Net Neutrality and Carrier Incentives To Invest

An anonymous reader writes "In policy debates before Congress and the FCC, the big ISPs and wireless carriers (Verizon, AT&T, Comcast, Cox, Sprint) argued that net neutrality rules would give them less incentive to upgrade their networks. The reality is just the opposite, says Infoworld's Bill Snyder, citing a game-theoretic work done by two researchers at the U. of Florida's business school. If carriers can charge premium prices for expedited service, they have an incentive not to invest. Hmm, this reminds me of the agriculture business, where prices are sometimes propped up by paying farmers not to grow crops."

Comments

Premium service..

[Anonymous Coward]

...is what you used to call 'regular service' yesterday.
Case in point: Data caps. there were no data caps before, services wee running just fine...and somehow, a couple of years later, you need to pay more for the same data transfer.
It's artificial shortage is what it is.

Glad to hear it, but a big "duh!!!"

[MobyDisk]

I am glad that someone did some academic research to prove this, but it seems unnecessary. Isn't the entire point of eliminating network neutrality just so that carriers can charge more for their existing bandwidth? They slow down a site, then charge you to restore the speed back to what it originally was. Or they charge you a fee to make your packets a higher priority than your neighbor's. Either way, no infrastructure changes were required. The highway analogy the article uses is spot-on.

Can someone explain to me why Republicans keep spewing this illogic about Net Neutrality? Why all the hate and rhetoric? It's really a very simple, and should be a non-partisan issue.

Re:Glad to hear it, but a big "duh!!!"

[0racle]

They slow down a site, then charge you to restore the speed back to what it originally was.

Actually, it's worse than that. In addition to the above, they could introduce internet tiering packages where they went to the content providers and charge them for getting preferential treatment or at least slightly less throttling. They charge you for access, charge you again for faster access and charge the content providers for letting them get your traffic in the first place.

Can someone explain to me why Republicans keep spewing this illogic about Net Neutrality?

You seriously have to ask this? It's about money. Also, I don't believe anti-net neutrality is a partisan issue, R and D are both for it.

Re:Glad to hear it, but a big "duh!!!"

[Bloopie]

Also, I don't believe anti-net neutrality is a partisan issue, R and D are both for it.

If both parties are against net neutrality, how do you explain the Senate vote last week where the Democrats voted against repealing it and the Republicans voted for repealing it? And Obama threatened to veto a repeal? Link

Incentive, incentive, this is capitalism?

[Anonymous Coward]

Industry is a bunch of spoiled children these days. They cry and scream and throw a tantrum, threatening to take their ball and go home unless they get bribed with candy to behave. Remember a time when all it took to get a business to make a wise move was prove it would make them more money? Neither do I.

Re:Open source internet?

[Ash-Fox]

With wireless technology developing as it is, is there any chance that some day we can create our own ad hoc internet without relying on expensive cables and thus expensive carriers?

Not without a decent spectrum allocated for it. The 2.4 GHz and 5 GHz band at our current power restrictions don't allow for very good distances, unless you have a very clunky antenna that you wouldn't find on a mobile device.

Developing an ad-hoc mesh network has many issues to take into consideration, including dealing with the fact that there will be people who are using an unfair amount of resources and no single transmitter can be trusted to keep any information secure or even 'truthful' about who it is.

You mean the ISPs lied to congress?

[JustAnotherIdiot]

I, for one, am totally shocked.
Shocked I tell you.

Re:Farmer subsidies need to STOP

[Aqualung812]

Cut the maize- grow healthier grains, healthier fruits and veggies- why are my tax dollars going towards making my neighbours into fat pigs?

It gets better. Wait until the USA has national healthcare. They they'll use tax money to make people fat (maize), then use tax money to deal with the health issues from being fat! PROFIT!

Manufacturing scarcity

[Catbeller]

They aren't providing a service; they are manufacturing a scarcity of service. Any producer or provider will ultimately do this if they are not regulated in some fashion. They will build out a minimum of infrastructure for a maximum of profit. And they will never stop raising fees. Our great-grandparents understood this, so electrical utilities and such are government-regulated monopolies. Some things can't be covered by free market economics. Wiring all homes is one of those things.

Let's try logic

[brxndxn]

Here's simple logic on 'carriers' or ISPs:

ISPs either have a monopoly or pseudo monopoly (in practicality) or they have competition. Therefore, there are two types of situations:

1. Monopolistic - Upgrading networks not necessary
2. Market-based - Carriers must upgrade networks to compete or lose customers

In either situation, there are two types of sub-situations:

1. Net-neutral - Carriers must upgrade networks to satisfy bandwidth demand, content decided by individuals
2. Prioritized - Upgrading networks not necessary, low-priority traffic dropped, content decided by corporations

What we have now in most of America is Monopolistic, Net-neutral. Carriers are arguing for Monopolistic, Prioritized. Consumers demand Market-based, Net-neutral. What should we get? Market-based, Either. What will we get most likely? Monopolistic, Prioritized.

The fact we even need a study to prove that the carriers are lying is ridiculous. The best incentive to force ISPs to upgrade their networks is MORE and DIVERSE competition. It is not free-market competition when the only 'normal bandwidth' Internet access at home for a consumer is a choice between either the local cable company or local telco. It is not free-market competition when the only cellular bandwidth is a choice of 1 of 3 major carriers that control hardware and software of the devices and lobby in unison to our government. Carriers are essentially arguing to continue a monopoly and ignore advances in technology that allow unlimited upgrades in bandwidth.

Instead of arguing net neutrality at all, if our lawmakers started making it easier for some competition in the marketplace, ISPs that do not deliver all traffic quickly would die off.

Re:Let's try logic

[fermion]

There is one other thing, a thing that most in the US have lot sight of. All mobile operators use the public space to generate a profit and as such should be required to use that space for the public good. If they cannot make a profit using the public space for public good, that public space should be given to someone who can. Nowhere is it written that profit is a fundemental right, although some conservative wackos want profit to be a fundemental right, I am talking about bush and reagan and the bailouts. Profit is merely something we have the right to persue.

We lost this when TV and radio took over our government and decided they were entitled to the bandwidth loaned to them by the people. The people have every right to take that bandwidth back. Even the cable operators, whose cable runs though and limits the use of public space, has a duty to the public though they too believe they can take from the people without giving anything back.

The argument for net neutrality is simply that the airwaves are public property and the public should make the decision on what it is used for, not the firms who are borrowing them. Like I said, if the mobile companies can't make a profit, then take the bandwidth away and attempted to be let to a new firm that can make a profit. This is what is done in real life. When a firm rents a space and does not make enough money to pay for that space, the space is taken back and rented to someone else. In the US we do say that they space is theirs forever just because they squatted on it and no one else wants it. We let the market work, except when a firm is so big they can corrupt the market by creating regulation to favor them. Which is the purpose of many regulations. To keep competition out.

And as far as sig goes with Ron Paul, remember that instead of letting the market work and allowing his constituents to suffer for bad housing and car choices, or to allow the public to decide what food was best for them, he used tax payer money to build a million dollar bus stop and gave untold hundred of thousands of dollars to his fishing buddies so they could be hired as consultants to push shrimp. This is what is wrong with the market. Even those that claim be hands off will not be able to avoid the temptation of free money and helping their friends steal from the poot.

Re:Farmer subsidies need to STOP

[Oswald McWeany]

Ahh-well the government will love then that not only do corn fed cattle have higher fat contents then grass fed cattle- they also require higher levels of antibiotics.

These antibiotics in farming is what leads to super bugs and antibiotic resistance in bacteria... which leads to... ... higher health costs and prescription costs.

Government should double subsidies on maize immediately to help make the loop complete.

The difference with agriculture

[rsilvergun]

is that there's a good reason to prevent over farming. Over farming tobacco turned Virginia into a desert in the 1800s. Plus in agriculture you sometimes have to get people to grow food that's not profitable but that people need to eat, e.g. it might be a bad year for potatoes, but we still need potatoes.

The trouble with net neutrality, indeed with any concepts on the Web, is that we're brushing up against a post-scarcity economy here. There really isn't any analogy that works because we've never done that before.

Re:Open source internet?

[jellomizer]

The internet is Open. The specs to communicate over TCP/IP are quite clear. The problem is who owns the infrastructure. Cables, Satellites, and the ability to bring them to peoples location costs money. Then they have the cost of maintaining their routing to other providers.
An Add Hock network can only go so far, once you scale larger then you get into more issues.
100 people all maintaining their own routers is fine.
1000 people you may need to find a good techie and pony up to give him a good router.
10000 More techies that you need to maintain the router. And you are start having complains on who's cable go where. Or crazy nuts afraid that their house is getting too much wi-fi radation.

The bigger it gets the most it costs and the more issues that happen. You will start to need Full time people working on this stuff, and they can't starve for the glory of keeping your internet up, they will need to be paid for their work...
Then when you are done you either have a set of big ISP that you probably need to pay $20-60 a month too or a government controlled internet, where you will get think of the children people yelling at the government to block whatever seems bad information to them at the time.

Re:Farmer subsidies need to STOP

[BranMan]

I'll take a shot at it. In essence, subsidies are an insurance policy so that we always have plenty of food. Without subsidies, farming would be subject to the ups and downs of the free market. Consider this - with subsidies, farms can, regardless of how much of what they produce, KNOW what they are going to have for income, more or less. The subsidies make sure the prices they get are STABLE. With that we can make sure we're always producing the right amount - i.e. too much for us here at home, so we sell the excess overseas - regardless of climate or droughts, since we'll always make sure we have excess capacity.

That works out really well. Without that, the market rules. If one year there is a drought, for instance, prices will jump as there will be shortages. The next year, all kinds of new people will try to get 'in' on the high prices and end up with a bumper crop, which will depress prices instead. Maybe to the point of bankrupting farmers, closing farms, etc. The next year after that, not enough of a crop is produced, and we have more shortages. Up and down, up and down. Not something we want happening to our food supply.

I'm probably not explaining it well enough, but that's the general idea - simple economics, lots of players looking for an edge - if we leave prices unsupported, we'll have chaos. And hunger. And if we end up hungry here, what about all the places depending on our exports?