At 7/16/2011 09:41 PM, Scott Reed wrote:
I also noticed that the breakup of Ma Bell degraded service in many
areas. A monopoly by market demand is not necessarily bad. A
monopoly by regulation is bad.
Well, not necessarily. Ma Bell's service was never consistent before
the breakup, but their P.R. was good.
The monopoly occurred "naturally" from the time the Bell patents
expired (1893) until the last competitors were gone in the
1930s. There were CLECs galore (called "independents" at the time,
but not the geographic-monopoly independents of later years) in the
1893-1920 era. Bell bought Pupin's patent on the loading coil in the
1890s, which gave them a monopoly on long distance (>10 miles or so),
but local service was competitive in many places. Independents
pioneered dial; Bell was all-manual until the 1920s. However, the
economics of natural monopoly are real. The larger market share
means a lower unit cost, so the big guy almost always wins. So by
1934, when the Communications Act was passed, the monopoly already
existed; FCC and state rules simply locked it in place (made it de jure).
The idea of TA96 was to de-monopolize. Since the natural monopoly
still exists, unbundling is a way to open the market, but the 2001
FCC turned against it and the current one remains opposed, law notwithstanding.
The public Internet only exists because the FCC in 1966 started the
Computer Inquiries, which created a bright line distinction between
carriage ("basic service") and content ("enhanced service"),
especially in 1980's Computer II. The ILECs hated that. The FCC also
rammed sharing and resale down their throats around 1976 -- before
that, you couldn't lease a line between two companies unless one of
them was a licensed common carrier (e.g., Western Union, one of Ma
Bell's few authorized wholesale resellers). How could you have an
ISP without those rules? However, in 2005 the FCC revoked the
Computer Inquiry rules, in response to a Verizon request, which is
what led to the whole Network Neutrality kerfuffle.
The "no regulation" approach would most likely involve granting ILECs
full property rights on their networks, so they would have
unregulated monopolies. Who does that benefit? It's a banana
republic situation. Every civilized country regulates its monopolies
or keeps them under public ownership. Of course property rights are
themselves an artificial legal construct, so I suppose a Somali-level
approach would be that you could string wires, but you'd need to hire
warlords to guard them, and could steal whatever your warlords were
able to rassle from competitors. Ironically, Somalia does have a
competitive mobile phone sector, since there is no government to
regulate it and the warlord armies do guard their towers, but no
wireline sector to speak of.
WISPs are less dependent on wireline rules than wireline ISPs, who
are largely hurting due to malevolent FCC policies. But they still
depend on spectrum regulatory policies. which the FCC makes
consistent with the law. And many depend on wireline backhaul, where
regulation is the only thing that keeps the monopolies from gouging
worse than they do. (I've got an article in the works about how the
real digital divide is the way the ILECs have kept the fiber dividend
-- the low per-bit cost of capacity on fiber -- away from their
monopoly ratepayers, even though it operates in competitive markets.
On 7/16/2011 9:25 PM, Faisal Imtiaz wrote:
Well...again you have to go further back in history...before
telecom regulation ..it was a Ma Bell monopoly ......and without
regulation...there is a very good chance that it will again become
a Ma Bell monopoly or maybe a duopoly...
Let's not forget that...
Faisal
On Jul 16, 2011, at 9:03 PM, RickG
<<mailto:rgunder...@gmail.com>rgunder...@gmail.com> wrote:
"it is Regulation (1996 Telecom Act) that
allowed us (ISP's) to be able to go into the business of providing
internet access and other communication services"
With all due respect, it's exactly the mindset that government
"allows" us to be in business that IS the problem. Telecom Act or
no, regulation or no, there should be no question that we are
allowed to make a living the way we want to regardless.
--
Fred Goldstein k1io fgoldstein "at" ionary.com
ionary Consulting http://www.ionary.com/
+1 617 795 2701
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