Observations of an Internet Middleman (Level3) (was: RIP Network Neutrality (was: Wow its been quiet here...

Phil Bedard bedard.phil at gmail.com
Sat May 10 19:40:36 UTC 2014

The UK only does this with BT OpenReach since they were the telco monopoly
that originated as a government entity.  Virgin Media (well all the people
who now form Virgin Media) built and operates their own fiber/HFC access
networks, the same as MSOs in the US, and does not offer wholesale access
and isn't treated as a utility.  There are areas in the UK Virgin serves
where the wholesale network does not, and areas where they offer much
faster speeds, which is the same exact scenario as we have here.  Just
because Verizon isn't using VDSL/VDSL2 or hasn't brought FIOS to your area
isn't Comcast's fault.  The newer OpenReach wholesale fiber network is
also partially subsidized by the government.

I'm all for wholesale broadband access, but I wouldn't paint the situation
in the UK as vastly different than here.  We had the same thing the UK
does now 10+ years ago with the CLECs and DSL providers like Covad, etc.
but the regulations changed and dried up access.  TWC did wholesale access
during the same time; Earthlink Cable had quite a few customers back in
the day through the arrangement, but it was complicated and ultimately
your Internet pipe all still went through TWC.


On 5/10/14, 2:42 PM, "Patrick W. Gilmore" <patrick at ianai.net> wrote:

>Nice discussion about history & motivations. Not completely correct, but
>it's always fun to argue over history, and over motivations, since both
>are open to intepretation.
>Personally, I am interested in the future, and specifically in
>market-driven solutions to our problems. Call me a capitalist if you
>like, but I believe in a functioning market, we can get a very good
>approximation of "fair".
>If Company A and Company B have a mutual customer, and that customer
>needs both companies to perform a task, the market will find a way to
>make those two companies work together. Either that, or the customer will
>replace A or B, whichever the customer feels is underperforming, with
>Company C.
>We have that situation today. Streaming Company wants to send End User of
>Broadband Company some content. If Streaming Company sucks - not enough
>titles, lousy customer service, high price, poor performance, etc., etc.
>- End User is free to select Streaming Company 2. And contrary to popular
>belief, there are plenty of "Streaming Company 2s" available. Besides NF,
>there is Hulu, Amazon, iTunes, iPlayer, etc. They might have different
>models, but they all allow you to access streaming content, so choice is
>And here is where we get into the problem. Should End User believe
>Broadband Company sucks, they frequently cannot choose Broadband Company
>2. I know I cannot, my choices are Comcast @ 100 Mbps or Verizon at 1.1
>(yes, one-point-one) Mbps. So when Streaming Company sucks, but they suck
>because Broadband company is doing something I do not like, I cannot
>"vote with my wallet" and pick Broadband Company 2. I have no choice but
>to pick Streaming Company 2, even if I think the problem is Broadband
>Company's fault. (To be clear, I am not a NF subscriber - any more - and
>so this is not a NF/CC thing, I'm just talking generalities.)
>Put more succinctly, there is no functioning market. therefore there
>cannot be a market-based solution.
>Personally, I view that as about the most Un-American, Un-Capitalistic
>thing there is.
>Lots of people have suggested a simple, if very difficult, fix to this
>problem. Make the underlying physical infrastructure a regulated
>monopoly, i.e. a Utility. Then allow anyone to run services over that
>physical infrastructure.
>This is not  pipe dream. The UK does it today. People there pick ISPs
>based on service, price, features, etc., not on "who paid off my local
>And before anyone brings up the whole "the UK is more dense than the US",
>I preemptively call BS. There is more choice, faster speeds, and lower
>prices in the middle of no-where UK than downtown manhattan. Please just
>leave that argument where it belongs, in the dung heap.
>Why can we not do something similar in the US? because the companies who
>own the lines have enough money to pay enough lobbyists to avoid even the
>promises they do make. (If anyone on this list is un-aware of things like
>the telcos promising ubiquitous high-speed BB years ago and never
>delivering, but never giving back their tax breaks or monopoly positions,
>you should be ashamed of yourselves.)
>But hey, a guy can dream, right?
>In the mean time, let's stop pretending that 'oh, L3 paid CC so they must
>be best friends'. L3 paid because They Had No Choice, and maybe because
>they see some long-term strategic benefit (e.g. they can charge others
>more later).
>This is not a functioning market. This is a few players with Market Power
>charging Rents, which any first year econ major will explain is a
>_very_very_very_ bad place for the market to be.

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