Here Comes Big Cable to Slay Another Rule That Helps Small ISPs Compete

Discussion in '[H]ard|OCP Front Page News' started by Montu, Aug 9, 2018.

  1. Montu

    Montu [H]ard DCOTM x4

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    Big Cable is lobbying to kill off a rule that helps small ISPs compete. The rule in question requires the telecom companies to allow competitors to resell their internet access at a government set rate. They don't like this. Economist William Zarakas uses figures from the telecoms to build his case that this brings much needed competition to the market. The study also found that small competitors that don't have installed equipment in the market are providing faster access than their Big Cable competitors and at very good prices. I know I can vouch for that because my electric provider installed fiber out here in rural Texas and I'm getting a great deal for 1Gbps up and down with no data caps. Hey, Big Cable companies, suck it up and compete. Read the report here. Thanks Lifelite!

    Amazingly, the competition is doing more than the actual companies that already have their equipment in the exchanges. Why? Because they know that people want faster internet access, and they are trying, despite being at a disadvantage, to offer that to the market.
     
  2. pcgeekesq

    pcgeekesq [H]ard|Gawd

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    Paying off government officials so they grant you a de facto monopoly is an ancient and highly-effective profit-maximizing tactic.
    A few million dollars invested as campaign contributions can yield billions in profits (e.g. the Federal mandate for ethanol in gasoline, ADM makes a fortune off that) -- where else will you find an investment with that kind of ROI?

    It's part and parcel of having a big powerful government: it takes only corporate pocket change to get just a tiny fraction of that power used for your exclusive benefit, but that tiny fraction is more than enough to cripple your competition.

    And no, it doesn't matter which party is in power. Politicians are politicians, and big corps like ADM donate to both sides of the aisle.
     
    Last edited: Aug 10, 2018 at 10:50 PM
  3. Baditude

    Baditude [H]ard|Gawd

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    Please define " I'm getting a great deal for 1Gbps up and down with no data caps." What does that cost per month?
     
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  4. katanaD

    katanaD [H]ard|Gawd

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    of course, because thats good business
     
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  5. [21CW]killerofall

    [21CW]killerofall Aliens...

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    Likely your 2nd born. It is a great deal over the 1st born that the cable companies ask for.
     
  6. Montu

    Montu [H]ard DCOTM x4

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    $99.00
     
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  7. dgingeri

    dgingeri 2[H]4U

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    That's not smaller companies competing. That's leeching off the big companies.

    For smaller companies to be able to compete, local governments must be forced to allow other companies to put down their own cables, as long as they abide by the rules to do so.
     
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  8. lcpiper

    lcpiper [H]ardForum Junkie

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    OK,so I have some problems with this, but it also depends on how certain things are determined, for instance, the government set rate that is mentioned. I think that's a pretty important figure in this discussion and if that rate is not properly set up then I can see this as unfair for one group or another.

    So here is my first real issue. I'm not sure these small ISPs actually qualify as competitors. Competitors compete, but these CLECs have no equipment in the game, their operating overhead is not only as minimal as it gets, but it's more parasitic then anything. It's not real competition, for instance, no innovation on the small ISP's part can happen because they aren't actually doing anything, nothing to innovate unless your talking about customer billing because that is about all they do. They create a company, buy bandwidth from a big ISP who has to sell it to them, they are not required to maintain it or upgrade equipment, etc, just sell it and make a their profit. These, if I am mostly right about this then I think parasite fits better than competitor. It's false competition. Or is it faux competition?

    How nice it would be if I could create my own water delivery company, I don't even have to delivery any water, hire drivers or buy trucks, I just buy 20-30 thousand jugs of water every month and my customers pay me instead of the company I bought them from.

    Imagine how low my costs are, no need to invest in infrastructure, no risk even, not really. Of course I can sell any speed of internet service cheaper.

    Maybe someone can tell me where I got it wrong. I imagine these small ISPs still have some infrastructure for their domain, exchange mail, etc, except of course that shit can all be purchased from Amazon Web Services and I just need a few work from home Admins to manage them.

    Yea um, I'm going to need you to come into work Saturday ......
     
    Last edited: Aug 9, 2018
  9. freeloader1969

    freeloader1969 2[H]4U

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    Why spend money on infrastructure when you can just buy politicians and have the laws changed to your benefit?
     
  10. Exavior

    Exavior [H]ardForum Junkie

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    This article is factually incorrect in a few areas.

    CLECs have their own equipment, or I should say normally have their own equipment. Those that resell over the existing ILEC network is very rare in the circles I have ever been in. Not only that but a cable company isn't an ILEC, they are a CLEC. An ILEC is your local telephone company. So AT&T, Frontier, CenturyLink, Windstream.... those are ILEC if they are the local telephone company. Comcast, Mediacom... they are overbuilding the ILEC to compete so they are CLEC companies.

    I am not aware of any rule that requires cable companies to share their plant with others, so that is a new one to me. Now ILECs under certain circumstances can be forced to do that, but even then if you are a small one you can get around that requirement.
     
  11. Exavior

    Exavior [H]ardForum Junkie

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    The government rate is flat across the state based on different factors. The same as your local telephone service cost. If I sell somebody a T1, the state tells me what I have to charge for the T1, I can charge more but I can't charge less. Same for DSL, same for transport... if you are regulated the state tells you what you have to charge.
     
  12. lcpiper

    lcpiper [H]ardForum Junkie

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    So the same is true for the major ISP and it's selling of bandwidth to smaller "competitors"? Are those prices regulated as well?

    Put it this way, I'll try and cut to the chase.

    If that rate is say, too low for a major ISP or telecom to make real profit because of operating costs, which smaller ISPs don't have much of. And if smaller ISPs are just reselling what they are buying with little additional costs, then who's making money and who isn't?

    And if the rate is set too high, well then they both are making bank and it's not their fault, and furthermore, the government itself is setting the price ceiling and actually limiting any possible competition because none of them can undercut the specified rates.

    Add to this that, if you are correct that the rate is flat accrossed the state, different regions can have drastically different impacts on the effects of these fixed rates.
     
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  13. Todd Walter

    Todd Walter Limp Gawd

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    That's not a great deal, that is fucking fantastic deal. I'm paying 800/mo for 100Mbps synchronous in Canada . Granted, that includes 12 SIP endpoints, but excuse me whilst I go cry in my beer for a bit!:cry::banghead:
     
  14. vegeta535

    vegeta535 2[H]4U

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    980MB/880MB $80 a month here.
     
  15. Biznatch

    Biznatch [H]ard|Gawd

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    No.... The parasites are the giant cable companies that received a ton of tax money to roll out infrastructure, then turned around and lobbied local governments to prevent competition from rolling in and using any of the infrastructure we already paid for. If a small ISP can lease those lines and make profit, then obviously we are the ones getting screwed by the big companies charging artificially high rates because they have no competition.

    We need to take back control of our infrastructure, then lease it out to anyone that wants to use it, including the big ISPs. They should not own/control that last mile, preventing anyone else from using it.
     
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  16. Todd Walter

    Todd Walter Limp Gawd

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    Welp, now I'm bitter.:mad: I'll be swinging a dead cat over my head at midnight to ensure a meteor heads both your ways. :troll:
     
  17. Todd Walter

    Todd Walter Limp Gawd

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    Sadly, we have this infrastructure sharing system in Canada and it doesn't help. Too many miles and too few people to ensure the cable guys get their ivory-handled back-scratchers.
     
  18. lcpiper

    lcpiper [H]ardForum Junkie

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    Just change the conversation and run off topic with it.

    Do I have this right about the overhead part of these small ISPs or not?
     
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  19. travisty

    travisty Gawd

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  20. gusphase

    gusphase [H]Lite

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    This is more jiggering with the terminology. These companies were not given "taxpayer money." They were given tax breaks, meaning they got to keep more of their own money. Also, I don't see any of these cable companies making "vast profits" that articles like the one in the OP keep alluding to. Cable company profit margins are tiny compared to Google (Alphabet), Microsoft, and Apple.

    https://ycharts.com/companies/CMCSA/profit_margin

    https://ycharts.com/companies/CHTR/profit_margin

    https://ycharts.com/companies/T/profit_margin

    So Comcast has averaged 14% for the last 5 years.

    Charter has averaged 6%.

    AT&T has averaged 11%.

    Meanwhile, Alphabet's average profit margin for the last 5 years has been just under 20%

    https://ycharts.com/companies/GOOG/profit_margin

    Facebook has averaged 30% over the last 5 years:

    https://ycharts.com/companies/FB/profit_margin

    And Apple has averaged 38%.

    https://ycharts.com/companies/AAPL/gross_profit_margin
     
    Last edited: Aug 9, 2018
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  21. cyberguyz

    cyberguyz Limp Gawd

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    Much as I hate to say this big cable sells blocks of bandwidth to these second tier providers at deeply discounted wholesale rates. Not only that but they have service contracts in place to maintain these 3rd'party's customers. To make up for the shortfall, they sell to the end consumer at inflated rates.

    Downside of that is that big cable loses customers to those second tier which can afford to resell that bandwidth with a smaller profit margin since they don't have to directly pay for service techs. While this is great for us consumers it sucks in many ways for the cable network providers.

    Unfortunately not everyone (me included) is lucky enough to be able to get on board with those Tier-2 providers. In Canada it is not possible yet for Tier 2 providers to install in FTTH sites (Needs CRTC {Canadian FCC} open it up and enforce it). Those of us that can't get on those discounted providers are stuck having doing the "new customer deal" dance every year or two between the major Cable and Telco players in our area. While having fiber right to your house is pretty cool, it is a serious pain in the ass when you only get to pick between the highest cost bug cable/telco network owners.

    Of course FTTH is where you are going to get real gigabit and beyond speeds so the second tier guys are pretty much cut right off from that.
     
  22. Exavior

    Exavior [H]ardForum Junkie

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    Yes, if the larger is a ILEC. A cell carrier has 3 towers in my ILEC region, I feed them with fiber for them and deal with the transport of data to the towers. What we charge them is set by the government based on tariffed prices. The same holds true for an area where I put some equipment and did fiber to the home for a industrial park. Instead of building out 15 miles of fiber I just leased a 10 Gbps connection from another carrier who was the ILEC there so that I could put CLEC equipment right in the middle of their area. That circuit has its price set by tariffed rates. On the flip side the next time I did that, I got a connection from another carrier who was not a local telephone company and just happen to have nation wide fiber through the area so their prices were cheaper and not set by the government.

    Again this is only true for your local telephone company (ILEC) not everyone else who comes in and overbuilds and sells service. The prices are set based on various factors. There are even different pricing set at state and federal levels depending on what the service is. There are going to be different tiers based on the area that you are in so prices in an area that is rock is going to be higher than an area that is sand or dirt. So they do take into consideration different factors to set which level you are at for your pricing to make it "justified" for what it set. I can link you to a 1900 page document of tariffs for different things if you want something to read to put you to sleep. So across the state everyone in a similar area all have the same pricing structure, same for across the country for other items. However the prices are higher than that of a none regulated company. That is why 50Mbps is cheap from comcast than it is through your local telephone company, because the local telephone company has to charge the tariffed rate and comcast makes up their own prices. Also for many of these things the local ILEC doesn't keep the money, they turn a large part of it over to various buckets so they might only keep 1/4th of its, but they then get money back from various programs / buckets. Like the USF that everyone pays for phone service. that goes to the government who then turns around and gives it back to ILECs. Of your $15 phone bill, most get broken up and sent out and then the telephone company might see between $5 and $10 of that come back to them via various things. I avoid that side of things as much as I can as it gets to be a mess quickly.

    The rates are not going to be that high that anyone is going to be making that huge of a profit. T1s are crazy in price, but everything else is normally at a reasonable level. If you are leasing service to another company it has to be something that is priced well enough for the other company to make money. I deal with the electronics and making sure the service works not the paying of circuits, but I want to say that up to 1Gbps normally it is something like $1 a Mbps for a leased circuit a month. Now when you get into something like Company ABC pays CenturyLink and uses their lines to sell people ABC DSL instead of CenturyLink DSL. That can work in a few different ways, ABC could have their own electronics and just has CenturyLink connect the customer to their equipment instead. So at that point ABC is only paying for leasing the cable to the house. In other case ABC just hands CenturyLink a data connection and CenturyLink would just provision the customers to a certain VLAN for that data connection. In which case they would pay more since they are using CenturyLink's equipment also. Now that said if somebody was to lease from Comcast, nobody is setting their price so Comcast can be as much of an asshole as they want with pricing.
     
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  23. lcpiper

    lcpiper [H]ardForum Junkie

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    It sounds like I am not far off the mark.

    Look, if the only thing that anyone expects from "competition" is lower rates for the consumer then I suppose these lower tier providers qualify.

    But me, I'd rather see those "competitors" with techs and other employees on their payrolls, etc. A full on ISP, all the bells and whistles, actually competing, not just using the other guy's wires and offering this faux competition. Nothing in this model looks like it incentivizes any of them to put more into their infrastructure and innovate better ways of doing things. Instead they will do like the government does and only make changes when older tech needs to be replaced, and then they won't jump on that latest hotness or try and develop something new based on recent breakthroughs, they'll just roll out a tech refresh and try to keep upgrade costs lower with the only valid reason to improve bandwidth being that they are leaving customers on the table if they don't.

    The way I see it, this is actually creating the look and feel of competition while actually inhibiting it.
     
  24. BlueFireIce

    BlueFireIce [H]ardness Supreme

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    Fairly unregulated Houston, I have 1Gbps/1Gbps for $80 from ATT.
     
  25. Master_shake_

    Master_shake_ Little Bitch

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    twice in one day.
     
  26. Baditude

    Baditude [H]ard|Gawd

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    I pay $70 a month from ATT because I receive a $10 discount with Uverse TV service. DirecTV users get the same discount.
     
  27. OFaceSIG

    OFaceSIG [H]ard|Gawd

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    It's shit like this that burns my bacon. Even though I'm a conservative, my fellow conservatives want to get rid of net neutrality and allow ATT and Comcast to do whatever they want. Why would we grant duopolies unlimited control over the internet. I don't get how this helps anyone.
     
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  28. TordanGow

    TordanGow Limp Gawd

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    Government is notoriously inefficient.

    If inefficient Govt. can successfully provide service for 50% of private enterprise rate, then the private enterprise needs to die.
     
  29. lcpiper

    lcpiper [H]ardForum Junkie

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    I think that this is a simplistic and basically inaccurate belief.

    You brought up two issues or claims, the first, conservatives wanting to get rid of NN;

    I think that many conservatives just see no need for what was being done. In fact, I know that I view what was done as a bastardized attempt to do the right things the wrong way. If that is to be fixed, you have to undo the bad before you can fix things the right way. Keep in mind that many prior rules related to NN remain in effect even without Title II classification, Pai didn't get rid of all of it.

    Second issue, allowing big ISPs/ Telecoms to "have unlimited control over the internet". Well that's a pretty big brush. In all fairness I suppose I have to ask you to be more specific particularly since these companies don't have anything like control over the internet. And although monopolies can be bad, they are not by definition bad, so why would duopolies be implicitly worse?
     
  30. DigitalGriffin

    DigitalGriffin [H]ardness Supreme

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    Maybe you missed the memo on the most hated companies in the USA.
     
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  31. MMitch

    MMitch Limp Gawd

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    What does EA has to do with this ?
     
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  32. DigitalGriffin

    DigitalGriffin [H]ardness Supreme

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    companies (with an S)
    Cox Charter Verizon AT&T Comcast are right at the top.

    What do they have in common? hmmm That's a real chin scratcher there. Naw, not really.
     
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  33. lcpiper

    lcpiper [H]ardForum Junkie

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    I did actually, how about you be a good chap and link it on up for me ..... pretty please :D
     
  34. Biznatch

    Biznatch [H]ard|Gawd

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    Yes, but the title II classification was what gave the FCC the authority to enforce those rules. So that leaves us with the FTC that you keep saying will take over, but I haven't seen anything about them picking up the slack or doing anything in regards to ISPs. So we now have rules that no agency can/is enforcing, how does that help us?

    There really isn't any difference between a monopoly and the current duopoly where they make sure to stay out of each others areas to avoid competing. They both have the same shitty policies, so to us consumers it might as well be a monopoly as we are getting fucked regardless.
     
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  35. DigitalGriffin

    DigitalGriffin [H]ardness Supreme

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    https://www.pcmag.com/g00/news/3509...cHM6Ly93d3cuYmluZy5jb20v&i10c.ua=1&i10c.dv=14

    https://247wallst.com/special-report/2018/01/22/americas-most-hated-companies-5/2/

    https://finance.yahoo.com/news/america-most-hated-companies-110032495.html

    https://www.cbsnews.com/news/americas-most-hated-companies/

    Comcast is pretty consistently up there for their customer abuses. In fact a lot of tel-coms are. But the fact Comcast is the biggest of the land based ISP's with a virtual monopoly in most markets says a lot.
     
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  36. DigitalGriffin

    DigitalGriffin [H]ardness Supreme

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    I can already point to two articles where ISPs are violating NN now that it has been repealed. Want to watch hi-def video on your phone? Sorry you have to pay extra for that.
     
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  37. jtmcclain

    jtmcclain n00bie

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    1.25MB/1.25MB $65 a month here. Rural Nebraska.
     
  38. Biznatch

    Biznatch [H]ard|Gawd

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    Didn't they categorize wireless carriers differently than regular ISPs, so they were not effected by the NN rules or title II changes? I don't have the time to go confirm, but I'm pretty sure I remember them fighting hard to be excluded. Which is why they've been able to continue the data caps with 3rd party services that don't count towards that cap.
     
  39. lcpiper

    lcpiper [H]ardForum Junkie

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    I'm getting a little tired of this one so I'm going to try and cut to it.

    This is one of Pai's comments when they were voting to return to Title I with the Restoring Internet Freedom Act, this topic seems directly related;
    https://docs.fcc.gov/public/attachments/FCC-17-166A2.txt
    Any of you are free to go to FCC.gov and look for yourself at all the news releases related to expansion of services and deployment of infrastructure supporting this claim.

    This topic is about a news article reporting big telecom efforts to do something that many of you believe flies in the face of Pai's claim. My arguments about whether or not this particular regulation actually supports true competition is not support for the big telecoms, it's just an argument about what we actually are getting from this legislation vice what the people who passed it claim it does.

    We are seeing it in action, watching it develop and we will see what comes from it one way or the other. But what this isn't is a final decision by the government, it's a play by the big boys, Pai said he doesn't expect anything better out of them, that they are only doing what comes natural to them but it's also why the FCC and FTC are there, to try and keep it as close to right as it can be.

    So many of you forget that many of the NN rules passed by Wheeler never actually went operational, still born, dead before they could do anything. And that some remain in place, left there by Pai because they made sense and were needed.

    Issues about what can and can't be done under Tittle I and Title II are a far second in importance to issues like getting Congress to look into these laws and fix the foundation that everything else rests on.

    And we'll see if this push by the big telecoms happens or not. My personal feelings is that they do not promote true meaningful competition. There are a couple of guys here who work for the smaller ISPs that are directly effected by this issue. They would know better than I if I am right. I left that open admitting I might not have a full grasp of all the facts, that there might be more too them then I see. So far none have come straight out and said that I am wrong and that these small ISPs are real and meaningful competition as opposed to faux competition, just a way to get a cheaper price for the same service over the same infrastructure many times maintained by the same people.

    And lastly, I don't see myself as getting fucked. I remember what I used to pay for a 14.4K dial-up connection and what my internet experience was like. I don't pay a hell of a lot more then I did back then but it sure as hell is a better ride. Everything costs more today then it did 20 years ago so I just don't see myself getting fucked and I have said it before that monopolies are not inherently bad or expressly illegal.

    So there are my views on this.

    As for the FTC having it's power returned, that AT&T is trying to get the FTC to settle their law suite in the throttling case. They don't want to waste more money fighting it out in court and risk greater fines because they are going to lose now that AT&T can't hide behind Common Carrier status and Title II. I'm not prescient, omnipotent, my crystal ball doesn't work a whole lot better than any one else's. All I can do is get a little involved and hope that I pick the right horses at race time.
     
    Last edited: Aug 10, 2018 at 2:11 PM
  40. lcpiper

    lcpiper [H]ardForum Junkie

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    I know I asked for this and I must apologize, at the moment I don't have more time to dig into it, and my last comment sort of makes it pointless. I will say though, I looked into who did the research and I can't fault the source, the ASCI looks legit.