> If you can make 30% returns over here in social networking, why spend billions of dollars digging holes in the ground for 5% returns?
This point is meaningless without absolute values for comparison: 30% of small is less than 5% of large.
The other point is the one that Google states every time they do something network related: they're an internet company and they benefit from more people and more activity. If US broadband stagnates, that means things like cloud storage, video, etc. are not going to advance significantly beyond their current levels – and if network neutrality isn't maintained, anyone who doesn't own a network is going to be frozen out. That gives Google a strong incentive to invest in the capacity both so they can expand their network offerings and to provide a clear, obvious example of how much better service can be than what the rent-seeking monopolists choose to provide.
> Sure, but only because Google makes 98% of it's money in a very high margin advertising business. Meanwhile, Comcast/Verizon/AT&T actually have to placate their shareholders with the money they make building infrastructure.
All of those companies are making far more money than they spend on their infrastructure. They're trying to expand into other areas to make more but they're not doing it because they're going broke charging far in excess of the operating costs.
> That gives Google a strong incentive to invest in the capacity both so they can expand their network offerings and to provide a clear, obvious example of how much better service can be than what the rent-seeking monopolists choose to provide.
It gives Google a strong incentive to invest, but what about companies that just build internet infrastructure?
> All of those companies are making far more money than they spend on their infrastructure.
Their profit margins are much lower than Google's.
> They're trying to expand into other areas to make more but they're not doing it because they're going broke charging far in excess of the operating costs.
The irony of your position is that you fault Comcast, etc, for branching out in order to make more money from other areas, but justify regulation that would make building infrastructure minimally profitable on the basis that companies like Google can still make a bunch of money using that infrastructure to push advertising.
You can't have your cake and eat it too. If you make building infrastructure less profitable, companies will invest less in that industry, and the ones that continue to do so will do it with the intent of peddling some other product on top.
> The irony of your position is that you fault Comcast, etc, for branching out in order to make more money from other areas, but justify regulation that would make building infrastructure minimally profitable
You should read my comment again because you're arguing against a claim I didn't make. I don't fault them for branching out but merely noted that they weren't doing so out of financial desperation — the network is hardly a loss-leader.
This point is meaningless without absolute values for comparison: 30% of small is less than 5% of large.
The other point is the one that Google states every time they do something network related: they're an internet company and they benefit from more people and more activity. If US broadband stagnates, that means things like cloud storage, video, etc. are not going to advance significantly beyond their current levels – and if network neutrality isn't maintained, anyone who doesn't own a network is going to be frozen out. That gives Google a strong incentive to invest in the capacity both so they can expand their network offerings and to provide a clear, obvious example of how much better service can be than what the rent-seeking monopolists choose to provide.
> Sure, but only because Google makes 98% of it's money in a very high margin advertising business. Meanwhile, Comcast/Verizon/AT&T actually have to placate their shareholders with the money they make building infrastructure.
All of those companies are making far more money than they spend on their infrastructure. They're trying to expand into other areas to make more but they're not doing it because they're going broke charging far in excess of the operating costs.