[133902] in North American Network Operators' Group
Re: Some truth about Comcast - WikiLeaks style
daemon@ATHENA.MIT.EDU (Owen DeLong)
Sun Dec 19 23:47:44 2010
From: Owen DeLong <owen@delong.com>
In-Reply-To: <4D0EBB72.50106@gmail.com>
Date: Sun, 19 Dec 2010 20:44:21 -0800
To: JC Dill <jcdill.lists@gmail.com>
Cc: NANOG list <nanog@nanog.org>
Errors-To: nanog-bounces+nanog.discuss=bloom-picayune.mit.edu@nanog.org
On Dec 19, 2010, at 6:12 PM, JC Dill wrote:
> On 19/12/10 5:48 PM, Richard A Steenbergen wrote:
>> On Sun, Dec 19, 2010 at 08:20:49PM -0500, Bryan Fields wrote:
>>> The government granting a monopoly is the problem, and more lame
>>> government regulation is not the solution. Let everyone compete on =
a
>>> level playing field, not by allowing one company to buy a monopoly
>>> enforced by men with guns.
>> Running a wire to everyone's house is a natural monopoly. It just
>> doesn't make sense, financially or technically, to try and manage 50
>> different companies all trying to install 50 different wires into =
every
>> house just to have competition at the IP layer. It also wouldn't make
>> sense to have 5 different competing water companies trying to service
>> your house, etc.
>=20
> This is the argument the government uses to keep first class mail =
service as an exclusive monopoly service for the USPS, claiming you =
wouldn't want 50 different mail carriers marching up and down your walk =
every day. Yet we aren't seeing a big problem with package delivery. =
Currently you have 3 choices, USPS, UPS, and FedEx. The market can't =
support more than 3 or 4 package delivery services (e.g. we had 4 with =
DHL, which didn't survive the financial melt down). Why not open up the =
market for telco wiring and just see what happens? There might be 5 or =
perhaps even 10 players who try to enter the market, but there won't be =
50 - it simply won't make financial sense for additional players to try =
to enter the market after a certain number of players are already in. =
And there certainly won't be 50 all trying to service the same =
neighborhood.
>=20
You can send letters just as well as packages via the other carriers.
The "USPS monopoly" on first class mail is absurd. In fact, FedEx, UPS,
et. al could offer a $0.44 letter product if they wanted to.
They could not call it mail. They could call it "first class document =
delivery."
However, the reality is that they probably couldn't sustain their =
business
at that price point.
The USPS doesn't have an actual monopoly so much as ownership of
the term Mail almost like a trademark. What they do have is an =
infrastructure
built at taxpayer expense that creates a very high barrier to entry for
competition at their price points.
> And if a competing water service thought they could do better than the =
incumbent, why not let them put in a competing water project? If they =
think they can make money after the cost of the infrastructure, then =
they may be onto something. We don't have to worry that too many would =
join in, the laws of diminishing returns would make it unprofitable for =
the nth company to build out the infrastructure to enter the market.
>=20
The point is that the cost of the infrastructure usually exceeds what =
you can
recoup if you only have part of the population in a given area as your
customers, thus, creating natural monopolies.
Owen
