Wireless Internet as a Public Good

[ErikViking]

Huck, would you be in favor of transferring control of the internet to the U.N.?

Bandwith for Porn programs?

 

[Mr. P]

Making free public access will open the door to onerous and freedom nullifying censorship of the internet. Bad idea.

Exactly. Bad idea? Hell, its insane IMO. Wanna stop the progress and destroy the internet and waste tax money? Give control to the government through a public access network. Huck mentioned a road, good analogy, I can see this government road marked with "STOP", “DO NOT ENTER”, "WRONG WAY” and “NO PARKING” signs everywhere. I don't want any part of it.

 

[Max Power]

Considering that there are already plans in the works for free (ad-supported) WiFi, it's 100% guaranteed that the government would overpay.

 

[rtwngAvngr]

Bandwith for Porn programs?

Exactly. "We must protect the children from porn" will be the first argument to put controls on internet content. Go away, commie.

 

[Huckleburry]

Rightwing,
I really did miss your thoughtless comments on economic development.

Huck

 

[rtwngAvngr]

Rightwing,
I really did miss your thoughtless comments on economic development.

Huck

Do you want the internet to be controlled by the U.N. or some other international organization?

 

[BaronVonBigmeat]

What about schools. You pay for those even if you don't have kids in them. People with out cars pay for roads, and oil subsidies even though they don't use it.

Do we benefit from greater connectivity? I argue that we do. Moreover, once the platform is provided private enterprise will begin working on ways to use it effeciently. You may never fly on a airplane or see a port but you benefit from their existence. This is really no different

First of all, the comparison to roads doesn't hold up. The supposed problem with roads is that you need the hand of government to force some people to sell their land. But with WiFi, there is no such problem. It's wireless. You put receivers every # feet apart. If someone doesn't want your box on their land, you can find another person close by who will. And a little electronic box is far less objectionable to property owners than a 4 lane highway, so you shouldn't have too many people refusing to allow your boxes on their property.

Second, one of the best things we could do for mass transit, suburban sprawl, fuel useage, pollution, traffic jams, and quality of life would be to fully privatize the road networks. One of these days I'm going to make a megathread explaining how privatized roads and freeways would work, and how they would benefit us, but for now let's just paraphrase that line from Jurassic Park: "The free market will find a way". Ditto for government schools. America was more literate before we had mandatory government education. And the same for airplanes and ports. Want them run well? Let a private concern handle them.

Considering that there are already plans in the works for free (ad-supported) WiFi, it's 100% guaranteed that the government would overpay.

Interesting, I hadn't heard that. You can bet that those plans will be scrapped once government gets it's thieving paws on the internet. Then, once the private sector is mostly gone from this field, lefties will use this as proof that the market won't provide it--because hey, only the gov't is doing it now--if they left, there wouldn't be any wifi! Over time, they will forget that it was government intervention that pushed private companies aside.

Making free public access will open the door to onerous and freedom nullifying censorship of the internet. Bad idea.

How did I forget this, this is the most important of all. Sites like this could be declared hate speech, or other sites could be declared to be aiding terrorism, or...(fill in the blank)

 

[ErikViking]

Exactly. "We must protect the children from porn" will be the first argument to put controls on internet content. Go away, commie.

Now there really should be a smiley in the shape of a dog going away with its tail between its legs...

 

[Huckleburry]

This is going to get a bit technical and MBA's and Engineers are going to have a shit fit...but here goes.

The problem with the arguments that have been presented here are that they have inappropriately applied the market model. Understand, the market model only works on scarce resources, if a resource can be infinite the market model breaks down. If one reads the economic litereature (especially theory) you will note that scarcity is always assumed.

In this model however scarcity does not apply. Techonology is such now that bandwidth need not be a scarce resource. Quite the contrary, we are now at a point when networks can (and in some areas do) provide symetric bandwidth beyond what could be ever be consumed. Ah ha! you say that is the government forcing the market out of whack. No, it is not, it is a unique feature of connectivity. So what happens when a good becomes infinite?

In an open economy the average total cost of an infinite good will be equal to the marginal cost of its production. If the good is infinite this cost will be zero and we will capture the entire area under the demand curve.

What about fixed cost? Yes there is a fixed cost, and in the case of internet and networks there is also a cost of operation. However, these costs are not great enough to push the marginal cost too far above zero. For example. Boarder to Boarder wireless in Ri is expected to cost 20 million dollars to build the network. Let's assume for the moment that it will cost an additional 20 million per annum to operate it. Ok so that is 40 million in fixed cost. There are roughly 2 million people in Ri. Which puts the cost of the network at 20/person/year. Frankly twenty bucks is not enough to push be considerd as marginal cost, especially when we are talking about a state.

The only way to make a infinite good profitable in a market economy is to introduce artificial scarcity. This is granted through monopoly power which as we all know is no good.

Cheers Huck

 

[BaronVonBigmeat]

So I can connect via WiFi, and then download 100 high definition movies in about a second? Oh. I guess bandwidth isn't even close to being infinite then. And neither is the physical infrastructure; the receivers, the cables, the substations at the phone company or cable company, etc. The labor required to support and service all these components sure isn't infinite or free, either. Hmmm.

About the only commodity I can think of offhand that is truly "infinite" for all practical purposes is air. In that case, the megasupply of air means it's not supplied by the market. It also means there's no reason for the government to supply it either.

Really, there's no reason the free market can't provide wifi, and there's no reason to think there will be a true monopoly (unless the government grants it of course). People who want wifi will pay a subscription fee. People who don't will not pay. Kinda like cell phones. Simple.

 

[Said1]

Oh, wait. There is free internet in this city, but it's not a government provided service. Might be partially goverment funded. I"ve heard it really sucks too.

 

[Huckleburry]

Baron,
The Ocean network is a is a symetric 32 color spectrum. Each color can carry about 10 million Gigabits of data. That is quite a bit more bandwidth than anyone could possibly use. Do not confuse your computers ability to process data with the networks ability to carry it. I can think of several infinite goods. For example Linux. Like I said, infinite goods do not fit in the market model unless you introduce monoply power and artificial scarcity.

I conceded that there would be fixed costs associated with establishing the network. However, when we spread these costs across the entire population they effectively go to zero. This is true becuase the price drops to marginal cost in a market economy. In the case of a infinite good the marginal cost is equal to zero and therefore the price is zero. Thus capturing the entire area under the demand curve. The only way to bring the price above marginal cost is through monopoly or oligopoly power.

Said, the techonoly we are rolling out here is not WiFi. It uses a different frequency (low spectrum educational) and is quite a bit better than the WiFi connection. Also it will not interfere with existing WiFi networks.

 

[Said1]

Said, the techonoly we are rolling out here is not WiFi. It uses a different frequency (low spectrum educational) and is quite a bit better than the WiFi connection. Also it will not interfere with existing WiFi networks.

Why do you feel the need to constantly state the obvious? Seriously, it's not an endearing quality.

 

[Huckleburry]

Said,
what the fuck are you talking about?

 

[BaronVonBigmeat]

Baron,
The Ocean network is a is a symetric 32 color spectrum. Each color can carry about 10 million Gigabits of data. That is quite a bit more bandwidth than anyone could possibly use. Do not confuse your computers ability to process data with the networks ability to carry it. I can think of several infinite goods. For example Linux. Like I said, infinite goods do not fit in the market model unless you introduce monoply power and artificial scarcity.

I conceded that there would be fixed costs associated with establishing the network. However, when we spread these costs across the entire population they effectively go to zero. This is true becuase the price drops to marginal cost in a market economy. In the case of a infinite good the marginal cost is equal to zero and therefore the price is zero. Thus capturing the entire area under the demand curve. The only way to bring the price above marginal cost is through monopoly or oligopoly power.

Said, the techonoly we are rolling out here is not WiFi. It uses a different frequency (low spectrum educational) and is quite a bit better than the WiFi connection. Also it will not interfere with existing WiFi networks.

If Linux is an example, then why did the free market provide it?

Even if the bandwidth is infinite, the physical equipment needed to install and maintain it (along with the labor to maintain it) are not. You have a similar situation with phone access from your cable company. The time you can talk is essentially infinite, and yet you still pay a monthly fee for access. It doesn't really matter if one company provides the service or a thousand provide it, as long as the state doesn't limit new companies from entering the field.

Really, why should people who don't want to use the network be forced to pay for it? "It will benefit society as a whole" isn't a good answer. It may benefit society, but it doesn't follow that government should control it. Or if it does, then we should advocate government taking over other parts of the economy which benefit society--food production, oil production, automobile manufacturing, etc.

 

[elephant]

Hey Huck wants to "play economics".

I'll start with this. Internet service is not and cannot be a public good according to neo-classical theory: it is rival and excludable.

Rival, because even though you think there is infinite bandwidth, there is not. It is not even theoretically possible to have infinite bandwidth. There is a limit to the number of atoms in the universe, etc. On a more practical level you sound like some short-sighted computer scientist from the 1960's. They did not believe the computers we have now were even possible; there are uses for bandwidth you have even conceived of yet.

Also, as soon as bandwidth increases so will use of bandwidth. This is basic economics as well. Think about supply and demand curves. There are already problems with VoIP using too much bandwidth and very few people use VoIP.

It is excludable, because only those with wi-fi compatible computers, and those who are happy to share their entire life with Big Brother will be allowed to use it. So there is a cost to using that excludes some people.

I am not sure what the Baron's deal is but from the Austrian view:

Terms like monopoly, oligopoly, and competitive markets are strictly classical terms. I believe Austrians would dismiss you outright for even using those terms. Then they would explain the market provides those goods as efficiently as possible by definition. It is not possible that the government could do better. There is no such thing as a public good, common resource, etc. These terms are made up by fake “free-market” socialists to subjugate those who do not understand the free market or economics.

Finally and this has already been mentioned:

Why should the government take over a fully developed industry and give away the product? Are you kidding? What would all of the companies that provide Internet service do? Why would any company try to do any large scale projects in a country that takes them over as soon as they are successful?

This must be one of the most retarded ideas I have ever heard.

I feel it is also important to point that Internet is not a free market to begin with, because packets cannot be prioritized, i.e. I cannot pay more to have my packets moved ahead of yours. The Internet thinks we are all equal. I hate the Internet because of this fact - it is stupid communist BS.

 

[Huckleburry]

Someone from the heritage foundation made a very similar argument. You are correct, no good can be fully infinite. Yet there comes a time when measuring becomes an excercise in frustration. For example, Space. We are pretty sure that space is not infinite. But does it matter? Space is so big that measuring it is really not usefull because the human brain cannot process size on that scale. So physists are correct when they argue against the infinte void but there argument is useless because space is too big to fill. The internet is very similar. There is a limited amount of bandwidth, you are right there, but there is so much bandwidth that measuring it has become effectively useless. Bandwidth has become similar to space and like space is expanding daily.

Regarding the Austrian view. I think it is pretty harmful to the model that it discredits monopoly power when there is empircal evidence supporting its existance. A model that makes no attempt to reconcile documented occurances in the economy seems pretty flawed. Am I to assume that monopoly power can not exist even though there is a large corpus of empirical evidence documenting its exitstance? It seems to me that you are choosing to bury your head in the sand rather than confront a major flaw in your model.

Next, why does public use of the internet automatically mean big brother intervention. Have you ever walked on the sidewalk? Because a side walk is a public good. Did sidewalk usage automatically entail a total loss of all rights? Did big brother come and takle you and make you the walking automoton that you seem to fear so much? From the sounds of things it did not which leads me to wonder about the other flaws in your model.

And what about exclusivity? Yes people without wireless capable computers would not be able to use it. But does that mean they would not benefit from a nomadic network. What if there power bill goes down because the electric company becomes more efficient or the health insurance. Incorrectly you assumed that this would only affect consumers. In reality it would benefit suppliers as well.

Finally this is not government usurption of a private good. Internet is far from ubixoutous and private firms have no interest in extending their networks beyond major urban centers.

Finally, we live in a society where government views economic developement as one of its roles. If you would like argue the approriateness of this role be my guest just do it else where. The fact of the matter is this...Things that are essential to commerce are gererally involved in the government. This is true of the legal system as it is true of the majority of our infa structure. Connectivity has been empircally linked to economic development therefore connectivity ought to be a public concern.

To recap...The austrian model is broken
bandwidth is not infinite but measuring it is pointless
and the government participates in the econonomy.

Huck

 

[rtwngAvngr]

Someone from the heritage foundation made a very similar argument. You are correct, no good can be fully infinite. Yet there comes a time when measuring becomes an excercise in frustration. For example, Space. We are pretty sure that space is not infinite. But does it matter? Space is so big that measuring it is really not usefull because the human brain cannot process size on that scale. So physists are correct when they argue against the infinte void but there argument is useless because space is too big to fill. The internet is very similar. There is a limited amount of bandwidth, you are right there, but there is so much bandwidth that measuring it has become effectively useless. Bandwidth has become similar to space and like space is expanding daily.

Regarding the Austrian view. I think it is pretty harmful to the model that it discredits monopoly power when there is empircal evidence supporting its existance. A model that makes no attempt to reconcile documented occurances in the economy seems pretty flawed. Am I to assume that monopoly power can not exist even though there is a large corpus of empirical evidence documenting its exitstance? It seems to me that you are choosing to bury your head in the sand rather than confront a major flaw in your model.

Next, why does public use of the internet automatically mean big brother intervention. Have you ever walked on the sidewalk? Because a side walk is a public good. Did sidewalk usage automatically entail a total loss of all rights? Did big brother come and takle you and make you the walking automoton that you seem to fear so much? From the sounds of things it did not which leads me to wonder about the other flaws in your model.

And what about exclusivity? Yes people without wireless capable computers would not be able to use it. But does that mean they would not benefit from a nomadic network. What if there power bill goes down because the electric company becomes more efficient or the health insurance. Incorrectly you assumed that this would only affect consumers. In reality it would benefit suppliers as well.

Finally this is not government usurption of a private good. Internet is far from ubixoutous and private firms have no interest in extending their networks beyond major urban centers.

Finally, we live in a society where government views economic developement as one of its roles. If you would like argue the approriateness of this role be my guest just do it else where. The fact of the matter is this...Things that are essential to commerce are gererally involved in the government. This is true of the legal system as it is true of the majority of our infa structure. Connectivity has been empircally linked to economic development therefore connectivity ought to be a public concern.

To recap...The austrian model is broken
bandwidth is not infinite but measuring it is pointless
and the government participates in the econonomy.

Huck

The internet requires ongoing maintenance and upkeep, it's not like air, nor is it unmeasurable, nor is it infinite. You're whole line of thinking is trash.

 

[rtwngAvngr]

Huck. DO you want to give control of the internet to an international body such as the U.N.? This is the third time I'm asking this question. Why are you such a little punkass?

 

[Huckleburry]

Honestly Wing, Why do you bother participating in this forum? Your ignorance regarding the entire corpus of economic thought just makes you and your neocon buddies look silly. From espousing antiquated theories which emporircal evidence proved wrong, to confusing market economics with the market economy you generally detract from any disscussion of things economic. I adressed your argument in my first thread via effective marginal cost. You can look that up in a book, or do you just go with gut.