--On November 15, 2005 6:28:21 AM -0800 David Barak <thegameiam@yahoo.com> wrote:
--- Owen DeLong <owen@delong.com> wrote:
True competition requires the ability for multiple providers to enter into the market, including the creation of new providers to seize opportunities being ignored by the existing ones.
Technically, lots of other providers CAN enter the market - it's just very expensive to do so. If there are customers who are not receiving service from one of the incumbent providers, a third party is certainly welcome to {dig a trench | build wireless towers | buy lots of well-trained pigeons for RFC 1419 access} and offer the services to the ignored customers.
The problem is that the capital expenditures required in doing so are very, very high, and most companies don't see the profit in doing so.
OK... Let me try this again... True competition requires that it be PRACTICAL for multiple providers to enter the market, including the creation of new providers to seize opportunities being ignored by the existing ones.
If two companies can act as gatekeeper for the entire market in a given area, that is not an environment where market forces carry much meaning.
Actually, here's where I'd disagree: market forces are exactly the thing which is keeping other providers OUT. It's too expensive for them to buy their way into these areas, and during all of the time when access was mandated to be (relatively) cheap by law, very few third parties actually built their own infrastructure all the way to homes. There are some competitive cable plants in some cities (I remember Starpower/RCN doing this in DC), but I'm not aware of any residential phone providers who built all the way out to houses exclusively on their own infrastructure.
No... Actually, the lack of market forces in the beginning is what allows the incumbent providers to have an advantage. The incumbent providers received huge subsidies from the government to build the existing infrastructure, and, continue to receive said subsidies (universal service). New providers, OTOH, are being forced to build parallel infrastructure and collect USF taxes while not receiving USF subsidies. In some cases, rather than build parallel infrastructure, they have the option of leasing infrastructure from the incumbent providers, but, that has it's other lack-of- market force problems. If it were equally expensive for the existing providers and the new providers, there would be no lack of competition. The fact that the existing providers have an economic advantage as a result of subsidies is not a market force, it is the lack of a level playing field preventing market forces from acting.
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.
Nope... What I want is LESS subsidy to incumbents and a recognition that infrastructure built with public funds belongs to the public. Said infrastructure should be equally open to all service providers on equal terms, regardless of who holds the contract to maintain it. Imagine instead of today's scenarios, an environment where SBC didn't think they OWNed the pipes, but, instead, the city's owned the copper in the street and contracted with <entity that doesn't sell direct end-services> to maintain said infrastructure for the city. Then, all RBOCs/ILECs/CLECs paid the same price to the City through said entity for the same services, whether dry copper connection, dark fiber, OC-X, etc. The city would have a term to the contract and would put it up for rebid periodically. That would be market forces at work and not MORE regulation. What we have today is an attempt to reduce regulation without recognizing the need to correct the damage already done by regulation. Owen -- If this message was not signed with gpg key 0FE2AA3D, it's probably a forgery.