ISP’s are in an interesting position. As some have touched on there is a cost to compete element to the game but even here it’s not the full picture. As google fiber found out the hard way when they attempted to start rolling out their service to cities across the United States, utilities and the conduits they run through be it on a pole or underground are heavily regulated and the easements on who owns rights a legal quagmire. The second part is that most jurisdictions award a single company full access to these easements as a common carrier and in doing so grant them a natural monopoly. This is due to the reality that there is only so much room available within the infrastructure and having many companies attempting to run their own services would quickly use up all available space. It’s the same issue with in the wireless broadband market with contracts and bids for parts of the designated spectrum as well as contracts for places to place ones antenna. So the first part of the issue is not just the startup capital required but the natural limitation either with in the physical space or with in the electromagnetic spectrum so the best solution is still to allow a few companies to operate as a service provider as a common carrier and provide the service for the community.
Given the natural limitations on who can provide internet content it becomes problematic when the common carrier is also capable of filtering what content is available to the end user. Netflix is a great example as they are in direct competition with most cable broadband provider’s corporate holdings. So while they might not be able to completely deny you access to Netflix they can easily slow down traffic coming from Netflix’s servers to the point where it’s impossible to stream any movie without massive amounts of buffering. At the same time they can promote their own content solution at a price slightly more than Netflix or a lot more and what choice do you have? We have seen a similar trend with cell phone providers were they will offer perks with Pandora in that Pandora streaming does not count against your monthly data cap. But if you want to listen to Spotify instead you reasonably can’t.
So while healthy competition is great as it spurs on development and increases options to the consumers due to the very nature of the physical connection and its limited space there is not a lot of options or competition. The end result should be that service providers should not also be allowed to be content providers. While the FCC cannot prevent these companies from being both it attempted to prevent them from favoring their own content over their competitors.
Maybe the solution is not to attempt to force them to treat all data equal but to break up these companies and put into place the ruling that service and content cannot exist within the same umbrella.
Given the natural limitations on who can provide internet content it becomes problematic when the common carrier is also capable of filtering what content is available to the end user. Netflix is a great example as they are in direct competition with most cable broadband provider’s corporate holdings. So while they might not be able to completely deny you access to Netflix they can easily slow down traffic coming from Netflix’s servers to the point where it’s impossible to stream any movie without massive amounts of buffering. At the same time they can promote their own content solution at a price slightly more than Netflix or a lot more and what choice do you have? We have seen a similar trend with cell phone providers were they will offer perks with Pandora in that Pandora streaming does not count against your monthly data cap. But if you want to listen to Spotify instead you reasonably can’t.
So while healthy competition is great as it spurs on development and increases options to the consumers due to the very nature of the physical connection and its limited space there is not a lot of options or competition. The end result should be that service providers should not also be allowed to be content providers. While the FCC cannot prevent these companies from being both it attempted to prevent them from favoring their own content over their competitors.
Maybe the solution is not to attempt to force them to treat all data equal but to break up these companies and put into place the ruling that service and content cannot exist within the same umbrella.
