Re: Level 3 Communications Issues Statement Concerning Comcast'sActions

[Steve Gibbard <scg () gibbard org>]

On Dec 1, 2010, at 5:47 PM, William Herrin wrote:

> On Wed, Dec 1, 2010 at 3:38 PM, Derek J. Balling <dredd () megacity org> wrote:
> > On Nov 29, 2010, at 10:25 PM, William Herrin wrote:
> > > There are a couple forms of shared billing.
> >
> > There's a third kind you failed to mention that doesn't require equal footing of the parties. The broker.
> >
> > I might pay an apartment broker $X to help find me an apartment.
> > In turn the apartment broker might match me up with an apartment,
> > and charge the landlord $Y for a successful tenancy.
>
> Hi Derek,
>
> For the most part the apartment broker process doesn't work quite the
> way you think. Generally he either gets a fee from you to find you the

Regardless of whether the apartment broker comparison holds up, there are many examples of what economists call 
two-sided markets:

http://en.wikipedia.org/wiki/Two-sided_market

They don't all have the same fee-splitting systems, and you can find an example to site as precedent for just about any 
system you could reasonably advocate.  An example raised in a talk I heard a few years ago was of scholarly journals 
that collect money from both their subscribers and their authors.  The authors need to be published in order to get 
tenure, and the readers pay because they want to know what the authors are saying.  Another example is the Golden Gate 
Bridge, which was funded in the 1930s by the rural counties north of the bridge (including one ~300 miles north), who 
wanted connectivity to San Francisco.

It's probably reasonable to generalize a bit and say that in the systems not imposed by regulators, the distribution of 
costs has something to do with how much each party cares, within the limits of each party's resources.  Whether the 
response produced by the market is at all fair is another -- far more subjective -- question, and that's where 
regulators come in.

-Steve