Günther Oettinger, the new EU Commissioner for Digital Economy, said in a recent interview just days after he took his new job, that ISPs need longer customer lock-ins to increase investments. Unlike his predecessor, Neelie Kroes, who fought to give EU a strong net neutrality law, much lower roaming fees, and many other consumer protections, it seems Mr. Oettinger is more preoccupied with ISPs making more money.
Despite his claim that longer lock-in would lead to more investments, which could be what the ISPs told him, in the history of business the opposite has usually been true. When a company has complete lock-in (monopoly), that company has no incentive to expand unless people are tired of it after many years of abuses and demand its government to force the monopoly to change.
On the other hand, when there is almost no lock-in, and there's much competition in the market, companies are forced to constantly invest. No company truly wants to invest in upgrades for its systems because it's the right thing to do; they usually do it because the competition forces them to try to keep up. This constant battle of "one-upping" each other leads to better services and lower prices for customers. Lock-in leads to poorer and poorer services over time, along with increased prices. People living in the U.S. probably know this best.
Oettinger said similar lock-in happens in the energy industry. (Oettinger was the EU Commissioner of Energy until two weeks ago, when a new EU Parliament and Commission mandate began.) It's interesting that he compared this proposal to how things work in the energy sector, because that sector is actually one where upgrades happen very slowly, and prices tend to rise over time, not fall, as it happens in most other industries where competition is strong and lock-in is weak.
If this is the kind of proposal Oettinger is going to make during his mandate, EU citizens should keep a very close eye on him. Otherwise, they risk losing much of the consumer-friendly changes to the Internet that Neelie Kroes managed to achieve during her mandate.
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To me, stuff like this is more like insurance for investors in european ISPs. It doesn't particularly infringe on any consumer rights in my opinion. Choosing an ISP is a very important decision so I would assume many educated consumers know which ones are good already so this would have not very much affect on net neutrality laws already put in place.
Besides all the small local ISPs need money from investors to provide better services and infrastructure maintenance so instead of bringing rates up, they'll just increase the amount of time customers have to stay signed on in order to attract more investors. I think it's a fair compromise.
No, just no. Limit the contracts periods to 2 months, max and force these ISP's to properly COMPETE like they should in the real world.
Then I read Dovah-Chan's comment and it stole Mr. Oettinger's 5 seconds of fame. You now hold the trophy in my book.
Large ISP's make money hand over foot. Any consumer in favor of locking themselves into one FOR THE SHEER REASON OF HOPING YOUR PROVIDER CAN BORROW MORE CAPITAL only means that you will be guaranteed to be paying the dividends on that money for the next 1 or 2 or 5 whatever years.
While we're at it lets increase the standard cell phone contract to 5 years and hey- maybe if we put a contract on your health insurance, it would guarantee revenue and they in turn could provide better care because they know you'll pay regardless. Or pay your cancellation fee so they really won't have any risk at all. What an excellent plan, get you hooked in with a great sales pitch and not have any real need to expand because hey, you're already here all the work has been done. Wow it sounds better and better by the minute really. Just wow.
My personal recommendation is to start Public Utilities that provide internet access. It works great for electricity as where I live, we have some of the cheapest in the US and probably the world. Support local jobs with a local public internet utility.
That wouldn't work as the big cable and phone companies own all the installed fiber. Any "utility" would have to purchase, lease or TAKE those lines and trunks, none of which are likely to happen in our lifetime. Some sort of improved satellite distribution might be viable if the "utility" could get the speeds comparable.