TELECOM Digest OnLine - Sorted: Re: Broadband Competition Must Surely be Working

Re: Broadband Competition Must Surely be Working

Garrett Wollman (wollman@khavrinen.csail.mit.edu)
Fri, 26 Aug 2005 20:37:48 UTC

In article <telecom24.386.13@telecom-digest.org>,
<hancock4@bbs.cpcn.com> wrote:

> I don't agree about the barriers. As I mentioned, our local cable
> company, while still a small independent outfit, managed to go through
> and wire us with coax and then come back and use fibre optic.

Your local cable company was granted a monopoly on cable TV service in
exchange for wiring your community. Such monopolies are now
forbidden.

> Two years ago we had a massive blackout thanks to this "new model".

Completely false. You had a massive blackout because the (regulated)
power distribution companies were not held to an appropriate standard
of reliability and capital investment. Competitive power generation
did not cause the blackout.

> Today the national grid is carrying far more power than
> it was designed to

There is no "national grid", unless you're referring to the
distribution company National Grid. Even allowing for what you
probably meant, it's still not true, and still a red herring: power
distribution is still regulated, both by the states and by the Federal
Energy Commission.

>> The barriers to entry in "local loop" services are so high ...

> If that is true -- local loop is so hard to build -- why wasn't the
> Bell System assigned the task of providing CATV service? After all, it
> already had the natural monopoly local loop plant already in place.

"Everyone Knew" that you couldn't carry even 100 MHz of television
spectrum over telephone wiring, and of course many people had
perfectly good antennas, so why would telephone subscribers have been
forced to subsidize the construction of cable television networks?

> my local Bell company wanted to sell me long distance, they were
> forbidden to do so (until very recently). I note that now I get my
> long distance from them and dealing with one provider is so much
> better than multiple, plus they give me a good deal.

You don't believe, I hope, that they give you "a good deal" out of the
goodness of their hearts ... They give you "a good deal" becase
there's a competitive marketplace for long-distance communications
services, and (unlike local service, until very recently) you have a
choice of carriers.

> Who gets to decide what is a "natural monopoly"?

The economy does. I don't have the definition available off the top
of my head, but any microeconomics textbook will give you a set of
objective criteria, which when applied retrospectively to observations
of an existing marketplace will tell you if it's a natural monopoly.

> MY phone rates went up to pay for a new telco building to house
> switchgear for external companies so that someone ELSE would benefit.

What makes you think you didn't benefit from having that choice?

-GAWollman

--
Garrett A. Wollman    | As the Constitution endures, persons in every
wollman@csail.mit.edu | generation can invoke its principles in their own
Opinions not those    | search for greater freedom.
of MIT or CSAIL.      | - A. Kennedy, Lawrence v. Texas, 539 U.S. 558 (2003)

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