Richard Freeman on 4 Dec 2010 05:32:08 -0800

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Re: [PLUG] Net Neutrality

On 12/03/2010 11:44 PM, Doug Stewart wrote:
> Not everyone's fer it -- I, for one, am agin' it. I'd rather have
> companies, competing against each other, with a small measure of
> accountability to their customers "in charge" of this field, as
> opposed to nameless, faceless gov't bureaucrats with zero
> accountability and no market pressures to keep them in check.

I would agree, but only if last-mile data carriers were forbidden from
offering any content services, or a connection to the internet, and that
they could not be owned by companies that do any of these either.

They should provide a connection from my house to the central office,
and charge me by the byte (on a shared line), or by the month (for a
dedicated line).

They would then terminate that line at the CO at an ISP of my choice,
with that ISP only paying a nominal fee for colocation space.

So, I might use Comcast as my last-mile provider, and AOL as my ISP.
Or, I might use Verizon as my last-mile, and Google as my ISP.

Since all Comcast does is move packets along the last mile, and they
charge by the byte, they cannot filter or prioritize by content (in
fact, they have no incentive to do so).  Comcast, of course, could only
keep either its data business, or its TV business, being forced to sell
the other.  Ditto for Verizon.

The last-mile provider would be price-regulated by the PUC just as is
the case with electricity and local phone service.  Beyond that things
would be fairly deregulated.

I think that this is the only way a free-market can regulate the ISP
business.  The problem is that rights of way and costs of entry keep the
last-mile internet business down to a few providers (and in many areas
really only 1).  However, once you get past the last mile then
competition could actually work.  So, you just have to keep last-mile
providers from vertically integrating and then using their power to
control the entire rest of the industry.

Imagine what would happen if PECO sold light bulbs and appliances, and
they were allowed to sell flat-rate "unlimited" electric service, but
they would have caps on power use for non-PECO appliances?  Sometimes it
just makes more sense to meter the use and then let consumers do
whatever they want with it.  PECO would never complain if I were a
"power abuser" - they'd happily run 30kV 3-phase to my house as long as
I consumed the power.  In fact, my rates would probably go down the more
I "abused" my service.

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