However, you have trotted out some laissez-faire cliches like “If your ISP is providing less for the same price, then switch. It’s a FREE MARKET” which, as billg says, is useless rhetoric in relation to telecom because most consumers don’t have real choice in broadband. This conflicts with your statement supporting a government-mandated solution. Do you like free markets in telecom, or not?

Those who pay more do not always get an enhanced experience. In Australia we pay more not just because we live in scattered population centres far away from net hubs and thus our infrastructure costs are unavoidably higher. We also pay because Telstra controls the local market, and recently we have had to pay even more to offset Telstra’s disastrous investments in Asia, which lost billions of dollars, to keep their profits at high levels to satisfy mum & dad swing voters who bought privatised Telstra stock. Our local government is too scared to attack Telstra’s monopoly for fear of tanking the stock price, not just because of the voters but because they want to flog off the 51% of the company they still own. Thus we get ludicrous market outcomes like Telstra selling retail ADSL to consumers for less than they charge wholesale to other ISPs. Now maybe you understand why I detest overly simplistic free-market attitudes to telecom problems.

Also, competition is not always the singular determinant of market health. Sure, it would be good for competition if every house had FTTH from 6 different providers so that you had 6 different plugs to choose from. However, the expense of building 6 separate billion-dollar national FTTH networks would be wasted expenditure that would be passed on to consumers in the form of higher prices.

I get the feeling we’re actually in violent agreement on this one, but I need to hear that you don’t sleep with a copy of Inquiry into the Nature and Causes of the Wealth of Nations under your pillow.

I go back to what I said in a previous post, which is that we need to go all the way and declare that internet access is a public utility, continue to finance it with public money, and then we can regulate it to our heart’s content for the good of the network.

Does that sound like laissez-faire? I support a government solution to the situation — what I question is whether the approach proposed by net neutrality will fix the root cause problem and whether it won’t in fact leave the door open to further shenanigans by the entrenched telecom monopolies.

The proper role of government in such an environment is not to open the doors to restrictive oligarchy in the name of competition. Instead, government should mandate that all levels of service are available to all customers, regardless of location.

Like you, I have no problem with companies selling different kinds of products for different prices. But, as I’ve said, I don’t think that’s where we are headed. We’re headed to certain products and certain kinds of network access being unavailable to certain customers at any price.

The comment was not meant as a slam, but simply wondering aloud. Thanks for answering it. I’m in the middle of a live radio show at the moment, so will have to answer the other points when it’s over on my blog.

I’m actually enjoying the conversation

As I said, if lack of competition is the problem, then the focus of legislation should be to enable competitors to enter the market.

Telling the monopoly companies how they have to operate does not fix the underlying root cause problem — and if we don’t fix the root cause, then there will be more problems down the road from monopoly control.

You’re talking about a free market, but from a customer’s point of view there is no free telecom market. Nor is there at the corporate or political level: just a very few large corporations who share an interest in blocking the entry of new competitors.

The result? If I want to watch Gilligan’s Island reruns, but my local monopoly cable provider decides not to program it, I can’t watch it even if I pick up my phone and pay more for an upgraded package. Nor can I call the competition. There is no competition.

I expect that same scenario to play itself out vis a vis the Internet, which the telecoms (and a lot of other people who ought to know better) clearly see as just another way to deliver more of their content to my TV. That means if someone like Microsoft or Yahoo pays them to “carry” their search engine, I won’t be able to use Google. Or vice versa.

So, it isn’t a case of “pay more and get an enhanced experience”. It will be a case of “Take What We Give You”.

Is the prospect of getting yet more bad television shoved down your Internet connection really all that enticing?

The fact that public money was used to build the infrastructure is key, but the bigger problem is that the entire system was built out, no surprisingly, without any foresight. Nobody thought about the fact that we were building a network that creates value through its open and unfettered interactivity and that we left for-profit companies in charge of access to the network.

I go back to what I said in a previous post, which is that we need to go all the way and declare that internet access is a public utility, continue to finance it with public money, and then we can regulate it to our heart’s content for the good of the network.

If the telcos want to raise their rates, that’s fine, but what they’re talking about it something different– something where there is a tiered service which means only the big players with the big budgets can get a fast connection. That means that in theory, small to medium sized web companies, the ones sometimes doing the most innovation, will have to pay a much greater share of the their revenues to get on the faster tier, or otherwise suffer from being slow to reach.

Tiering off the internet is a type of practice which does not benefit the essential utility of the network– which allows anyone from a single blogger with a server to Time Warner to create something useful and important. And like the transportation industry, the food safety industry, and others, congress can and should do something to ensure that this utility, much of which was built with public money, is not changed into a system where only the biggest can afford the same service we all have now. This is about not stifling innovation, not about any ‘free rides’. Again, the big bandwidth sites, like YouTube, ALREADY pay more because you pay for bandwidth.

And Tdavid, if you mean “devil’s advocate” as in disagreeing for the sake of disagreeing simply to get attention (what others call “trolling”), that accusation is too often use in Swift-Boating manner — a smear that you just can’t get out from under even if it’s really not true. I stand by what I say here and will admit when I’m wrong when convinced of such. So believe and insinuate whatever you like.

But, in any given market area, there is little or no competition in the telecom business. This is similar to the situation in many parts of the American economy. In those instances, exhortations to buck up and accept the free market amount to little more than shilling for a few entrenched oligarchic corporations.

In my market, there’s one cable company and one telephone company. That means two Internet marketers. The entry of competitors into this market is effectively blocked. It is not a competitive market. If I decide to walk away from one of these companies, no other cable company is there to sell me a similar product.

I’ll add that, in keeping with the telecoms view of the Internet as a medium via which they can market content, and not as a network, I can only buy the programming my local cable company decides to sell me. If I want to watch something they don’t market, I can’t, regardless of price.

As others have said, the expectation is not that different kinds of “content” will be available at different prices. The expectation is that entire portions of the network will be unavailable regardless of my ability to pay.

My understanding is that net neutrality advocates want to make sure that the companies controlling the last mile aren’t allowed to degrade or block packets based on source or type—which has nothing to do with customers “paying more for faster service”.

I just don’t understand why of the thousands of instances where people don’t get what they pay for, this one should require government regulation.

And the supply issues are real. Maybe the ISPs are hyping it up and have more supply than they let on, but bandwidth is NOT infinite. Supply and demand does kick in legitimately at some point.

We’re just shocked because we never had video before to push the demand envelope.

The issue is not whether consumers should have to pay for better Internet access, it is that if net neutrality gets nobbled by the carriers, this better access you’ve just paid for as a consumer is then dependent on the backdoor deals the carriers impose. So you might have paid for that shithot 5Mbps line, but because YouTube refuses to pay the carrier ransom, your connection to youtube.com is shaped down to dialup speeds.

You brought up some analogies, and those are always fraught with danger, but if you want to go there… the situation is like paying for a big T-bone steak at a restaurant and then being told that because of supply issues you’ll have to make do with week-old meatloaf.