Outline for Negative Position

(Let cable remain closed to other ISPs)

 

  1. Build Out Issue
    1. Only 20 million of 80 million cable subscribers now have access to cable modem services.
      1. Getting more people to have access to service should be the number one goal of our policy in this area.
    2. Seeing profits to be made, cable companies are investing huge amounts of capital to get the job done.
      1. $10 billion infrastructure investments this year
      2. Mega-mergers between cable companies and other cash-rich companies.
    3. If cable companies must share profits with other players, then they will have less incentive to build infrastructure in new areas.
    4. Presumably, cable companies would be mandated to charge reasonable rates to competing ISPs just like the telecom act for RBOCs.
      1. A "reasonable" rate will be much harder for cable companies because their infrastructure is not built out yet.

  2. Competition Already Exists
    1. Competition from competing technologies forces cable operators to keep prices low.
      1. DSL
      2. Satellite
      3. Wireless
      4. Dial-up modems

  3. Broadband Internet Services over Cable is in its Infancy. Early regulation could:
    1. Distort the market:
      1. When competition exists the market forces balance each other, best solution wins
      2. Regulating changes this balance so that the market may settle on something that is not as optimal
    2. Impede the growth of a new industry
    3. Technical problems in degradation:
      1. Since cable is a shared resource, several competing ISPs would have to share the resource. ISPs cannot co-exist with this shared resource:
        1. One ISP could impede another ISPs traffic
        2. Example: Cut rate ISP offers low prices, has lots of users, prevents higher priced, higher quality ISP from being able to offer the kind of quality it needs
    4. Moralistic – Cable companies paid for infrastructure

  4. Regulation is inherently messy and difficult and should only be done when necessary
    1. In this case it is not necessary since competition already exists
    2. It is messy because regulating involves forming regulatory agencies, commissions, and costly bureaucracies and often involves lots of litigation

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