[170165] in North American Network Operators' Group
Re: Level 3 blames Internet slowdowns on Technica
daemon@ATHENA.MIT.EDU (Owen DeLong)
Mon Mar 24 21:32:02 2014
From: Owen DeLong <owen@delong.com>
In-Reply-To: <616B4ECE1290D441AD56124FEBB03D0818E24FCD02@mailserver2007.nyigc.globe>
Date: Mon, 24 Mar 2014 16:54:53 -0700
To: Eric Wieling <EWieling@nyigc.com>
Cc: "nanog@nanog.org" <nanog@nanog.org>
Errors-To: nanog-bounces+nanog.discuss=bloom-picayune.mit.edu@nanog.org
A natural monopoly exists without force of arms or regulation very =
easily.
Any place where the market density is insufficient to support the cost =
of multiple providers building out the infrastructure for a given =
service, a natural monopoly exists.
For example, if cities were to simply open up the provision of sewer =
services* to residential areas, you wouldn=92t have a bunch of companies =
choosing to suddenly get into the sewer business. Instead, whoever has =
pipes already in the ground will continue to serve customers and no =
competitor is going to see enough market upside to build a second set of =
pipes out or build a pipe network on an ad-hoc basis.
So it also goes with other similar types of services, such as copper =
pairs (telephony/DSL), co-ax (Cable), Fiber (GPON, Active Ethernet, =
Etc).
Companies have created the illusion of competition by convincing =
regulators that cellular competes with cable competes with copper pair, =
but in reality, the service profiles of those media are so radically =
different that in most areas, any perceived competition is mostly =
imaginary.
($99 for 50Mbps/10Mbps co-ax does not, IMHO, compete with $50 for =
1.5Mbps/384Kbps DSL, for example)
Very few, if any neighborhoods have copper pairs from more than one =
phone company. You can argue that there are regulations preventing a =
second phone company from deploying, but in reality, even if such =
regulations were removed, there wouldn=92t be a second phone company =
laying copper in most areas. In many areas, the regulation is the result =
of the USF process attempting to get at least one phone company to do a =
subsidized build-out into the area because subscriber density was so low =
that it didn=92t even support a natural monopoly, let alone competitive
environment.
Even if the incumbents gave up their =93right-of-way=94, you wouldn=92t =
see enough of a market in any but the most densely populated areas to =
support establishment of a competitor and you likely wouldn=92t even see =
initial build-out into most locations.
Instead, the part that needs to be heavily regulated, the natural =
monopoly, the last-mile local loop should be provided by an independent =
operator who does not have a conflict of interest with regards to =
serving all of the providers trying to provide higher layer services. An =
owner of the physical infrastructure that is allowed to use that =
physical infrastructure in anti-competitive ways against other =
higher-layer service providers will do so to the detriment of the =
customers. Prohibiting them from owning the last-mile physical =
infrastructure and, instead, requiring that to be managed by an =
independent system operator who provides equal footing to all comers =
just makes sense.
Owen
*By sewer services in this context, I mean the actual sewers themselves =
and the waste-removal service that they provide, not services such as =
roto-rooter/rescue-rooter/etc.
On Mar 21, 2014, at 8:45 PM, Eric Wieling <EWieling@nyigc.com> wrote:
>=20
> Make the regulation and force of arms be as targeted as reasonable. =
In the case of telecommunications as targeted as reasonable means the =
"last mile" or, more correctly, the "local loop". I advocate =
stringent ongoing oversight and regulation of the local loop and very =
little regulation for the rest of the communications industry. =20
>=20
> If the incumbent telcos want to compete on equal footing in a free =
market then I invite them to give up their government granted right of =
ways to run their copper or fiber and compete on a level playing field. =
They will never do that and therefore the last mile can never be a free =
market. =20
>=20
>=20
> -----Original Message-----
> From: Larry Sheldon [mailto:LarrySheldon@cox.net]=20
> Sent: Friday, March 21, 2014 9:54 PM
> To: nanog@nanog.org
> Subject: Re: Level 3 blames Internet slowdowns on Technica
>=20
> *too old, failing memory and all, I'll have to go read up on "natural =
monopoly"--I can not think of one that does not require regulation and =
force of arms to exist.
>=20
