dslreports logo
 story category
Again, Neutrality Won't Curtail ISP Investment
Even Wall Street sector analysts and ISP CFOs agree...

While there may be some good arguments against network neutrality regulations (government will screw it up, or pass rules lobbied for by carriers that do more harm than good), the idea that investment will be curtailed by neutrality enforcement has never been among them. The idea that carriers will just stop investing in their networks if Uncle Sam passes neutrality rules has never really stood up to scrutiny. The meme is the oldest ISP PR bluff in the playbook, and it's one that not even ISP CFOs or Wall Street sector analysts believe in:

quote:
Net neutrality/reclassification opponent Thomas Seitz (Height Analytics and previsously Barclay) today joined the parade of top analysts doubting the claims that Net Neutrality rules would produce a serious cutback in broadband investment.Washington is inundated with claims NN will clobber investment, but the carrier CFO are telling Wall Street it won't be a determining factor. Seitz joins John Hodulik of UBS (voted #1 telco analyst), Craig Moffett (voted #1 cable analyst) and Michael Rollins of Citigroup as well as several others who haven't gone on the record.
Carrier investment is frequently dictated by a number of factors -- competition being highest among them. As such, those interested in neutrality might be better served by supporting policies that improve competition -- especially since a carrier in a truly competitive environment faces defection to other carriers should the ISP block content and services.

That said, CFOs and Wall Street stock jocks may also no longer be afraid of new neutrality rules because they know that carrier lobbyists are working overtime to ensure any new rules are more show than substance. Carrier lobbyists meanwhile are also more worried about Title 2 reclassification, which holds the very-remote possibility that the FCC could enact tough pro-consumer rules and price controls.
view:
topics flat nest 

Z80A
Premium Member
join:2009-11-23

Z80A

Premium Member

Doesn't make any sense

They have made billions upon billions while not double dipping and extorting content providers. Of course no one with a brain is going to buy their arguments that the status quo means the end of investment.

They can cry and moan until the cows come home but they're aren't going to leave billions on the table because they would rather have even more through double dipping.

FFH5
Premium Member
join:2002-03-03
Tavistock NJ

FFH5

Premium Member

Re: Doesn't make any sense

said by Z80A:

They have made billions upon billions while ... extorting content providers.

If I read that correctly, you have that reversed. The content providers are doing the extorting and not the access providers.

Z80A
Premium Member
join:2009-11-23

Z80A

Premium Member

Re: Doesn't make any sense

How is google extorting money from the ISPs? How is Hulu or Netflix extorting money from the ISPs?

Subscribers already PAY for their data, regardless of where the data comes from.
Angrychair
join:2000-09-20
Jacksonville, FL

Angrychair to FFH5

Member

to FFH5
What?

Z80A
Premium Member
join:2009-11-23

Z80A

Premium Member

Re: Doesn't make any sense

Perhaps he is thinking of broadcasted video content (ABC/ESPN, Fox Sports, etc).

FFH5
Premium Member
join:2002-03-03
Tavistock NJ

FFH5

Premium Member

Re: Doesn't make any sense

said by Z80A:

Perhaps he is thinking of broadcasted video content (ABC/ESPN, Fox Sports, etc).
Yes, that is what I am referring to.

Gbcue
Premium Member
join:2001-09-30
Santa Rosa, CA

Gbcue to FFH5

Premium Member

to FFH5
said by FFH5:

said by Z80A:

They have made billions upon billions while ... extorting content providers.

If I read that correctly, you have that reversed. The content providers are doing the extorting and not the access providers.
No, remember when AT&T boss wanted Google to pay for data as well?

»Scott Cleland: Google Using 21x The Bandwidth They Pay For
»SBC Wants to Make Google Pay
»AT&T: 'Free Ride' Hypocrite?

See also:
»Spanish ISP Ain't Gonna Let Google Ride Their Pipes For Free

Capt Obvious
@comcast.net

Capt Obvious

Anon

investment

if competition in the marketplace is what will forestall any decrease in network investing how can those pushing for new regulations use the lack of competition as their reason for net neutrality regulations??
amigo_boy
join:2005-07-22

1 recommendation

amigo_boy

Member

Re: investment

said by Capt Obvious :

if competition in the marketplace is what will forestall any decrease in network investing how can those pushing for new regulations use the lack of competition as their reason for net neutrality regulations??
The fault in your reasoning is assuming there is competition in the marketplace. When 1-3 carriers exist through the exclusive use of public easements and rights-of-way, that's a duopoly existing largely upon finite public resources. Not a healthy, competitive "market."

The same applies to wireless providers using the public airwaves (again, a public and finite resource creating a duopoly through public resources).

IMO, the answer is to treat broadband as a public utility, not dictate that they can't manage their networks to prioritize traffic. I think the whole topic of NN misses the root of the problem.
amigo_boy

amigo_boy

Member

I think it will discourage investment

If I own a building and rent rooms, why would I invest in my building to add more rooms if a law would give all the existing renters access to those rooms, for any purpose they choose?

That's just basic economics. The social upside may outweigh the downside of treading upon the fruits of private investment like that. But, acting like nothing's happening seems unrealistic.

cooldude9919
join:2000-05-29

cooldude9919

Member

Re: I think it will discourage investment

said by amigo_boy:

If I own a building and rent rooms, why would I invest in my building to add more rooms if a law would give all the existing renters access to those rooms, for any purpose they choose?

That's just basic economics. The social upside may outweigh the downside of treading upon the fruits of private investment like that. But, acting like nothing's happening seems unrealistic.

You analogy isnt quite right. As people have said plenty of times, google pays for their bandwidth, users pay for their connection to at&t for example, why does someone such as at&t need to be paid again?
amigo_boy
join:2005-07-22

amigo_boy

Member

Re: I think it will discourage investment

said by cooldude9919:

You analogy isnt quite right. As people have said plenty of times, google pays for their bandwidth, users pay for their connection to at&t for example, why does someone such as at&t need to be paid again?
Who does Google pay? How does my ISP get that money to offset their own infrastructure costs?

It's been my impression that supporters of NN would prevent my ISP from prioritizing traffic. This means my ISP would be in a position to invest in their infrastructure to increase their capacity to meet max demand of all protocols and content.

That would have the effect of my ISP increasing capacity to "rent rooms" to VoIP users. And then faced with an existing customer having more accessibility to things like streaming video, music, etc, taking advantage of the capacity of the size of the room which the VoIP renters didn't need.

It basically forces an ISP to treat all customers as T1 users when not all customers want that. Just because some customers don't want to buy their own T1 line.

Again, there's may be a reason to do this. But, it seems disingenuous to say there isn't an economic impact upon the building owner when they're forced to add rooms that existing tenants will be entitled to use without paying additional rent.
cooldude9919
join:2000-05-29

cooldude9919

Member

Re: I think it will discourage investment

I am sure google has tons of paid transit such as cogent, level 3, and hell probably even AT&T at some places. Everybody buys bandwidth from someone unless you own your own backbone, or have settlement free peering.

Why doesnt your monthly cost cover your isps capex for infrastructure? Where is it going? Into the CEO's pockets and not enough left over for capex?
amigo_boy
join:2005-07-22

amigo_boy

Member

Re: I think it will discourage investment

said by cooldude9919:

Why doesnt your monthly cost cover your isps capex for infrastructure?
If I'm paying for VoIP but my ISP has to build capacity for more than that, and another customer gets the benefit of that extra headroom... why would you expect my monthly bill to cover that?
cooldude9919
join:2000-05-29

cooldude9919

Member

Re: I think it will discourage investment

said by amigo_boy:

said by cooldude9919:

Why doesnt your monthly cost cover your isps capex for infrastructure?
If I'm paying for VoIP but my ISP has to build capacity for more than that, and another customer gets the benefit of that extra headroom... why would you expect my monthly bill to cover that?
Can you clarify a bit? Why would they have to build capacity for more than that unless other customers are paying for more than voip? Are you using your provider cox as an example? Meaning cox telephone?