-----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Les Hughes Subject: Re: Office365 ? Nope, now an argument on the NBN.
Tony Wright wrote: >> Actually perhaps the word "natural" is confusing people. Technically the >> existing telephone network is a natural monopoly because >> it is prohibitively expensive for companies to compete with Telstra. The >> monopoly was created by the government when Telstra >> was government owned, because everyone had a home phone and Telstra owned >> all the infrastructure. >> >There was nothing "natural" about Telstra's monopoly. It was created as a >monopoly by a monopoly using the resources of taxpayers. Did you read the link I posted to the economic definition of a "natural monopoly"? Sometimes it helps to draw upon the knowledge of others. Most distribution networks are natural monopolies - especially the "last mile" - fixed line telephony, electricity distribution, water and sewerage pipes, local roads, railway lines etc. The market is a fixed size, and a new entrant entering the market simply divides the market in half, yet still has to expend a huge amount of capital duplicating an existing distribution network. Sometimes, between major centres of distribution it might be economic to duplicate infrastructure (e.g. fibre network between Sydney and Melbourne), but this becomes less and less financially viable the smaller the customer based (i.e. down to the "last mile" It doesn't really matter that Telstra/Telecom was a government monopoly when it built the fixed line network. Show me one other modern economy that has multiple fixed line phone companies competing side-by-side for the same broad customer base. They don’t exist for a good economic reasons. Cheers Ken
