Re: Network Neutrality and Groundhog Day

[David Farber <dave () farber net>]

Begin forwarded message:

From: Brett Glass <brett () lariat net>
Date: November 12, 2008 11:40:11 PM EST
To: dave () farber net, "ip" <ip () v2 listbox com>
Subject: Re: [IP] Network Neutrality and Groundhog Day

At 05:07 PM 11/12/2008, Lauren Weinstein wrote:

> Let's start with a number.  According to best public estimates right
> now, the top 5 ISPs have over a 55% U.S. market share.  The top 23
> hold more than 75% market share

And several of those "top 23" are neither telephone companies nor
cable companies.

> Everyone else, including most of those 4000+ wireless ISPs that
> Brett likes to talk about, are clustered down in the remaining less
> than 25%.

However, some of them are fairly close to the top. And some of them,
ironically, are dialup providers and so should not really be counted
if one is talking about broadband.

> Brett portrays his (often laudable) business practices as if they were
> representative of the ISP industry at large.  But even his own
> statements illustrate why so many observers put the dominant ISPs in
> a completely different category.  From Brett's last posting here in  
> IP:
>
> "While the government seems intent upon making it impossible for
>  us to compete by denying us reasonable access to radio spectrum
>  and by allowing the telephone and cable companies to engage in
>  anticompetitive practices with impunity (witness the Trinko
>  case), we are surviving and growing nonetheless."
>
> Who are these "telephone and cable companies" being referred to?
> None other than the dominant carriers with that monster Internet
> access market share!

The table to which you refer does not show market share; it shows
numbers of subscribers. To interpret the numbers as "market share" is
misleading, because none of the carriers serve all markets.

Furthermore, while the telephone company that's competing unfairly
against us (Qwest) is on the list, the cable company (Bresnan) is not.

> Why aren't wireless ISPs on the radar for most consumers?  In many
> cases, it's because they are not accessible for technical reasons in
> a given location,

This is not correct. More than 98% of the US population is within
reach of a WISP and able to connect to it.

> or can't offer a similarly attractive price/performance package as the
> dominants,

Also incorrect. We actually offer more bang for the buck in many cases.
The anticompetitive tactics to which I refer do impact our profit  
margins,
though, making them narrower. As a small business we can run leaner
than the big guys. But we'd like to grow much bigger, and that will
require better margins if we are to do it in a timely way.

> First, it must always be remembered that whatever Google's scope,
> your friendly ISP has it beaten in terms of your data seven ways from
> Sunday.  Every single blessed byte you send or receive, every TCP or
> UDP connection you directly establish, every piece of e-mail passes
> through your ISP.  That is power with a capital P.

You're assuming that all of the data is unencrypted and that the ISP
is interested in, and capable of, using all of it. In fact, none of
these things are the case. What's more, the ISP has no interest in
compiling a dossier on you. Google/Doubleclick certainly does.

> And how did these ISPs attain such exalted positions?  Much of the
> time, simply by edict.  Your local DSL and cable firms are usually
> the direct descendants of the basic telco and CATV services that
> were typically granted monopoly (in the most basic sense of the word)
> status in any given location.

Again, you neglect independent and wireless ISPs -- which, if they are
taken into account, invalidate this argument.

> Google is entirely different.  They weren't granted any exclusive
> establishment rights by municipalities or other government
> entities.  They didn't even twist arms the way that courts have found
> Microsoft guilty of widely doing.

And neither did our ISP. But Google's attempts at a deal with Yahoo
amount to maintenance and expansion of a monopoly -- which IS
illegal.

> A firm that achieves market dominance in any business segment
> through its own hard work and customer satisfaction is *not* the
> same as a company that achieved dominance by virtue of special
> privilege grants or illicit manipulation of the marketplace.

By your own admission, above, the overwhelming majority of ISPs got
no such special help from the government and do not have the power
or desire to manipulate markets.

In short, Lauren, you are conjuring up bogeymen. And when confronted
with evidence that ISPs are not in fact monopolies, you are making
desperate attempts to deprecate the competition.

--Brett Glass







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