Would introducing competition for internet access at the residential level help prevent the type of consumer abuse that was predicted to happen? If Comcast is my only choice for broadband and there is no net neutrality, they can set whatever terms they want. If I have a choice between Comcast, three LEO internet providers, and four fixed wireless providers, Comcast loses its leverage.
Creating traditional competition in local infrastructure is difficult if not impossible for several reasons
- Last mile sections of the city will always have winner takes most (customers) situation, making the lines built by the other providers redundant and wasteful
- There are only so many communication lines you can put on poles, and underground, before the people start complaining about ugliness, and never ending construction.
I think a good approach for local communication infrastructure is ownership by community/local-goverment and private contract bidding on construction, maintanance and support
- Companies bid on building new infrastructure,
- Companies bid on running & maintaining existing infrastructure (usually a 2-3 year bid contract that sets fixed rate for all customers for 2-3 years). At the end of each contract a new bid goes out, but the same company can "win" the bid
- People in the community vote on the bids. The POLITICIANS don't get to pick the winning bid
A lot of people agree that the problems that net neutrality regulations try to solve are caused by local, unimpeachable telecom monopolies. The economics of having a bunch of competing infrastructure make no sense. As much as I generally dislike regulation, I welcomed Title II classification because regulations are an effective answer answer to an abusive monopoly.
However, I think another overall approach would be just as effective at achieving pro-consumer ISP behavior. The approach is simply this: via regulation, force local loop unbundling, and take no other action. Suddenly, anyone would be allowed to start an ISP and rent the existing infrastructure. This would reintroduce the free market and allow it to solve the underlying behavior problems. I think that when it came time to vote with their wallet, most people would select a pro-neutrality ISP, regardless of their political alignment. Competition generally works fine in places it's actually present.
Incumbent ISPs would complain and scream, possibly louder than they have against Title II. I don't know what the legal approach would be for forcing unbundling, but I seem to recall it wasn't completely infeasible.
I disagree. Local loop un-bundling does not solve the problem. You are still back to the same situation. A single pipe can only handle so many providers, thus limit local competition to 2 or 3 providers. So either all will collude, or the one with the deeper pockets will under-price the other ones until they go out of business. (sure you can add more "regulation", but this just throwing duct tape on a broken system)
Local infrastructure will always be a winner takes all economic game. So its pointless to play it. (side-note: Elon Musk's Starlink might change the economic game)
The only way for people to "vote with their wallets" on local communication infrastructure, is BEFORE the winner "settles in", not AFTER.
A bid system, allows 100's of companies to compete to set the price for 2-3 years. Rather than 2-3 companies competing to set the price for perpetuity. It also creates an incentive to produce quality service, because they will be competing for another contract in 2 to 3 years (i.e. they have 2-3 years to demonstrate they are a competent provider).
A single pipe can handle only so many customers. I don't see how it limits the number of providers?
There actually are countriess with such rules, and they seem to work well. The difficult part is the need to set some uniform price providers must pay for that "last mile" connection to their customer. I seem to remember something like $8/month in Germany. That's actually low enough, it would allow healthy competition even if you set wholesale price 50% higher than neccessary.
The same mechanism is used for competition among power and natural gas companies.
I guess you are right. You can really put as many "providers" on a pipe as you want. But are they really providers from a competition standpoint, or just the same pipe with a different logo?
The problem is that they can't compete on price (in the downwards direction), and they can't compete on building new infra with latest technology. The minimum price is established by the price the owner of the pipes charges. Which is usually set by the gov't. So the can only compete on value added services (i.e. hey we are not going to sell your data hooray!)
The core competition we want in local infrastructure is faster internet and cheaper prices. I think the dual bid system can accomplish that (i.e. separate bids on building/upgrading infra, and bids on maintenance/support)
As for gas and electricity, I think a similar bid system would work as well.
It's "slightly" easier for a local monopoly to write a check to bribe a politician than to "squeeze out" or "collude" with a "new competition". (it's simply a path of least resistance). But either way the monopoly will win.
Even better, you have multiple ISPs on the same shared infrastructure. That’s how Utopia in Utah works—Utopia builds out and runs the fiber network and ISPs provide bandwidth and other services on top of the fiber. IIRC, they use VLANs to separate the ISP networks.
Fixed wireless and LEO internet doesn't require last mile wiring. Your post, while accurate and informative, doesn't appear to have much to do with my question of wireless technologies enabling competition where wired ISPs now hold monopolies.
Fair point. I wasn't sure what LEO stands for (I guess low earth orbit satellites). Wireless competition is tough as well, because you have to purchase spectrum from the gov't.
Maybe not all wireless technologies ??? I am not an expert on wireless.
Still wired internet has advantages over the other technologies (stability and latency), so I am merely suggesting an effective way to compete on wired internet can help significantly (its path of least resistance from a technology standpoint, but not from a political standpoint)
Yep, and from information theory standpoint, wireless will never have anywhere near the same capacity as wired because of inherently worse channel characteristics (loss, dispersion, and interference)
The typical scenario is Comcast asking "startup X" for money to allow them to reach you.
You wouldn't have to pay more, nor would you necessarily notice: established sites would be exempt because customers expect them to work. But nobody will be missing a new company they have never heard of.
Since you will not (immediately) feel the impact, there will be no incentive for you to chose a different ISP.
Conversely, that startup doesn't get a choice: your ISP is the only route to get to you, and they have to pay or forfeit the chance to do business with you.
ISPs would be in a position to claim the vast majority of any internet-based business' profits. As a data-intensive startup, you would also be faced with the prospect of negotiating contracts with every single significant ISP. You'd get to make decisions such as "should we fire ten people, or go dark in Florida for the rest of the month?"
Were I to have ample ISP choices, I wouldn't want net neutrality as much. While the principle is still sound, the need for NN would be more reactionary and probably only in response to ISP collusion.
