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FCC's Claim That One ISP Counts As 'Competition' Faces Scrutiny In Court (arstechnica.com)
Jon Brodkin reports via Ars Technica: A Federal Communications Commission decision to eliminate price caps imposed on some business broadband providers should be struck down, advocacy groups told federal judges last week. The FCC failed to justify its claim that a market can be competitive even when there is only one Internet provider, the groups said. Led by Chairman Ajit Pai, the FCC's Republican majority voted in April of this year to eliminate price caps in a county if 50 percent of potential customers "are within a half mile of a location served by a competitive provider." That means business customers with just one choice are often considered to be located in a competitive market and thus no longer benefit from price controls. The decision affects Business Data Services (BDS), a dedicated, point-to-point broadband link that is delivered over copper-based TDM networks by incumbent phone companies like AT&T, Verizon, and CenturyLink.
But the FCC's claim that "potential competition" can rein in prices even in the absence of competition doesn't stand up to legal scrutiny, critics of the order say. "In 2016, after more than 10 years of examining the highly concentrated Business Data Services market, the FCC was poised to rein in anti-competitive pricing in the BDS market to provide enterprise customers, government agencies, schools, libraries, and hospitals with much-needed relief from monopoly rates," Phillip Berenbroick, senior policy counsel at consumer advocacy group Public Knowledge said. But after Republicans gained the FCC majority in 2017, "the commission illegally reversed course without proper notice and further deregulated the BDS market, leaving consumers at risk of paying up to $20 billion a year in excess charges from monopolistic pricing," Berenbroick said.
But the FCC's claim that "potential competition" can rein in prices even in the absence of competition doesn't stand up to legal scrutiny, critics of the order say. "In 2016, after more than 10 years of examining the highly concentrated Business Data Services market, the FCC was poised to rein in anti-competitive pricing in the BDS market to provide enterprise customers, government agencies, schools, libraries, and hospitals with much-needed relief from monopoly rates," Phillip Berenbroick, senior policy counsel at consumer advocacy group Public Knowledge said. But after Republicans gained the FCC majority in 2017, "the commission illegally reversed course without proper notice and further deregulated the BDS market, leaving consumers at risk of paying up to $20 billion a year in excess charges from monopolistic pricing," Berenbroick said.
He's just looking out for a job back at Verizon when he's done.
Your hair look like poop, Bob! - Wanker.
Super obvious this guy is basically a plant / spy. We know it. He knows we know it. No one is doing a thing about it other than going wahhh wahh wahh. Me included. Russia should take note. They could plant some politicians and probably give deaths of the US to Russia and propose we pay taxes to Russia. We would sit here and bellyache but do nothing.
It's all the "potential competition" from teen idols and buff movie stars.
Oh you're not really starving, you can smell your neighbor's dinner from here.
Is anyone really surprised by this now? This has been the way of things in America for ages. Democrats aren't even good politicians, just centrist normals. Republicans are so far to the right it's hilariously stupid. America needs a third party and has needed one for years. At least a moderate right party if not a further left party.
Oh that seems fair. Not "served by a competitive provider" but rather, "within a half mile of a location served by a competitive provider".
Which party is doing this shit again?
Oh, right.
Now who's the fucking moron?
You are welcome on my lawn.
When is a monopoly not a monopoly? Why, when it's a monopoly, apparently.
This is beyond idiotic and dovetails nicely into the recent news that Comcast and other ISPs have decided that Americans "pay too little" for their broadband, which is an outrageous claim. Maybe we pay too little for road access too, why not just make all roads toll roads?
http://www.fiercecable.com/cab...
Look back up at my post, now look back down, you're on the Internet. Now look back up. I'm a signature.
One of rather many flaws in modern American conservatist thought is the idea that because someone has a freedom that they are using to crush someone else, that this is OK, because in theory the other person could spend their life building up the same resources to crush the other guy.
It's the same logic as with gun freedoms - even the most abject set of mass murders with guns is seen as socially acceptable in aggrigate, because in theory, a 'good' person could have popped up and shot the mass murderers with a gun also - therefore, it's no problem. Even with words mouthed towards mental illness, decade over decade, these same politicians reduce funding for those same mental health issues, AND promote legislation to make it easier for those same mentally ill people to get guns.
Same here - they mouth words at how bad monopolies are, but put forth legislation and appoint people that makes it easier to form monopolies, and use them to ruin lives on a continuous basis.
And no, you can't fight against this with individual action - monopolies when they form tend to by definition lock up a crucial resources that prevents you from fighting against them on an individual level. And modern 'conservative' ideology is for the same arbitration systems that prevent you from using the court to fix it, along with countless laws to shelter resources from any victory you could achieve.
I thought the all too common gradeschool understanding of the market that thinks two players constitutes healthy competition was bad. Now apparently even almost having 2 players counts.
Price controls are not only oppressive, they discourage competition by helping the incumbent service-providers. They can lobby for price-increases, but any newcomer would not be able to.
On the other hand, if the greedy KKKapitali$st$ do increase the price too much, the competition will appear.
In Soviet Washington the swamp drains you.
that isn't evil?
Despite what the FCC may say, if there are only two competitors, there is no effective competition.
Wait, what? My family was a Comcast customer for ~10 years, and that was never a thing. The thing to understand is that their 'business class' provides basically:
Higher prices
No data caps where they exist
- Significantly better availability for service technicians
Aside from that, it's effectively the same. Some of the only things that seemed to be blocked on the home tier were inbound port 25 and a few MS RPC/SMB ports.
There is no XUL, only WebExtensions...
Yup, and unless you live right next to the DSLAM, DSL isn't comparable to cable, the performance drops off quickly with distance. And satellite/wireless is pretty much a joke. Sure, there are alternatives to cable, but they're not competitors, they can't match the performance. Comcast just jacked my rate up to $100, for a piece of cable plugged into a switch. It's insane.
Never let a lack of data get in the way of a good rant.
You can call him Ray _or_ you can call him Jay. Surely this must mean competition.
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So, whenever two sports teams face off against each other, that doesn't constitute competition?
Do I also win the lottery if my numbers are +/- 5 from the winning numbers?
Hahahahahahahahahahaha! What planet do you live on? I just moved, to a location well within the city limits, and my options for internet from the phone company are...none. Just checked their website, and at my old house they could deliver... 3 whopping Mbps. Fibre may be replacing DSL some places, but sure ain't around here.
Never let a lack of data get in the way of a good rant.
I remember they were trying to give everyone commie healthcare! The public said NO! NO! NO! Keep your big government out of my MEDICAID!
So then they tried to throw a bone to the average american joe by sprinkling this deal with identity politics and an establishment pro-business candidate whose husband drafted NAFTA!
Well you can't fool us you pinkos!
It looks like the FCC are favouring the communications companies over everyone else, including all other businesses. How is that not bad for the US? Hands up all those who want better internet.
Are the Chambers of Commerce, trade associations etc calling for improvements? This lawsuit is being pursued only by consumer advocates so far.
They used to be much more aggressive in blocking inbound ports considering them "servers" (as upstream bandwidth is what kills their system performance).
At the risk of disturbing what is clearly an exceptionally robust echo chamber on this topic, here's my take:
If the FCC is fixing prices at an artificially low level because there's only one provider in an area, there's zero incentive for a second provider to engage in the capital expenditure to start to service that area. The fiat prices make it impossible for a newcomer to recoup the cost of buildout. Nobody is going to sign up for that, and the monopoly will continue.
Removing the price caps may be temporarily painful, but in the long haul someone is going to spin out that last half mile when there's a proper incentive to do so. (And the higher the incumbent jacks prices, the richer that incentive gets, so getting too greedy just slits their throat faster.) You then have multiple providers that will naturally compete on price to get more market share and pay down their capex faster. And if the incumbent lowers prices enough to disincentivize the other provider from laying that last piece of wire, the customers win that way as well. If you were talking about one provider in the entire city, that might be concerning. But having at least one other provider within half a mile completely changes the calculus in my view.
Very happy to have a thoughtful discussion about this. Flamethowers can save their keystrokes.
Obama and Hillary are to Trump's right on corporate trade laws, cutting Social Security, and starting a new cold war with Russia for reasons entirely of America's making - like overthrowing Ukraine's democracy and starting a trillion dollar upgrade to America's nuclear arsenal. Democrats complain about Trump's travel bans, but DGAF when Obama was murdering teenagers with drones and allowing the military to throw their sycophantic asses in prison without a warrant.
P.S.
To the "go home, Boris" shitbirds who already have half a comment written in response to this, go slink back to the hole you climbed out of after smearing anyone who questioned the invasion of Iraq as a Saddam lover.
you need to vote in your primary. We'd have Bernie Sanders right now folks would do that. Also, people need to get over the knee jerk anger reaction they get every time they see somebody get something they didn't work for. New flash, we all get lots of stuff we didn't work for. I didn't invent the PC but I'm typing away at one right now. And I didn't pay all the subsidies that made the things affordable. We do better as a species when we work together. Though certain individuals are doing great while we fight among ourselves...
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they were desperate. He won because our screwed up electoral college and Hillary's arrogance (she bought into the "Blue Firewall" and didn't campaign in eastern swing states). Meanwhile Trump stumped in Michagan and Wisconsin telling them he's bringing their jobs back. He's not, but neither was Hilary. Trump said it best, what do you got to lose?
If the Dems want back in power they need to kick the right wing "centrists" out and get on board with populist ideas: Medicare for All, college for all, end the wars, $15 minimum wage, and the New New Deal (e.g. infrastructure spending in the trillions paid for by the billionaires that benefit from it). Or they can keep banging on about Russia while Trump gets sworn in for his third term (he's got a son).
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I'd almost agree that one ISP could count as competition, but that's missing the major problem with the scenario. In those markets, you have the Cable ISP with great speeds, high price, and unrealistic data caps. The "competition" is usually a Telco ISP that has crappy speeds, average price, and no data caps.
As I understand markets (I am NOT an economist, so if you are one, check me): Even if the two competitors were comparable, two is not enough for market forces to push prices down toward cost-plus-modest-return. Three is iffy and you need four before it's close to certain.
With only one, maximum profit is achieved by raising prices until anything higher will lose more from people who decided to do without than it gains from people who stick around and pay more.
With two, maximum profit is achieved by adjusting prices until the customers are split evenly and ramping them up until, again, further price hikes lose more than gain. This is a "duopoly". It prices like a cartel. But no back-channel collusion is required. The price signals alone are enough to keep the players in sync and even drive toward the optimum.
With several competitors the maximum profit would still be "split the customers fairly and charge all the traffic will bear" - a cartel. But the more players you have, the more you need communication among them to keep the customer base distributed and the prices in sync. Without it, a player who is being squeezed out (with too small a share of the customers) can drop his prices and gain more by improving market share than he loses by the sale price. This can get a price war going, shake out the weak players, and stabilize at cost plus enough profit that several players (three or more) survive.
With three strong players the market MIGHT be stable for a ong while at the pricey cartel-like point without actual collusion. But with four or more it tends to collapse into the consumer-friendly state unless there's an actual cartel.
(Variants include providing a degraded product at a lower price point. But that's iffy, more complicated to discus, and doesn't really change the "two is about as bad as one, three is iffy, you want four or more" rule of thumb.)
Unfortunately, the government (composed more of lawyers and bureaucrts than businessmen) considers two to be "competition". And that's built into the FCC rules at a number of points. (For instance, the early cellphone channel allocations, which allowed only two companies in an area, or the "One telco wireline ISP and one cable ISP is competition" thing that led to the telco/cable duopolies.)
So now "competition" is supposed to include two of which one is a threat of a hypothetical competitor?
Seems to me the court should insist that there be a minimum of four non-hypothetical competitors in a market before they let the FCC treat the market as "competitive".
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
A group of self-taught network engineers in the Red Hook section of Brooklyn, NY basically told Time Warner to go fuck themselves and built their own ISP, Brooklyn Fiber. Believe me, I would like to do this as well - it's on my bucket list. This is the best way to thwart the telecom oligarchy. There are very poor areas of Philadelphia, PA that are just ripe for market upending.
Many credit card processors require Business Data Service instead of a dial up link. And it bloody takes less time.
High volume credit card processors such as gas stations and convenience stores can be hit with huge costs for data service in rural areas. We aren't talking about home internet but scanners for credit cards at the cash register.
A lot of low volume processors are opting out of the traditional credit card scanners through a bank's business services in favor of a card scanner attached to a smart phone. The high service fees for card processing through PayPal are cheaper than a one provider market for Business Data Service.
NRRPT/RCT