The Poor, Abused Robber Barons

by Dave Schuler on February 26, 2014

In his recent column castigating “net neutrality”, the idea that all content should be treated equally by Internet service providers, nowhere does Holman Jenkins mention that the cable and telephone companies that control the “last mile”, the ultimate delivery of Internet service to end users, achieved their privileged positions by being monopolies. Not natural monopolies. Government-granted monopolies. I see net neutrality as a means of leveling the playing field between companies that used their monopoly power to charge exorbitant rates for mediocre service, slowing the pace of inovation, and upstarts. He sees it as upstarts exploiting FCC rules to steal cable companies’ core TV customers.

As I’ve said before I’d like the cable companies to be treated as common carriers and the law of common carriers is well-developed. But I’d be satisfied with transparency, allowing customers to pay for bandwidth, and giving them the ability to select the bandwidth they need in advance.

{ 3 comments… read them below or add one }

PD Shaw February 26, 2014 at 11:41 am

I’m not sure common carrier law gets you to where you want to go. Common carrier status does not preclude a company from offering different service tiers at different rates. A railroad can offer passenger class and elite class services. Locally, it sounds like cable companies operate under common carrier principles by being required to provide basic television services to everyone at an affordable price. They are not required to provide HBO or connectivity speeds suitable for streaming HD.

It sounds like what you want is to require common carriers to provide access to private carriers to use their lines. Requiring Union Pacific to allow Amtrak to operate means Amtrak to pay rent to UP and accepting second-class status to UP’s business. We’ve had some recent local disputes with the railroads in an effort to get them to improve their lines by consolidating the various tracks to one area. Durbin said something to the effect that he’d discovered something more powerful than the federal government — the railroads. Basically, if we want the railroad infrastructure to be improved, the taxpayer has to fund it, even though the railroads will benefit from it.

Dave Schuler February 26, 2014 at 2:27 pm

Common carrier status does not preclude a company from offering different service tiers at different rates.

I’m okay with that. What I don’t think is okay is just silently blocking access or throttling access, especially to confer advantage in expanding into an area of business outside of the original monopoly.

Comcast’s monopolies are for the cable television business not the general streaming business. They’re using their monopoly cable business to expand into and dominate the streaming business and I have a problem with that.

PD Shaw February 26, 2014 at 4:53 pm

My first principle here is that I want wide access to broadband, whether by cable, phoneline or other, to as many households as possible. My thinking begins along the line of what kind of incentives can the government provide for wider build up? Or does the government need to engage in direct spending, and if so, should the government become a market participant or utilize regulatory controls?

My secondary concern is broadband quality. Is the quality promised the same as delivered? How can the consumer know, and what level of variability should be considered standard? The wide availability of broadband needs to be grounded to a minimum standard, though I see no reason why standard DSL telephone service would not meet it. I want access to phone and cable lines anywhere in a city to means quality access to broadband anywhere in the city, and not simply access to lines sufficient for pre-internet uses.

Third, I want a reasonable price for basic broadband quality, and I don’t want high-end users to drive up the price with their increasing demands. All I know about BitTorents is its a rich source of litigation with lots of interesting questions.

Put together, my priorities probably lack a uniform national approach, what a large city might do will be different from a small city or rural area. My priorities might also require giving money to Comcast for more build out, though that is not the objective.

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