--- Matthew Crocker <matthew@crocker.com> wrote:
That is the exact problem with a [mon|du]opoly. The incumbents drive the price so low (because they own the network) that it drives out an potential competition.
So you're complaining that the problem with lack of competition is that the prices are too LOW? As a consumer, I'm thrilled with low price, and would only change providers for a well-defined benefit or a lower price.
We don't need 8 fiber networks overlaid to every home in the US to provide competition. We need a single high quality wholesale only fiber network which is open to use by all carriers. I don't want 200' telephone poles down my street with 10 rows of fiber. It doesn't make sense.
So should the government charter such a build? My understanding is that Verizon and SBC (maybe others, but I don't know about them) are currently working on doing a FTTH build at this time. Presumably, as they're private companies doing it, they'd like to be able to be the ones that obtain the primary benefit. Do you think that a municipal build/new monopoly build as you describe would be cheaper or better than what SBC or Verizon are doing? If so, you should be able to convince some cities of the math.
Again, because of the monopoly held by the incumbents keeping the price low enough that you can't afford to build your own infrastructure.
This is such an astounding comment that it needed to be singled out: most of the complaints about monopolies are that they artifically RAISE prices.
We don't need competition in the infrastructure business, we need competition in the bandwidth business. That can only happen if the infrastructure is regulated, open and wholesale only. The RBOCs should be split up into a wholesale *only* division (owns the poles, wires, buildings,switches) and a services *retail* division (owns the dialtone, bandwidth, customers ). The wholesale division should sell service to the retail division at a regulated TELRIC based price which will allow the wholesale division to make enough money to build/ maintain the best infrastructure in the world. Any competitive service provider can buy the same services at the same price as RBOC Retail. Regulated such that wholesale profit can't subsidize retail services. In high density areas there may be alternate infrastructure providers that can sell to CSPs and in rural america there will be one infrastructure provider and many CSPs
Aren't you pretty much describing the '96 telecom act? The result has been the glut of inter-city fiber, and a dearth of advanced access services at the rural/suburban edge. Saying "we don't need competition in infrastructure, only in bandwidth" ignores the fact that infrastructure upgrades are required to support increased bandwidth. In addition, why treat L0/1 infrastructure in a different way than L2/3 infrastructure?
This IS the market at work. If you want it to be different, what you want is more, not less regulation. That may or may not be a good thing, but let's just be very clear about it.
More regulation of the physical infrastructure (the expensive piece) and less regulation of the bits to foster competitive solutions and bring along new innovations. The future innovations are not going to revolve around new types of fiber. They will revolve around what can be done with high bandwidth to everyone.
First, I wouldn't be so sure to rule out new improvements in fiber or other physical transmission media as important - as an example, I think the widespread adoption of 802.11 has been part of a huge shift in the way people use the Internet. That said, I agree that the biggest innovations are likely to be applications, not media. So let me take the devil's advocate position: why should prices be raised so that multiple ISPs can get a layer-2/3 connection to customers without having their own layer-1 infrastructure? Is there some service which is provided which wouldn't be cheaper/simpler to mandate that the incumbent provide? The content providers and innovators you mention should be able to work with the customers of any ISP, right? I guess what I'm saying is that "competition" is a virtue only when it leads to either improved or cheaper service. Do you think that there are improvements to service that alternative providers could make which justify the cost of the regulation you describe? David Barak Need Geek Rock? Try The Franchise: http://www.listentothefranchise.com __________________________________ Yahoo! FareChase: Search multiple travel sites in one click. http://farechase.yahoo.com