The FCC is planning new net neutrality rules. And they could enshrine pay-for-play. - The Washington Post

Mon Apr 28 09:03:31 UTC 2014

On 14-04-25 00:57, Larry Sheldon wrote:

> In a private message I asked if he could name a single monopoly that 
> existed without regulation to protect its monopoly power.

Egg of Chicken question. Did regulation arise because of marker failure
(monopoly, duopoly), did did regulation create monopolies ?

When cable cos started in canada (TV only), they went to the CRTC, as
part of obtaining their broadcasting licenses and demanded they be
granted monopoly status for the areas they served.  So fairly quickly,
the country was carved up into different territories, each served by a
single cable company (a couple of exceptions for border cases etc).

residential telephone was almost always a monopoly. There may have been
many different telcos, but each operated as the incumbent in its town.
The bigger guys ended up gobbling most of them over the years.

The probvlem of net neutrality does not reside in the "internet" itself.
The transit industry is a functioning markletplace with many competitors
and dynamic pricing pushing pricing towards costs.

The problem resides in the last mile which is controlled by incumbents.

The problem is that telcos and cablecos are becoming undifferentiated.
Cablecos offer telephony, and telcos offer TV distribution.

The difference is that not all telcos have advances and those still
stuck with old DSL are becoming irrelevant, leaving only a monopoly
cableco to serve customers.

And whenever 100% of facilities based last mile providers are more
interested in protecting their legacy TV assets, you get problems with
net neutrality, just as Comcast is doing to Netflix.

For large ISPs, Netflix provides caching appliances that can be inside
their network, so it is not a question of transit costs. It has
everything to do with a company that is heavily involved in TV, and
which controls the ISP market is such a large areas of USA wanting to
replace lost TV revenus by billing whoever is stealing those revenus.

In other words, they use their market power to hurt competitors. While
the FCC is getting the news, this should have gone to the FTC because it
is clearly an anti-competitive and predatory measure that proves Comcast
is using its market power to hurt competitors.

As a side note in Canada, the "Competition Bureau" (FTC in USA) is
getting involved with CRTC (FCC in USA) and submits into processes with
arguments on competition.

When there is a clear case of abuse of marlet power and anti-competive
practices, (such as Comcast vs Netflix) then government intervention is
not only warranted, it is essential.