Net neutrality is simply requiring that all packets and data are treated identically by ISPs. They can offer faster speeds to all sites, but Comcast cannot offer faster speed to only Comcast Video on Demand, for instance. Or similarly Time Warner, who owns CNN, could not decide to throttle down all news sites except CNN. It's extremely desirable at a glance, which is why this issue is so divisive. A glance is all most people give most issues!
If you'd like to understand Pai's argument, you're going to need to read unedited interviews with Pai himself. The media in general is giving a very one sided view of this issue. I tend to agree with the desire to keep net neutrality as well, but I think Pai's view is also perfectly cogent and deserving of more than the mob-driven straw manning that it's been given.
So what is his view? Let's start with Google Fiber as an interesting case study. Google Fiber has effectively been a failure. In the ~6 years of operation to 2016 it managed an estimated 0.07million television subscribers, 0.45 million broadband subscribers. They've since rolled back further plans for expansion and engaged in lay offs and downsizing.
Why did it fail? There are quite a large number of reasons but the most fundamental issue is that they didn't attract anywhere near the number of signups they likely anticipated. Why not? The most basic reason is that they announce they're coming to an area. They then spend billions of dollars setting up their infrastructure, advertising, hiring, and getting ready to launch. The day before they 'flip the switch', Comcast/Time Warner announces they are price and speed matching them. Some people sign up out of spite, but most do not.
The thing about competition against a monopoly is that you need to not only be able to beat what they are charging, but what they can charge. Or you need to create a different, somehow more compelling offering. So what does this have to do with net neutrality? Net neutrality in essence requires that ISPs behave identically to one another. Their only distinguishing factor is supposed to be speed and cost. This, in turn, means companies have to be able to offer prices or speeds that Time Warner/Comcast simply could not match. And this isn't really possible. Given their size, these companies could even afford to run at a loss to drive out competition if necessary.
A recent NYT article stated something that seems to contradict everything I just stated. In particular they imply that France and the UK have strong net neutrality, yet also have some 13 and 50+ telecom companies, respectively, competing for business. I asked people why that was here [1]. The responses there are very informative, but I also found them somewhat ironic. It's about bundling, per site performance in some cases, and more. In other words, the behaviors that eliminating neutrality would overtly allow are already what is helping drive competition in these areas.
If Pai is right then disabling net neutrality will help drive competition and investment in telecoms. If he is wrong then instead you'll simply see the doomsday scenarios I described in my first paragraph. So that gamble is disconcerting. There are rules and regulations in place for anti-competitive behavior that could help preempt some of these scenarios, but that's certainly hardly a relief given the current state of telecom operation in the US is presumably completely legal. But on the other hand before you assume the doomsday scenarios do come to pass, how do you think that would change the calculus for competition from an upstart? When Comcast/Time Warner only need worry about the price/speed of things, the determination of consumer perception is simple. When it starts coming down to far more nuanced issues of service management and packages, it's not so easy for them to simply say "We match this, exactly." In some cases that may not even be possible - an upstart ISP with agreements with various companies could create offerings that would be money losers for other ISPs.
If you'd like to understand Pai's argument, you're going to need to read unedited interviews with Pai himself. The media in general is giving a very one sided view of this issue. I tend to agree with the desire to keep net neutrality as well, but I think Pai's view is also perfectly cogent and deserving of more than the mob-driven straw manning that it's been given.
So what is his view? Let's start with Google Fiber as an interesting case study. Google Fiber has effectively been a failure. In the ~6 years of operation to 2016 it managed an estimated 0.07million television subscribers, 0.45 million broadband subscribers. They've since rolled back further plans for expansion and engaged in lay offs and downsizing.
Why did it fail? There are quite a large number of reasons but the most fundamental issue is that they didn't attract anywhere near the number of signups they likely anticipated. Why not? The most basic reason is that they announce they're coming to an area. They then spend billions of dollars setting up their infrastructure, advertising, hiring, and getting ready to launch. The day before they 'flip the switch', Comcast/Time Warner announces they are price and speed matching them. Some people sign up out of spite, but most do not.
The thing about competition against a monopoly is that you need to not only be able to beat what they are charging, but what they can charge. Or you need to create a different, somehow more compelling offering. So what does this have to do with net neutrality? Net neutrality in essence requires that ISPs behave identically to one another. Their only distinguishing factor is supposed to be speed and cost. This, in turn, means companies have to be able to offer prices or speeds that Time Warner/Comcast simply could not match. And this isn't really possible. Given their size, these companies could even afford to run at a loss to drive out competition if necessary.
A recent NYT article stated something that seems to contradict everything I just stated. In particular they imply that France and the UK have strong net neutrality, yet also have some 13 and 50+ telecom companies, respectively, competing for business. I asked people why that was here [1]. The responses there are very informative, but I also found them somewhat ironic. It's about bundling, per site performance in some cases, and more. In other words, the behaviors that eliminating neutrality would overtly allow are already what is helping drive competition in these areas.
If Pai is right then disabling net neutrality will help drive competition and investment in telecoms. If he is wrong then instead you'll simply see the doomsday scenarios I described in my first paragraph. So that gamble is disconcerting. There are rules and regulations in place for anti-competitive behavior that could help preempt some of these scenarios, but that's certainly hardly a relief given the current state of telecom operation in the US is presumably completely legal. But on the other hand before you assume the doomsday scenarios do come to pass, how do you think that would change the calculus for competition from an upstart? When Comcast/Time Warner only need worry about the price/speed of things, the determination of consumer perception is simple. When it starts coming down to far more nuanced issues of service management and packages, it's not so easy for them to simply say "We match this, exactly." In some cases that may not even be possible - an upstart ISP with agreements with various companies could create offerings that would be money losers for other ISPs.
[1] - https://news.ycombinator.com/item?id=15903647