Verizon Thinks 'The Most Important Concept Of Net Neutrality' Is Giving Verizon More Money
from the feel-healthy-yet? dept
It's pretty clear at this point that after nearly a decade of histrionics and hyperbole on all sides that the definition of net neutrality has been somewhat warped. That's in no small part thanks to the larger carriers like AT&T and Verizon, who have consistently done their best to argue that they need to be allowed to engage in "creative" and "innovative" new pricing (read predatory price gouging) or they simply won't invest in the networks of tomorrow. Between the recent peering debates and Verizon's defeat of FCC neutrality rules things are as murky as ever.Verizon's defeat of the FCC's neutrality rules was a double-edged sword for the company. On the one hand, they killed the rules (which they helped craft with Google and AT&T, and as a result did little), but on the other end, their real goal was to kill FCC authority to regulate broadband for good. Instead, the court re-enforced that the FCC does in fact have some (albeit shaky) authority to regulate broadband providers and impose neutrality rules, they just have to argue their case differently. All in all, things are murky as hell on the net neutrality front, but apparently not for Verizon CEO Lowell McAdam:
"McAdam addressed the U.S. Federal Communications Commission's proposed net neutrality rules during a conference call about the company's acquisition of Vodafone's 45 percent stake in Verizon Wireless. The FCC's move this month to resurrect net neutrality rules should provide "clarity" for the broadband industry, said McAdam, whose company successfully challenged an old version of the regulations in court."So McAdam apparently believes by throwing a stick in the spokes and killing the existing neutrality rules (which again, most ISPs liked because they did little to nothing, and didn't touch wireless), his company has brought "clarity." But what McAdam thinks is the most important thing for people to take away from the neutrality discussion is that paying Verizon increasingly more money is the truly important part:
"McAdam dismissed concerns that his company would selectively block or slow some Web content. "We make our money by carrying traffic," he said. "That's how we make dollars. So to view that we're going to be advantaging one over the other really is a lot of histrionics, I think, at this point." But McAdam suggested that broadband power users should pay extra. "It's only natural that the heavy users help contribute to the investment to keep the Web healthy," he said. "That is the most important concept of net neutrality."That people already paying an arm and a leg for bandwidth never somehow pay their "fair share" has long been the cornerstone of the industry's effort to impose usage caps and overage on wireless and wired networks alike. In reality, it has never been about heavy users paying more, it has always been about all users paying more. And more. And more. One thing I believe Verizon can take comfort in is that while there's some uncertainty about what the new FCC rules will be, I think they'll largely be superficial in nature and will go to great lengths to avoid tramping Verizon's right to make the Internet "healthier" through abusive pricing practices.
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Filed Under: bandwidth, broadband, fcc, net neutrality
Companies: at&t, google, verizon
Reader Comments
The First Word
“getting them to invest in the networks of today would be a good start!!
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Then again, when all the carriers/broadband providers of the nation have the same price, you'd figure someone would take notice.
Instead, T-Mobile shakes up the wireless industry with its price change.
Perhaps T-Mobile should get into the broadband market.
Then, perhaps we'll start seeing better prices given that most broadband providers now demand service contracts.
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Red flags go up
People who use these terms cause perfectly capable poor people in the world to starve. Then, they get shiny desks at some non-profit, directing the dumping of dirt-cheap goods on said countries' markets to further undermine their productive capacity while maximizing tax write-offs for their clients.
I used to think TechDirt was better than this.
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They just don't get it...
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Re: Red flags go up
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Re: Red flags go up
How else would you describe companies taking advantage of their monopoly, or near monopoly, positions to charge insane rates to their customers, knowing that no matter how lousy their service, or how expensive it is, they will still get away with it because there are no other options.
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Why don't they give us an option?
Give us an Internet plan with a $30 line charge, a 10mb/s minimum commit, and charge us $4/mbit on the 95th percentile of dedicated bandwidth? They'll have at least 300% profit on that.
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Re: Red flags go up
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Now don't get me wrong, I believe the right to pursue profits, but we need to start employing fact-checkers in-between the corporations and lawmakers.
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Re: Red flags go up
Exactly. Along with "crony capitalism". It's all just good old "capitalism", which all the commie socialists just hate. Techdirt has turned into a haven for left-wing nut-jobs.
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Re: Red flags go up
People who use the word predatory are killing poor people? Wha?
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Heavy users...
But in my (not so) humble opinion, when I pay for 10 Mbits a second, I should damn well be able to use that 10 Mbits a sec for the course of the period! Stop selling me 'Unlimited Data' in your advertising if that's not what you're selling!
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All of this hokum is about charging you more for the same service. No provider turns away potential customers because they are exceeding their capacities. They could of course roll out new equipment and activate a new strand of fiber but it is about charging you more, not about improving services.
I notice that prices constantly creep up but the service doesn't. In fact over time it seems to degrade. Until we actually have competition nothing on this is going to change. If you take notice, where Google comes in with fiber, suddenly in those markets, the incumbents are willing to do more to improve their services. This did not happen until Google showed up on their block.
That pretty much tells you exactly where the problem is and what it is about.
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Re: Re: Red flags go up
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You can't hear me anymore!
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getting them to invest in the networks of today would be a good start!!
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Re: Red flags go up
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Re: Re: Red flags go up
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Re: Re: Red flags go up
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Re:
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Re: Re: Red flags go up
(b) is not just lazy, but it reduces the incentives for, and usually even legal possibility of competitors entering an industry. When competitors do not enter the industry, you get interest groups fighting over some monopoly's surplus, not market forces. We are still living with the repercussions of the regulatory barriers to entry in the telecom industry.
In a different context, for example, in a country where there is a food shortage, people who actually invested in food production, storage, distribution, actually get to make a windfall profit. If they can keep that profit, it gives others an incentive to invest in things like food production, storage, and distribution.
However, in most instances, such as in the case of gas prices in the wake of Sandy, people start crying about "price gouging" and "predatory" behavior, and enlist politicians to steal other people's property by not allowing prices to rise to reflect the shortfall in supply relative to demand. You get low prices on the signs, but no gas in the tank. You get low prices in the grocery stores, but no food to buy.
In the case of the poor country with a food shortage, rich, Western countries not only do not object to the destruction of the profits of productive people in such countries, they actively sabotage them by immediately dumping whatever surplus food, shoes, blankets etc their producers could not sell. Therefore, no one ends up having the incentive to actually make or distribute these things in times.
So, crying about "predatory behavior" and "price gouging" causes people to go without food, without gas etc.
In the case of telecoms, you must ask why these companies seem to be able charge the prices you do not like. Assuming they are making a boatload of economic profit as you seem to imply, why are other competitors not coming in? Why are people not coming up with providing alternative access methods?
There is a simple answer: Barriers to entry in this industry, as in the case of taxicabs, and many other things, are backed by government power. It is not just FCC regulation. Patents, tax structures, etc also stand in the way potential entrants.
So, if you want the telecom market to improve, think about how to bring in more competitors, not another granting another power to government bodies.
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Re: Re: Re: Red flags go up
You'll excuse me if I stop reading at this over-simplification and distortion of a point and go have some ice cream.
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Re:
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Re: Re: Re: Re: Red flags go up
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Re: They just don't get it...
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Re: Why don't they give us an option?
Oh yes they blame torrenting for the high traffic people use but these days it has changed the most traffic is being used for legal access to legal services that are going to become more available as people improve and increase the production of free video and free access to movies, as per Google and many other sites.
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Re: Re: Red flags go up
I wish there were not so many shills for the industry on here, it is becoming trying replying to them to correct their lies.
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Re: Re: Re: Red flags go up
You want something. You don't think it's worth the price the supplier is charging. You have some alternatives: a) don't buy it, don't do anything; b) cry "price gouging", "predatory behavior" and get politicians to steal the fruits of someone else's efforts and give to you at supposedly a lower price.
Say what? Permitting some competition would actually solve the problem. There is such thing as a middle, you know. And what do you mean by "the fruits of someone else's efforts?" Verizon is making very little effort because it has no incentive to. If some competitors came in, they'd have to raise their game or lose out to T-Mobile, etc.
(b) is not just lazy, but it reduces the incentives for, and usually even legal possibility of competitors entering an industry. When competitors do not enter the industry, you get interest groups fighting over some monopoly's surplus, not market forces. We are still living with the repercussions of the regulatory barriers to entry in the telecom industry.
Which are...? Name one.
In a different context, for example, in a country where there is a food shortage, people who actually invested in food production, storage, distribution, actually get to make a windfall profit. If they can keep that profit, it gives others an incentive to invest in things like food production, storage, and distribution.
In every famine/shortage situation I know of, what happens is that some people either hoard food or interfere with distribution to drive up prices. You're not really interested in the causes of famine and shortages, are you? It's not as simple as you pretend.
However, in most instances, such as in the case of gas prices in the wake of Sandy, people start crying about "price gouging" and "predatory" behavior, and enlist politicians to steal other people's property by not allowing prices to rise to reflect the shortfall in supply relative to demand. You get low prices on the signs, but no gas in the tank. You get low prices in the grocery stores, but no food to buy.
Please, for the love of God, STOP pretending there is such a thing as "the free market." It's a MYTH, damn it, and creating artificial shortages by hoarding is stealing the people's money, if you want to look at it in terms of money/profit = property. The moment you intervene in the free exchange of goods and services by constricting supply or stimulating demand, the market is not free and pretending that it is causes the poverty and starvation you described earlier. Those "windfall profits" end up being spent on the other things that tend to run short in a crisis, so it's only beneficial if you can hoard ALL of the necessities you require. Few of us can do that.
In the case of the poor country with a food shortage, rich, Western countries not only do not object to the destruction of the profits of productive people in such countries, they actively sabotage them by immediately dumping whatever surplus food, shoes, blankets etc their producers could not sell. Therefore, no one ends up having the incentive to actually make or distribute these things in times.
Now, now, you're advocating that we "steal the fruits of someone else's efforts" - in this case, those of people in rich, western countries. If over-supplying the market to drive prices DOWN is theft, what of the reverse? Why is under-supplying the market to take advantages of people's needs NOT theft?
So, crying about "predatory behavior" and "price gouging" causes people to go without food, without gas etc.
Sorry - HOW does crying about "predatory behavior" and "price gouging" cause people to go without food, without gas etc.? Those things continue to be needed and in the case of the USA, they are abundant and compared to the rest of the world, quite cheap. So relatively few people go without food, gas, or the other things they need. Yes, there is poverty in the US, but there's also food and gas.
In the case of telecoms, you must ask why these companies seem to be able charge the prices you do not like. Assuming they are making a boatload of economic profit as you seem to imply, why are other competitors not coming in? Why are people not coming up with providing alternative access methods?
Because, in many cases, they've made it so that THEY ALONE supply that particular service and actually ban competitors from entering the market. In some cases, this means that the will of the people is subordinated (when municipalities cannot set up broadband, for example) to that of the telco, in this case Verizon, though they're not the only one that does it.
There is a simple answer: Barriers to entry in this industry, as in the case of taxicabs, and many other things, are backed by government power. It is not just FCC regulation. Patents, tax structures, etc also stand in the way potential entrants.
Uh, you've forgotten about the mergers and consolidation that keeps entrants out. That's because the anti-trust laws we have on the books aren't being enforced, as they should. That bit of government power would enable other entrants to compete.
So, if you want the telecom market to improve, think about how to bring in more competitors, not another granting another power to government bodies.
So, at the end of your confused Libertarian rant, we're blaming the government for everything, but not the innocent-of-all-wrongdoing companies. As I've stated, when companies become too powerful by becoming too big to let other companies in, the exercise of government power to break them up via anti-trust laws is the answer.
As for your other complaint about under-pricing wrecking the economies of poorer countries, it'd solve the problem there because they wouldn't have the buying power to flood foreign markets with cheap goods.
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Internet Must Go
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Re: Re: Re: Red flags go up
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Re: Why don't they give us an option?
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Does that sound like they are committed to increasing investor value?
They can keep their horse and buggy, I'll be in my core vet.
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