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Businesses Communications The Courts United States

FCC Can Define Markets With Only One ISP as 'Competitive', Court Rules (arstechnica.com) 163

Posted by msmash from the how-about-that dept.
An appeals court has upheld a Federal Communications Commission ruling that broadband markets can be competitive even when there is only one Internet provider. From a report: The FCC "rationally chose which evidence to believe among conflicting evidence," the court ruling said. The FCC voted last year to eliminate price caps imposed on some business broadband providers such as AT&T and Verizon. The FCC decision eliminated caps in any given county if 50 percent of potential customers "are within a half mile of a location served by a competitive provider." This is known as the "competitive market test." Because of this, broadband-using businesses might not benefit from price controls even if they have just one choice of ISP.
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FCC Can Define Markets With Only One ISP as 'Competitive', Court Rules More

FCC Can Define Markets With Only One ISP as 'Competitive', Court Rules

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  • Where are they? (Score:3, Interesting)

    by Comboman ( 895500 ) on Wednesday August 29, 2018 @01:19PM (#57219080)
    Where are all the Trump/Pai supporters to tell us how this is really a good thing and the invisible hand of the market will make everything all right? Is it possible there is some level of corporate cronyism that even they can't justify?

    • Re: Where are they? (Score:1)

      by Anonymous Coward

      We're right here. And let us tell you that it will all be ok. An invisible hand is the BEST hand to stroke you into a calm submission. Just lay back and enjoy it. Relax your butt muscles. It won't hurt if you don't struggle.

    • Priorities (Score:2, Interesting)

      by Okian Warrior ( 537106 )

      Where are all the Trump/Pai supporters to tell us how this is really a good thing and the invisible hand of the market will make everything all right? Is it possible there is some level of corporate cronyism that even they can't justify?

      We're right here, and we don't necessarily agree with everything the administration does.

      For example, I'm completely in favor of allowing women the ability to choose to have an abortion, with minimal government oversight (regulate the safety, not the right to choose).

      But I also know that there are larger issues at hand, the two most obvious ones being the economy and immigration.

      I accept that some of the smaller issues won't be handled in the way I think is optimal, but the bigger issues seem to be working

      • Re:Priorities (Score:4, Insightful)

        by Anonymous Coward on Wednesday August 29, 2018 @02:05PM (#57219450)

        Where are all the Trump/Pai supporters to tell us how this is really a good thing and the invisible hand of the market will make everything all right? Is it possible there is some level of corporate cronyism that even they can't justify?

        But I also know that there are larger issues at hand, the two most obvious ones being the economy and immigration.

        For example, I really like the new economy, and I think illegal immigration needs to be reined in..

        Yet illegal immigration has already been way down for years before your orange dreamboat took office. And do you have any actual numbers that indicate that the illegal immigration that occurs has a negative impact on the country? I agree that laws are laws and should be enforced, but everything is a matter of priority (we don't insist that every driver who speeds MUST be fined) and I just don't see the evidence that illegal immigration is anywhere being the biggest threat to the US right now. That's why it always smells of racism when people complain about immigration, the concern just never matches the actual impact of the issue.

        Also, what "new economy"? Are you seriously suggestion that the Trump administration has had a significant impact on the economy? the economy that has been steadily getting stronger since about 2008? I'll concede that there's some (possibly temporary) bump in the stock market caused by the tax cuts allowing corporations to do massive buy-backs of stock, but to equate that with economical gains on a global level is just silly. What else has Trump done (specifically) to boost the economy? Spend government funds at his own hotels and golf clubs?

        • Re: (Score:2)

          by Bert64 ( 520050 )

          Look at why most migration (legal and otherwise) occurs... It is due to disparity of conditions between the source and destination country, where the migrant is planning to have a significantly higher quality of life in the destination country.

          Legal migration then actually hurts the source country, because legal migration is typically only available to the top percentages of a population (smartest, best educated, richest etc)... If you allow the smartest people from a poor country to migrate to a richer cou

          • Look at why most migration (legal and otherwise) occurs... It is due to disparity of conditions between the source and destination country, where the migrant is planning to have a significantly higher quality of life in the destination country.

            And in the absence of any movement at all in really low unemployment numbers what this quality of life for the person equates to is GDP growth for the nation. Thank you immigrant friend for boosting our economy.

            • Re: (Score:2)

              by Bert64 ( 520050 )

              Yes, it generally benefits the destination country - at the expense of the source country, which only serves to fuel further migration. The rich get richer, and the poor get poorer.

    • Why do people keep blaming the market for this? (Score:4, Insightful)

      by Solandri ( 704621 ) on Wednesday August 29, 2018 @02:02PM (#57219434)
      These areas have only one ISP because local governments awarded a monopoly, and prohibit competition. These ISPs are not natural monopolies created by the market. There is no invisible hand of the market at work here because government regulation eliminated market forces.

      The only areas free of the problem are the ones where government got out of the way and allowed multiple ISPs to compete.

      • Re:Why do people keep blaming the market for this? (Score:5, Interesting)

        by jeff4747 ( 256583 ) on Wednesday August 29, 2018 @02:49PM (#57219844)

        These areas have only one ISP because local governments awarded a monopoly, and prohibit competition

        People aren't blaming government because this claim is false.

        Local governments awarded monopolies for cable TV. Those monopolies were time-limited. They've all expired. And if you took a moment to think about it, you'd notice a cable TV monopoly is not an Internet service monopoly.

        So no, this is not the ebil big govment. This is the result of the natural monopoly you get in any utility - the company that has already paid to run lines to every house has a massive competitive advantage over the companies that have not run those lines yet. And they're able to use that advantage to crush any competitor that tries to enter the market.

        A free market does not prevent this from happening, and actually acts to maintain this situation. Which is why we need the ebil big govment to prevent exploiting the natural monopoly so that competitors can actually enter these markets so that they can become functional markets.

        • Re: (Score:1)

          by Anonymous Coward

          People aren't blaming government because this claim is false.

          The $3 dollar surcharge on my ISP (which does no other business but internet) labeled "exclusive access fee" is proof in the opposite direction.

          My city council sold exclusive access to two ISPs, one for DSL, and one for cable. No other wired ISPs are allowed within the city limits.

        • Re: (Score:2)

          by rtb61 ( 674572 )

          You need to explain the economics, to make sense. Existing company, with existing infrastructure has largely paid off it's debt and has raised it's price as high as economically possible (supply and demand without competition). New company can undercut that, but needs to borrow money, to start building. So it borrows money and now needs to generate revenue to pay off debt and undercuts the incumbent monopoly because big fat margins of the incumbent. The incumbent, then drops prices to below the new competit

        • Last I checked it is essentially impossible to run lines through public and private properties, through towns, across rivers, etc without being granted permission by state/county/city government and doing is disruptive so the party they allow to do it has what amounts to a government granted monopoly.

          • Last I checked governments actually grant permits when you apply for them, since that's a significant fundraising stream for smaller cities and towns.

            Also, rejection of a permit can be appealed, to either city/town entities or the courts, where winning would be easy since the rejection was arbitrary and as a bonus, that would fund a chunk of your new ISP's rollout.

            • Right, which is why google couldn't even manage to build out fiber beyond the one test city even with the city TRYING to let them.

      • Re:Why do people keep blaming the market for this? (Score:4, Insightful)

        by sjames ( 1099 ) on Wednesday August 29, 2018 @04:03PM (#57220398) Homepage Journal

        As jeff4747 explained to you, those exclusive agreements have all expired and never covered internet in the first place. I'll enlarge for you. They were made in the first place because before that there were zero cable companies willing to serve the area due to high starting costs to recoup. So they were granted a temporary monopoly and regulations to go with it so they would have a sure way to recoup their costs. They have now done that a few times over.

        The problem is that the same market forces that kept them out of the area before now keep everyone else out of the area now PLUS there's an incumbent provider to contend with. Without further government action, those forces will remain in place next year and for decades to follow.

        Now, as for the FCC, I'm not so sure that 5 competitors is enough to make a healthy market, much less only 2. Having a "competitor" a half mile away is as good as not having one.

      • Re: (Score:2)

        by AmiMoJo ( 196126 )

        Really? I thought it was mostly because the last mile infrastructure is so expensive that if there is an incumbent other companies don't want to risk that major investment.

      • There wouldn't be any ISPs in these areas in a market free of regulation.

    • Re: (Score:3)

      by AHuxley ( 892839 )
      Think of a gated community setting up its own new fast network.
      Its not going to be a new ISP out in the wider community.
      No ISP wants to just be an ISP for a gated community.

      By giving some freedom back to who and what an ISP is local communities can grow their own ISP without federal laws setting out what an approved competitive ISP is.
      By removing more and more federal NN rules and network laws people all over the USA can have the freedom to become their own ISP.
      Without having to be come a "competitive

      • Think of a gated community setting up its own new fast network.
        Its not going to be a new ISP out in the wider community.
        No ISP wants to just be an ISP for a gated community.

        An ISP run as a co-op by the members of the gated community does.

        By giving some freedom back to who and what an ISP is local communities can grow their own ISP without federal laws setting out what an approved competitive ISP is.
        By removing more and more federal NN rules and network laws people all over the USA can have the freedom to become their own ISP.

        Horseshit. Net neutrality for a new ISP is the default. Networking equipment is out-of-the-box neutral. Only asshats in the incumbent national ISPs want to violate net neutrality and they want to do it for more money, not because it's either necessary for operation or better for the customers. Neither is true.

        Without having to be come a "competitive" new ISP state/nation wide.

        More horseshit. No new ISP has to instantly be national before it's legal, Not now, not ever. Nor does this law make it any easie

    • Re: (Score:1, Troll)

      by liquid_schwartz ( 530085 )

      Where are all the Trump/Pai supporters to tell us how this is really a good thing and the invisible hand of the market will make everything all right? Is it possible there is some level of corporate cronyism that even they can't justify?

      As much as this may surprise you one can vote for Trump while hating corruption and cronyism. I say this because the alternative was Hillary, who is known for corruption and cronyism. Really the 2016 election was the best evidence that a "none of the above" option should always be available.

      • I hope the meta-moderators correct this. I'd support off-topic of the parent and GP but the parent replied rationally while the GP was doing the trolling.

  • Replace bullshit with... nothing? (Score:3)

    by Areyoukiddingme ( 1289470 ) on Wednesday August 29, 2018 @01:19PM (#57219082)

    The original rule was obvious bullshit. Price controls should be imposed unless 100% of potential customers have at least one competitive provider at each and every location.

    Eliminating even the pretense of controlling the monopoly is not better. A new rule should actually control the monopoly. Or better yet, make it untenable to be a monopoly.

    • Not really a rational approach; line extensions should be viable for business users (to a point). The challenge comes when one provider is the LEC for one side of a street, but another is on the opposite side. It takes a CLEC to cross the lines, renting access from either or both providers.

      Likewise, should bad locations in a city/area be given preference for subsidies when alternate locations exist that have competition?

      Personally, I would love to see opportunities for small ISPs because of the broken mark

  • FCC dismantal (Score:4, Informative)

    by HeckRuler ( 1369601 ) on Wednesday August 29, 2018 @01:34PM (#57219200)

    Trump appointees continue mission of dismantling their institutions.

    So have AT&T and Medicom established a checker-board pattern of non-compete territory all of which is half a mile from the other's guy's territory?

    And which telecom do you think Ajit Pai is going to go work for once he's kicked out?

  • C student in English (Score:4, Interesting)

    by DarkRookie ( 5030953 ) on Wednesday August 29, 2018 @01:34PM (#57219206)
    English wasn't my best subject, but doesn't competitive usually imply that 2 or more parties are involved.
    How else can something be competitive?

    • Re:C student in English (Score:5, Interesting)

      by Anonymous Coward on Wednesday August 29, 2018 @02:11PM (#57219510)

      The FCC assume that:

      1) if there's a competitive ISP serving someone half a mile from you, then that ISP would be willing to extend their network to cover you. That's probably not the case, but it's what the FCC decided to (pretend to?) believe. Therefore, the FCC can claim that you have a choice of changing to that other provider

      2) The fact that people have an alternative provider and could switch to it, means that the ISPs in that area have to keep the price down.

      3) ISPs are going to set prices for everyone in the county to be the same, so if *most* of the county has an alternative provider and could switch to it, then that keeps prices down for everyone in the county.

      Of course, every point I just listed is wrong, but that's what the FCC decided to (pretend to?) believe. This happens to be good news for the existing ISPs, which can raise their prices in every case where the FCC's assumptions are wrong.

      • if any of this is going to change how anyone votes? Even a little. I realize this might not be a big enough issue to make the "single issue voter" grade, but so far as I can tell while it annoys people it's not something that even registers with even the most tech savvy voter. And so long as the FCC knows they can get away with it why stop? Especially when the gravy train of sweet post FCC cush jobs awaits.

        I wouldn't mind seeing corruption be a bigger issue for Americans. They claim it is, but when it's

      • Swamp the FCC with complaints.
        {o.o}

    • I presume each customer is provided a half mile of fiber to connect to a competitor if they wish.

  • This is why the Republicans (Score:5, Interesting)

    by rsilvergun ( 571051 ) on Wednesday August 29, 2018 @01:48PM (#57219302)
    have been spending so much to win local elections. They've spent the last 30 years stacking the courts. Now it's paid off.

    And I know it's not popular to call out one party because there's a bunch of pro-corporate Dems who helped stack those courts. But the Democrats at least have a party wing that refuses corporate & PAC money (they're called Justice Democrats, look 'em up). I know of no such animal for the other side. The Dems seem somewhat redeemable. e.g. the pro-consumer elements might take over at some point in a future I could conceive of. Barring a seismic shift like we got in the 60s after the civil rights movement I don't see that happening to the Republican party. At a certain point it's time to call a spade a spade.

  • As I understand it, The rule is that if there is a competitor with 1/2 of a mile, they can rule that the market has competition. But if there are no competitors, then the price controls apply.

    So I think the headline is a bit misleading here.

    • Only if you pretend an ISP would extend their network that 1/2 mile to service new customers.....who would suddenly be getting "great" deals from their incumbent ISP as soon as the competitor filed for permits, guaranteeing that 1/2 mile extension is a loss.

      • But my point is, the FCC still has price controls for those outside the 1/2 limits. They didn't totally abandon price controls for everybody with a single provider, just some of them.

        • Re:The devil is in the details here... (Score:5, Insightful)

          by jeff4747 ( 256583 ) on Wednesday August 29, 2018 @04:18PM (#57220472)

          The point is that the FCC is using a standard that is utterly divorced from reality, whether or not they have price caps.

          • My point is the headline is misleading as the new rule only effects a subset of ISP customers nation wide not all of us.

            I'm not arguing to justify or vilify the FCC's actions, only point out that they are not changing anything for the majority of people out there.

            • Re: (Score:2)

              by q4Fry ( 1322209 )

              This does, however open the market to create a sham ISP that rents a line from the ISP with a local monopoly. This new ISP then "offers service" to one house every 1600/sqrt(2) meters in a grid. The service can be poor quality or exorbitant; it doesn't matter. The point is not to actually serve that customer.

              Then, everyone is within 800m of a place with "competition," and the real ISP set prices without restriction.

  • Sounds like the incumbent is being tricked into raising their prices until the nearby competitor pulls their cables into the area. Then your lawyer better find a reason to sue the incumbent when they bring their prices down to undercut you.

  • Ignorance proven (Score:5, Insightful)

    by mysidia ( 191772 ) on Wednesday August 29, 2018 @02:38PM (#57219750)

    50 percent of potential customers "are within a half mile of a location served by a competitive provider."

    WTF? Has the government been proceeding with their ears plugged for the past decade?
    The whole issue is The last mile problem

    A competing provider is not going to travel Half a Mile to try and grab another provider's customers ---- buildout is so extremely expensive that typically there is a tacit agreement between so-called "competitors" that they will stay away from other providers' turf.

    Just TRY and get a cable company to service you whose nearest line is 1/2 a mile away.
    Extending service by 1/2 mile of thickline is something like $30,000+ in a suburban/rural area, and potentially half a million or more in build costs to run the additional cable in an urban area ---- thus they aren't inclined to build, especially when the consequence is violating a de-facto unwritten informal but anti-competitive agreement b/w neighboring providers that risks causing revenue loss from losing other customers.

    • So, what would you do in order to encourage the actual competition? By saying a half-mile, you need about 20 individual customers to justify a line extension in suburbia, improving access. If you can get 30 you are golden. Sure, if it is a half-mile for 3-5 subscribers it is hard to justify still, but the more penetration you have the more options there are for everyone.

      The anti-competitive practices might need some regulation though...

    • Re:Ignorance proven (Score:4, Funny)

      by jeff4747 ( 256583 ) on Wednesday August 29, 2018 @03:15PM (#57220056)

      WTF? Has the government been proceeding with their ears plugged for the past decade?

      It's difficult to hear with all that lobbyist money stuffed in your ears.

    • I am sitting here 200' from neighors ON ALL SIDES, that have a sort of real "high speed", by antiquated FCC definitions, choice, DSL or Charter Spectrum. I am 1/4 mile from the nearest FIOS connection. I have no market I can call upon for alternatives. I am too far away from their poles to serve. It's the bane of a large piece of land in the middle of a sea of 60'x140' lots. The state cannot do anything, not that it would being California, because the FCC has preempted the field. And the FCC will not act be

  • "Ah, this is obviously some strange usage of the word 'competitive' that I wasn't previously aware of."

  • And just think (Score:5, Insightful)

    by smooth wombat ( 796938 ) on Wednesday August 29, 2018 @03:11PM (#57220016) Journal

    If Kavanaugh gets put on the Supreme Court, ISPs like Verizon/ATT/Comcast will be given free reign to rape and pillage users as they see fit.

    If one ISP is considered a "competitive market", then what's a little throttling and price gouging among friends?

  • Density (Score:3)

    by thegreatbob ( 693104 ) on Wednesday August 29, 2018 @03:36PM (#57220220) Journal
    When population density gets beyond a few 10s per km^2, this starts to seem pretty delusional. Can't wait for the ISP service area gerrymandering to start, if it hasn't already.

  • Welcome to the new world where one choice is competitive. Newspeak brought to you by the GOP.

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