Utility vs Information Service

I saw this headline on the New York Times today:

F.C.C. Is Expected to Propose Regulating Internet Service as a Utility

Now you can argue whether regulating the last mile Internet is a good idea and we have done that ad naseum here at AVC over the years.

But if you accept that some regulations are necessary, you are then faced with the question of whether you should classify last mile Internet as a “utility” or an “information service” as is currently the case.

The decision by then FCC Commissioner Michael Powell to classify internet access (the last mile) as an information service a decade ago is really what’s at stake in this net neutrality debate.

An “information service” is something like AOL or maybe even Wikipedia. It is a service that provides information to a user. The wire (or fiber) that Comcast, Verizon, or some other telco runs from their network to your home or office is most definitely not an information service and should not be regulated as such.

To me it looks like a utility. Just like my electricity service, my water service, and my gas service. The honest to god truth of this matter is that last mile internet service is a utility and has been since broadband arrived a decade or more ago.

Again, we can argue about whether it should be regulated (as electricity, water, and gas are), but we really cannot argue with a straight face that broadband internet access is an information service. It never was and it never will be.


Comments (Archived):

  1. awaldstein

    Words matter. What we call things is what they are.When connectivity like water like electric is the same, it is at it should be,

  2. David Semeria

    All the more so considering 75% of households in the US have no choice over their broadband supplier (source: The Economist)

    1. awaldstein

      Bingo…Choice is really an issue here as there is none basically.

    2. William Mougayar

      Yup, there’s an irony in this- these top ISPs create a false illusion of competition. Instead of truly competing with each other, they bandy together and form a bigger collective monopoly, and impose their lobby on others.Same in Canada. Yes, it looks on the outside that Rogers, Bell, Telus are “competing” with each other, therefore it must be good for consumers. Nah! They move together in cahoots with each other, and they block other “real competition” like WIND. It is a failure of the CRTC and the government to not see through that. All they could do is ask them to reduce 3 year contracts to 2-years.

      1. Campbell Macdonald

        Yup. Many cities offer only 2 of the three to the home. In the US it is worse William. Many homes have a single data provider to the home.

      2. Jess Bachman

        Yeah, its a false choice. In Canada the choice between Rogers, Bell, and Telus is which type of technology you want to use to get your broadband. It’s not really a choice between companies. It would be like if transportation choices were between sedans and pickup trucks, not Ford, Chevy, GMC, etc.

      3. CJ

        It’s not a failure, it’s corruption.

    3. Bruce Warila

      Interestingly enough, I can get water (well or town), electric (numerous suppliers), and gas (propane or natural) from multiple suppliers. We are stuck with Comcast in our town, but I am willing to bet that Verizon would run more fiber if they did not have to negotiate with (pay off) every single municipality in Massachusetts.

  3. William Mougayar

    So the question now is – will this lead to further competition and pressure among the ISPs to upgrade their last mile technologies, or will this lead to further break-ups of the big ISPs who still have a quasi-monopoly?

    1. fredwilson

      Google continues to roll out its fiber business while Verizon seems to be stalling on FIOS

      1. William Mougayar

        Definitely Google Fiber is a game changer. The ISPs can’t afford to cannibalize their own business if they lay out more fiber, whereas for Google, it’s new revenue.

      2. Joe Marchese

        Residential customers wanting to know when FiOS will reach their are are being told: when it goes wireless. Nice idea… bad bet on VZ.

      3. John Revay

        Yup, I thought I heard/read that Verizon was slowing or stopping roll out of FIOS, but one thing is for sure – they are advertising the hell out of it to get people to switch from cable.For some reason – they are advertising in CT and I don’t believe it is an option if I wanted to switch from Cablevision.

      4. LE

        Why should they continue to jackhammer streets if they have to share that last mile at pricing that the government thinks is reasonable?And don’t compare google to anybody. Google is swimming in boatloads of money and they can afford to take all sorts of stupid gambles on things by virtue of the monopoly that they have on search.

          1. LE

            The subsidies are “supposed to help offset construction costs.” Offset is not the same as “pay for”. Either way it’s a very large expense which most likely takes many years to pay back. Plus no guarantee that technology won’t change to make it irrelevant (or less profitable).

    2. Sean Myers

      I think the answer to this may lie with what provisions of Title II the FCC is willing forbear. For example, I don’t think they intend to enforce price regulations.

      1. fredwilson


    3. David Geertz

      In Vancouver there are a few start ups who have acquired most of the unused dark fiber in the city that was rolled out by 360 Networks back in the day. They are taking a competitive approach to only dealing with the last mile. It’ll be certainly interesting to watch them unfold.

      1. William Mougayar

        That’s great. I didn’t know that.

  4. Anthony Serina

    I can’t say I have ever been ecstatic with any of my utility companies. They are all pretty much oligopolies or monopolies with little incentive to improve. Guess we are choosing between two devils here?

    1. James Ferguson @kWIQly

      It is not the oligopoly per se that causes the damage – it is the cartel action they take. An oliopoly provides choice and market competition where a cartel does not. (Gas stations moving prices in unison or banks moving interest rates together.)

  5. anon

    Never underestimate the potential of classifying electricity and water as information services. Actually, there are some very nice financial opportunities in this direction

  6. Marcus Detry

    It’s times like this that I love knowing Comcast spends more money lobbying the federal govt than any other company (sarcasm). It’s not like they could spend the money improving its customer service (even more sarcasm). I guess that decision has benefited shareholders, but I’m not sure how well I’d sleep at night if I was CEO. Hopefully common sense prevails over lobbyist $$$.

    1. pointsnfigures

      Professor George Stigler won a Nobel Prize illustrating the math behind regulatory capture. It’s no surprise that Comcast has allocated more money to government the larger they became, and the more byzantine government regulations became. They actually benefit from more regulation which is a perverse way to think about it.

    2. LE

      It would be stupid and reckless if they didn’t spend money on lobbying. They are a large company and government decisions (without their input) can have a large impact on what they are allowed to do and their profitability. Makes total sense that they would allocate resources to lobbying which is simply getting their point of view across. Nothing bad about that. Lobbying is education. You can do it as well if you want to take a trip to Washington you can meet with lawmakers and educate them on your position.

      1. CJ

        I just find this to be a willfully naive view. Sure what you say COULD be true but we both know it’s not.

        1. LE

          Hah if you knew me you would know that I am most likely the least naive person out there. You just want to throw in the “lobbying is bad” mantra hook line and sinker. By the way I have gone to Washington personally and have lobbied for things that I wanted to change.

      2. Marcus Detry

        I never said all lobbying was bad, but when it results in shutting down a company like Aereo, I have a problem with it.

    3. Santosh Mishra Yash

      nice idea… Mr. Detry…

  7. Chimpwithcans

    As utilities, will web cos all become fixed income, low volatility investment propositions in the future? They also rely on other utilities (powergrids) which i find an interesting relationship to watch in the future – data centers take up huge amounts of juice. They do not run without juice.

  8. ZekeV

    Net Neutrality advocates seem focused on access to high-bandwidth info without price discrimination. I’m certainly in favor of this. But I’m even more, like 10x more, concerned about how we cable consumers are forced to purchase bundled services. I would happily get by with a small fraction of the bandwidth that I use currently, if the cable company priced the tier in a fair way. Of course, they will never do that unless forced. B/c they know that there’s no upside in offering me a pricing tier that matches the trickle of data that I actually need to use, as a consumer that does not care about consuming high bandwidth streaming content. As it is, I’m offered essentially 2 options: all I can eat for like $100 and crappy for $80.

  9. iggyfanlo

    Feels like the distinction is between monopoly and competition. If those names mean that, then yes, utility… but perhaps those definitions cloud the real argument

  10. Pranay Srinivasan

    Ideally Services should be splitting their content arms and their service provider arms and bill you separately for pipe access and content access.Its the bundling that unnerves me.



    1. Chimpwithcans


  12. Twain Twain

    This is what happens when data is intellectually positioned as akin to oil, fuel, oxygen, water, gas. It erodes its status as “information”.Of course, it’s used as a utility.Data, especially pricing data, is included in a whole bunch of utility functions.

  13. kirklove

    Hmm, I struggle with labeling the Internet as a Utility. Is TV a utility? Not to me, so I’m not entirely sure why the Internet is. You need electricity, water, and gas to survive, you won’t die without the Internet.Don’t get me wrong I’m all for a neutral playing ground, and handling the last mile better, etc. Just that word utility feels wrong.



      1. kirklove


        1. Rick


        2. Karen Peters

          Grimlock has a point.The hardest part is now most companies only want your resume, CV, or experience through their specific applicant portal, which is only online. Now the portals are hard enough to fill in at home at your own desk where you have all the time and space you need. Try going to the DOL office, or the library, or use a phone?! Each “application” requires at least three document attachments, then for you to edit and add information to what they auto-filled into your form. Two hours is a safe amount of time for one application if you are hand writing and customizing your documents to each opening. The library and DOL One Stop offices have a time limit to how long you can use their internet. And when a lot of people all get on a network at once you are slowed drastically and are lucky to get a page to load at all.There’s also the issue of lack of quality. For example, I have friends who pay as much as I do for internet service, however they live in a location with old infrastructure, so that at 10 pm their internet slows enough that the time to load a page is back to dial up standards. Yet they pay what I do, since their other option is nothing at all. Shouldn’t some of that money go towards making their service comparable to mine? If the companies had competition, they would need to do this to stay on top of the game, however as it stands, no one is doing anything because the companies is making more money standing there doing nothing.

      2. Richard

        Try to get a job without tshirt and jeans 🙂

        1. FAKE GRIMLOCK


      3. Rick

        I’m gonna’ try to go fake grimlock. Here goes: Don’t be stooge begging for job on internet.

      4. Prokofy

        Funny, for electricity, a utility, and electric heat, a utility, if I use more, I pay more.INTERNET NOT UTILITY. INTERNET STONE SOUP.

        1. FAKE GRIMLOCK


    2. fredwilson

      last mile KirkLast milelast milelast milethis is what everyone doesn’t understand about this discussionthis is just about what happens between the cable and telco’s network and your apartmentit has nothing to do with what happens on the internet itself

      1. kirklove

        I think some keys on your keyboard might be stuck 😉

        1. Blake

          I think the “last mile” provisio (or blatant lack thereof in North America) needs to be trumpeted much, much louder than it currently is.

      2. awaldstein

        Doesn’t mesh nets play into this answer Fred?

        1. Rick

          I’ve already brought that up with VCs. They wouldn’t talk about it.

      3. Richard

        Looking back at 1934 act, it looks like Best time to regulate innovation as a utility is AFTER innovation peak not BEFORE.Are we at that point?

        1. CJ

          Yes, artificially because of the lack of competition. Regulation, in this case, will spawn competition.

        2. Rick

          Or the introcuction of regulation causes innovation to stop!

          1. Rick


        1. Blake

          While monopoly last-mile access does impact paid peering, if open access was once again the rule of law, local & regional interconnection with medium-sized players would be much more important in the North American peering landscape than it is.Like it is in the rest of the world, & becoming more so every day.When the national players can sue a municipality for *gasp* attempting to provide decent service to its residents & win, there’s a really big problem. & the biggest problem is that far too few people know or care about it.

          1. kidmercury

            “if open access was once again the rule of law” (emphasis added)open access was never the rule of law. payments between points in the network have always been occurring.your hypothetical argument may in fact be true, as is the case for any hypothetical argument. in practice, internet speeds and access rates have been improving, and the united states is generally ahead of the pack — especially when one adjusts for geographical differences.

          2. Blake

            Under TCA96, incumbent local loop operators were legally required to provide access to the last-mile copper pair to the subscriber, and to do so at a regulated rate. This was the case until Congress repealed the parts with teeth in 2005 after a decade of lobbying by Big Telco & Big Cable.Broadband Internet service providers are the only industry in the US with customer service ratings consistently lower than airlines.According to the OECD data, the US ranks 16th out of 34 OECD countries at 29.8 broadband subscriptions per 100 inhabitants, just barely above the OECD average of 27.Big Telco (& the legislators they’ve bought) like to use the excuse “it’s because we have such a large rural & suburban population”. However, in the list of OECD countries with better broadband penetration, about half of them have a similar level of urbanization as the US, & some are significantly lower (World Bank 2013 data).When you consider the urbanization data & the fact that we have the 4th-highest per-capita GDP in the same list (by a wide margin vs. #5), it becomes clear that the real reason is that Big Telco has written & bought the legislation that enables them to maintain their monopoly, allowing them to provide absolutely crap service for high rates in most of the country, & not bother to improve service for markets with no competition.

          3. kidmercury

            i don’t fully follow your comment, but will try my best:1. TCA /96 resulted in more consolidation, so i don’t know what you mean here; if anything, that legislation advanced the fears of NN proponents.2. everyone can cut and choose the data as they please, as you are illustrating by not factoring in OECD countries or looking at data on a state by state basis (and observing the characteristics of the worst performing states that bring the average down — you’ll likely find geographical and demographic similarities), or the year of year improvements in speed, or other things like 4k readiness that telecoms are investing in. i am not here to defend the telecoms, only here to illustrate that we have a process on a positive trajectory that people claim is not working because of hypothetical fears.

      4. MickSavant

        what about mobility? Should we classify mobile broadband as a utility? Where does the “last mile” argument come into play when most major metropolitan markets have 5+ options to access mobile broadband?

      5. Rick

        How does this all play out with making money? That’s what matters. Is there a way the “last mile” law will create an opportunity to change how things are done and make fat stacks of cash?

        1. ldouglas

          Yes, we believe there is a way to make money with a utility model. We are deploying several networks in US and Canada this year that are a pure utility model for the first, middle, and last mile infrastructure. We’re working on hosting a Next Century Cities conference on the topic.

      6. Gregory Magarshak

        Fred, I think the real solution to all this is more competition. Stop the states from suing cities to prevent them from implementing municipal fiber. Open up the field to companies like Google to come in and partner with cities who can provide the last mile, competing with businesses. Even libertarians should say, “well, a city is a large organization and a giant corporation is a large organization, and both are kind of monopolies at this point…”

        1. fredwilson

          Yes. That would be great. Hasn’t happened and not sure it will. It is the ideal solution for sure

          1. Gregory Magarshak

            Yeah, “Obama’s on it.” Wish he cared when dems still had control of the senate. Now it’s likely republicans will take the opposite stance, and nothing will get done. On the other hand, opposing municipal fiber might bring the republicans some heat in the next election cycle, so maybe they’ll go for it. Cory Booker introduced a bill called the Community Broadband Act recently to make it illegal for states to block cities from implementing broadband. Where are the lobbyists? :)http://www.propublica.org/a…

        2. Prokofy

          Criticism of the magic of Google fiber in cities. https://www.google.com/sear…This article especially telling. Google needs to get into your house to scrape more data for its ad agency.http://www.wsj.com/articles…This article really calls out all the “progressive” and libertarian fallacies about cable and broadband. Not everyone finds it useful. Not everybody wants to pay even a little for it.

      7. Steven Kane

        yupyupyupyupand amen to that

      8. Prokofy

        The last mile is where all the heaviest lifting is done, YouTubes and Lost Episodes and World of Warcraft. Yes.

      9. Blake

        The sad thing is, we had a good chunk of what’s necessary for about 10 years:http://en.wikipedia.org/wik…TCA96 forced incumbent carriers to provide 3rd party access to their last mile infrastructure at regulated rates. After a decade of strong lobbying from Big Telco & Big Media, Congress pulled most of the teeth out of the last-mile stipulations in it.People from the rest of the world (other than Canada) flip their lids when I explain to them that Congress actually rolled back our open-access provisions. Then the conversation usually rolls around to health care…

    3. David Semeria

      TV is a good analogy. Most transmission masts have a range of around 50 miles. Since it doesn’t make sense to build masts close to each other, each has a de-facto monopoly within a 50 mile radius, give or take.Now, imagine the owner of a mast decided to offer better reception to different channels based on how much they were willing to pay.You sit down to watch your favorite program and the screen is all fuzzy. Is there something wrong with your TV? Nope. Your aerial? Nope. Perhaps the broadcaster has a problem? Nope again.Your crappy viewing experience is simply due to the broadcaster being unwilling or unable to agree to be shaken down by the mast owner.This is what happens when monopolies, even local ones, abuse their market position. And that’s why they should be regulated.

      1. kirklove

        Solid point. Appreciate the time outlining it.

    4. Vasudev Ram

      You (meaning anyone) may not die without the Internet, but it is getting pretty close to that – in the places where the Internet exists – for _practical purposes_ , i.e. not speaking literally but close to it – for a lot of people.Compare service Internet to phone service (whether land line or mobile) as a utility, observe how Net services are replacing phones (e.g. ask Fred – Kik et al. but also ask plenty of others who use the Internet heavily), and then think again.So it ought to be regulated as a utility, IMO.

      1. kirklove

        Fair point. No one would die, though it has become invaluable.

    5. James Ferguson @kWIQly

      From Wiki”Utility is an important concept in economics and game theory, because it represents satisfaction experienced by the consumer of a good. Not coincidentally, a good is something that satisfies human wants and provides utility, for example, to a consumer making a purchase.”so a) consumed – YUP 1b) satisfies a want – YUP 2works for me – ahh thats YUP – 3

      1. kirklove

        I’m always suspect of a definition that uses the word itself to define it 😉

        1. James Ferguson @kWIQly

          I can agree there – but I guess “value would do it”

      2. MickSavant

        are you trying to be clever here, with this different meaning of utility?

        1. James Ferguson @kWIQly

          @MickSavant:disqus – No this is one and the same word – the fact is that the common parlance use is derived from “public utility” and since none of these privatised companies provide that (ie public services from taxpayer funding) – the difference is mute – and not clever at all.The “works for me” was undoubtedly me trying to be funny – but perhaps less than clever

          1. Vasudev Ram

            That should probably be “the difference is moot” – unless you were trying to be clever again, and succeeding this time 🙂

          2. James Ferguson @kWIQly

            Perhaps only when common parlance is under discussion and the “public”in “public utility” is unspoken but none-the-less debated is mute for once mootWell spotted – It would have been truly brilliant if deliberate – but sadly it was an error on my part

          3. MickSavant

            I don’t think Fred used it in the context you applied

    6. Chimpwithcans

      I don’t think defining a utility should be about survival. Humans can survive on very little.A utility is something that is provided as a service to the public, often by government simply due to infrastructure costs. Nothing to do with survival.

      1. Rick


    7. Rick

      “You need electricity, water, and gas to survive”.What?!

    8. PhilipSugar

      In my mind utility means you have a set fixed price and rules of delivery. For some things it is not feasible to have open competition because of the infrastructure costs/feasibility/right of way access to deliver your service. You named several like electricity, water, and gas. in return for being granted the right of way access you need to deliver the last mile you are treated as a utility.So you deliver like a utility. It doesn’t matter whether:I am using my electricity to power a light bulb in the basement or using it to power a super secret trading algorithm that makes me millions.I use my water to water my plants or make the best beer ever made.I am using my gas to take the chill out on a fall morning or keep from freezing in sub zero weather.I am using my phone to blab with a friend or close a million dollar deal.The price and the delivery are fixed, you are not allowed to slow down delivery or increase price depending on how I am using.You can bet if it was feasible for any of these utilities to price on value versus as a utility the would love to price for value, but it would cause all sorts of problems and so they are a utility.With internet delivery it is very possible to price on value, but if you allowed that you would be allowing the utility to extract all the profit for all the value.So for instance you have people like Ed Whiticare from Southwestern Bell on record saying why should Google make so much money? I should be making that money. Does that sound reasonable? Or should Ed realize he is a utility, and its none of his damn business what somebody is using his utility to power.

    9. Sean Hull

      Yep. I agree kirk.

  14. kidmercury

    “The wire (or fiber) that Comcast, Verizon, or some other telco runs from their network to your home or office is most definitely not an information service “it is. when it provides security services, it engages in intelligence and thus is an information service. future innovations will come from making ISP pipes “smart”.more importantly, my understanding is that the NN regulations will put peering and non-last-mile aspects of internet connectivity under title II regulation. i consider it reasonably probably this will reduce internet speeds, hinder innovations like amazon’s silk browser and various “sponsored data” programs introduced by at&t and t-mobile.the big point to remember is that the key variables that impact speed occur primarily beyond the last mile. yet proponents of NN always focus the discussion on the last mile. the regulations they propose impact both the last mile and all other “miles.”

  15. kev polonski

    “To me it looks like a utility. Just like my electricity service, my water service, and my gas service”Would you advocate paying for the amount of the utility you use just like all others you mention? Why should I pay the same as a you-tube junkie who wastes his/her time watching useless videos?

    1. pointsnfigures

      Delivering video content takes up more bandwidth than a simple webpage. The marginal cost of delivering the next drop of water, or the next volt of electricity is the same.

      1. LE

        Except that in the case of water or electricity if the usage exceeds a certain point then the utility company needs to build a bigger powerplant to supply it. That’s the reason they run those conservation ads. They want to keep usage below a certain point because if they have to “expand” they won’t be as profitable. High fixed cost.

    2. fredwilson

      absolutelyi don’t think internet access pricing should be regulated

      1. kidmercury

        all miles NN regulation (what is currently being proposed) is implicity regulating price, because it prevents subsidized content (tmobile music, att sponsored data). so carriers like tmobile are unable to complte on price differentiation in such a capacity.

      2. Steven Kane

        i’m super in favor of title II and NN but i do fear that much more costly, metered broadband is now imminent. btw, thank you for calling NN “regulation.” 🙂

    3. LE

      Why should I pay the same as a you-tube junkie who wastes his/her time watching useless videos?Who is to determine what “entertainment” is “useless”. All entertainment is useless. Nobody needs any entertainment. Why is someone who is enjoying a stupid youtube video any less worthy of entertainment than someone watching a stupid football game or an opera?

      1. kev polonski

        They are not. But doesn’t mean they shouldn’t pay based on how much they consume

  16. pointsnfigures

    I am going to say that it’s not a utility. Mankind can survive without it. Makes life a lot less convenient, but you can survive. It’s not like water, heat, or electricity which are sort of “public goods” and necessary for survival. Although the argument could be made we don’t need heat or electricity either.My prediction is that they will pass regulations that may fit for the short term. Over the long term, those regulations will become a larger block to innovation than the perception that corporations will throttle the internet.Another prediction is they will freeze out competition, and only larger corporations will be able to afford and take advantage-killing small competitors. Look at Dodd-Frank and Obamacare. Who was able to take advantage, and who went out of business?

    1. fredwilson

      try doing thatits just like electricity

      1. pointsnfigures

        I don’t think it is because the marginal costs are different. Also think that regulation will limit innovation and competition, because new entrants will have to squeeze through the regulatory wormhole.

        1. FAKE GRIMLOCK


          1. pointsnfigures

            Can I use cellular only? If so, I theoretically could do my “job”. Wouldn’t be as efficient, convenient or easy, but I could do it.

          2. FAKE GRIMLOCK

            ONLY FOR VOICE.

          3. fredwilson

            Cell is last mile too. We are taking about how you and everyone else get to the Internet.

          4. pointsnfigures

            I think you and I agree on the outcome-I seriously detest government regulation when it comes to things like this and think they do more harm than good. At the same time, I am cognizant of the potential monopoly powers of Comcast et al. My personal experience has been more regulation increases costs, further limits competition, and picks defacto winners and losers because only the humongous corporations can afford to shoulder the burden of regulation. This is not an easy problem to solve, and I don’t the the FCC is going to solve it either.”I can’t invest in your company because of fast lanes and slow lanes” might turn into”I can’t invest in your technological innovation because you won’t be able to bear the cost of regulation-so just go to Comcast and see if they will buy it.”

          5. Rick

            It’s possible to drop a wireless net over the country with a “point” at every home. I brought that up with Brad but he didn’t respond. But if the funding could be had the technology is there to use.

          6. Rick

            Yes, they have cellular internet packages.

          7. Rick

            I think that’s a good idea. Everyone should go one month without using the internet. It’s kinda’ like going a month without getting drunk. Are you better off after the month?

        2. CJ

          No competition anyway, better the chance for some than the certainty of none.

    2. Vasudev Ram

      >It’s not like water, heat, or electricity which are sort of “public goods” and necessary for survival.Have you heard of the Internet of Things (IoT)? Rhetorical question, I’m sure you have – but you may have not factored it into your argument. It looks like after some years, many if not most devices (such as sensors and actuators that control your water, heat and electricity supply) will be IoT devices and need the Net to work. So, indirectly if not directly, you will need the Internet for survival.

      1. pointsnfigures

        I know I am not going to win the hearts and minds of anyone in the tech industry. Tech people think out of the box, years ahead of time, and imagine all kinds of “what ifs”. Yes, IoT will probably happen. When? Who knows but I’d also hypothesize that when they do permeate every part of your life, the regs they write today will be relatively useless. I’d also postulate that new delivery technology will be developed if there is demand for it.My experience is regulators fuck it up more than fix it. My expectation is not hopeful here, but I hope I am terribly wrong.

        1. LE

          Tech people think out of the box, years ahead of time, and imagine all kinds of “what ifs”I think in all fairness you would have to actually research all the out of the box things that never happened and weren’t practical in the end and just dreamer ideas (everyone having an airplane was one of those ideas as an example).Plus there is a big difference between some guy sitting somewhere writing about some idea or postulating and someone actually trying to do that idea.

        2. Vasudev Ram

          >I know I am not going to win the hearts and minds of anyone in the tech industry.No issues there, this is just friendly discussion :)>Tech people think out of the box, years ahead of time, and imagine all kinds of “what ifs”. Yes, IoT will probably happen. When?Yes, tech people do tend to do that. And are often wrong, or it may take longer than they think – agreed on both points. But this particular one may happen sooner than we might think. A couple of points (only anecdata, of course): 1) I’ve been in talks with a company that is into the IoT area, have been doing it for a while, and have had customers for some time – and their area of work involves utilities. 2) PTC (Parametric) acquired Thingworx, an IoT company for $112 million. I blogged it here a year ago:PTC Acquires ThingWorx, Internet of Things Platform Provider:http://jugad2.blogspot.in/2…I agree with you on the regs part.

          1. pointsnfigures

            thanks. will read the blogpost. I think I agree with the net neut people on the end game, disagree on the road to get there.

  17. Rick

    Shouldn’t the internet be free?!

  18. John Willkie

    One tends to think of the electricity company, water company and gas company as not being innovative. Classifying Internet access as a public utility — the reductio ad absurdum of “net neutrality” means less innovation, less investment, etc. Once again, the path to hell is paved with good intentions.This is what happens when many (unthinking, for the most part) people clamor for a political solution to a non-existent problem.

  19. Austin Broadband

    VZ and T own last mile and 100+ MHz of licensed spectrum. Cable is competitor in fixed. They are transitioning from copper to wireless last mile in plain sight by using the FCC and Congress as their pawns. The web/internet companies are allowing this minus a few science projects here and there. We need to see the VC community start investing more in local competitive last mile provider business models. Fixed wireless is now viable and “Special Access” has no real competition. VC’s can earn 10-50x over 3-10 years almost guaranteed…and create meaningful competition along the way for their other more important investments….

    1. fredwilson

      It’s tough to compete with these big guys.

      1. baba12

        it isnt tough to compete if the money bags were to not keep pushing their agendas and actually think of the public at large… It is hard to see that happening…

  20. Ari Lewis

    This whole affair is frustrating. I don’t even think the government understands what they are even regulating. They are creating a broad range of rules that will arguably affect internet for many years to come. Yet, nobody understands what these proposed rules even are.

    1. CJ

      I think they understand that they want the ability to regulate the industry to keep it in check. That’s good enough for now.I honestly don’t expect much change except that the industry will play better on their own knowing that the spectre of regulation is real rather than bluster.

  21. Irongirl

    Are there any VCs interested in the mesh space? Most of them seem to be focusing on social media and copies of companies that are already out there.

    1. fredwilson

      We are. We have one mesh investment and would like to make more

      1. Irongirl

        Do you have a team you’d like to use? I have a one page plan; I’d be happy to give it away. But I can’t be the lead goat because I’m building a media company right now and its’ where my heart is…I do wish we had more than one company in our rural community because they are awful and their csv is &*^%&!!! I built my plan to be fast, flexible and as cost effective as possible, but I’m a cloud …ant stuff doesn’t fly. I’m not the person I’d need to be to carrying this egg across the finish line. But I’ve heard that most VCs have favored ee’s so if you do…just reply here.

  22. Kevin Werbach

    Fred, just to clarify, there isn’t a “utility” category in the Communications Act. That’s a general description of this type of regulation. The distinction in the statute is “information service” vs. “telecommunications service.” Each of those has specific legal definitions. The FCC has to follow the language dictated by Congress; it can’t just go on the common-sense usage of the terms. The Brand X case before the Supreme Court in 2005 was about whether the FCC could permissibly label broadband an information service; it was a split decision but the majority said “with a straight face” that it could.Brand X didn’t say the FCC had to reach that conclusion, just that it was permissible. The agency will be on solid legal ground reclassifying broadband access as a telecommunications service (although I see the legal challenge as less of a slam dunk than most net neutrality proponents). I’m not arguing against the outcome.My point is that if being a “utility” matters, we need to ask what exactly makes something into one? What about the dominant, essential company that for a long time called itself a “social utility” (Facebook)? What about the dominant, essential company that likely owns the biggest communications network of anyone (Google)? And even if we agree on who goes in the box, what kinds of rules does the “utility” label mean should be imposed?It turns out the computer scientists who built the predecessors to the Internet thought about these kinds of questions a fair bit in the 1960s. The concept back then was called the “computer utility.” I wrote about this history and what it means for today’s policy debates here: http://papers.ssrn.com/sol3

  23. Frank Franzi

    Now you can argue whether regulating the last mile Internet is a good idea and we have done that ad naseum here at AVC over the years.But if you accept that some regulations are necessary, you are then faced with the question of whether you should classify last mile Internet as a “utility” or an “information service” as is currently the case.The decision by then FCC Commissioner Michael Powell to classify internet access (the last mile) as an information service a decade ago is really what’s at stake in this net neutrality debate.An “information service” is something like AOL or maybe even Wikipedia. It is a service that provides information to a user. The wire (or fiber) that Comcast, Verizon, or some other telco runs from their network to your home or office is most definitely not an information service and should not be regulated as such.To me it looks like a utility. Just like my electricity service, my water service, and my gas service. The honest to god truth of this matter is that last mile internet service is a utility and has been since broadband arrived a decade or more ago.Again, we can argue about whether it should be regulated (as electricity, water, and gas are), but we really cannot argue with a straight face that broadband internet access is an information service. It never was and it never will be.

  24. ddrechsel

    Introducing Warren Meyer to the discussion, he posted yesterday, commenting that if we let the regulation go the way phones and other utilities go, we’ll soon be locked out of all innovation. See his post here: http://www.coyoteblog.com/c…Dilemma, hardening of the arteries via utility regulation vs. hard to control, but free to enter and nominally competitive ISPs.I think I take no regulation and let’s figure out how to get more than two cable companies (and in reality one) into most local municipalities. This is controlled according to the FCC and my memory by, “local franchising authority – the city, county or other governmental organization authorized by your state to regulate cable television service”That’s where we need to go back to to create more ISP compitition to control the actions on the pipe.

    1. baba12

      What you need is a effective, intelligent and informed democracy. What is a in-effective, stupid & garbage filled democracy. The last 40 plus years have gotten us to where we are, if you look at the number of progressive public policies (legislatures) passed in the last 40 years you would be hard pressed to find many. It took eons to pass fair pay act or get some other things that would be considered progressive.But in the same time period we have increased the rhetoric around things most of the developed world has moved beyond like evolutionary biology or climate change. We still debate such things and keep the masses more stupid than ever.This tech revolution has not benefitted the lower 20% of the population, has actually destroyed many of the folks ability to have a quality of life.I dont believe “no regulation” would have the effect you espouse.On the contrary those who are operating in regulated industries would loathe and scream foul if you were to strip regulations and allow new entrants into the field, sectors like Finance, Energy and Telecom have no desire to give up their fiefdom. They are fine and dandy as long as de-regulation happens in every other sector but they don’t wish for any changes in their environs.I would like to see cities deploy broadband networks either in conjunction with the “Google’s” of the world or on their own and charge the citizens the cost plus 20% to maintain the infrastructure. Allow the existing players to participate and offer equal or better service. But most like the Verizon’s of the world would rather get out of the landline business and focus on wireless (not wireless broadband), they have huge margins and like that.We the community would benefit from real broadband networks and possibly offer a fairer space for those who have not been able to participate in the tech boom thus far.Ah well i need to slap myself and wake up this is more of a dream….

    1. fredwilson

      Great post

  25. alg0rhythm

    Utilities are capital intensive infrastructure that only makes sense to install as a system to static locations. Water, roads, electricity, information (phone, cable, internet, who cares, its information flow rate- connections that form our societal nervous system) Regulate? Of course you have to; anything that is structural in nature requires structural checks and balances. Worst cases with businesses get out to things like judge payoffs to keep for profit prisons full, and individuals cannot, and should not have to try to take on huge systems; building guidelines in usage depends on function, and should be a part of building new infrastructure. I disagree that it has to be complex; the mediums change but the biological hardware they serve changes primarily in how they understand themselves, not in capacity or technique. Last mile of information infrastructure needs to be looked at and dealt with systemically, and placed, in secure, easy to maintain pathways, in tandem with traditional utility infrastructure, since every foot of water and gas infrastructure needs upgrade, update and or replace.

  26. Sean Hull

    Is there only one possible perspective on this issue?Do we as tech startups, investors & disruptors have a bias on this question?

  27. IS

    Could someone please define “innovation” here? The term is being thrown out like there’s a) a clear definition of what it means in relation to ISPs, and b) as if innovation hasn’t happened in other regulated utilities.Re. point b) have there not been, for instance, innovations in power generation and transmission? Innovations in grid management? It’s a lazy argument to say “but … innovation” and fail to articulate even the slightest view of what that means in practice. What about all the suppliers to those regulated industries? Will they stop innovating, too?The way I see it, especially if price regulations go into effect, the ISPs are going to have a very selfish incentive to innovate. Why wouldn’t they bring online new technologies to maximize throughput on exiting infrastructure, to route data more and more efficiently, etc. In other words, to invest in technologies that allow them to increase service and reliability without huge capex expenditures?Maybe I’m off base, but I’m not sure that we’re seeing a whole lot of ISP innovation right now, unless you consider “how to make mad money while antagonizing your customers” a business model innovation, which it may well be.

  28. nagaraju kalwacherla

    it’s corruption.

  29. ldouglas

    What the incumbents have today is the power to operate in a monopoly/duopoly “facilities-based” competition. The result is purely synonymous with slum-landlords. They have the market cornered on those that can’t afford, relocate to, or own their own facilities (that would be most humans and businesses on earth – it costs a few nickles to launch a new carrier from scratch, I’ve done it)The alternative is Municipal FTTP Infrastructure. It is actually more aligned with real estate than any other model. The best case scenario is that the fiber is simply glass in a leased, deeded, or shared space. That glass is leased or rented to providers/carriers to deliver in a “services-based competition” situation. Resulting in every citizen being afforded the equal opportunity to “fair access” to live, learn, and launch on the backbone of the global economy, while driving up quality, and prices down, of services.If we are honestly in the knowledge, sharing, and/or digital economy, then access is as essential as clean water, roads, and public safety. It is the government’s mandate to ensure essential services.

  30. Prokofy

    Because Google’s business model and revenue generator relies on having “capitalism for me/socialism for thee” and getting the state/the people to pay for the last mile, so they don’t have to. So yeah, the last mile never has information on it, ever. It’s just cable. And hey, just a utility. Because Google needs it that way, and so do many of the services reliant on Google.

  31. Prokofy

    So I stopped by to see if you were going to go for Sling TV or nothttp://www.fool.com/ecap/th…