Isn't Competition Supposed To Lower Rates?

from the oh,-right... dept

If you haven't been following what's been going on in Lafayette Louisiana, they've been having quite a technology battle. The local telco and cable company (BellSouth and Cox) have been spending millions of dollars fighting a proposed muni-fiber offering that the residents of the city voted for. The people of the city voted for it, even after push polls (designed to influence the vote, not accurately predict it) and silly threats from the incumbents. Ever since it was approved, however, the incumbents have been able to hold up the deployment by fighting it in court. Cox and BellSouth, of course, claim that such a muni network would represent unfair competition -- something they should know an awful lot about, since Cox was recently accused of anti-competitive practices in blocking out competitors in certain new housing developments. Apparently, from their point of view, "unfair competition" is just about any competition. Competition, of course, might force them to do something like offer more competitive rates -- something studies have shown isn't really happening yet. With that in mind, is it really any surprise to hear that Cox is now raising their cable rates in the city, even as they try to convince the courts that the muni-fiber network would be bad for the people of the city?

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  1. identicon
    I, for one, 13 Jul 2006 @ 5:33pm

    Time for system update

    AC #3 wrote "if what your competitor is doing to compete is illegal, then it is illegal competition. if what he's doing is legal, its just plain old competition. there is no such thing as unfair competition."

    Good point. Semantics I know, but worth thinking about.
    I'm trying to find a counter example. What about "loss leaders"?
    Technically those are legal, no crime is done by selling your product at a loss. But I'm sure there are examples of courts finding that practice to be "unfair" and issuing orders against companies. Correct me if I am wrong. In this case it must have been a civil action brought by one company against another claiming "damage" to their business. So is "unfair competition" just another example of tort law gone insane? Is this just an American thing? Obviously not because of the way the EU is fining Microsoft right now. They have done nothing illegal. It does seem to fly against basic free market principles. If so, what is to stop you suing AT&T because they are stopping you from breaking into the telecoms market with your two cans and piece of string? Who decides "unfair" and on what basis? Who gives them the authority to so arbitrate?

    Robert #4

    That's a very interesting comment.

    It's supported by an overwhelming body of evidence that the majority of elected and appointed officials today don't have the first fucking clue about the specialised subjects they are tasked with. Yes, it is true to say that the "average lay person" is better informed.
    Better informed on the ramifications to their own lives, better informed on the technology and social issues.

    I don't know a lot about the machinations of American government, I believe it was held very highly once upon a time, but what you describe sounds like an increasing problem in all political systems. As progress speeds up the relevance of an officials knowledge/position within a given timescale diminished to zero. Basically they just can't keep up. So what would seriously improve that, as happens in Europe, is that a referendum is called. That is a single issue vote conducted nation wide. The cynic in me says Americans would be too apathetic to engage, but surely we all eventually *must* move in that direction.

    People knock democracy as an impossible concept. Even the Greeks gave up on it. Everybody likes to point out how we don't actually live in a democracy but rather an oligarchy. The main argument is that true democracy is too fickle and creates a tragedy of lowest common denominator thought. I recognise that, but I don't think it is a fault of the ideology, only a fault of the implementation. The oligarchy has a kind of stability built in to it, usually just a slowly reciprocating slide between left, right, and back to left again over a few decades.
    A truly dynamic democracy abandons all notion of the two part see-saw. Maybe there is still hope for true democracy. If the Diebold voting machines weren't rigged and there was really a credible method for massive quickfire referenda on a number of social issues can you imagine how dynamic and interesting participatory democracy in real time might be?

    I would happily give it a shot over the current system of special interests paying for laws behind closed doors.

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