Broadband Provision and Net Neutrality

by Henry Farrell on June 13, 2006

The Washington Post “comes out against”: net neutrality today, trotting out a bullshit telco industry talking-point as if it were established fact.

bq. The advocates of neutrality suggest, absurdly, that a non-neutral Internet would resemble cable TV: a medium through which only corporate content is delivered. This analogy misses the fact that the market for Internet connections, unlike that for cable television, is competitive: More than 60 percent of Zip codes in the United States are served by four or more broadband providers that compete to give consumers what they want — fast access to the full range of Web sites, including those of their kids’ soccer league, their cousins’ photos, and the Christian Coalition. If one broadband provider slowed access to fringe bloggers, the blogosphere would rise up in protest — and the provider would lose customers.

It ain’t the “advocates of neutrality” who are being absurd here. The claim that “60 percent of Zip codes in the United States are served by four or more broadband providers that compete to give consumers what they want” is based on FCC statistics that are widely recognized (except by industry hacks) to be useless for this purpose. As this “Government Accountability Office report”: discusses, the FCC zipcode survey doesn’t provide any data on how many subscribers are served by particular broadband providers within zipcodes. It indiscriminately includes satellite broadband service, which isn’t a significant option for most consumers (and is only just about broadband in any event), in zip codes where there is at least one subscriber to the service. Furthermore, it lumps together (a) data on broadband services that cater to specialized business needs and (b) data on consumer broadband, as if they formed one and the same market. The result is that it grossly overestimates the degree to which there is actual competition in consumer broadband markets. The GAO estimates that when you exclude irrelevant providers, the median number of household providers in each zipcode is two. The claim that market forces will miraculously protect consumers and resolve the network neutrality problem is unsustainable; there probably isn’t a competitive market in most municipal regions in the US, let alone rural areas. Perhaps the Post editors weren’t aware of this, but I suspect that this is because they didn’t think it was part of their job to find out. Garbage journalism, pure and simple.



Evan 06.13.06 at 3:40 pm

And of course, pro-net-neutrality arguments can always be characterized as “bullshit Amazon/Google/Yahoo/Microsoft/eBay talking points.”

Don’t get me wrong, I think it’s great that Amazon, et. al happen to be on the right side of this issue from a public-good perspective. But let’s not kid ourselves — this is all just a giant exercise in rent-seeking. As such, it’s not about our rights, or what would be best for us, it’s *all about* bullshit lobbyist talking points. May the best talking points win.


abb1 06.13.06 at 3:45 pm

They’ll kill the internets, I have no doubt. It’s too democratic, they won’t put up with it. Ten years from now it’ll be a package of sports, movie and news sites with obligatory variaty of shopping urls. And with pop-up ads you can’t stop. Resistance is futile.


Adam Kotsko 06.13.06 at 5:40 pm

Maybe once the Internet is destroyed, we can all meet up and talk to people in person.


Pooh 06.13.06 at 6:50 pm

Is it just me or does the “they don’t want to be charged fees” argument really piss anyone off? Content providers ARE ALREADY BEING CHARGED.

Further, how does voting down net-neutrality increase incentives for the monopolists to increase capacity?


Daniel Nexon 06.13.06 at 10:28 pm

We should also keep in mind that the service structures of most broadband providers create major transaction costs for switching, making it unlikely that competition will “solve” the issue.


goatchowder 06.13.06 at 11:36 pm

Choice?! Hah!

1) 2-year lock-in contracts. Don’t like the fact that AT&T blocks access to your favorite site? Choke on it until 2008, asshole. I tried to cancel SBC DSL before my year-long contract was over. They threatened to cut off my telephone unless I paid the full year, whether I used it or not.

2) Remote nodes. In my zip code, “officially” there is tremendous choice of access due to the “open access” laws which require that any “Central Office” be available to all providers. Hee hee, that’s funny. The reality is: your choice for DSL is either SBC/AT&T or SBC/AT&T, over most of the zip code. Take your pick. Most of this zip code is way too far away from any official “central office”, so what SBC did is they created “remote nodes” which are not “officially” central offices, and thus are exempt from the “open access” restrictions. But, they are central offices. They put repeaters in them, and all of this zip code is lit up with SBC/AT&T DSL. Only the areas within range of a CO (there are only 2 in the entire zip code) can get any competitor.

FCC statistics of choice per zip code is indeed bullshit. Instead, look at choice per household, and, if you really want to do it right, choice by contract length and position in contract duration.


Something Polish 06.13.06 at 11:58 pm

I thought the editorial reluctantly supported Net Neutrality, though conceded some of the bullshit big company talking points you mention.


Eszter 06.14.06 at 5:53 am

Thanks, Henry, for writing this. It’s all very maddening and frustrating. And Goatchowder makes an additional good point about the limitations posed by contract length. Plus who is to guarantee that various options will continue to exist?

Moreover, will people be aware that they are not getting equal access to various types of content under provider x? And even if they are, will they know that if only they switched away from provider x (assuming that’s even an option) they would then have more equal access through provider y? I think all of this is extremely doubtful.


Barry 06.14.06 at 7:57 am

“Is it just me or does the “they don’t want to be charged fees” argument really piss anyone off? ”

Oh, it pisses me off. A 100% flat-out lie; I’d sue if I were Google or Yahoo or eBay. There’s nothing to lose, since the telco’s will put the squeeze on them anyway, given the chance.

The evil joke about deregulation, as always, is that we’ll get screwed the most. Larger companies have something to bargain with; for us, it’ll be ‘take it or leave it’.


ProfWombat 06.14.06 at 8:26 am

Er, uh, doesn’t the WAPO Corp. have a financial staake in this?

I live in the Boston area, which you’d expect a priori to be well-serviced. You can get dial-up (’nuff said), Comcast broadband or Verizon DSL. But if you want to, say, bundle cable TV or local phone service, your choices get even more limited…


M. Townes 06.14.06 at 8:54 am

This is the sentence that gets me: “Thanks to technology, the Internet will always be a relatively democratic medium with low barriers to entry.” As if technology were impervious to policy – especially not the case for the Internet. It’s like we’ve suddenly decided that maybe X.25 wasn’t such a bad idea after all, after twenty years of successful networking that would have been unlikely had the telcos gotten their way back then.


jen r 06.14.06 at 5:19 pm

Our choices for broadband in what is supposedly a very wired college town are:

* Horribly unreliable cable; or
* DSL owned by SBC/AT&T, who are evil.

I’m not feeling the benefits of this great competition, quite frankly.


Twill00 06.14.06 at 7:02 pm

There are multiple radio stations available in most areas, and yet on each one you only hear fifty songs owned by the corp that owns the station. Tell me about competition.


Matt 06.15.06 at 4:14 am

I just have to wonder. You all know where Congress stands vis-a-vis the public interest on other issues like intellectual property. Yet somehow you seem to trust them to write a new law to protect the public interest from a threat which does not presently exist, yet you think it might come to exist in the future, while simultaneously _not_ screwing you in the process.

Where does that trust come from?


maidhc 06.16.06 at 2:08 am

I recently stayed with my in-laws, who get around 150 channels on cable TV. And most nights there was nothing at all worth watching! They even get CBC, but they were just rerunning old hockey games.

The future of the internets?

In related news, the Ford Motor Company is demanding that FedEx pay royalties on all profits made by delivering packages in Ford trucks.


Alva 06.16.06 at 6:33 am

I ve a different view of net neutrality-i worry far more about wat the govt will do once they have their regulatory claws on the net. Think the FCC and TV/radio. Think content restrictions and campaign finance “reforms”.

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