[UFO Chicago] might be a bit late to tonight's meeting

[Neil R. Ormos]

Jordan Bettis wrote:
> Richard Lynch said:

>> We are chewing up bandwidth faster than we can
>> create it -- And the video/audio services
>> rolling out will tip that over into a "crisis"
>> -- where some of the business who cannot
>> deliver their promised bandwidth, will find
>> themselves in deep doo-doo.

> 2) What company has so inept a legal staff that
> they will be "in deep doo-doo" if they don't
> deliver their promised bandwidth?

Services directed to businesses sometims have SLAs
that provide for delivery of specified bandwidth,
enforced by penalties, similar to what's going on
at Airbus.  It's unclear where people seem to
think the bottlenecks are likely to be, but a
carrier is not going to guarantee service on a
network that it doesn't control, such as the
public internet.

Your prediction that carriers will seek to
obfuscate pricing are probably right on the money.

> Net neutrality will, at the very least, mean
> that the pricing structure stays as transparent
> as it is today.

I don't see how transparent pricing follows from
net neutrality.  As you noted, most of the
"innovation" in the pricing of wireless phone
service centers around making the comparison of
pricing among vendors impossible through slight
plan variations, undisclosed tax rates, and
several meritricious "fees" with names suggestive
of government mandate that are added to the plan
price to inflate the bill.  Nothing in the net
neutrality proposals I've seen prevents this from
happening to internet access or transport
services, and some carriers already charge bogus
additional fees styled as "regulatory cost
recovery" or "digital divide elimination" fees.

For that matter, it's unclear how net neutrality
rules can actually prevent the evils they seek to
avoid, because carriers already furnish varying
levels of service at different rates, and rules
requiring absolutely non-discriminatory routing
and transport would seem to interfere unacceptably
with the carrier's ability to upgrade their
networks.

> From the business side, that means a particular
> cost per bit. For the consumer that typically
> means a flat monthly bill that comes with some
> vague insinuations as to service quality.

I don't see why net neutrality necessarily results
in flat-rate pricing.

> The idea that the Internet is about to "fill up"
> or get "bogged down" displays little faith in
> the ability of the market to provide solutions
> (especially coming from forbes). If bandwidth
> really gets tight on the internet because
> increasing demand, then the cost will go up, and
> then either supply will increase or demand will
> plateau. But at least people will understand
> what they're getting, and what they're paying.

Predatory pricing has been used to destroy
competition in the access market, leaving that
market as an oligopoly with extremely high
barriers to entry.  When an oligopoly is present,
price remains sensitive to aggregate demand, but
supply often does not.

--Neil Ormos