Gyroscopic Investing

I think there's only one thread about this where thing's got moving: PS's thread on Jan 20 (you participated, Pugchief)
http://gyroscopicinvesting.com/forum/ot ... eutrality/

I posted the John Oliver clip in June, no takers http://gyroscopicinvesting.com/forum/ot ... /#msg97202
Rural Engineer did the same two weeks later, no takers http://gyroscopicinvesting.com/forum/ot ... /#msg97440

But it's a big, big, big deal, as far as I can see. The internet is everything.

"If you like your internet, you can keep your internet, period."

clacy wrote: "If you like your internet, you can keep your internet, period."

Obamanet.

Tortoise wrote: Obamanet.

Tortoise, you are Ted Cruz? This was meant for you then:

Dear Senator Ted Cruz - The Oatmeal on Net Neutrality

It is a complicated and thorny issue, for sure, but what I would like most to help supporters of net neutrality understand is that when you ask the government to do something, if it does it, the process and results are more often than not very different from what you actually wanted.

In a utopian world where our government was actually capable of functioning to produce positive outcomes, I think the best solution would be for Congress to pass a law prohibiting state, county, and local governments from making monopoly agreements with specific ISPs that treat them like regulated monopoly utilities, which enriches said government and insulated the ISP from competition, but hurts the people. This IMHO is the major problem and the primary reason why there's very little competition among ISPs: our own governments have destroyed it in the quest to enrich themselves with lucrative franchise license fees.

Simonjester wrote: an opposing opinion article "Am I The Only Techie Against Net Neutrality?" http://www.forbes.com/sites/joshsteimle/2014/05/14/am-i-the-only-techie-against-net-neutrality/

Wonderful article. I agree with everything there.

I have a very basic question:  isn't net neutrality just price controls?

Benko wrote: I have a very basic question:  isn't net neutrality just price controls?

No, it's price discrimination controls. 

It makes sense to have regulated monopolies at the line level -- we don't need a new company digging up the roads every time they want to enter the market, or a rats nest of wires on the telephone lines.  But we should separate the infrastructure from internet service.

Imagine you pay company 1 for "unlimited electric delivery," and pay company 2 for the power generation.  Then, you start using a lot of power and company 1 goes "woah, I'm only going to deliver half the requested power unless company 2 pays me!".

What I don't understand about net neutrality is that contract law should have already handled this.  Every link along the chain there should be a "peering agreement" that specifies how much, if any, you pay for lopsided network traffic.  At this point, the top tier providers (internet backbone providers) should just put in a clause that "you agree not to separately charge any third party for data delivered under this agreement"

dragoncar wrote:

Benko wrote: I have a very basic question:  isn't net neutrality just price controls?

No, it's price discrimination controls.

What does that mean in english?

Yeah, can't really disagree with that article.
So what needs to change to so we get prices similar to these (I now pay about $100 for 20Mbit+basic TV):

Ziggo TV & Internet

$50 for 30Mbit...
$75 for 180Mit...

Benko wrote:

dragoncar wrote:

Benko wrote: I have a very basic question:  isn't net neutrality just price controls?

No, it's price discrimination controls.

What does that mean in english?

I edited above, but by price discrimination I mean charging extra for certain types of data than others (when there's no difference in cost for different kinds of data).  It's like if the Post Office charged more for letters to grandma and less for letters to your accountant.  Also, the Post Office has a special "grandma telegram service" that competes with your personal letters to grandma, so they want to discourage it.

I'm not against all forms of price discrimination -- Krogers can issue coupons and charge different prices for the same can of tuna.  But I'm against price discrimination for infrastructure -- I'm not OK with toll booths charging extra for blue cars.

Even in my local monopoly, I pay $50 for 50/5 internet only service. If my local government allowed Comcast to compete (they're the monopoly literally 500 feet away in another adjoining city) I imagine that prices would be even lower.

Competition is an amazing thing.  That's the real solution to the net neutrality problem.

When Google announced they were coming here, all of a sudden AT&T announced their own gigabit network, and Time Warner gave the whole city a tremendous free speed increase.  The $45/month tier used to get you 20Mbit/s down and 1Mbit/s up, and now it's 100 down and 10 up.

Xan wrote: Competition is an amazing thing.  That's the real solution to the net neutrality problem.

Imagine that.

Sounds like another good platform for the Statist-Anarchist Common-Sense Union Party.

Pointedstick wrote: Even in my local monopoly, I pay $50 for 50/5 internet only service. If my local government allowed Comcast to compete (they're the monopoly literally 500 feet away in another adjoining city) I imagine that prices would be even lower.

Damn local governments!!


In the end, the big question for me is, for whatever reason, would the FEDERAL government getting out of the "net neutrality" business actually INCREASE competition.  Unlike a lot of uber-capitalists, I don't believe that monopolies don't develop naturally.  I think any time the natural barriers to entry and overhead costs of any industry is high enough, monopolistic tendencies will develop.  In that light, I really don't think we'd have more competition, and in the light of no better competition, simply saying "I want more competition instead of government intervention" doesn't get you more competition... so what are the feds to do?

If idiotic local governments all over the country are reenforcing monopolies with their internet service, and/or if these monopolies are going to continue to develop anyway, I see little problem with federal regs on making the internet a public resource... a la Teddy Roosevelt, I'm ok with regulating to limit monopolistic behaviors, whether or not they exist as a result of corrupt local governments or just the natural affect of free market economics in high-overhead industries.


So while I agree that competition is probably the best solution for most economic problems around monopolies, one has to ask themselves if that's even a realistic goal.  And what, praytel, do we do when we simply aren't going to achieve the ideal?

moda0306 wrote: If idiotic local governments all over the country are reenforcing monopolies with their internet service, and/or if these monopolies are going to continue to develop anyway, I see little problem with federal regs on making the internet a public resource... a la Teddy Roosevelt, I'm ok with regulating to limit monopolistic behaviors, whether or not they exist as a result of corrupt local governments or just the natural affect of free market economics in high-overhead industries.

Are they reinforcing them, or creating them? You think the former, I think the latter. Why not test this out by having the federal government pass an (eminently constitutionally-permissible) law saying, "Hey local governments… stop granting monopolies to these companies." Then we could see if that was enough to end the monopolies, and if it wasn't, then perhaps we could go on to try some heavier-handed regulation. Because I see no evidence that ISPs are a real "natural" monopoly in the absence of governments making them that way.

I don't see any reason not to start with a light touch, if indeed any touching is required at all.

Pointedstick wrote:

moda0306 wrote: If idiotic local governments all over the country are reenforcing monopolies with their internet service, and/or if these monopolies are going to continue to develop anyway, I see little problem with federal regs on making the internet a public resource... a la Teddy Roosevelt, I'm ok with regulating to limit monopolistic behaviors, whether or not they exist as a result of corrupt local governments or just the natural affect of free market economics in high-overhead industries.

Are they reinforcing them, or creating them? You think the former, I think the latter. Why not test this out by having the federal government pass an (eminently constitutionally-permissible) law saying, "Hey local governments… stop granting monopolies to these companies." Then we could see if that was enough to end the monopolies, and if it wasn't, then perhaps we could go on to try some heavier-handed regulation. Because I see no evidence that ISPs are a real "natural" monopoly in the absence of governments making them that way.

I don't see any reason not to start with a light touch, if indeed any touching is required at all.

The "experimenter" in me loves ideas like that.  Politics always seems to get in the way anytime we want to try something in good faith to see what the correct variables are.

I'd love to read an article that really dives into the ISP markets, how the governments reenforce/create the markets for them, and how they might exist in an environment where local governments were essentially banned from digging their fingers in.

But in the face of NOT being able to control the market input of local governments everywhere, I have to default to favoring almost any decision that democratizes the internet.  It seems like way, way too much control over a HUGE aspect of how we take in information to put in the hands of the few ISP's that do exist.

It's a shame we have so few natural experiments of anarcho-capitalist societies, but as I've said before, it is probably a pretty good indication that they are not nearly as robust nor productive as AC's think they are.  But without these societies, any big-ish industry is going to have obvious links with the governments (local, state and federal) that coexist with them.  To some extent, my assertion that I believe monopolies can develop naturally was a false one.  I barely think any functioning civilization can function without a government... and since monopolies are very large, organized players in any market, that means I don't even buy what I'm selling! 

At least not so in any world where "natural" means "without the hands of non-voluntary economic transactions."

You're going waaaay into the weeds, my friend! Nobody's talking about anarcho-capitalism or a stete of perfect freedom or anything.

Even though I would prefer no regulation at any level, and you would prefer heavy-handed regulation at the federal level, it looks like we both like my "experiment" idea... this is called a "compromise." It's so much easier to agree to implement chunks that we can all approve of than hold out hold for huge monolithic plans to overhaul everything that nobody is ever going to agree on. I feel like this is congress's problem, too. Everybody keeps trying to pass 5,000 page bills chock full of objectionable content, that nobody really understands anyway, rather than passing 10 page bills with small targeted fixed that both Democrats and Republicans agree on.

PS,

We can't reduce small chunks to their overall more macro-level benefit... That's a fallacy of composition.  "Allowing competition to work" at the federal level could mean "monopolistic tyranny" at the local/state level.

We'd have to run a full experiment to see what works best. Until then we are always left with the next most reasonable alternative. Often, that isn't competition, but monopoly.

I am for "Net Neutraility" if all we do is restrict preferential treatment and not have the corporate interests use this as an legislative opportunity to squelch competition and cement their monopoly position.  Otherwise we are doomed to have the Internet turn into the equivalent of the "public option" of Obamacare while having the overpriced "private options" that we have currently.  The best of nothing and the worst of both.

If Ted Cruz is any example, I am not optimistic.  People like him are the worst kind of two-faced traitors.