Maybe this is where I think the problem is… If they really start giving their own websites preferential treatment to the point where the rest of the internet is unusable then people in a deregulated marketplace, would simply switch to a more convenient ISP. In a deregulated marketplace is doesn’t have to be option A or nothing. There’s option A. If option A isn’t doing its job, someone starts option B to compete. If A & B both don’t work someone makes C… the real trick here would be to deregulate the current regional cable monopolies and allow startup capital to be infused dynamically into areas of the country where cable service is underperforming for its customers…
Also, again in theory, if you spent billions of dollars laying the pipe and you want to promote your own internet businesses by opening some pipes for some extra speed that you don’t provide the competition, I’m not sure I see a huge problem with that. If a pharmeceutial company spends 3 billion dollars in R&D to develop a new drug that helps cure cancer, are you saying that we should immediately make a generic version of the drug available and tell the pharma company that spent its 3 billion dollars “Hey thanks for this great invention and all those sunk costs… but sorry! No money for you on this one!” What do you think that would do? THAT would stiffle innovation.
The pursuit of maximizing profits by any reasonable measure in a competitve marketplace requires service providers of any good or service to continue to improve and tailor their products to maintain a healthy advantage or to keep up with one’s competition. I don’t disagree with you that Comcast maybe doesn’t have huge incentives to be innovative in its approach (however, I would argue that a multi-tiered approach to internet subscription coupled with a unique pricing mechanism that may make for a more affordable yet more tailored internet experience would be an innovative product in this marketplace as long as they maintained an option for a wide open internet subscription plan). But the answer to the question as to how to get companies to be more innovative is to deregulate and for people with capital to invest into technologies that can grow and compete for the existing customer base.
The SEC couldn’t regulate Bernie Madoff because the SEC wasn’t SMART ENOUGH to regulate Bernie Madoff. The SEC wasn’t smart enough to regulate AIG. Once again that’s a matter of incentives. The really smart people aren’t the regulators. They’re the ones who get paid the big bucks to outsmart the regulators. That’s how it works. If you can make 500K as a hedge fund manager or make 70K as the SEC guy who audits their transactions… if you have a choice the choice is easy. You take the 500K. But the trick here is that there’s very few people who have the skills and the talents to earn that wage… and people who have those talents don’t tend to settle for less money just for the hell of it.
I agree that corporations without a competitive marketplace can govern themselves inefficiently. Imagine if in an evolutionary sense humans had no predators throughout the course of their history. Would we be the species we are today if we didn’t need to overcome those obstacles? No. Much the same way in a competitive business, you either govern yourself effectively and pursue profit maximization or you die. When regulations artifically raise the barriers to entry for new competitive firms, all that is done is that a little more monopoly power is given the companies who already exist and then without the threat of serious predators or competition, they get lazy or abusive. If you don’t trust corporations, then I think the better choice is to trust that when they’re all fighting each other, then they’re fighting for you and your interests because they want your business… they need your business to survive and when faced with the prospect of someone out innovating or out hustled.
So, in the end, I would argue again, in favor of deregulation so that we can lower the costs associated with entry into the market space to encourage competition. Yes, I’m (almost) always in favor of deregulation.
Now, with that being said, I just want to say Fishjie, you’re a pretty cool guy. I mean like with so many people on this forum, I find that almost no one agrees with me, but I commend you for being able to articulate your views so well. It’s always fun when you and a couple other people post.
P.S. Everyone have a Merry Christmas.