Who Do You Root For? The Monopolist Or The Bureaucracy?

from the looking-past-the-rhetoric dept

There various fights over muni-WiFi from earlier this year have mostly quieted down, but that doesn’t mean plans aren’t moving forward on both sides. Andy Kessler has written up a quick opinion piece for the WSJ pointing out the core issue that seems to make this such a polarized issue: who do you support, the monopolist or the government bureaucracy? Most supporters of either side do so because they dislike the other side. So, the anti-muni-broadband crowd always points out how inefficient government bureaucracies are. The pro-muni-broadband crowd always points out how areas are underserved and overcharged by the monopoly incumbent providers. In some sense, they’re both right. Neither answer is a perfect answer, but there are good reasons to support the right for muni-broadband, while carefully watching the implementation. First, as Kessler makes clear, in many cases the muni-broadband will end up saving the government plenty of money in not having to buy expensive (monopoly priced!) lines from the telcos. Second, Kessler notes that there must be something in between government bureaucracy and incumbent monopolist: competitive businesses. However, it’s been difficult for them to get underway for a variety of reasons, including the huge upfront expense and lack of access to places to install access points (which the government does have) — not to mention the dominant position of incumbents. So, Kessler believes that muni-broadband will actually lead to competitive broadband, because once the system is installed, no city is going to want to be in charge of handling customer and technical support for such a network, and it will get passed over into private companies anyway. This makes plenty of sense, and, in fact, it’s what some of us have been suggesting for years. The government has a right of way, and can provide a network that anyone should be able to offer services off of, providing more competition in the space.

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Comments on “Who Do You Root For? The Monopolist Or The Bureaucracy?”

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Jeff says:

Its very simple

Don’t let the owner of the lines be the ISP. The FCC looks at it the wrong way. They think that Cable’s competition is DSL. Wouldn’t it be better for the competition on cable to be between ISP’s?

Lets look at it this way:

Think of cable as our interstate system. Its the fastest system (at least in theory). But the only available vehicle is sold by the owner of the interstate system. If we don’t like that, we can switch over to the highway system. The owner of the highway will sell us their car or allow us to buy a car from another dealer (ISP) but that car will cost more because that dealer has to pay a fee to the owner of the highway.

Joseph T. Klein (user link) says:

No Subject Given

How about an open solution through municipal cooperatives using an open network model based on CityLink of Wellington NZ? http://www.citylink.co.nz
If power lines can be owned by utility consortiums, why not cooperative or condominium style local loop access? A fair and level playing field for all ISPs, ASPs, NSPs on a cooperative network. The open marketplace model vs. government or provider owned monopoly.

Anonymous Hero says:

The Monopolist Or The Bureaucracy?

Many people seem unable to comprehend that there may be more than two sides to a situation. There is at least one choice in this one other than a monopoly or bureaucracy. That choice is freedom, in the form of deregulation.

Revoke the protective regulations that have given the cable and phone companies their monopolistic powers and let anyone freely build in the utility right of ways. And remember that the internet was originally designed to operate as a composite of many smaller networks working together in a grass roots fashion, not the consolidation of a few large providers that it is becoming. There is no pratical requirement for consolidation.

The problem is, the monopolists and the bureaucrats both benefit from the current regulations. So don’t expect to see much improvement anytime soon.

stokes (user link) says:

Re: The Monopolist Or The Bureaucracy?

Removing regulations will not necessarily spur competition — everyone (other than municipals in some states) is already free to build in the public rights-of-way and offer competing services. The federal Communciations Act, as amended prohibits state or local barriers to entry by any entity that wants to provide telecommunciations services(47 U.S.C 253) and prohibits the granting of exclusive cable franchises (47 U.S.C. 541).

It is the incumbents that are largely blocking access to their facilities by new entrants who need to interconnect and lease facilities at reasonable rates, and are otherwise acting in an anticompetitive manner. In most markets new entrants cannot viably compete against the entrenched power of the incumbents without teh aid of regulation. Deregulation at the behest of incumbents has largely solidified this position. What is often overlooked is that the success of the Internet was based in large part on the common carrier regulatory obligation on the underlying network operators to carry the transmissions of ISPs and other information service providers.

In many areas the only viable facilities-based competitor is a municipal provider either on its own or in partnership with private entities.

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