The Coming Internet Monopolies

scrm writes "'The Federal Communications Commission is quietly handing over control of the broadband Internet to a handful of massive corporations according to this Salon article." Very important stuff; Slashdot has covered this before, but this is a great article which sums up everything that has gone on over the past few years.

Comments

Isn't long distance telephony bascially owned too?

[Sagarian]

Isn't long distance telephony infrastructure also controlled by a few massive corporations? Equal access carrier laws and preventing a single company from owning the whole thing has fostered enough competition to really hammer AT&T, for instance.

This can't be good in the long run

[Budgreen]

" They warn that if the FCC goes through with its plans, cable companies and the Baby Bells will quickly establish a monopoly on broadband service over their own networks."

The quote in the article states that this could give the Cable companies a monopoly on broadband.. This I see as bad because there is no compeition (locally) for cable companies. you get what is there, I see it bad for pricing/monitoring

you get 1 choice of cablemodem (cable company) or 1 choice of DSL (local phone company) or satelite (not great for gaming) and no real competition. Who wants to bet that Innovation in this field is the next to die?

Re:This can't be good in the long run

[GreyPoopon]

The quote in the article states that this could give the Cable companies a monopoly on broadband.

Yeah it does, but I'm not so sure that this is all that bad. Everybody flame me if you want, but at least let me explain my reasoning. Right now, my local telco has an absolute stranglehold on service in my area. Forget about DSL -- not even available here. My cable company has a stranglehold on TV (never mind the fact that I actually like my cable company -- it's a rather small one). For the first time, though, my cable company is planning on offering telephony over IP, which will provide direct competition with the behemoth that runs the phone service. Cable is the first technology in decades that poses a threat to the rather well entrenched baby bells. I can easily see how forcing them to share their infrastructure will reduce the short-term profitability of providing these services.

Now, here's what I'm hoping will happen: My cable company picks up steam and goes head to head in competition with my telco. Prices drop in the battle, and service improves. Then, the FCC reconsiders its decision (because my cable company is now providing phone service too), and forces the cable company to allow startups a chance to get into the business.

On top of all of this, I believe that startups should only be allowed access to an existing companies equipment for a specified period of time. I believe this will provide incentive to build their own infrastructure.

Finally, I'd like to submit one last idea. Right now, there are three technologies that are capable of providing good TV, Internet and Telephony services. That would be the telephone companies' copper (or fiber), the cable companies' coax (or fiber) and wireless broadband. If all of these technologies can provide the same services, I really don't care if each is a monopoly. As long as they compete with each other, prices will go down and service will go up. What I don't want to see is one company controlling all of these technologies in the same area.

OK. Am I wrong? Correct my thinking if I am.

Great...

[jandrese]

Despite those dire warnings, the FCC's policy on broadband enjoys strong support. Companies with a stake in the matter are gung-ho for it, at least for their own networks

In other news, several CEOs were recently admitted to the Mayo clinic with an unusual condition that caused their eyeballs to actually turn into small dollar signs. When asked about his condition, once CEO could not stop laughing manically long enough to answer.

A spokesman for AOL/Time Warner said he was quite willing to accept customers from price gouging DSL monopolies into his price gouging Cable networks. Comcast could not be reached as their network was apparently down yet again.

No problem?!

[Smallest]

When TimeWarnerAOL (or Disney or whoever else ends up as the big players) decides you shouldn't be seeing this or that website, or sending this or that data down the wire, you'll care.

Remember, these are the same companies who bought the DMCA - they do not have your interests in mind.

-c

bundling lawsuit?

[aeryn_sunn]

I know in my area (that being Atlanta), one cannot get DSL without having a landline or a Cable Modem without getting cable

I was wondering if anybody sees this as the same type of monopolistic behavior MS was convicted of when they bundled IE with the OS?

For example: I have no need for a landline as I have a cell phone plan that gives me more than enough minutes, yet I have to shell out an extra 45 (lets face it, one can barely get a bare bones phone line for less than 45 bucks when all the extra taxes, fees, etc are tacked on) for a phone line so I can have a DSL line. A phone I really never use. Thus my DSL cost is really 85 bucks instead of just 40

isn't this the one of the issues this article might allude too? shouldn't the government bring a lawsuit against the cable/telcos accusing them of bundling? or forcing their un-related product on us just as MS was accused of?

Just wondering.....

Monopolies plural?

[GMontag]

Okay, first stop misusing the word "momopoly", it is defined as ONE entity controlling a market.

Second, figure out what market you are talking about. If it is high-speed data access then one company owning the local/regional/national cable infrastructure is not a monopoly IF (as is the case) there are DLS and other providers within that territory. Lookup the famous monopoly case against Celophane, the Celophane manufacturer won because the market was wrapping material, not the fact that one manufacturer makes one wildly popular product.

Look folks, the more we keep bastardizing the language the more confusing it will be to communicate.

Re:I'm not too worried...

[Bearpaw]

While wireless isn't there yet, it will be soon.

Who controls access to the airwaves in the US? The FCC. And who controls the FCC ...?

Yeah; it'll be like a combined telephone/TV ...

[jc42]

There will be several "competing" giants, but in your neighborhood, you'll only be able to subscribe to one of them. They'll tell you the price, take it or leave it. All ports will be blocked on your end, so you won't be able to put up your own "content". It will only exist so that you can connect to commercial sites.

Also, as in the first century of the phone system (and most current cable TV systems), it will be illegal to connect anything not on the approved list. This list will include the latest releases from Microsoft, and nothing else.

If you don't like it, well, you don't have to use it. Connectivity is a privilege, not a right.

Then, after maybe a century, we'll have some new laws making it legal to connect your own equipment that runs unapproved software. At that time, we'll see a huge expansion of the Internet, as the first innovations in many decades hit the market and the companies upgrade the lines to more than 100KB.

Remind yourself that if the old Bell monopoly were still in place, we'd still be using the old black rotary phones, one per customer unless you pay a surcharge for an extension line. Also, note that right now most of the cable companies are blocking port 80, preventing customers from being "producers" and limiting them to a "consumer" status. And we've read the reports that MSN has been buying up ISPs and blocking email access to everyone but Windows users.

And the bell tolls...

[Rogerborg]

...for unfiltered IP access. As the article so insightfully points out, the issue isn't cost or even availability, it's that pretty soon the companies that rent you a cable modem or DSL connection will be the same companies that own (or have an interest in) a whole stack of content. These are the people who bought the DMCA, the people who want to buy DRM legislation like the SSSCA in its various incarnations. Now they will control the creation, the ownership, the distribution and the delivery of content. So much for the original intent of copyright law.

Ask yourself this: when your choice of access is a subsidiary or partner of either Disney or AOL-Time Warner, why would they even need to buy legislation? For your safety and convenience, they can just block everything except port 80, map that to their caching proxies, and firewall off any part of the 'net that challenges their profit models.

You think they won't or can't do it? Why not?. The FCC's position is that competition should be across technologies, not within technologies, and they seem to be lumping cable and DSL in as one technology. The cable/DSL providers could offer (e.g.) filtered 2048/64 cable modem or DSL for a giveaway price of $10 a month; if the competition is $100 a month 512/128 satellite service, or a range limited and contended 2.4Ghz wireless service, then that will just about kill off the idea of unrestricted residential (not consumer, dammit) broadband. That's quite apart from rate/bandwidth capping and billing depending on whether you're downloading content that you've bought from your provider, or if you're daring to go out onto the big wide internet.

Yes, I know that we've no right to demand cheap unrestricted content, and that we should vote with our wallets and so on. But here's something to think about. If you truly believe that an unregulated free market will take care of this, then you wouldn't object to a shell corporation representing the Chinese government buying AOL-Time Warner or AT&T-Comcast and owning 40% or more of the cable networks in the USA, right?

I use that example because the free market, in its purest sense, means that anyone who can afford to buy or do something should be able to do it. The assumption is that purchasing power is obtained through persuading people to give you money of their own free will, and that your actions will continue to be along those popular lines. There are holes big enough to sail an oil tanker through in that theory, the biggest being that once you get in a position to demand money, or you sell a service that has no effective competition, or (my example) you are spending the taxes you collectd from taxing a billion people, then you can continue to leverage that hold indefinitely, especially if there's a large capital investment cost to entering the market.

Capitalism suffers from exactly the same problem as communism: it works great in theory, because it assumes that people are basically good and honest and will cooperate with the spirit as well as the letter of the system. In practice, any system of human governance or interaction requires constant vigilance to prevent tyranny, even if that tyranny comes wearing a pair of big friendly round Mouse ears. I think we need to be asking our government if they understand that the whole point of the Constitution and of the American State is to prevent situations where We, the People can be oppressed and (de facto) taxed without representation. I'd say we're well past that point already; the only question is how far we'll push it before we either see mass civil disobedience, or we tear up the Constitution and start over with a political version of an End User License Agreement, complete with all the usual disclaimers of warranty.

Re:And the bell tolls...

[5KVGhost]

Capitalism suffers from exactly the same problem as communism: it works great in theory, because it assumes that people are basically good and honest and will cooperate with the spirit as well as the letter of the system.

You are very mistaken. Capitalism works precisely because it does _not_ assume that people are good and honest. Capitalism assumes that people will act out of self-interest, which is usually true.

If a broadband provider in your area is charging too much or blocking access to things people want, then it's only a matter of time before another alternative is developed to take its place. Someone else will see that there's an opportunity to make some money or spread some goodwill. Intelligent regulations don't make these corrections happen (they happen anyway) they just keep things moving a bit more smoothly.

The subject under discussion is specifically an example of what happens when capitalism is not allowed to correct the problem. The cable companies and other broadband providers got where they are because they were granted an artificial monopoly where competition was prohibited by the government. Some would claim that those were necessary incentives to encourage the huge investment needed to create the infrastructure needed, and that may have been true. But removing those antiquated regulations would change everything. Adding more won't change anything, at least not for the better.

Re:And the bell tolls...

[warpSpeed]

This is good in theory, but if the local provider has a lock on the market, and is blocking content, there is not going to be much you can do. You are dealing with a high infrastructure cost medium. There is a high barrier to entry into the market.

If (and this is a big if) some other provider wants to get in on the action, the first provider (for all intents and purposes a monopoly) can easly squeeze the new provider by dropping thier price and or loosening up the control over the content to passify their current clients.

Even if a second provider wanted to get into the local market they would have to be highly capitalized and would probably resort to the same tactics (almost collusion) that the first provider resorted to.

Just look at all the CLECs carcases near the baby bells. Do you think that Verizon, and all their evil bretheron, just passivly sat by while new competition was gaining a foot hold. Hell no, they fought them every step of the way, in the courts, with predditive pricing, and sloppy/incopentent service.

I hate to say it, but there needs to be strong regulation of at least the last mile or there will never be any competition.

You can vote, but there is only one candidate

[Arcturax]

So you either pay up, or go without. How many here would actually give up the internet in protest? Round about none I'd wager.

Competing "platforms"

[Irvu]

If the government steps aside, they say, robust competition will develop between different technology "platforms" such as cable, phone, satellite and local wireless, giving consumers plenty of choices and stimulating a build-out of broadband infrastructure at the same time.

"If you have competition between platforms, consumers will be better off," says Randolph May, a communications policy expert with the Progress and Freedom Foundation. "The problem is that [regulation] impedes investment and new entrants to the market."

Yet:

Separate platforms exist for separate purposes, and have separate capabilities. While I am as enamored of Bluetooth as anyone it is not the same as a fat cable pipe.

The FCC rulings do not (as I understand them) prohibit one company from owning multiple "platforms" If the local wireless net, and cable, and DSL all come from the same source then nothing has been gained.

In any location where one company has a monopoly on most services such as broadband, etc. Where is the incentive to develop a new "platform"? If a town has cable and DSL controlled by AOL then I have little or no incentive to develop a wireless alternative there. The startup costs will be (as they are for anything) huge. In order to break even (until I get a lot of subscribers) I will have to charge more than AOL can charge. So, while I am depleting my cash reserves trying to undersell them they are a) selling at a fraction lower than me, and b) blocking my ads from running and my web page from working on "their" lines and c)running news on their service saying that I torture kittens in my spare time. Then once I'm gone they can jack up the prices again.

Where is the incentive to invest in infrastructure going to come from? Once you have a service that "works" and are facing no competition, why upgrade? Why waste your cash reserves on making life better for your captive audience when you could be working on expanding your audience.

Monopolies are only good for themselves, and the economists that they pay.

How Baby Bells FIT the Definition

[JohnDenver]

First, Let's refer to...

Marriam-Webster
1. exclusive ownership through legal privilege, command of supply, or concerted action
2. exclusive possession or control
3. a commodity controlled by one party

Notice the word exclusive as in exclusive ownership, exclusive control, exclusive possession

Litmus Test

Q. Do the Baby Bell's have exclusive control over the publicly owned telephone telecommunications infrastructure?

A. No, They currently have Primary Control now as they are required to share thier control with other providers.

Q. If the current FCC proposal allowing Baby Bells to deny access to the network access, will the Baby Bells return to thier Monopoly status?

A. Yes, The current FCC proposal will give EXCLUSIVE rights to the public infrastructure, making the Baby Bells Regional Monopolies. IE, No more Covad or Flashcom.

Political control...

[gillbates]

From the article:

But the far more urgent concern is that media conglomerates will use their control over broadband pipes to restrict access to content, information, or technologies that compete with their own content or otherwise threaten their interests.

In a democracy, those who control the flow of information control the country. Grassroots movements can't get started without free communication, and as the Internet is becoming an increasingly used political sounding board, this deregulation will give the media companies more power than we realize. Unlike the government, which is required by the Constitution to allow free speech, the media companies have no such requirement - they can deny access to anyone without any justification whatsoever. Those with views unpopular (say Jews, Christians, or Muslims...) or critical of the ISP, may find themselves silenced without any legal recourse.