More vs Less Regulation: Where do the telcos fall?
My friend Adam and I had an interesting discussion about Net Neutrality and how the telcos are trying to play both sides of the Regulation vs. Less Government argument. Here is a snippit:
Adam: I think, in a completely academic sense, regulation and free market pricing are at odds. For better or for worse, regulation discourages competition because prices and profits are inherently kept in check, and it also impedes innovation since it removes an incentive for startups to find better ways to deliver broadband service to consumers. Those outcomes are contrary to the "long term benefits" you refer to for red bank broadband consumers.
Tom: My southern business school degree and I would generally not argue with one iota of those sentiments. Government interference in natural free-market forces does discourage competition; and yes I know that more regulation is generally bad for Red Bank consumers.
Tom: But are the big telcos really the standard bearers in the Less Regulation is Good army? Who does Net Neutrality regulation affect negatively? The only companies that I can see that would be adversely affected by it are the big telcos. Am I missing something? These guys don't give a rat's ass about the free market. They are the remnants of the last big monopoly.
Tom: The big telecoms come in third when it comes to spending on lobbyist. You can be sure that all of there lobbying money doesn't go towards protecting the free market. I would bet that most of that money goes towards pushing new regulations that protect the telecoms. They live on government regulation.
Adam: You're right. The telcos will play both sides of the regulation fence depending on which side is most beneficial to them at the time. One thing we can be sure of is that big business DOES NOT like competition in the markets where they already hold a major share. period. So the fact that they oppose this regulation shows me that they have designs on becoming de-facto players in the content game, where they will have a natural advantage of owning the pipes and the customer relationships. I believe they are arrogant enough (or spend enough) to think that they can have it both ways, backing regulation that stifles competition in infrastructure (Harrisburg) and fighting regulation that would keep them from dominating the content market (net neutrality).
Tom: Right, look at what Verizon did when Philadelphia(Harrisburg) wanted to start a WiFi. They ran straight to the Pennsylvania government to introduce new regulations that would prevent muni-WiFi's. Now they are putting their lobbyist to work to defeat Net Neutrality regulation.
Tom: The telcos love watching the internet message boards play this off as a Right v Left or More Regulation v Less Regulation argument; it's doing more for their public image then any ad campaign. They must be getting a chuckle out of watching free market proponents passionately defend them. Net Neutrality may be the first time that they have ever been on the "keep government out of our business" side of the argument.
Adam: Adam Thierer argues in his 2004 article that net neutrality regulation would only set the stage for continued government interference in internet issues. It may have not been worth the hassle in 04, but things seem to be getting closer to the reality envisioned by the net neutrality protectionists. Im still trying to sort it out myself.
Tom: Me too. Let's continue this further. Catch you at the MI3 screening tonight. -- Tom
Adam: I think, in a completely academic sense, regulation and free market pricing are at odds. For better or for worse, regulation discourages competition because prices and profits are inherently kept in check, and it also impedes innovation since it removes an incentive for startups to find better ways to deliver broadband service to consumers. Those outcomes are contrary to the "long term benefits" you refer to for red bank broadband consumers.
Tom: My southern business school degree and I would generally not argue with one iota of those sentiments. Government interference in natural free-market forces does discourage competition; and yes I know that more regulation is generally bad for Red Bank consumers.
Tom: But are the big telcos really the standard bearers in the Less Regulation is Good army? Who does Net Neutrality regulation affect negatively? The only companies that I can see that would be adversely affected by it are the big telcos. Am I missing something? These guys don't give a rat's ass about the free market. They are the remnants of the last big monopoly.
Tom: The big telecoms come in third when it comes to spending on lobbyist. You can be sure that all of there lobbying money doesn't go towards protecting the free market. I would bet that most of that money goes towards pushing new regulations that protect the telecoms. They live on government regulation.
Adam: You're right. The telcos will play both sides of the regulation fence depending on which side is most beneficial to them at the time. One thing we can be sure of is that big business DOES NOT like competition in the markets where they already hold a major share. period. So the fact that they oppose this regulation shows me that they have designs on becoming de-facto players in the content game, where they will have a natural advantage of owning the pipes and the customer relationships. I believe they are arrogant enough (or spend enough) to think that they can have it both ways, backing regulation that stifles competition in infrastructure (Harrisburg) and fighting regulation that would keep them from dominating the content market (net neutrality).
Tom: Right, look at what Verizon did when Philadelphia(Harrisburg) wanted to start a WiFi. They ran straight to the Pennsylvania government to introduce new regulations that would prevent muni-WiFi's. Now they are putting their lobbyist to work to defeat Net Neutrality regulation.
Tom: The telcos love watching the internet message boards play this off as a Right v Left or More Regulation v Less Regulation argument; it's doing more for their public image then any ad campaign. They must be getting a chuckle out of watching free market proponents passionately defend them. Net Neutrality may be the first time that they have ever been on the "keep government out of our business" side of the argument.
Adam: Adam Thierer argues in his 2004 article that net neutrality regulation would only set the stage for continued government interference in internet issues. It may have not been worth the hassle in 04, but things seem to be getting closer to the reality envisioned by the net neutrality protectionists. Im still trying to sort it out myself.
Tom: Me too. Let's continue this further. Catch you at the MI3 screening tonight. -- Tom
