As if in answer to my question Andy Kessler pens an op-ed in the Wall Street Journal which, I presume, gives the broadband carriers’ side of the “net neutrality” argument:
But the Internet cannot function as a public utility. First, public utilities don’t serve the public; they serve themselves, usually by maneuvering through Byzantine regulations that they helped craft. Utilities are about tariffs, rate bases, price caps and other chokeholds that kill real price discovery and almost guarantee the misallocation of resources. I would know; I used to work for AT&T in the early 1980s when it was a phone utility. Its past may offer a glimpse of the broadband future. Innovation gets strangled.
So far the comparison between the major broadband carriers and Ma Bell or the electric companies seems pretty strong. Except, of course, that the broadband companies are profiting from technologies in the public domain or that were invented by somebody else rather than developing any of their own. He continues:
If the Internet is reclassified as a utility, online innovation will slow to the same glacial pace that beset AT&T and other utilities, with all the same bad incentives. Research will focus on ways to bill you—as wireless companies do with calling and data plans—rather than new services. Imagine if Uber had to petition the FCC to ask for your location.
I wish Mr. Kessler had given us some examples of the innovations produced by the major broadband carriers. Offhand I can’t think of any. I can think of scads of “online innovations” produced by small companies or by Google or Netflix but I can’t think of any produced by the major broadband carriers. I tell a lie. Their innovations are in billing: Americans pay more for worse service than people who live in other developed countries do.
In other words, to my eye Mr. Kessler appears to be attacking the innovators on behalf of the freeriders in the name of future innovations that the freeriders will never produce. I said we were living in an age of irony.
The cable company is only responsible for traffic to and from the internet backbone and your house. They must lay and maintain the cable, routers, and switches. They must also upgrade the equipment to take advantage of the latest standards.
Cox is on the DOCSIS standard 3.0 or 3.1, but the could have stayed at 2.0. The higher standard allows for faster bandwidth by bonding two channels. This is more than two separate accounts because they work together. Should I pay for a separate account? Should I pay for the additional capability?
The cable companies have DNS servers located on their networks to speed up traffic, and they have smart switching and routing capabilities to alleviate network congestion. They may also have some co-located servers on their networks to speedup content being served.
Cable TV has a fixed bandwidth usage. Cable internet does not. The problem is that when usage exceeds capacity everybody experiences a slowdown. In the early days, I would do heavy downloads late at night to avoid network traffic. If you wanted to watch a video, you needed to let it buffer enough before starting it.
The iPhone generation believes that the iPhone sprang forth fully developed from the forehead of Steve Jobs, but it ain’t so.
In this battle of cable companies versus government we can only hope both sides lose.
Where’s Godzilla when you need him?