[171277] in North American Network Operators' Group
Re: The FCC is planning new net neutrality rules. And they could
daemon@ATHENA.MIT.EDU (Patrick W. Gilmore)
Fri Apr 25 00:10:00 2014
From: "Patrick W. Gilmore" <patrick@ianai.net>
In-Reply-To: <CAFn5mmEip-X52Xc0Sx9LhZNb+vNsBitE9_PrMwUBisCrhYT+HQ@mail.gmail.com>
Date: Fri, 25 Apr 2014 00:09:36 -0400
To: NANOG list <nanog@nanog.org>
Errors-To: nanog-bounces+nanog.discuss=bloom-picayune.mit.edu@nanog.org
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On Apr 25, 2014, at 00:01 , Everton Marques <everton.marques@gmail.com> =
wrote:
> On Fri, Apr 25, 2014 at 12:44 AM, Patrick W. Gilmore =
<patrick@ianai.net>wrote:
>> On Apr 24, 2014, at 23:38 , Larry Sheldon <LarrySheldon@cox.net> =
wrote:
>>> Regulating monopolies protects monopolies from competition.
>>>=20
>>> Monopolies can not persist without regulation.
>>=20
>> You are confused.
>>=20
>=20
> I think Mr. Sheldon is pointing out this:
That's nice.
A bit disingenuous, but nice.
To be clear, I have no idea if AT&T was a natural monopoly in the 1890s =
or not. But the idea that there can be no "natural monopoly" is =
ludicrous, unless you distort the definition so far out of shape is =
doesn't resemble anything except a complex syllogism in a textbook. Here =
in the real world, sometimes there is very clearly an overwhelming =
preference for a single company / provider / etc. to own a market =
segment. Pointing out the laws of physics do not prohibit competition =
does not mean there will be competition.
But we can agree to disagree. :)
--=20
TTFN,
patrick
> --xx--
> The biggest myth of all in this regard is the notion that telephone =
service
> is a natural monopoly. Economists have taught generations of students =
that
> telephone service is a "classic" example of market failure and that
> government regulation in the "public interest" was necessary. But as =
Adam
> D. Thierer recently proved, there is nothing at all "natural" about =
the
> telephone monopoly enjoyed by AT&T for so many decades; it was purely =
a
> creation of government intervention.
>=20
> Once AT&T's initial patents expired in 1893, dozens of competitors =
sprung
> up. "By the end of 1894 over 80 new independent competitors had =
already
> grabbed 5 percent of total market share =85 after the turn of the =
century,
> over 3,000 competitors existed.[55] =
<http://mises.org/daily/5266/#note55> In
> some states there were over 200 telephone companies operating
> simultaneously. By 1907, AT&T's competitors had captured 51 percent of =
the
> telephone market and prices were being driven sharply down by the
> competition. Moreover, there was no evidence of economies of scale, =
and
> entry barriers were obviously almost nonexistent, contrary to the =
standard
> account of the theory of natural monopoly as applied to the telephone
> industry.
> (...)
> The theory of natural monopoly is an economic fiction. No such thing =
as a
> "natural" monopoly has ever existed. The history of the so-called =
public
> utility concept is that the late 19th and early 20th century =
"utilities"
> competed vigorously and, like all other industries, they did not like
> competition. They first secured government-sanctioned monopolies, and
> *then,* with the help of a few influential economists, constructed an =
*ex*
> *post* rationalization for their monopoly power.
> --xx--
> The Myth of Natural Monopoly
> http://mises.org/daily/5266/
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