Will Net Neutrality Cure Comcast?

This weekend, Comcast, after fixing one inexplicable problem with my home's on-demand service over the phone, sent a service tech out to look at the TiVo in my living room. He spent a lot of time on the phone with someone who I'm pretty sure was a Comcast tech but may have been a friend or family member, mumbled a lot, and walked in and out of the house without explaining what he was doing. Eventually, he left without fixing the problem, saying only that Comcast would call to schedule a further appointment with an "elite" tech by the end of day, and that I should be prepared for the possibility that it might just be that my TiVo, at just a year and a half old, is too old for their most recent upgrade. Needless to say, Comcast has yet to call to schedule that next appointment.

Why do I bring this up? Because Comcast is a key player in the debate over net neutrality, and it's important for those of us who're skeptical of mandated neutrality to be open about the failures in the ISP market. The broadband market has advanced with remarkable speed in the U.S. -- just a decade ago, it was rare to have broadband in homes; now it's common -- but is not some sort of high-speed utopia.

On the other hand, when neutrality advocates like Jeffrey Rosen treat Comcast as some sort of monopolist, they're wildly exaggerating the problem:

This problem is especially acute in the United States because of our lack of competition among broadband companies in most markets. In many towns, Comcast (or its regional equivalent) is the only plausible supplier of broadband.


It's probably true that there are a handful of rural localities in the U.S. where Comcast is effectively the only option. But FCC data shows that 98 percent of zip codes have at least two broadband providers and 88 percent of zip codes have four or more broadband providers. Competition isn't perfect, but it's a lot stronger than people think.

Rosen is worried that Comcast, as a monopolist, might start, say, charging for access to Facebook, or blocking Verizon's websites. But even if you agree that Comcast is a monopolist, why try to fix the problem through regulation when it might be resolved through competition?

Franchise reform, which would make it far easier for broadband providers to enter new markets, would go a long way to doing that. In Texas, reform has already led to significant improvements, provoking consumer reactions like the following: "The company that had a monopoly had lousy services until competition came, and then they improved their services." Imagine that!

Rosen also takes issue with Comcast's throttling of Bittorrent file-sharing software:

Two years ago, Comcast, America’s second-largest high-speed Internet provider, blocked BitTorrent, a popular peer-to-peer file-sharing application that could be used to distribute (among many other things) high-definition TV video that would compete with Comcast’s video services. The obstruction was discovered by an amateur singer who wanted to share public domain performances of barbershop quartets with his fellow aficionados. After initially denying that it was blocking BitTorrent, Comcast, which was literally denying access to the King James Bible, claimed that it wasn’t blocking the file-sharing application, but merely delaying it to conserve bandwidth as part of "reasonable network management." The Comcast case is a model for the free-speech battles of the future, where Internet and wireless providers may want to favor certain content providers over others in order to maximize profits at the expense of consumer choice.

This is, indeed, a problem. But it's a problem has a lot less to do with net neutrality and lot more with honest business practices. It's one thing for Comcast to limit usage of certain application -- it's quite another for them to deny doing so. But again, neutrality doesn't seem like much of a solution. The fix is to make sure that Comcast clearly discloses the limits of the service it offers -- not force into a predetermined network management scheme.

Rosen also doles out silly bits like this:

You might think that a decision to block the King James Bible would violate the First Amendment, or at least raise important constitutional concerns. But, if Comcast, a private company, is blocking a particular technology, rather than discriminating against particular speakers, there’s no state action and no obvious peg for a First Amendment lawsuit.


Well, no, you wouldn't think that, and the only reason to bring this up at all is to cast Comcast in an ominous light. Just as Wal-Mart can throw out a guy who walks in wearing a sandwich board with the words FUCK GOD scrawled on it, network owners can limit or decline to service certain applications. That's how private property works.

Indeed, the biggest neutrality controversy going right now is whether or not wireless data providers -- the folks who provide mobile Internet to your iPhone or Blackberry -- will be subject to neutrality regulations. In particular, there's been uproar over Apple's decision to block the Google Voice application from its iPhone app store. But again, the Wal-Mart analogy applies. Just as it would be unreasonable to force Wal-Mart to carry every brand or type of good that someone submits, it's unreasonable to expect the same from the Apple store. I'd even agree with Jerry Brito that selectivity can be a good thing, as it suggests carefulness and diligence.

So I'm with neutrality advocates when they complain about crappy ISPs like Comcast, and I'm happy to require Comcast to fully disclose its network management practices, as they now seem to do. But net neutrality, I think, is hardly the best way to resolve these issues; as others have said before, it's a solution in search of a problem.

I wrote about the new FCC chairman's latest bid to expand net neutrality here, and predicted that neutrality advocates were preparing to go after wireless networks here.

Update: Julian Sanchez takes me to task for using sketchy FCC data about broadband competition, which he says is seriously misleading. I actually think the presence of half-decent 3G could help keep faster ISPs honest, at least in some cases, but fair enough. Even still, I don't think we ought to set policy under the assumption that Internet service is an essentially monopolistic business. Instead, we ought to look for ways to free up markets to increase competition. And, as Sanchez says, we ought to be cautious about how regulations might affect future circumstances: "With 4G rollouts on the horizon, we may actually get adequate broadband competition in the near-to-medium term, and might want to be wary about rushing into regulatory solutions that not only assume the status quo, but could plausibly help entrench it."

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  • ||

    Peter,

    What's wrong with your TiVo? Some channels displaying and others blank? Is it throwing you a gray and black screen full of address numbers and telling you to contact your cable company?

  • The Gobbler||

    I think the problem is that he keeps licking everything. Electric gadgets hate getting licked.

  • ||

    Question of the Day: What are Peter and Megan's Season Passes?

    The Rachel Ray Show perhaps?

  • MP||

    I have no idea how your TiVo relates to Net Neutrality. Totally unrelated topics.

    As for Comcast, they walked away from throttling technology and adopted a simple hard cap at 250GB/month. This is more transparent than filtering specific traffic. I have no issue with that cap.

  • Mango Punch||

    Don't worry Peter, I'm sure you can catch reruns of Real Houswives of Atlanta even though your TiVo dropped the recordings.

  • Jordan||

    Maybe Ezra Klein can repair your Tivo.

  • ||

    Hey, now. Klein went to UC Santa Cruz, a veritable hotbed of political acumen and producer of some the finest minds in Hollywood.

    Of course he can fix a TiVo. Assuming it can be fixed with a blank stare and thin drool.

  • Peter Suderman||

    MP,

    Yes, I'm aware that neutrality and customer service are different issues. But I think a lot of people start out as reflexively Comcast because of the company's terrible customer service. And I think the original problem -- lack of disclosure -- stemmed in part from its culture of poor customer service.

    I also think it's useful for neutrality skeptics to be willing to admit that the broadband market isn't perfect. A lot of the debate seems to go back and forth between people saying, "ISPs are the devil!" on one side and "Competition means things are A-OK!" on the other. There's a middle ground here.

  • ||

    A lot of the debate seems to go back and forth between people saying, "ISPs are the devil!" on one side and "Competition means things are A-OK!" on the other. There's a middle ground here.

    Talk about missing the point. The question isn't whether ISPs are perfect or evil. The question is why anyone would think that putting a nice, thick layer of government bureaucracy on top of the ISPs will improve anything.

  • Bill & Karolyn Slowsky||

    Why would anyone not think that?

  • ||

    98% of zipcodes have at least two broadband providers? Well that certainly doesn't sound like a misleading stat at all. Ooops! It is!

    First, read the damn report rather than skimming through it for stats that supposedly support your theory. Second, notice the context. The stat you cite to means that most zip codes have a phone company and a cable company. This is your idea of competition? Two monopolies that offer internet in connection with their primary business? Hell, it would have been a better argument to say that 3G service is available in more places. And breaking things down by zip code? I lived for 8 years in a zip code where I was forced to have DSL while neighbors across the street had cable.

    So when you say that competition is a lot stronger than people think, I would submit to you that the realities on the ground contradict your thesis.

  • ||

    Bingo! The idea that competition exists in 88% of the country is preposterous...

  • Thom||

    This is exactly right. Most of that competition is between a superior product and an inferior product. It's not real, apples-to-apples competition. I'm a Comcast broad-band customer and will be into the foreseeable future, but that's because my only other choice is Verizon DSL. It has nothing to do with Comcast being good at what they do. And the moment that Verizon gets around to install FIOS I'm defecting. Comcast's entire business is built on their status as a monopoly.

  • I, Kahn O'Clast||

    My choices are Qwest DSL or Grappa Wireless, the latter being somewhere in between the DSL and dial-up and which drops out frequently. Some competition!

  • ||

    Two companies in most major markets own the infrastructure, which by the way was mostly built during a time of government-granted monopoly.

    We can talk about adding a layer of government bureacracy, and that is a valid discussion. But to be such a pro-corporate stooge that you fail to recognize that the infrastructure and competitive arena was formed under government control is too much.

  • ||

    Agreed.

    The level of government control is also why broadband speeds in the US are an absolute joke compared to most of the rest of the world (especially Asia).

  • ||

    On talking about this subject, I once had a liberal ask me, with a straight face, "How would you like it if there were 12 companies stringing cable on the telephone poles outside your house?!"

    My answer, not surprisingly, was "You bet. Just think of the deal I could get from one of them."

    You can see what the priority here is: not that we have competitive and inexpensive service, but that we can brag about the tidiness of overhead lines on our street.

    'Zere must be ohrdehr.

  • kinnath||

    I live in the sticks. No cable TV; no DSL phone lines. Boo Hoo.

    I guess I just have to be satisfied with Dish Network and my wireless broadband service.

  • ||

    Peter--Get FiOS (if you can). Problem solved and you won't miss Comcast one bit.

    Yeah, I know, trading one duopolist for another, but at least Verizon is betting the farm on fiber, rolling it out nationwide, whereas Comcast is betting on their lobbyists.

  • ||

    Thank god for AdBlock in Firefox. I can block out creepy iPhone licking hipster doofus! [shudder]

  • Library Desk Graffiti||

    that's an insult to hipsters, you racist

  • Rich||

    the problem with those federal stats is that they describe a zip code as having "access" to broadband if 2 or more houses in it can get service. there are quite a few zip codes that border Beverly Hills, where Verizon has deployed FiOS widely, where more than 90% of homes have access only to broadband from the cable company or significantly slower but priced just as high DSL. My home, in a middle class suburb, is too far from the phone switch to get DSL that goes as fast as the wifi can retrans the signal, and since we don't collectively make enough money for Verizon to care, our options are Time Warner cable, a hundred bucks a month to Verizon for their mobile access point, or dial-up.

    and we don't live in the sticks. we live in suburban Los Angeles. if it can happen here, etc.

    which isn't to say that legislation is necessarily the best answer, but i submit that for rather more than 2% of the country, the market has yet to solve the problem on its own.

  • kinnath||

    The market has solved the problem.

    There is no business case to rewire the telephone lines that go to your neighborhood.

    Eventually, wireless services will solve your predicament.

  • Rich||

    at $100 a month I don't consider the problem solved.

  • kinnath||

    That's your problem. That does not constitute a market failure.

  • Rich||

    and libertarians wonder why people consider them rude...

  • kinnath||

    This is why we consider progressives to be leeches.

  • kinnath||

    There is never going to be a positive business case to run wire for high-speed service to every home in the US, regardless of whether or not those homes are rural or urban. The cost per mile can be far higher to install wires in heavily populated areas due to conflicts with existing infrastructure and regulations.

    I get tired of people bitching that the "market failed" because no one is willing to start a business that has a negative business case.

    If you want to propose that internet service should be a publicly regulated utility like electric and phones, then make that argument. Just quit using "market failure" to mean something it doesn't.

  • Mo||

    Considering that most cable companies have been grated local monopolies, it's hard to say there's a free market. As of the late 90s, 99% of households could only pick one cable company and from my observations (having lived in 8 different markets since then) that number has likely not moved much.

  • kinnath||

    Dish Network & DirecTV . . No cable company has a monopoly.

  • ||

    "Dish Network & DirecTV . . No cable company has a monopoly."

    Cable companies have hardwired connections that can deliver a number of products. So when people say "the cable company", they aren't just talking about watching TV. "Cable company" is not the same as "TV content delivery company".

  • kinnath||

    "Cable" one-way delivery of digital content which may or may not be package with bi-directional TCP/IP traffic.

    Satellite broadcast and satellite internet service exist today. No cable company has a monopoly on TV or internet service anywhere in the lower 48.

  • ||

    So, you admit that they doesn't broadcast to Alaska and Hawaii.

    MARKET FAILURE!!

  • kinnath||

    I'm not positive one way or the other. I assume that Hawaii and Alaska have other attractions besides high speed internet services ;-)

  • Mo||

    There are tons of places that don't have access to satellite television. Primarily in apartment buildings or places where the southwest sky is blocked

  • kinnath||

    As far as I know, the government does not ration housing. So Americans are actually allowed to choose where they live. So you don't get to bitch about the sky being blocked where you live.

  • Mo||

    No, it's just evidence that you're full of it when saying "No cable company has a monopoly on TV or internet service anywhere in the lower 48".

  • kinnath||

    The fact that service coverages areas are not one-to-one does not alter the fact that the various cable companies have substantial competitors through the US market.

    You and Lamar seem to expect that some fairy is going to wave a wand and every mailing address in the US is going to have equal coverage from every available service provider. You two are the ones that are full of shit.

    Here in the midwest, Mediacom, Dish, and DirecTV spends lots of advertising dollars to impress upon potential customers that they are far superior to the others. That is competition.

  • ||

    Actually, that's what is driving Verizon to push out a fiber network. Copper is much more expensive to maintain than fiber over the long-term, not to mention, have much lower value as a product.

  • ||

    kinnath: That's very Barack of you....to claim that "Eventually" the problem will be solved and therefore "the market has solved the problem".

    No, the market did not solve the problem. It may in the future when the long lasting effects of government-granted monopolies wears off. But to proclaim that day today is just not realistic.

    Here's the thing that your incredibly arrogant yet small mind doesn't realize: the high barriers to entry into the market are largely a result of years of government-granted monopolies. So you can prattle on and on about what a market failure is. Just know that being an asshole about everything doesn't mean you understand markets.

  • ||

    Lamar--Not to speak for kinnath, but yeah, we get that. That local franchise agreements have fucked the market for everyone is a given.

    Adding even more layers of bureaucracy isn't the answer to better Internet access. Getting rid of the franchise agreements is, but we have to wean the locals gummints off of their yummy franchise fees first.

  • kinnath||

    There are at least two satellite service providers. 3G is common and 4G is being rolled out in test markets.

    "Eventually" is near term, not long term.

    Government regulation is certainly hurting the business. But the real problem is the cost of laying wire or fiber.

    The market is not free, but it is functioning. When the market cannot support a particular business, then that business does not happen. That is not failure; that is the market working even if it is inefficient due to government regulation.

  • ||

    "When the market cannot support a particular business, then that business does not happen. That is not failure; that is the market working even if it is inefficient due to government regulation."

    If the barriers to market entry are a result of the government intervention, that is not a sign that the market is working.

  • kinnath||

    That would be a symptom of a government failure -- that was the point you were trying to make?

  • Mo||

    I think the issue is that the cable and phone companies have government granted monopolies. That is why their customer service is atrocious. If you don't like Time Warner, you can't call Comcast and use their cable. If you're lucky, you can call DirecTV or FIOS, but many people can't. To use your Walmart analogy, if I hate the way Walmart treats you as a customer, you can go to Target or use Amazon.

    Their customer service sucks for the same reason why people don't want to give them power to throttle broadband, they're largely the only game in town.

    Also, if ISP start prioritizing traffic, they should lose common carrier protections.

  • ||

    I live in the sticks. No cable TV; no DSL phone lines. Boo Hoo.

    I guess I just have to be satisfied with Dish Network and my wireless broadband service.

    Ditto. Although I don't even have broadband; I have to pay through the nose for satellite intertube access.

    MARKET FAILURE! Net neutrality, you're my only hope!

  • ||

    You said it! Once we get these regulations passed Comcast will have no choice but to wire your house in the boonies, since the existing lines won't be as profitable.

    That's how markets work, right? When things are less valuable and/or have a lower ROI, you make more of it to make up for the difference!

  • kinnath||

    When I built my house, I was going to install a dual service satellite antenna (Dish and Starband). The licensed dealer that I called was running a small enterprise that put wireless access points on water towers in little towns. So he sold me his service instead of the satellite internet.

    Still, the market has no obligation to provide high-speed internet services to people that want to live away from everyone else.

  • ||

    I've made this very case to boonies-dwelling lefties and all I got in return were blank stares.

    Evidently it is the god-given right of every American to have high-speed Internet access. You know, since we're the only western nation that doesn't have directly gummint subsidized high-speed.

  • ||

    It's something that no one can live without. It just shouldn't be left in the hands of PROFITEERING companies.

  • ||

    "Still, the market has no obligation to provide high-speed internet services to people that want to live away from everyone else."

    And if it were truly a case of a few yokels living in the sticks, nobody would care. This is about companies serving large swaths of the population that have an unearned advantage due to being a government-granted monopoly in communications. So while the market has no obligation to anybody, monopolies do.

  • kinnath||

    And you want to fix this by making more regulations? Or are you just on the rag today?

  • ||

    Yes, I'm shedding my endometrium. And whether "eventually" is near term or far term, it isn't now. Telecom has successfully reduced its level of regulation as new actors (mostly cell phones) came into the market. There's no reason to believe internet would be any different. Regulations are generally bad, but removing regulations has to be done with care, and that includes sometimes adding a regulation or two to simulate the market (albeit inefficiently). Market competition can't be turned on and off like a spigot. Once the government grants monopolies, it takes a long time to extricate itself.

  • kinnath||

    Regulation won't make it now either. The fastest way to better is to strip cable/phone companies of their exclusivity. Either the existing service providers will get a lot better, or competitors will start laying wire, or someone with a vision will buy up the existing wires.

    At any rate, the pace of technological development will make wireless the best delivery mechanisms for the last mile. Wires will remain in place to support corporate users that need massive pipes, but I don't see anyone laying a lot of new wire out to houses or small businesses unless they happen to be in close proximity to major trunk lines.

  • ||

    Which regulations would that be? Like the 96 Telecom act? That was a rousing success of turning telecom startups into welfare queens which didn't need to run their own infrastructure. All they had to do is sponge off of the ILECs and demand below market prices on their lines so to resell the same service.

    Then, when the FCC changed the pricing rules 2002, POOF! There goes that market. Will all the surviving CLECs please raise your hands? Yes, both of you.

    The best defense against monopolies is to not intentionally create them to begin with. It saves a lot of trouble later.

  • Bob Smith||

    Franchise reform doesn't mean monopolies will be overturned. Despite franchise reform in Texas, Verizon still hasn't brought FIOS to Houston (a Comcast area), and the general concensus is that it will never bring FIOS to Houston.

  • ||

    What? Is there a bug-red shiny button somewhere that rolls out fiber overnight to everywhere?

    I get the feeling that general consensus doesn't know what the fuck he's talking about. Rolling out to-the-door fiber is going to take some time, considering that they can only do it as fast as their profits and investors will allow.

  • Bob Smith||

    FIOS doesn't go into any area where AT&T owns the local phone lines. San Antonio and Houston are former SBC markets.

  • IceTrey||

    The whole broadband debacle is caused by the Feds not allowing high power ultrawide band. If we had UWB everyone would have gigabit+ speeds and no bottlenecks. Of course it would put Comcast out of business...wait that would be a good thing.

  • ||

    You drift into an error many people make. Your BB provider is transporting bits, nothing more. You can send to and request bits from Facebook, MySpace, this blog, whatever. They are just bits. For your ISP to try and say some bits are more vasluable then others is wishfull and dishonest thinking on their part. Remember, both you and Facebook are already paying to transport those bits and the ISPs have peering contracts with each other to keep them flowing. They have no basis for prioritizing bits based on the source.

  • kinnath||

    You are nothing more than a collection of atoms, and your collection of atoms is no more significant than an equal mass of clay.

  • ||

    Remember, both you and Facebook are already paying to transport those bits and the ISPs have peering contracts with each other to keep them flowing.

    Furthermore, those ISPs laid all that cable and infrastructure for nothing, so they shouldn't even be charging us anything. It's true! All the materials and labor were free!

  • kinnath||

    I doubt that my ISP does anything more than rent a spigot from some telecom's pipe.

  • Sandy||

    Remember, net neutrality was sparked by Verizon and Comcast openly wondering if regulators would let them out of their peering agreements to discriminate on traffic. Net neutrality largely enforces existing peering agreements.

    Second, when I think of "innovation," I think of Verizon, Comcast, and Time Warner. Yeah, right. These services all have the means to offer discriminatory network services if they wish: simply roll out a new network service and don't call it "the internet." They can be CompuServe all over again if they wish. The trouble is, we already had market competition on that point and the market spoke pretty loudly, unless you still use dialup to get your Prodigy on.

    Third, I'd be happy for the local monopolists to give up neutrality if they want to give up being common carriers. Your telco doesn't discriminate on phone connectivity depending on the number you call, so they're common carriers. Your bulletin board doesn't pre-screen submissions, so it's treated like a common carrier. But if they want to discriminate on packets, let them be responsible for all the content that flows in and out of their networks, too. Am betting they'll not want to take the flipside of responsibility in order to favor ComcastTunes over iTunes, or RealCompetitionMagazine over, say, Reason.

  • ||

    Net neutrality largely enforces existing peering agreements.

    To that extent, then, it is redundant.

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