One ISP to Rule Them All - US Courts say Price Caps don't apply to areas with only one ISP

[rcmaehl]

Source:

Tech Spot

 

TL;DR:
Only have one ISP providing service in your area? The Court system states they can set their price however high they want, as long as a smaller ISP doesn't provide service.

 

Quotes/Excerpts:

Quote

 The ... Court of Appeals has ruled that the FCC can ... allow areas with only a single ISP to be considered "competitive" and thus immune to business broadband price caps. so long as a competing company's service region is less than half a mile away. ISPs that aren't challenged by any competitors often have price caps imposed... to prevent them from unfairly raising prices for their customers. By allowing the FCC to deem areas with only a single ISP as "competitive," these price caps could effectively be removed even when a company has a monopoly in an area. The theory here seems to be that... smaller ISPs can merely expand... to challenge the big guys... and... said big guys shouldn't be subject to price controls. Competitive Local Exchange Carriers (Small ISPs)... and ... customers disagree, however. t wouldn't be economically viable to expand their service areas. The court seemed to reject this evidence, however. This seems like a pretty strange decision. Based on this statement, it sounds like the FCC has been given free reign to pick and choose which evidence it wants to believe as long as its decisions aren't "arbitrary."

 

My Thoughts:

This definitely is a bit unreasonable. The costs of expanding infrastructure for smaller ISPs is very high, even if only half a mile, even so much as $15,000 (charged directly to the customer in some cases) upon allowing the existing ISP to charge whatever they want.

[Deus Voltage]

Is this even legal? Now were're gonna have Martin Shkrelis popping up all over the place and price gauging the hell out of people

[Streetguru]

4 minutes ago, rcmaehl said:

 

He could have saved us, had he not been cast aside...you pure F in economics soul...

[Velcade]

Become your own ISP.

[Syntaxvgm]

Court Says price caps dont apply to areas where price caps were invented for. 

[Oliv.r]

6 minutes ago, rcmaehl said:

Only have one ISP providing service in your area? The Court system states they can set their price however high they want, as long as a smaller ISP doesn't provide service

I lived in a rural area in Alaska for quite some time and they charge the public school with only two teachers and 20 students $6,000/mo for unlimited data, 5Mbps down, 500KB up.

 

And keep in mind that the connection was satellite powered thus the high electricity cost, harsh weather = area is not easily accessible for an immediate maintenance and repair, tech ticket and housing costs a lot.

[Rune]

How the fuck is one provider competitive? What is going through their heads?

[Jurrunio]

Taking away things from where they are most needed, great...

 

I thought we only let smart people work in courts, but it seems not.

[Brooksie359]

19 minutes ago, rcmaehl said:

Source:

Tech Spot

 

TL;DR:
Only have one ISP providing service in your area? The Court system states they can set their price however high they want, as long as a smaller ISP doesn't provide service.

 

Quotes/Excerpts:

 

My Thoughts:

This definitely is a bit unreasonable. The costs of expanding infrastructure for smaller ISPs is very high, even if only half a mile, even so much as $15,000 (charged directly to the customer in some cases) upon allowing the existing ISP to charge whatever they want.

Your TLDR is horribly worded. They are saying that you don't have price caps if a small isp is within a half a mile of the larger isp. You would already not have price caps if there were a smaller isp that provided service........

[Syntaxvgm]

8 minutes ago, Rune said:

How the fuck is one provider competitive? What is going through their heads?

[Taf the Ghost]

The TechSpot piece is mostly click-bait/outrage response. From the Ars Technica story, which has more technical information.

 

Quote

While petitioners presented data suggesting that it isn't generally economically feasible to expand networks, the FCC argued that "the CLEC Petitioners' studies inflate costs by selecting the most expensive build (entirely underground lines), presuming a separate lateral line for each individual low-bandwidth customer, and treating the main fiber ring as part of the cost of reaching new customers rather than as an existing 'sunk' cost near a potential new customer," judges wrote.

 

Judges concluded that the evidence in support of both arguments is credible and that the FCC can decide which one it wants to believe:

"We recognize that the relevant data presents radically different pictures of the competitiveness of the market depending on the economic theory applied and the weight given to conflicting pieces of evidence. But the FCC may rationally choose which evidence to believe among conflicting evidence in its proceedings, especially when predicting what will happen in the markets under its jurisdiction. Thus, we deny the petitions for review as to the Competitive Market Test because the FCC's resolution of competing evidence was not arbitrary and capricious."

"https://arstechnica.com/tech-policy/2018/08/fcc-can-define-markets-with-only-one-isp-as-competitive-court-rules/

 

There isn't really that much here. This is one industry group against another. 

 

Price Caps, the favored tool of starving socialist regimes the world over, don't work as an economic tool. They can work as an anti-monopolistic punishment, however.  (Exact same reality applies to Minimum Wage Laws. Destroys job pools if close to the clearing rate, when acting as a wage floor, but useful (when well below the wage floor) as an anti-abusive practices law.)

[mynameisjuan]

This is what happens with no competition.

 

But people dont realize how fucking much money it cost to build up an ISP large enough to compete.

[Taf the Ghost]

1 minute ago, Syntaxvgm said:

Monopolies don't have to act abusive. It's a choice. The problem is business schools have turned most of business practices into utterly short-sighted, "beggar thy neighbor" industries. 

[S w a t s o n]

Hopefully the advent of wireless 5G home internet service can stop this bullshit. It will be much easier to serve wider areas as long as you can put up the towers/ mini towers.

[Brooksie359]

Just now, S w a t s o n said:

Hopefully the advent of wireless 5G home internet service can stop this bullshit. It will be much easier to serve wider areas as long as you can put up the towers/ mini towers.

Hopefully it doesn't come to that and the isps won't jack up the price in areas with no competition. 

[S w a t s o n]

1 minute ago, Brooksie359 said:

Hopefully it doesn't come to that and the isps won't jack up the price in areas with no competition. 

Oh my sweet summer child...so naive  

[Brooksie359]

1 minute ago, S w a t s o n said:

Oh my sweet summer child...so naive  

One can only hope. 

[kting15]

how does a ruling like this make sense? isn't the point of price caps to protect the consumers from unreasonable prices? Having price caps in markets where there are multiple providers but not in markets where there is no competition confuses me because, if anything, having more competition tends to drive down prices because companies want to try and be competitive.

[asus killer]

The US is a very weird place, in the same news i found you guys have government price fixing like Socialist countries and that having a monopoly is "competitive" 

[Stefan Payne]

48 minutes ago, huilun02 said:

Making America great again

bullshit as the Judges were there before the 2016 election. And the president doesn't do all the judges.

Blame the law for that. And every politician that doesn't support it.

 

And here lies the Problem: The judge can only rule on what's in the books. If there is no law for this case, he can't judge on that...

[Suika]

Quote

The theory here seems to be that... smaller ISPs can merely expand... to challenge the big guys... and... said big guys shouldn't be subject to price controls.

So once the little guy moves into the area to compete, the big ISP can just drop their rates to merely cover operational and maintenance costs (basically nothing depending on the area) so the little guy can't compete and be forced out of the area.

 

Big brain politics my guys. Can't have your constituents vote you out of office if they don't have the internet service to inform themselves of your doing.

[bcredeur97]

doesn't this give incentive for secondary ISP's?

Like if there is only 1 and everyone is complaining then that is prime opportunity for someone else to move in and undercut the big guy

[Brooksie359]

33 minutes ago, Stefan Payne said:

bullshit as the Judges were there before the 2016 election. And the president doesn't do all the judges.

Blame the law for that. And every politician that doesn't support it.

 

And here lies the Problem: The judge can only rule on what's in the books. If there is no law for this case, he can't judge on that...

They put the FCC head that pushed for this. He also happens to be a former lawyer for Verizon so it makes sense for why he would want this. I mean it was entirely up to the FCC and the judge was just choosing whether or not what they were doing is legal. 

[Noctus]

Lol America, you stupid.

[Brooksie359]

50 minutes ago, kting15 said:

how does a ruling like this make sense? isn't the point of price caps to protect the consumers from unreasonable prices? Having price caps in markets where there are multiple providers but not in markets where there is no competition confuses me because, if anything, having more competition tends to drive down prices because companies want to try and be competitive.

They don't have price caps in areas where there are more than one provider. What they are saying is that if 2 isps are within half a mile form each other then they are considered in competition meaning there is no price caps required. If you actually have 2 isp options then it is considered competition and again price caps aren't required.