying them money for access. If you're trying to start a website and don't have hundreds of thousands of dollars to pay Comcast or they just cut off access to your site, what would you do? What if customers have to pay a $60 a month fee on top of their current plan if they want to properly use a video streaming service? It is total bullshit.

This is against the philosophy of the internet and is the culmination of corporate collusion and immense greed at the cost of one of the greatest things we've made as humanity. The merger, in my opinion, is in violation of antitrust laws but nothing will come of it because corporations rule America now. They rule the government, they rule the citizens, and they line the pockets of politicians to get everything they want which is to fuck you out of money, and hard.

The excuse my ignorance, because I'm in the suburbs of NY where we actually have options. Optimum. Verizon. The like.

By all means, if it's a legit monopoly then unfortunately the government has to step in... That being said, I still wonder what good that is going to do. The only thing that'll temper the storm competition. How the competition is created is beyond me, unfortunately.... I suppose the ideal would be if we had the government somehow make it easier for new internet startups to be created.

Because honestly, you regulate Comcast... well great, a corrupt government overlooking a corrupt organization. That doesn't work.

 

[barbzilla]

snip

And this op-ed in the WSJ lays out all your complaints and throws them off the table:

http://online.wsj.com/news/articles/SB10001424052702303426304579404832175692084?mod=opinion_newsreel

That article fails at the most basic level. If you want to complain about through-put as the basis of your reasoning for not enforcing net neutrality, then comcast should be throttling youtube and not netflix, as pound per pound Youtube eats Netflix's throughput over all ISPs (go check the numbers, I'll wait....). Why doesn't Comcast attack Youtube? Because Youtube is owned by Google, and Google's wallet is much larger than Netflix's. To top that off, Youtube doesn't require a subscription, so Comcast knows that Google isn't reliant on Youtube for its revenue (even though it is substantial). Instead Comcast targeted Netflix because Netflix is reliant on its streaming service to maintain its revenue source.

It is just another example of opportunistic predation on smaller businesses.

 

[Kolby Jack]

I want the government far far far fucking away from the Internet.

Honest? Lets let, for once, the free market decide. I mean this is technology, one of the few places the free market can really make an impact. All it takes is someone to come along, bring a faster download speed for less a price or even the same price and there ya go. The only problem is educating Joe Public... because hell, I myself I don't know my download speed. All I know is I haven't had much problems with anything.

the moment we bring the FCC into it... I mean thats a whole can of worms, and I'd really rather not pay taxes for it.

Do you know the FCC's stance when it comes to the internet? It's probably the best stance they could possibly have on it, which is to say not much of one at all. They believe the internet should be basically regulated by nothing but the laws our society has already established, and nobody has the right to change that. THAT'S net neutrality. It's a GOOD thing.

Please don't just be one of those goons who immediately thinks "FCC= government, government= bad, FCC= bad."

 

[DudeistBelieve]

I want the government far far far fucking away from the Internet.

Honest? Lets let, for once, the free market decide. I mean this is technology, one of the few places the free market can really make an impact. All it takes is someone to come along, bring a faster download speed for less a price or even the same price and there ya go. The only problem is educating Joe Public... because hell, I myself I don't know my download speed. All I know is I haven't had much problems with anything.

the moment we bring the FCC into it... I mean thats a whole can of worms, and I'd really rather not pay taxes for it.

Do you know the FCC's stance when it comes to the internet? It's probably the best stance they could possibly have on it, which is to say not much of one at all. They believe the internet should be basically regulated by nothing but the laws our society has already established, and nobody has the right to change that. THAT'S net neutrality. It's a GOOD thing.

Please don't just be one of those goons who immediately thinks "FCC= government, government= bad, FCC= bad."

I know of their position. I also know they fined the NFL over the janet jackson nipple slip... and mind you, even the former head of the FCC has said publicly that the only reason they reacted the way they did was because they were expected to. I have very little belief that what they are arguing now will be what they will argue 30 years from now.

 

[Atmos Duality]

The Time Warner/Comcast merger makes a huge company that is able to call the shots of basically the majority of the telecom infrastructure of the country. This is dangerous.

Oh come now! A sanctioned monopoly that's not subject to regulation sounds like tons of fun!
Especially when one private company owns most of the home cable market!

What's the worst that could happen?
Rates going up? Content filtering in exchange for kickbacks?
Backroom deals with local gov to prohibit development of fiber infrastructure?

I mean, lets be reasonable here!
(if it wasn't clear, I'm being thoroughly sarcastic)

 

[Lillowh]

No, the FCC was not. They do not have statutory authority to regulate the Internet. That's out of their purview. That's why the FCC lost the case. And why so many on the right made a big stink last week about that "editorial bias" study the FCC wanted to conduct. As the FCC has zero authority over print media.

Actually, the FCC had every right to enforce and place net neutrality restrictions. After all, any government agency has the right to make rules and regulations due to the new deal era (NLRB V Jones & Laughlin Steel), and they were well within their rights to do so. The appeals court is in the wrong, because the practices of Comcast here place a burden on interstate commerce, and therefore allow the commerce clause to be referenced as a reason to put such restrictions in place.

 

[barbzilla]

No, the FCC was not. They do not have statutory authority to regulate the Internet. That's out of their purview. That's why the FCC lost the case. And why so many on the right made a big stink last week about that "editorial bias" study the FCC wanted to conduct. As the FCC has zero authority over print media.

Actually, the FCC had every right to enforce and place net neutrality restrictions. After all, any government agency has the right to make rules and regulations due to the new deal era (NLRB V Jones & Laughlin Steel), and they were well within their rights to do so. The appeals court is in the wrong, because the practices of Comcast here place a burden on interstate commerce, and therefore allow the commerce clause to be referenced as a reason to put such restrictions in place.

You should look into how the anti-trust laws were formatted prior to 1920, it was a whole different ball game back then, but unfortunately businesses make the one thing that the government wants... money. Well, I guess power is more accurate, but money = power in this day and age.

As for NLRB V Jones, that is a president, not law. By the law, the appeals court was in the right abolishing the FCC's power to enforce net neutrality. However, I do think that the law needs to be changed to allow someone to enforce net neutrality in some form or another. This country has slowly slipped down the slope towards a business controlled government over the past 90 years or so, and is in danger of becoming even more in trouble than we already are.

 

[FieryTrainwreck]

I just feel bad for Comcast. They bought the worst network from GE and have thus far done nothing to change that, at all. Now, they want to buy the worst customer service rated ISP. Why do they keep buying bad companies?

What world are you living in? Comcast is in such dire straights that they're buying anything and everything they can get their hands on, expanding their business model to more industries as quickly as possible, and bribing regulatory agencies with cushy post-approval job placement. They're operating at profit margins that positively dwarf successful businesses in any other industry. They're enjoying and expanding a natural monopoly with apparently no interference from the governing bodies designed to protect consumers. And they're doing all of this while offering the worst possible customer service and value - because they can.

"Protect citizens" from voluntary contracts they don't have to have makes no sense. I can understand the reasoning for protecting water basins and reservoirs. That makes sense. Protecting people from voluntary consumer interactions makes no sense. Do your own research before taking the plunge like any reasonable person. Netflix has become a streaming giant in the last few years with their insanely popular and all-dropped-at-once-seasons-of shows. They're chugging down data like it was a Jaeger Bomb. Comcast responded to what was probably screwing their bottom line like it was hot.

Except Netflix (and any similar service) is the primary reason people even shell out ridiculous sums of money to Comcast every month for what should be more-than-adequate DL rates. They are a service provider complaining about the popularity of the content that justifies large portions of their service. When something makes that little sense, the missing ingredient is money. They are leveraging a natural monopoly in order to (once again) increase profits at the expense of consumers who have nowhere else to turn. Unless you actually believe there are legitimate, equally functional alternatives to cable broadband in most areas.

And I'm guessing none of this has anything to do with a long-term goal to increase the price of Netflix, which has effectively replaced Cable Television for a large chunk of consumers on account of how unreasonably overpriced cable tv has become. Probably because there are no controlling factors in place since the industry was deregulated in the 90s, which is when profit margins jumped from 5-6% to ~30%. The recent decisions against net neutrality are functioning as a backdoor deregulation for service providers who are miffed that consumers abandoned their overpriced entertainment in favor of a better, cheaper alternative. Now Comcast can clog he pipes whenever they want to renegotiate the terms of their arrangement with Netflix, effectively siphoning money from the public through a company/product Comcast doesn't even fucking own.

The free market works until someone wins.

Sidebar: I'm totally confused as to how Comcast hasn't been dominating the "worst company in America" competition for 2-3 years running.

 

[Flutterguy]

I don't know wy people still use comcast. Unless you are poor and rarely use the internet or have literally no other options why get comcast? I have been hearing people complain about them often since 2008.

The phone line to my house was estimated 30+ years old by an electrician and I don't have problems using netflix with a cheap contract from bloody execulink.

 

[barbzilla]

Netflix recently "guaranteed" its new "superHD" service to all its customers. I think that's why it happened.

Read the actual op-ed. You clearly didn't read it, as I took that information from the op-ed you criticized.

No, I read the article, and pointing out one factor doesn't change the numbers from the past 8 years. You are either working for a large corporation and willfully want larger profit margins, or you have some further agenda here. There is no reasonable excuse for poor business ethics in a society that claims to be civil. This reeks of Ford buying up the rail car companies back in the 30s to drive up sales on their cars. Without a regulating body, capitalism doesn't work at the most fundamental level. It fails for the same reason that you claim to not want government interference, and that is corruption and greed.

I agree that most of the time, business and government shouldn't be involved, but when it comes to protecting citizens from outrageous profit margins, their either has to be a regulating body, or the economy turns into something akin to what China is experiencing. You can't have it all the way on either side, there has to be balance to bring any kind of reasonable result.

 

[Fireaxe]

Except it's not net neutrality if the government regulates it.

Net neutrality isn't the government controlling the content that appears on the internet, it's the government preventing the control of the internet by collusive business interests. So actually it is still neutral. You can have a contrary opinion but if you do it's very clear you don't know what net neutrality *IS*.

 

[Vausch]

I don't know wy people still use comcast. Unless you are poor and rarely use the internet or have literally no other options why get comcast? I have been hearing people complain about them often since 2008.

The phone line to my house was estimated 30+ years old by an electrician and I don't have problems using netflix with a cheap contract from bloody execulink.

You ever actually looked at your options? It's rare to have more than 1 cable company available in any given area. The big ISPs basically just make deals to stay out of each others' areas, thus giving no competition and meaning they never have to worry about pricing.

Spoiler: Or as South Park put it

 

[barbzilla]

No, I read the article, and pointing out one factor doesn't change the numbers from the past 8 years. You are either working for a large corporation and willfully want larger profit margins, or you have some further agenda here. There is no reasonable excuse for poor business ethics in a society that claims to be civil. This reeks of Ford buying up the rail car companies back in the 30s to drive up sales on their cars. Without a regulating body, capitalism doesn't work at the most fundamental level. It fails for the same reason that you claim to not want government interference, and that is corruption and greed.

I agree that most of the time, business and government shouldn't be involved, but when it comes to protecting citizens from outrageous profit margins, their either has to be a regulating body, or the economy turns into something akin to what China is experiencing. You can't have it all the way on either side, there has to be balance to bring any kind of reasonable result.

You're questioning my motives! You think I'm arguing in bad faith! Hilarious!

Ethics does not equal law. And if it did, probably 90% of politicians would get arrested. And almost all lawyers. And every life insurance salesman.

Except it does. Amazon is the store for everything. I have access to things at my fingertips my grandparents never dreamed of.

You're just upset that the reality of the economics here doesn't agree with your ideals. And I can't do anything to convince you otherwise.

Net neutrality isn't the government controlling the content that appears on the internet, it's the government preventing the control of the internet by collusive business interests. So actually it is still neutral. You can have a contrary opinion but if you do it's very clear you don't know what net neutrality *IS*.

Yes, because the federal government has such a good record on business collusion. Ha ha ha.

I'm not sure if that was supposed to sound as confrontational as it did, but I am done arguing with you. I'm happy you have an opinion, and I'd be happy to defend it, but I think I am through hearing it.