Which kind creates value and which kind destroys it?
Creative bundling has always been a part of the history of innovation. What we're talking about here is the possible bundling of last mile and search.
Google thinks this is a nice bundle, as is evidenced by its fiber explorations, Topeka, etc.
There are a lot of innovative ways that bundling could make consumers better off... We don't notice most of them b/c we just take it for granted that they are sensible.
When is the last time you complained about buying a bundle of a beverage + regrigeration? Or about buying a car + tires?
Bundling works in some markets when there are economies of scale to be gained by merging two things.
Consider that comcast would have better demographic data to power its search/advertising engine, and comcast could also merge in tv habits data. As the internet and TV merge this is going to become huge.
What does it mean? Maybe that some of that ad revenue that is paying Google's shareholders could instead be used to subsidize high quality broadband for the masses while enriching Comcast's shareholders.
All in all, firms wouldn't want to do it if it wouldn't result in more profit. Unless you believe that google is a lucky accident (rather than a business that only makes money because it satisfies customers) then you shouldn't worry about net neutrality.
Comments
Which kind creates value and which kind destroys it?
Creative bundling has always been a part of the history of innovation. What we're talking about here is the possible bundling of last mile and search.
Google thinks this is a nice bundle, as is evidenced by its fiber explorations, Topeka, etc.
There are a lot of innovative ways that bundling could make consumers better off... We don't notice most of them b/c we just take it for granted that they are sensible.
When is the last time you complained about buying a bundle of a beverage + regrigeration? Or about buying a car + tires?
Bundling works in some markets when there are economies of scale to be gained by merging two things.
Consider that comcast would have better demographic data to power its search/advertising engine, and comcast could also merge in tv habits data. As the internet and TV merge this is going to become huge.
What does it mean? Maybe that some of that ad revenue that is paying Google's shareholders could instead be used to subsidize high quality broadband for the masses while enriching Comcast's shareholders.
All in all, firms wouldn't want to do it if it wouldn't result in more profit. Unless you believe that google is a lucky accident (rather than a business that only makes money because it satisfies customers) then you shouldn't worry about net neutrality.