Route 2(A)

Ani and I were chatting today about an article I saw linked to from Marginal Revolution I think. The article, headlined Tired from a hike? Rescuers fear Yuppie 911 is about how hikers and such can purchase these electronic locater beacon things that basically act as a call to local rescue workers in remote places. The increased availability of these devices is leading to people summoning emergency help in situations that wouldn’t even be generously described as emergencies.

My initial reaction was to ask why isn’t the cost of a false alarm borne by the person responsible for pressing the button. This wasn’t especially well thought on my part, but mostly a reaction to how relying on these devices is becoming a substitute for not being recklessly stupid. Ani points out that billing people in hindsight for idiotic use of the rescue button might provide some pretty bad incentives in that if you are in legitimate danger, you shouldn’t have to think first “am I really in an emergency or not?” before calling for help.

Perhaps some more stringent licensing requirements could be implemented so that the only people with these devices are also only the kind of people who would be prepared to go up on the treacherous mountain pass in the first place? Presumably, before these things existed, this was very self-selected because if you didn’t think yourself ready to take on this dangerous trail, you wouldn’t try in the first place. We’re not all Aron Ralston, I admit, but still.

I’m still unsure what a better system for dealing with this would be, you guys have any more ideas?

I don’t know much about this. Here is a summation of what I understand the proposals and the relevant issues to be, then hopefully others can comment.

What Net Neutrality seems to be:

Net neutrality seems to be a proposal to make it illegal for ISPs to throttle or restrict users’ bandwidth to certain websites. It may also encompass restrictions/throttling for certain applications (like upstream bittorrent, or streaming video, &c.).

The fear is of a large ISP, like Verizon or Comcast, entering into an agreement with, say, Microsoft, to provide a new, cheaper, internet access package (presumably subsidized by Microsoft) that would allow customers to use Bing, but not Google, for search. One could also imagine “tiers” of internet access, where, for, say, $15/month, a customer would have access to perhaps 100 large websites like google, microsoft, cnn, nytimes, etc., and for $30/month, a customer could have access to more webpages, and for $60/month, to the whole internet. One could also imagine pricing schemes that allowed use of certain applications – perhaps for a little more money, a user would be allowed to use his upstream bandwidth to seed torrents, or would have unrestricted access to the ports used for battle.net, and so on.

I don’t think there’s a clear idea of how these behaviours ought to be curtailed. Some people seem to want the FCC to be ordered to issue regulations that would make these sorts of internet restrictions illegal. Others, presumably, would want a different (perhaps newly-created) agency to oversee the internet, or have certain internet restrictions prohibited by an Act of Congress.

Critiques (and counter-critiques):

1. Would this be so bad?

Advocates of net neutrality seem to envision a “net-partial” future as some sort of apocalyptic nightmare, but it may not be so bad. Cable TV companies already engage in similar behaviour; customers have to pay more to have access to certain channels – pricing is determined by agreements between content-providers and cable companies, and by competition (to the extent that there is any). No one has a problem with this as far as I can tell. Perhaps a particular customer prefers Bing to Google; why should he be unable to pay less for a customized internet package?

2. Would the market allow this?

The ISP space is considerably less fragmented than it was when most ISPs were small dial-up providers, but I don’t think there are many places where customers have no choice at all. Even if a single cable company dominates an area, usually there is DSL, or satellite internet available. If net-partial internet access is bad for consumers, it’s likely that they would switch to a provider that is net-neutral.

3. If this would make more money for ISPs, why hasn’t it happened?

The technology to monitor users’ internet access has existed for years, and large ISPs are sophisticated businesses that would be able to deal favorable with large websites. These companies are unlikely to have dismissed an idea like this out of hand. Do we really need prophylactic regulations where there seems to be no sign of disease?

4. Allowing that this is a problem, are regulations the way to deal with it?

The McCain internet bill (S.1836 – which does not seem to be available online yet) would prohibit the FCC from regulating the internet. The FCC has not had a great track record; it’s unlikely to get better w/r/t the internet. More generally, technology changes very quickly, but agencies are slow to change regulations. Regulations that are intended for cable internet may have unintended and negative consequences when applied to wifi, for example.

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I tend to agree with the critics, for most of the reasons I’ve listed. Most convincing to me is (1) – net-partial packages seem like they could be good products, and (3) – why haven’t we seen them yet?

I do worry a little about the potential for abuse, especially in markets where one large provider dominates. Google, for example, might be able to leverage its near-monopoly on search to squeeze out other search competitors – by offering kickbacks to ISPs that signed customers on to Google-only internet packages, it would make it near-impossible for other search engines to compete. It seems to me, though, that these situations can be handled on a case-by-case basis, rather than with blanket regulations.

So I was reading Fred Wilson’s blog and he brought up an interesting point

Android is a lot like Microsoft’s Windows OS. It was a copy of Apple’s operating system in many ways, but it was open and it could run on many devices. And it became the standard with Apple retaining a small but important share. I believe the same thing will happen with Android and the Motorola/Verizon Droid looks to be the first really great Android phone to come to market.

This got me thinking: he has a point. We are sort of in a similar place with phones to where we were with PCs in the early 80s, and one of the players is the same. Apple: An elegant but closed platform that will only run on their hardware. Then it was Microsoft that kludged together a crappier platform that ran on a bunch of different hardware. Today it is Google. No matter how great Android 2.0 is, I think it probably will not be as nice as the iPhone experience. The reason is the same reason that the OS X experience is better than the Vista experience: Apple has a clear advantage by controlling the hardware.

However, they have a clear disadvantage: A lot less innovation in app development. What are the differences this time around that will keep history from repeating itself?

And, in the end, which way is better for the consumer?

I’m interested in talking about health care, and I was disappointed that no one responded to my post. Also, I promised to make more blog posts. I’m starting off easy.

Assumptions that are common in the debate about health-care:
(1) The system of health-care that we have right now in the US is in any way “free market”

(2) The only real other options are what exists in other first-world countries (or some option in-between here and there).

(3) The various systems found in Canada / England / France / everywhere else are largely similar.

(4) That health insurance in a form largely similar to the way it exists now (independent of who’s paying for it or who it covers) is a necessary component of medical care.

Anthony is alone taking on two conservatives defending health care reform:

http://www.facebook.com/geddes.munson?v=feed&story_fbid=163993865912

please weigh in!