FCC / Net Neutrality - Go Read It Again
The Market Ticker - Commentary on The Capital Markets
2017-11-22 09:40 by Karl Denninger
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FCC / Net Neutrality - Go Read It Again
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The screamfest has re-commenced.

I'd write a whole post on this, but I have already.

So here's the piece I submitted to the FCC during the comment period back in 2014, which I have unlocked from its "expired" status.

Go read it.

People like Hastings and Bezos have extracted billions of dollars from consumers who do not want their services by getting the government to shove a gun up their noses, picking their pocket.  While you may say "but I want and buy Netflix" the fact is that there are many such firms, there are and will be more every day, and the odds of you buying all of them are zero.

You may be perfectly happy with forcing your neighbor to subsidize your Netflix subscription. Do you feel the same way when your neighbor forces you to subsidize his baseball, football or Hulu subscription?  What happens when the "next new thing" is some 4k-def virtual reality application you think is stupid but the kid next door loves and your internet service goes up in price by 20% so the ISP can build out the capacity necessary for him to have it?

The facts are that Netflix is a cash furnace; it has, for several years, run negative cash flow and will continue to into the foreseeable future.  Wall Street allows this and Hastings has made billions doing so because the company steals a decent part of its operating expense from people who don't buy the service under government mandate.  Amazon's "Prime Video" doesn't break out its financial picture but it's odds on that it operates exactly the same way and Bezos has thus also made billions by likewise stealing from non-users, and so will Disney's upcoming "over the top" offering.

The problem with endorsing theft when it benefits you is that once you've done that it will very-reliably be used against you.

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User Info FCC / Net Neutrality - Go Read It Again in forum [Market-Ticker]
Posts: 224
Incept: 2009-10-06

Msumelle, Ar
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As to be expected the Democrats, certain companies, and consumer groups, to name a few are up in arms on the Net Neutrality decision.

Net Neutrality in the simplest explanation, as I see it, it nothing more than a form of Socialism/Communism, take your pick.

Now as I see it Karl, and from your well written explanation to the FCC, companies like Netflix, and Hulu are probably going to have to raise their prices to gain access. As we know for example, Netflix eats up something like 1/3rd or more of the bandwith between 7pm and 10pm at night.

Now the big question is how much are they going to have to charge? Amazon, if your a Prime Member is $99 a year, how much are they going to charge or do you think they will use Prime as a continuing Loss Leader to keep members?

What will be the rate of attrition for Netflix if they raise prices to anywhere from $20 to $40 a month. My prediction is that you will see a huge drop in subscribers for them along with Hulu. Frankly if you want their services then you might have to make choice as you may only want to pay for one.

On the other somebody like ROKU may end up with more streaming channels to offer, yes some will be pay, and you might just have more Ala Carte choices than ever.

Another question is how will this effect the Cable Companies? Will they be charging more for internet access and/ just offer more packages based on your internet usage?

So many possibilities to ponder and my guess is those changes will be coming quickly within the next 6 months to a year.
Posts: 908
Incept: 2012-12-05

Huntsville, AL
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I'm using Hulu for the last 15 months at $12/month for no commercials, and find it useful, as their delivery is markedly more reliable than the cable internet provider (Mediacom) in my area.

Using Sling TV in my third month now, Gold+Blue costs $40/month. They don't provide local channels except in certain markets, but they do have ESPN and its brothers live.

Fifty-two bucks a month is an awful lot less than I pay for trash cable channels delivered by Mediacom (in no particular order, local channels, Oprah, RFD, Spike, porn, shopping, and so on). On the other hand, if you don't buy the entire bundle of internet, phone, and TV from them, but leave one or two of them out, then your total cost is not going to decrease on account of it.

This is not some kind of "natural monopoly". The County government appoints a board, and apparently that board goes into an "eternal closed session". You can't like that very much. I question very much why I don't have a choice between Wow and Comcast (not that I care much for either of them) over Mediacom, other than the facts concerning where I live... I tried Verizon a few years ago, but the first couple of $500/month cellular service bills convinced me to go back to a hard-line/land-line provider.

I have learned that not an awful lot of my neighbors use Netflix or Amazon services, and that's a good thing. The young guys next door, both "IT professionals" with local school systems, don't even have a TV, but are more into information they can learn from the internet than alleged entertainment they could get from it; as they explained to me, they like "their money" too much. (I wish I'd been that smart when I was about 30 years old!)

All of you, enjoy your Thanksgiving Day!

Posts: 1551
Incept: 2010-11-07

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I tell people that Highway Neutrality for big trucks should be next if they support Net Neutrality.

Why should trucking companies pay higher fees for tags and fuel taxes if Facebook and Netflix don't have to pay a proportional rate for the load they put on the fiber backbone?

Then they get it.

Net Neutrality isn't about the consumers.
It is about the big corporations avoiding costs.

Preparing to go Hunting.
Posts: 1494
Incept: 2010-12-29

arkansas ozarks
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Great analogy S T Tom ! You are a real thinker ..


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