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Many people are going on about how the merger of Comcast and Time Warner will enable them to create a lane for the internet where wealthier individuals or companies can pay more for a 'faster lane.' What I'm wondering is why wouldn't current antitrust laws prevent this from happening.

  • Doesn't the Clayton AntiTrust act only apply to commoditites not services? It would be problematic to charge people the same price for difference services. The government already grants a pseudo-monopoly to your phone/cable provider, and they already charge you different rates for better bandwidth. Why would it be illegal to do the same for companies like Netflix either throttling their bandwidth or making them pay a preimium. – user1873 Nov 24 '14 at 3:33
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    @user1873 your question gets to the core of the net neutrality debate. Many argue it is illegal as their common carrier status prevents them from discriminating on the type of content. en.wikipedia.org/wiki/Common_carrier (But yes, the 'commodity vs. service' is part of that whole debate as well) – user1530 Nov 24 '14 at 5:48
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    @DA. - another complication is whether Netflix can be considered to be their customer (unlike Internet users). – user4012 Nov 24 '14 at 11:37
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So you're correct in stating that competition is at the root of the net neutrality debate. If there were multiple options for internet providers, then they would be able to compete to bring services to customers in a manner that customers wanted; if comcast couldn't reach a deal to get Netflix at a reasonable speed, then customers could switch to Time Warner of Google fiber who would have every incentive to do a better job at delivering the services they want. The problem is that currently most consumers don't have many options for internet. If they don't like the way Time Warner does business they're still stuck with time Warner. Thus there is a movement (net neutrality) to regulate the way Time Warner provides internet and tries to charge money from content providers, since Time Warner is a monopoly.

However, the Clayton Anti Trust Act will only help if there are multiple competing firms trying to combine to form a monopoly. In the case you mentioned, Time Warner and Comcast, as Tyler Cowhen puts it "serve separate districts." One might own a cable network in Philadelphia while another would own one in New York. The fact that there is a competitor in New York doesn't offer a viable alternative for a customer in Philadelphia to switch to. That customer can't switch between TW and Comcast, so keeping them from merging wouldn't keep their cable company from doing things unfriendly to consumers, even if they were separate. On the other hand, there is an argument to be made that a single monolithic company with access to many individual cable networks would have too much bargaining power against smaller content providers (like Netflix). That being said, any undue power would dissolve as soon as there was a healthy competitive environment on the various local cable markets. Cable providers would then have to fight each for consumers business.

In my opinion, there is a way help to encourage healthy competition in local cable markets and make the net neutrality issue less important; tear down the barriers to entry in local cable markets. If local governments stop making it so difficult for new entry into local cable markets, competition can solve the problem of 'fast lanes' that don't give consumers what they want.

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    Interesting. So net neutrality is a by-product of AT&T successor monopolies. I thought it might be a global concern but now I think about it, net neutrality does seem to be a band-aid to address service provision in countries that don't charge end-users on a per MB basis. – LateralFractal Nov 25 '14 at 2:12
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    For uninitiated, please refer to this short documentary on cable providers: youtu.be/0ilMx7k7mso – LateralFractal Nov 25 '14 at 2:13
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    I wouldn't say net neutrality is a way to regulate an unregulated carrier, but rather a way to confirm that the concept of common carrier--which they've always been--is preserved with internet access as well. Semantics, perhaps. – user1530 Nov 25 '14 at 18:06
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    Also, you can't have competing cable providers. It's an infrastructure impossibility. Yes, there are barriers that can be broken down, but you'd never get real competition as it's simply not profitable for every company to run coax to everyone's house. More competition isn't going to fix this issue by itself. – user1530 Nov 25 '14 at 18:07
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    @lazarusL I'm all for more competition. It certainly wouldn't hurt! That said, net neutrality, IMHO, shouldn't be confused with that issue. It's really a separate issue, albeit related. Keep in mind that a lot of the content delivery companies also own--or are owned by--content creating companies. It's a pretty complex mess. – user1530 Nov 25 '14 at 19:16

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