
Title II kills investment? Comcast and other ISPs are now spending more - Deinos
http://arstechnica.com/business/2015/10/comcast-and-other-isps-boost-network-investment-despite-net-neutrality/
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mgkimsal
why is "investment" the primary benchmark? if the costs of deploying services
dropped (hardware costs dropped a lot, reliability improvements meant fewer
replacements, etc), and someone's spending just remained the same for a year,
is that 'reduced investment'? And is that bad? It's far too simplistic a
measure. Are they serving more customers, and is customer satisfaction
improving? Those seem like much better metrics to track than 'investment'.

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chimeracoder
> why is "investment" the primary benchmark?

Because consumers want faster speeds, lower latency, and/or expansion of
coverage (to areas that currently don't have fast speeds - or even broadband
internet at all).

That all qualifies as investment. If we were talking about something that is a
pure commodity utility with pretty much no ongoing technological improvement,
like water[0], then investment is less important than ongoing maintenance.

But our Internet is a piece of infrastructure that's constantly evolving, and
keeping up with increasing expectations requires investment.

> Are they serving more customers, and is customer satisfaction improving?

Serving more customers almost certainly requires investment. Customer
satisfaction probably does too.

Yes, there are other factors which affect those two metrics besides
investment, but investment is one that is very easy to measure and is a
leading indicator (whereas those two are both lagging - the results are only
observed long after the actual work has taken place).

[0] There are plenty of technologies associated with better and/or more
environmentally friendly ways to supply and deliver water, but the point is
that to the _consumer_ they're all the same. Nobody is clamoring that they
want water 2.0, which is wetter than water 1.0.

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mgkimsal
There's absolutely no incentive to ever cut costs then, because any reduction
in cost would be counted as 'non-investment', and be taken as a sign that
things are moving backwards.

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boombip
How did you arrive at that conclusion? You could make an investment now in
infrastructure to reduce your long term costs. It's not about the cost of
delivering service, it's about how much service is expanding, as measured by
purchases of networking infrastructure.

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mathgeek
I'm still a firm believer that when these companies can't rely on artificial
limitations to service speed, their only choice is to improve their actual
service compared to their (sorry for using this dirty word...) competitors.

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Zelphyr
Why is "competitors" a dirty word?

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burnte
Because competition requires capital investment to be better than the
competition. Capital investment reduces what can be taken as profit. Profit
should be above all else, so therefore huge corporations have an incentive to
encourage regulations that prevent competition. It's pretty much the exact
opposite of what Ayn Rand thought would happen, despite the fact that it's a
glaringly obvious conclusion.

Government regulations and business are both part of an ecosystem we call "the
economy." In order for that ecosystem to be healthy, we must balance
regulation and business, because when one is too powerful, the economy
stagnates causing problems like we had in the Great Recession. We let banks
get too big, and they fell on us. Water monopolies always fail. Always.

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AndrewUnmuted
The article links to the 3rd Quarter Financial Results report from Comcast. It
is far more informative than the actual article is.

Comcast appears to be spending more because they had a good quarter.

    
    
        Revenue for Cable Communications increased 6.3% to $11.7 billion in the third quarter of 2015 compared to $11.0 billion in the third quarter of 2014, driven by increases of 10.2% in high-speed Internet, 19.5% in business services and 3.3% in video.
    

6.3% is pretty great.

    
    
        The increase in Cable revenue reflects increased customer relationships (see below), customers receiving higher levels of service and customers taking additional services, as well as rate adjustments.
    

"Higher levels of service" refers to customers opting for faster connection
speeds. Consumers appeared to be willing to purchase better plans from Comcast
despite whatever regulations have been put into place recently.

"Increased customer relationships" refers to the number of people they've been
successful at roping back into their cable TV ecosystem. How? By putting
streaming video onto college campuses.

The report later states:

    
    
        Video net losses improved 40.6% year-over-year to 48,000 and were the best result for a third quarter in nine years
    

Why?

    
    
        The improvement in video customer net losses in the third quarter of 2015 includes an 11,000 increase in net additions, compared to the third quarter of 2014, related to schools participating in our Xfinity On Campus service.
    

OK -- so Comcast has had a huge spike in high speed internet sales thanks to
customers wanting upgrades, and they have had a huge decrease in losses in
their cable television market thanks to customers leveraging their new
streaming TV service. Given that some of their services have seen 20% revenue
increases year-over-year, an 11% increase in expenses is not exactly what I'd
call absurd.

And I don't really want to pour through this document any further, but we
shouldn't forget that debt payments and all sorts of corporate nonsense can
cause spikes in operating costs, investments, expenses, etc., which may tell
part of the story.

Overall, I for one am a bit disappointed that Ars Technica would stoop so low
towards the territory of populist journalism. They have misrepresented and
editorialized cold-hard facts in an offensively blatant fashion. Let me point
out that I fucking hate Comcast as a service, a company, and a concept. So I
am not shilling for them. But come on, Ars Technica is really losing face by
posting this kind of nonsense.

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fche
Don't forget opportunity cost. Sure they may be investing, but if government
weren't imposing a distortion, they could be investing better.

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lostcolony
That sort of 'logic' can be used to argue against any decision that someone
doesn't like, that can't be fully controlled for. "Oh, sure, ever since X
happened Y has occurred, but you never know what >Y might have happened if
only X hadn't, despite all historical data to the contrary!"

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vdaniuk
Their logic is faulty, but opportunity costs are very real and routinely
analyzed in many domains, ranging from systems engineering to advertising.

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omginternets
Yes, but such analysis involves formal models, so in the absence of such
models we can safely shout "quackery!".

~~~
lostcolony
Or at least -some- sort of suggested mechanism by which that opportunity could
and would have been exercised.

"They could have invested better" \- sure, they probably could have. However,
there is no reason to believe they -would- have invested in a way that better
serves their customers (or whatever 'better' means, that isn't just maintain
the status quo), given they never have shown any inkling to do so in the past.
Given no proposed catalyst to cause a change on their part, there is no reason
to believe they would have changed; ergo, this particular change's leading to
'better' results equals a better outcome than this change not having occurred.

