Linked by Thom Holwerda on Wed 1st Jun 2011 22:38 UTC
Internet & Networking Because OSNews is technically a site from the US, and because the technology industry is decidedly a US-centric industry, we often talk about US politics having adverse effects on technology - or, the other way around. That's why I've been detailing the political movements here in The Netherlands with regards to net neutrality. After a lot of positive news, I've now got some bad news - bad news that involves the largest political party trying to block net neutrality - because one of its members of parliament, Afke Schaart, is a former KPN employee. And yes, KPN is the carrier that first announced it was going to block and throttle traffic.
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jhodapp
Member since:
2009-11-24

"I'm sure there won't a free market in the Netherlands if its citizens don't desire it. That's a given.

Amen to the Market God.

If the Dutch wanted it, there would be a 4th provider. But bet that it is illegal to start your own telecom company in The Netherlands? Probably heavily regulated, eh?

If it's like in France, where it's easy to create a landline ISP and hard to create a mobile ISP, the reason is simple : the part of the electromagnetic spectrum which is used by mobile carriers is a limited resource. Free market only works well with resources which are in infinite supply.
"

You are naive in your knowledge of economics and free markets. No it is not a free market is The Netherlands, nor is any utility by definition, but it's precisely in markets (all markets) where resources are not infinite that markets work well. There is no such thing as infinite supply; all goods and services are by definition scarce and limited. If goods and services were infinite, then politicians could centrally distribute these things and nobody would be worse off because of it (i.e. there would no longer be any trade-offs inherent in this situation).

From Wikipedia: "Microeconomics (from Greek prefix micro- meaning "small" + "economics") is a branch of economics that studies the behavior of how the individual modern household and firms make decisions to allocate limited resources." http://en.wikipedia.org/wiki/Micro-economics

Instead of fixing the results of failed regulation in creating these natural monopolies with high barriers to entry by creating more regulation, the government should be trying to lower the barriers to entry in this market to help foster increased competition. Instead, net neutrality (a terrible name, it won't be neutral, it will just be whatever the government dictates) will increase the costs of being an ISP which will get shifted to the customers. It happens in every market that a government gets involved in. Please educate yourself on the subject of economics before you go criticising a subject you clearly know very little about.

Reply Parent Score: 1

Neolander Member since:
2010-03-08

You are naive in your knowledge of economics and free markets. No it is not a free market is The Netherlands, nor is any utility by definition, but it's precisely in markets (all markets) where resources are not infinite that markets work well. There is no such thing as infinite supply; all goods and services are by definition scarce and limited. If goods and services were infinite, then politicians could centrally distribute these things and nobody would be worse off because of it (i.e. there would no longer be any trade-offs inherent in this situation).

I was talking about free markets specifically here.

Let's say that a cure for AIDS is found. But its manufacturing processes requires use of a substance called Geekium whose sole known supply is a tree that grows in the middle of M. John Smith's property.

Free market scenario, where property is still enforced through some weird black magic : John Smith keeps the number of trees equal to one and maximizes his benefit by selling the substance for an insanely high price. Only rich people will be cured.

Free market scenario, where property is not enforced : People fight for the tree endlessly until the neighbour, tired by the noise, sets the tree on fire and destroys the sole known supply of Geekium. Everyone dies.

Regulated scenario : government seizes the tree, offers a good check to Matt Smith as a compensation, and then makes sure that more trees are planted and that the drug is distributed for a fair price among the infected population. Millions of lives are saved.

Instead of fixing the results of failed regulation in creating these natural monopolies with high barriers to entry by creating more regulation, the government should be trying to lower the barriers to entry in this market to help foster increased competition.

And how is the government supposed to lower the barrier to entry without regulating, exactly ?

Fundamentally, even if the GSM spectrum was in infinite supply and thus regulation wasn't needed, there would still be the following problem : how is a new actor with a few millions of dollars in his pocket supposed to compete with established mobile operators that have an infrastructure worth billions of dollars and billions more in their pocket, without having a governmental entity make sure that other operators accept to share their infrastructure with him in the beginning ?

Instead, net neutrality (a terrible name, it won't be neutral, it will just be whatever the government dictates) will increase the costs of being an ISP which will get shifted to the customers.

Why ? Nothing prevents ISPs from putting monthly caps on full-speed downloads and reducing transfer rates afterwards. This is a perfectly neutral solution : nature of the traffic doesn't matter. In fact, many mobile operators already do this.

Reply Parent Score: 1

Alfman Member since:
2011-01-28

jhodapp,

A few comments,

"There is no such thing as infinite supply; all goods and services are by definition scarce and limited."

This isn't strictly true, especially when we start talking about virtual goods like software. People who paid real money to buy property in "second life" were buying something which is in infinite supply literally. The only scarcity is an artificial one.


"If goods and services were infinite, then politicians could centrally distribute these things and nobody would be worse off because of it"

The implication that competing corporations can manage resources better than government is an assumption. It's not necessarily wrong, but it is a weak part of the argument.


"Instead of fixing the results of failed regulation in creating these natural monopolies with high barriers to entry by creating more regulation, the government should be trying to lower the barriers to entry in this market to help foster increased competition."

Let me ask you what tools does the government have to foster competition and reduce barriers to entry?

Like you, I don't like regulation, I hate it - I hate how governments entitle themselves to strip away our rights without even asking our permission. In fact I absolutely despise it. The Orwellian laws need to be shredded to pieces.

But without any regulation, particularly over giant corporations, there is no possibility to compete fairly. A pure free market economy converges into oligopolies if they are permitted to become all powerful. Businesses cannot compete without merging and consolidating, the result is always a market dominated by too few players. Those at the top might make alot of money in the process, but most people just loose their jobs and livelihoods.

I'll ask again because I think it's an important question: what tools does the government have to stop the monopolization of our markets and improve competition?

Reply Parent Score: 2

Neolander Member since:
2010-03-08

This isn't strictly true, especially when we start talking about virtual goods like software. People who paid real money to buy property in "second life" were buying something which is in infinite supply literally. The only scarcity is an artificial one.

I'd say that even money, which is one of the core subjects of economics studies, can be considered an infinite resource. Modern laws allow banks to clap their hand and create money which they don't have when they make a loan.

Reply Parent Score: 1