Wall Street Calling Telcos' Bluff On Stopping Investment If Net Neutrality Put Into Law

from the give-it-up dept

While we're still worried that any "net neutrality" rules put in place by the government will contain so many loopholes for the telcos as to make them do more harm than good, it's nice to see that more and more people are calling the telcos on their bogus claim that net neutrality rules would mean that telcos would cut back on investment. Lots of us have debunked that claim before, but the telcos have tried to make the case that this is a big deal for Wall Street people. Eh... perhaps not so much. Broadband Reports notes that even the Wall Street analysts who are against net neutrality rules don't believe it will impact investment:
Net neutrality/reclassification opponent Thomas Seitz (Height Analytics and previously 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.
As we've seen over and over and over again, telcos invest when there's competition in the market. When competition goes away, that's when they cut back. If the focus is really on encouraging investment in network infrastructure, then the focus should be on encouraging more competition in the marketplace -- which is exactly what the telcos don't want. They like their monopoly rents. They like not having to invest as much in infrastructure. It's great that more and more people are calling them on this bogus claim.


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  1.  
    identicon
    bob, Jul 22nd, 2010 @ 1:50am

    Open Free Internet

    As long as an open and free Internet are not made in the ideas of SEIU and Free Press. With extremely limited government involvement or control, I am for net neutrality.

    The trouble is that some of the groups want to have a say in what free speech is and want the Government to regulate and control it.

    No place in America should be allowed to stop an ISP from starting up.

    No company should be allowed to prevent any packet from reaching you.

    Companies should be required to disclose how they handle traffic and bandwidth.

    Unlimited must mean unlimited.

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    darryl, Jul 22nd, 2010 @ 4:08am

    Conflicting statements, more investment with competition and 'monopoly rents'. !!

    rules put in place by the government will contain so many loopholes for the telcos as to make them do more harm than good,

    http://www.techdirt.com/articles/20100716/02412410243.shtml

    That link does not show or explain any loopholes or potential loopholes. Its just an article complaining about the steakholders (the ISPs) wanting input into the NN regulations, and a complaint that the Government is going to be responsible for making up laws !!


    Thats what Governments do !, they make and enforce laws, who would you rather make the laws ? the carriers ?
    The general public who do not understand the issues, or the government in consulation with industry to reach agreement ?


    Loopholes, is nasty talk for working within the rule of law, so as far as your concerned you are either breaking the law, or exploiting some 'loophole' might it just be possible that you are just simply playing by the rules, and expecting everyone else to play by the same rules.

    Its a playfield levelling system. And working within the rule and laws is not exploiting loopholes its abiding by the law.

    And do you think those "loopholes" would not allready be there now? if you can do what you like without NN, then they are not loopholes, but they are what you can allready do, I do not think improving NN regulation will 'create' extra loopholes. But will define what is legal and what is not.

    As we've seen over and over and over again, telcos invest when there's competition in the market. When competition goes away, that's when they cut back. If the focus is really on encouraging investment in network infrastructure, then the focus should be on encouraging more competition in the marketplace -- which is exactly what the telcos don't want. They like their monopoly rents. They like not having to invest as much in infrastructure. It's great that more and more people are calling them on this bogus claim


    As we've seen over and over and over again, telcos invest when there's competition in the market.

    where are the examples of that, telco's or any company does not invest more because of competition, they invest based on demand, or potential demand.
    You think a carrier will risk investment money in an allready well serviced (lots of competition) market? or will they try to find new markets, or by providing better services or product take customers away from competition.

    Its about demand or possible/potential demand, not competition.


    When competition goes away, that's when they cut back.

    You link points to a company spending 22Billion dollars in the next 12 months (from article date) on infrastructure, and also with a continued investment, that is not what is called 'cutting back'.

    When competition goes away? (ok some isp goes out of business I guess), so if that is the case why would the existing IPS's cut back ?

    If there are more potential customers, and more demand for their service they will invest in infrastructure to meet that demand. If demand increases, they increase to meet the demand, if demand decreases they seek to increase demand, far before they consider becoming smaller.

    But believing that companies grow and shrink due to competition in the market is wrong, they grown and shrink due to demand for their product. Yes, competition changes the demand, or puts new demands on them, thats called competitionm, and it results in cheaper and better services for customers.

    So the focus **IS** on increasing the infrastructure of the net, and competition is good, and competition with defined rule is even better. Competition is much easier when everyone plays by the same rules, as a starting base, and offer products and services within the framework of the agreed rules (laws) to conduct business.

    Everyone gets to play by the same rules, large or small, evening the playing field.


    _______________________________________

    then the focus should be on encouraging more competition in the marketplace -- which is exactly what the telcos don't want. They like their monopoly rents. They like not having to invest as much in infrastructure. It's great that more and more people are calling them on this bogus claim.

    The focus **IS** on encouraging more competition, set out the rules for the game, and allow all players to compete on those terms.
    Sure, no business wants competition, but every busines **IS** competition... The fact that other players can enter the market means by definition it is not a monopoly.

    Anyone who is willing to play by the rule can open shop in the industry, so it is not a monopoly.

    So there is no thing as 'no competition', or 'monopoly rents', and you cant really have it both ways, your saying they spend and invest when there is competition and they like their monopoly rents. Which is it, who can they possible do both ?

    You also focus competition on a very narrow basis, you look at it in terms in telco's ONLY. And competition as you well know goes far further than that.

    They are not just competing with other telco's they are competing with the general cost of living, employment, descresionary money for people to spend, food, electriciy, rent, mortgages and so on. Are all competition for the customer dollar.

    And if you want to restrict to only telco's there appears to be more than one player in the industry, and its possible for you or me to enter the market. Nothing stopping us, so by definition it is not a monopoly..

     

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  3.  
    identicon
    Anonymous Coward, Jul 22nd, 2010 @ 6:25am

    Re: Conflicting statements, more investment with competition and 'monopoly rents'. !!

    Care to explain how telcos are able to hold back vodafone making them comply with every standard under the sun?

    There is no law explicitly forbidding competition. That would be dumb, but there are infinite rules that are cost prohibitive to most people and in fact bar anyone from entering the market.

    Just try to build your own physical infra-structure in Texas and you will see what that means.

    Now could you stop lying and misleading people?

     

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  4.  
    icon
    Hephaestus (profile), Jul 22nd, 2010 @ 6:30am

    Re: Conflicting statements, more investment with competition and 'monopoly rents'. !!

    "Loopholes, is nasty talk for working within the rule of law, so as far as your concerned you are either breaking the law, or exploiting some 'loophole' might it just be possible that you are just simply playing by the rules, and expecting everyone else to play by the same rules."

    You seem to think the telcos wont have a hand in writing the rules. They will and they will define and create loop holes for themselves.

    "Sure, no business wants competition, but every busines **IS** competition... The fact that other players can enter the market means by definition it is not a monopoly."

    Try starting an ISP in your town. You will find that the current primary ISP in your area has already had laws put in place disallowing you to run lines, or will sue you for attempting to enter the market. There are 20 cases I know of in the united states where law suits were filed against towns or companies attempting to enter the market.

    " and its possible for you or me to enter the market. Nothing stopping us, so by definition it is not a monopoly.."

    Please go ahead and try.

     

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  5.  
    icon
    Kingster (profile), Jul 22nd, 2010 @ 6:35am

    Re: Conflicting statements, more investment with competition and 'monopoly rents'. !!

    @darryl... You have got to be one of the worst trolls I've ever seen... You ask for statistics behind a claim, then spout an opposing claim, and then you don't offer statistics?
    But believing that companies grow and shrink due to competition in the market is wrong, they grown and shrink due to demand for their product. Yes, competition changes the demand, or puts new demands on them, thats called competitionm, and it results in cheaper and better services for customers.
    The fact that most companies grow and shrink based on demand for a product is true... However, that really only works in the case of physical widgets. In something like digital services (TV, telephone, internet, etc.) the "product" is bandwidth... And most of the infrastructure that is there today can scale pretty well. What can't is the "bandwidth" a provider is willing to dedicate.

    As to your discussion on monopolies and competition, you're so far out in left field, I need a set of binoculars to see you. Name me a city with more than one traditional telco, or more than one traditional cable provider. One that can cover the entire city. I'd be surprised if you can. In all the cities I've lived in over the past twenty years, there hasn't been a single one where I had a choice in telco's or cable providers (Oklahoma City, OK; Lansing, MI; Grand Rapids, MI; Chicago, IL; Memphis, TN; Portland, ME). Why is that? Because competition is hard. Monopolies are easy.
    They are not just competing with other telco's they are competing with the general cost of living, employment, descresionary money for people to spend, food, electriciy, rent, mortgages and so on. Are all competition for the customer dollar.
    While some services compete with other COL expenses, most people have made the decision that they can't live without (at least) internet, so you can throw your customer dollar competition right out the window.
    And if you want to restrict to only telco's there appears to be more than one player in the industry, and its possible for you or me to enter the market. Nothing stopping us, so by definition it is not a monopoly..
    Really? Sure, there's more than one player... Funny how their territories don't overlap. And I'd like to see you enter the market. Where do you get funding/capital to do so? You have to lay all new lines - pretty expensive, because guess what - the people that own the lines currently? They aren't going to let you use them. No investor in their right mind is going to give you the capital - it's too big. So, you either have to be big already (i.e., Google), or you're screwed.

    Also... Use a freaking spell-checker. Or did one of your brothers Larry or Darryl get it today?

     

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  6.  
    icon
    Hephaestus (profile), Jul 22nd, 2010 @ 6:44am

    Re: Conflicting statements, more investment with competition and 'monopoly rents'. !!

    Your logic is circular and has given me a headache.

     

    reply to this | link to this | view in thread ]

  7.  
    icon
    Hephaestus (profile), Jul 22nd, 2010 @ 10:25am

    Re: Re: Conflicting statements, more investment with competition and 'monopoly rents'. !!

    " Name me a city with more than one traditional telco, or more than one traditional cable provider."

    NYC, but the ISPs divide it up into individual blocks and buildings.

     

    reply to this | link to this | view in thread ]


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